A Letter to Sam Harris on the Economy

Dear Mr. Harris-

You have requested that economists in particular contact you in regard to the 08-19-11 Addendum to your blog post "How Rich is Too Rich?"  I am not an economist, but I follow economics very closely.  I'm an engineer by degree and run a construction company, so it is perhaps in my nature, as well as required of my position, to know what's happening in the world, economically.  I hope you will take a few minutes to think about my take on your ideas, however, because admittedly this is long, I will not be surprised or disheartened if you do not.

First, I will assess your first idea:

Future breakthroughs in technology (e.g. robotics, nanotech) could eliminate millions of jobs very quickly, creating a serious problem of unemployment.


In a very broad sense, I think that the creation of a massive robotics industry causing large scale unemployment would perhaps be akin to the fear once upon a time that the rise of the automobile industry would have caused large-scale unemployment due to their replacing horse-drawn carriages.  To shamelessly steal from DeVito's speech in Other People's Money, there was once a company that made the world's best buggy whips, whose employees surely found themselves eventually unemployed due to the rise of the automobile.  But as those people lost their jobs due to the rise of an industry that made their profession nearly obsolete, so too did a new industry arise whose ability to employ massive numbers far surpassed the ability to employ of carriage-makers, horse farmers and buggy whip makers combined.  In the aggregate, employment rose.

Will robotics eliminate jobs?  Of course, it has already eliminated thousands upon thousands of jobs, from the automobile industry to the airplane manufacturing industry to the construction even of submarines.  Many welds on the newest submarines, for instance, require accuracy that only robotics can achieve.  This means that welders that worked on submarines are out of that particular work.  But they are still welders.  They just need to weld elsewhere.  Perhaps they might even go to work for the company that is manufacturing the robots.

If we look to the future of robotics, the scenario that kills millions and millions of jobs is the perhaps Asimov's Foundation series scenario, or more recently, the scenario in the movie, Surrogates, where robots become so commonplace, there is nearly one robot, or more, for every human being.

But who makes the robots?  Surely for the smaller components and the excessively detailed work, there are other robots.  But there are still going to be assembly line jobs.  There are going to be jobs for the people who need to supply the materials, all the way back to the original mines they came from.  Robots won't do everything.  All along the way there will need to be people to do the work.  Perhaps this is best explained easily in Leonard Read's pamphlet, "I, Pencil."  If the industry grows to such a magnitude as you suggest, then yes, surely it will create massive unemployment in other currently existing industries, but it will create massive employment in a new, growing industry.  Such is the nature of capitalism and economic progression.

But many of your readers responding to you have already covered this basic idea, and you are looking for something more.

I am suggesting, however, that there is nothing that rules out the possibility of vastly more powerful technologies creating a net loss of available jobs and concentrating wealth to an unprecedented degree.


To this I would suggest that there is and always has been this possibility, however the missing piece of the equation is necessarily the rate of population growth.  It did not used to be uncommon for families to have 4, 6, 8 or even 10 or 12 kids.  When our economy was largely driven by agrarian life, it was economically necessary for a family to have as many workers as possible to work the farm.  Given the rise of mechanical farming equipment, the farm family has gotten smaller over the years.  In the early-to-mid 20th century boom in manufacturing, we saw our population skyrocket as we had an economy that we were comfortable still having several children per family, as factory workers would have assumed that their kids could eventually go to work in the factory, if nothing else.  I would suggest to you that as many manufacturing jobs have moved overseas, families have trended to get smaller as a response, with families focusing on grooming their children for white collar work, whether as engineers, academics, or businessmen.

The moving of blue collar manufacturing positions overseas has also been a response to the market.  Union contracts in the United States grew to the point that the manufacturing of goods locally has in large part become untenable.  I would put this largely on the unsustainable nature of a pension model for retirement, moreso than the wage rates themselves, but this is another topic altogether.  So if we are talking about a "serious problem of unemployment" I assume we are talking about it locally in the United States, because technically speaking, the jobs haven't disappeared, they have gone elsewhere, where the labor can be had for significantly less money.

I make this point because, if we were to see such a significant rise in robotics, it would be not only because the manufacture, sale and maintenance of the robots was that much cheaper than American labor, but also that much cheaper than rock-bottom foreign labor.  Looking at it macro-economically, taking the world market as a whole, and taking employment to be a worldwide phenomenon, because it is a worldwide phenomenon, I feel the possibility of a rise in robotics to replace employment of human labor to such an extent that all levels of human employment are made economically obsolete to be something that is probably a few hundred years down the line, should it ever happen.  There's an entire world's worth of cheap labor to exploit before a saturation of robotics seems likely to even begin to take place.

Now, on to your next idea:

The federal government should levy a one-time wealth tax (perhaps 10 percent for estates above $10 million, rising to 50 percent for estates above $1 billion) and use these assets to fund an infrastructure bank.


You do, strangely, caveat this by ultimately saying "Leaving aside fears of government ineptitude, please tell me why it would be a bad idea for the rich to fund such a bank voluntarily."

Let me first point out that these are two wildly different things.  The federal government descending upon the rich and absconding with 10-50% of everything they own from behind the barrel of a gun is not the same thing as our country's 400-something billionaires voluntarily pooling their money together to charter a new bank that would be used to fund infrastructure projects.  To insinuate anything of the kind is disingenuous.

The latter would most certainly not be a bad thing, though let's remember that the structure of such an entity would be as a bank, loaning money out to municipalities and states and the federal government to fund infrastructure projects.  This money would have to be paid back with interest, and that this is really not any different than how this already happens, except for the fact that this bank would be something like another Federal Reserve style central bank dedicated solely to infrastructure, though, I would assume and hope, not allowed to print money.  To that effect, I guess I don't really understand the point of it, other than that it's an accounting trick to move debt out of treasuries and into another entity.  The debt still grows, only it doesn't affect the country's balance sheet.  At some point it becomes another Fannie/Freddie-type of entity, with so much debt that it doesn't even know how much of it is even good anymore.

This is to say nothing of the point, also, that if the super-rich are the ones funding this bank, they are getting even richer because of it, thereby increasing the wealth gap you are hoping to close.

If you have taken the time to read through all of this, thank you.

Sincerely,
Paul Kroenke

I Do Not Think It Means What You Think It Means

Gateway Pundit finds a story so absurd you know a Democrat has to be at the center of it.

Democrat Representative Michael Sturla has made the ludicrous claim that fracking causes the spread of STD's "amongst the womenfolk."

While it's refreshing to see that someone has picked up John Murtha's mantle of severely bigoted Pennsylvania Democrat, perhaps even more refreshing is Sturla's response to criticism of his bigotry.

“This is in the heart of the drilling area” said Sturla, as he read from the report.  “Other issues: an increase in sexually transmitted diseases.  One of the recommendations: increased Department of Health availability of services related to STDs and substance abuse.” 

“I don’t make this stuff up,” said Sturla.  “Should we not have drilling in the state because of that?  No, but it’s one of those impacts that we need to deal with.  In the Marcellus Shale Commission report, it says we should deal with it.”

Bigoted Comedy Gold.

Oh, and as an added bonus, (based on Ed Schultz's criteria) he's a racist!

“It’s just you can’t whitewash it and say it doesn’t exist,” said Sturla.

Fracking?  Drilling?

Ron Paul is The One

Great timing on this video as a response to his being deemed the "13th floor of a hotel" by the media in general.

Brett Baier at Fox News may be rolling his eyes and smirking away in neocon hell, but there are plenty of people who recognize Ron Paul as The One.

Fair (and unbalanced) to Say

John Stewart on the media's continuing ludicrous blackout on any coverage related to Ron Paul.

The Daily Show - Indecision 2012 - Corn Polled Edition - Ron Paul & the Top Tier
Get More: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

What can we really say? For someone who has forced himself to the forefront of the national debate since the primaries four years ago, the media still treats him like a crazy person. Here is a man whose ideas have driven the groundswell of libertarianism in America, who other candidates are taking seriously this time (they treated him with the media's same level of derision last time, openly laughing at his responses on stage and never debating him), and even Fox News, the guys that are supposedly the leaders of the Vast Right Wing Conspiracy are acting as if he's irrelevant.

It occurs to me that Michele Bachmann has been something of an economic understudy of Ron Paul's over the past four years.  I wonder if, as Mike Huckabee joined forces with John McCain last time around to freeze Romney out of the primaries in the south, perhaps Bachmann (because let's face it, she can't and won't win) has been handpicked to pull libertarian minded social conservatives away from the Ron Paul camp so that the likes of Romney and Perry can battle it out without having to worry about debating Paul on actual ideas.

A Would-Be Nobel Laureate

That's what I am.  If only someone would nominate me for my prescience.  Two-and-a-half years ago I wrote the following:

Why is it that these people think that if they do the exact same things wrong, only bigger and bigger, somehow in the end it will ever turn out right? 

After a world-wide house of cards collapses, what will they do then? 

Their only hope for another 30 years down the road will be to have imperialized space to the same extent as they have this planet, so they can ruin economies at a universal level as well!

Now, Nobel Prize Winner in Economics and "economic journalist" for the New York Times Paul Krugman has jumped on my bandwagon of crazy.



Ladies and gentleman, stand in awe of the intellect of a Nobel Laureate!

Rick Perry and Federalism

I love Reason.com.  Very often they do some of the best libertarian-based analysis of any issues that are offered around the intertubes.  Today, however, Jacob Sullum strides to the plate with the confidence of Casey at the bat, and like Casey, screws himself into the ground with a huge swing and a miss at Rick Perry.   

I was much more offended by the alacrity with which Perry, who is expected to announce his candidacy for the Republican presidential nomination next Saturday, abandoned his avowed federalist principles to embrace the legislative agenda of the Christian right. It took less than a week.

"Our friends in New York," Perry told GOP donors in Aspen on July 22, "passed a statute that said marriage can be between two people of the same sex. And you know what? That's New York, and that's their business, and that's fine with me. That is their call. If you believe in the 10th Amendment, stay out of their business."

It soon became clear that Perry, who wrote a book championing federalism, does not really believe in the 10th Amendment. In a July 28 interview, he assured Tony Perkins, president of the Family Research Council, that he supports amending the Constitution to declare that "marriage in the United States shall consist only of the union of a man and a woman." So much for letting states define marriage as they see fit.

Perry did a similar about-face on abortion. On July 27 he told reporters in Houston he favors overturning Roe v. Wade, which would leave states free to set their own policies in this area. "You either have to believe in the 10th Amendment or you don't," he said. "You can't believe in the 10th Amendment for a few issues and then [for] something that doesn't suit you say, 'We'd rather not have states decide that.'"

Two days later, Perry's spokeswoman told The Houston Chronicle he "would support amending the U.S. Constitution…to protect innocent life." Most versions of the Human Life Amendment would ban abortion throughout the country, even in states that want to keep it legal.

On its face, this seems like an anti-federalist about face, but really, it's federalism at its core.  How can mandating this or that at the federal level be federalist, you ask?  The answer is simple.  Amendments to the constitution are not fly-by-night mandates on the people a-la Obamacare's mandate that we all buy health insurance or face stiff fines.  Amendments to the Constitution represent one of the most federalist processes we have to govern ourselves.


First, an amendment must be introduced in Congress, go through the rigorous process of debate and revision and whatnot, and then be passed by a 2/3 majority in both the House and the Senate.  After this happens, the amendment is then sent to the states to be voted on, where it must be approved by 3/4 of all of the states to be added in as part of the Constitution.

This is not some top-down, anti-federalist ignoring of the 10th amendment to further ones agenda.  This is the process by which a massive, massive majority of the country decide that we are going to fundamentally change the laws under which we live.

In supporting amendments to the constitution, Perry is indeed supporting the federalist process.  While his support of an amendment like the Human Life Amendment, which limits the freedom of people anywhere to have an abortion, even in states that wish to keep it legal, would appear to be anti 10th amendment, it's not really anti 10th amendment if the massive majority of all the states, and thereby the people, voted to change our laws in this manner.  The point of federalism is for states to decide what is best for themselves.  Amending the constitution would be a case of all of the states deciding for themselves.

I take Sullum's point to heart, even though his argument is technically incorrect.  I like Rick Perry for his economics.  I don't particularly like Rick Perry's social politics.  I don't think it's any government's place, local, state or federal, to have any place in deciding who can marry whom.  Nor is it any government's place to decide whether or not a woman should be able to decide whether or not to have a baby, or whether or not we should be mandated to pay for birth control or abortions for that matter.  These are places where no matter the opinion on the issue, government just needs to take its nose out of our personal business and let us live as we will.

However I see this for what it actually is: Rick Perry playing to his evangelical base during the primaries.  A candidate needs the base in the primaries.  Neither of those amendments will ever see the floor of Congress, much less be passed by 2/3 majorities in both houses, and you can forget 3/4 of the states ever ratifying.  Come the general election, Perry will be dancing on the head of a pin to articulate the reasons why his positions are indeed not anti-federalist, but if he speaks the plain truth, that amendments are a federalist process, he should get through to the likes of Jacob Sullum.

We don't have to enjoy or even agree with Perry's social politics.  But let's not intimate the man is a power-hungry emperor-in-waiting when that is clearly not the case.

Farewell, Old Friend

As a child, I don't particularly recall music playing a major role in my life.  I vaguely recall thinking Paradise City by Guns 'n' Roses was an awesome song when I was something like 9 or 10 years old.  Growing up in rural Wisconsin, I recall Motley Crue getting a lot of airtime as well.  But I was never really into music.  I was just a kid and I never really had a reason to be, I guess.  Music was there, on the radio.  That was all.  Things changed for me in the 90's, after moving to Chicago.

I wasn't as quick to really catch on to the whole grunge movement, as I was a bit younger than would be required to be in the mainstream of it.  But when I hit 13, I stumbled across an "Alternative" radio station, playing  some good stuff.  I was particularly taken by Alice In Chains.  By 14, I was fully into music, and I found my musical home with that "Alternative" radio station.  That radio station was Q101, and it gave me what was at that time nearly unlimited access to a vast library of phenomenal new rock music that was nothing like anything else out there.  Q101 broke me into the world of rock music.  I fed on everything they played with the eagerness of youth in exploration.  I began asking for nothing but new CD's for Christmas, and spending weekend afternoons looking for imports and B-sides and other hidden gems at an out-of-the way used CD store that not many people knew about, trying to build my collection.

I gave up on the station from about 16 to 18 because they had lapsed into a mode of Lilith Fair driven softness and playing Creed songs 9,487 times a day that I couldn't stand, and I greatly preferred the hard rock coming across the airwaves from Rock 103.5 in the form of Pantera, Megadeth, Sevendust, and the beginnings of the likes of Godsmack and Disturbed, up until the day the station, who had been one of the top stations in the entire country for several years running, had its format changed by Clearchannel for no particular reason at all in 1999.  As an 18 year old male, seething with too much energy, aggression, anger and depression, the loss of an aggressive rock music outlet, the loss of something I felt was a part of me every day, was a crushing blow.

I begrudgingly went back to Q101 until I got to college and reveled in the rebirth of Rap through Eminem, Dre, Ludacris and Nelly, all in time for my hardest partying days.

But there remained Q101 in the background.  Every now and then through its constant curtain of Red Hot Chili Peppers (replacing Creed as the 9,487 plays-per-day artist-du-juor for about the past decade), there would be a glimpse of what the station used to be: a pioneer in the alternative music industry.  Every now and then I'd find something new and great coming across the airwaves, most recently over the past few years with artists like Manchester Orchestra, Cage the Elephant, The Mars Volta and Silversun Pickups.

None of those kind of artists ever got played enough on the station, however, which is part of what has always been wrong with the station.  They'd introduce us, every great once in a while, to something new and amazing, play it for about two weeks, and then promptly dismiss it to the bin of radio history, rapidly queueing up some adolescent trash like Three Days Grace, or else the seven millionth play of fucking Red Hot Chili Peppers' Californication.  They would also hard-headedly ignore things they should have been playing like Mumford & Sons or Mutemath or My Morning Jacket.  Yet still, that one gem every now and then kept the station mildly relevant, and the general mix of music was usually reasonable.

I will be 30 in two days, and for my 30th birthday, Q101 will no longer exist.  I don't feel crushed by this the way I did in losing Rock 103.5.  I feel more like I suppose I will feel when my dad's old dog Skeeter finally dies.  Limping and almost entirely blind, she is so far beyond her best years he tried to put her down a year ago, only to pull the trigger, muzzle to her head, and then watch her sprint away into the forest.  The next day, unspeakably, she was back on her spot on the couch as if nothing had happened.  Like Skeeter, Q101 has shown intermittent signs of life but has been on its last legs for some time.

This is the station's own doing, of course, obstinately refusing to embrace the new music that it should have been embracing, in favor of becoming something of an "alternative classic rock" station.

What I will miss most about Q101 is the same about what I will miss about Skeeter being gone: the fact that it was there.  Every day I knew I could turn it on and find something good, and that every now and then there would be just a glimmer of how great it used to be.  Finally, I will miss having the last remnant of a good rock music station in Chicago.

The list of artists this station has introduced me to over the past 16 years, both in the form of transcendent artists and in the form of one-hit wonders, is nothing short of staggering.

Alice In Chains, Nirvana, Pearl Jam, Stone Temple Pilots, Soundgarden, Green Day, Smashing Pumpkins, KORN, Marylin Manson, 311, Social Distortion, The Offspring, Weezer, The Violent Femmes, The Joshua Tree, The Dovetail Joint, The Cure, TOOL, The Deftones, Silverchair, Sublime, Nine Inch Nails, KMFDM, Stabbing Westward, Rammstein, Foo Fighters, A Perfect Circle, Cypress Hill, Rage Against the Machine, Primus, Incubus, Rancid, Goldfinger, Sponge, Rise Against, Muse, The White Stripes, Blur, Radiohead, Cake, Ben Folds Five, Harvey Danger, Spacehog, Elastica, Andrew WK, Mighty Mighty Bosstones, Beastie Boys, Presidents of the USA

For all of them, and for everyone else I can't seem to pull off the top of my head...

Thank You, Q101.

There is now a gaping hole in this city's musical landscape.  I can only hope that someone will fill it, sooner rather than later.

Illinois Pension Reform Begins

It's sure to be a major battle.  This video from the Illinois Policy Institute outlines the prominent aspects of House Bill 149, a bill to bring reform to the pension system of public employees in Illinois.

The major questions over the bill that are tackled here are:

What will current employees keep?

How will the bill affect the public sector employee retirement age, currently 55, as opposed to private sector retirement age, currently 65?

What is the State Constitutional protection of pension benefits?

It's Ron Paul's World

We're just living in it.  Says...Juan Williams...

Very interesting conversation about the results of Paul's being the father of the Tea Party movement, and in particular following on the discussion of the legalization of drugs.

Morality Over Freedom?

Michael Gerson wrote what amounts to a "for shame" kind of attack piece on Ron Paul in the Washington Post yesterday, decrying the Congressman's "second-rate values."  Gerson, as could be expected, seized on Paul's statement from last week's Republican debate that all drugs should be legalized, up to including cocaine and heroin.  Gerson rather ham-handedly goes at the argument by attacking what was actually one of Ron Paul's most poignant comments from the entire debate:

The freedom to use drugs, he argued, is equivalent to the freedom of people to “practice their religion and say their prayers.” Liberty must be defended “across the board.” “It is amazing that we want freedom to pick our future in a spiritual way,” he said, “but not when it comes to our personal habits.”

When you stop to think about it for a minute, this is a pretty obvious statement arguing for removing the authority to control drugs from the realm of the federal government.  What that one sentence does, quite matter-of-factly, is force a religious social conservative to look him or herself in the mirror and ask whether they would like there to be a federal law regarding whether or not they are allowed to choose their own religion.  Framed in this manner, if you are free to make the personal choice to fill your heart and soul with the holy spirit, or whatever deity of your choosing, why then should you not also be free to fill your lungs with smoke or your veins with poison?  Choosing to be a Catholic and live within the hard rules of Catholicism means that you have chosen to forgo many modern forms of birth control.  It is a choice you make, and if you find yourself with a child before you are financially capable of supporting one, you find a way to move on.  You may not be ready, either, emotionally, to raise that child, but you try, because you live with the choice you have made.  Perhaps over the years you damage both yourself and that child emotionally or even physically, due to the stresses a life of unreadiness brought you.  Perhaps you don't.  But it was your chocie to be a Catholic, and it was your choice, therefore, to live that particular life.


This may seem a strange example for comparison, but it holds as follows.  We do not view the choice of Catholicism and the subsequent lack of choice regarding when to have a child as being poisonous.  But if the family is not ready for it emotionally or financially, stresses and strains are applied to the family and the localized community that have the opportunity to eventually become poisonous, not only to that immediate family, but to that localized community as well.


The same is to be said of drug use.  Yes, it is a precarious choice to poison yourself, and perhaps eventually to destroy yourself, and in the process to have the opportunity to have a detrimental effect on the localized community, but should or should it not be your choice?


It is a question worth asking, though Gerson would have us believe that the concept itself is entirely backward, and that the mere suggestion of it by anyone is to deny the fact of addiction.

This argument is strangely framed: If you tolerate Zoroastrianism, you must be able to buy heroin at the quickie mart. But it is an authentic application of libertarianism, which reduces the whole of political philosophy to a single slogan: Do what you will — pray or inject or turn a trick — as long as no one else gets hurt. 

Even by this permissive standard, drug legalization fails. The de facto decriminalization of drugs in some neighborhoods — say, in Washington, D.C. — has encouraged widespread addiction. Children, freed from the care of their addicted parents, have the liberty to play in parks decorated by used needles. Addicts are liberated into lives of prostitution and homelessness. Welcome to Paulsville, where people are free to take soul-destroying substances and debase their bodies to support their “personal habits.”

I will forgo going into too much discussion about how Gerson ignores and therefore absolves entirely the economics behind why drug neighborhoods become drug neighborhoods, though this has far more to do with the "why" of things than does the actual drug use, and focus more on the fact that Gerson rests on the ever-popular "only government" argument, and specifically given his essay, "only the federal government," though he hides it within the cloak of the superiority of his own Republicn Morality.

Libertarians often cover their views with a powdered wig of 18th- and 19th-century philosophy. They cite Locke, Smith and Mill as advocates of a peaceable kingdom — a utopia of cooperation and spontaneous order. But the reality of libertarianism was on display in South Carolina. Paul concluded his answer by doing a jeering rendition of an addict’s voice: “Oh yeah, I need the government to take care of me. I don’t want to use heroin, so I need these laws.” Paul is not content to condemn a portion of his fellow citizens to self-destruction; he must mock them in their decline. Such are the manners found in Paulsville. 

This is not “The Wealth of Nations” or the “Second Treatise of Government.” It is Social Darwinism. It is the arrogance of the strong. It is contempt for the vulnerable and suffering. 

The conservative alternative to libertarianism is necessarily more complex. It is the teaching of classical political philosophy and the Jewish and Christian traditions that true liberty must be appropriate to human nature. The freedom to enslave oneself with drugs is the freedom of the fish to live on land or the freedom of birds to inhabit the ocean — which is to say, it is not freedom at all. Responsible, self-governing citizens do not grow wild like blackberries. They are cultivated in institutions — families, religious communities and decent, orderly neighborhoods. And government has a limited but important role in reinforcing social norms and expectations — including laws against drugs and against the exploitation of men and women in the sex trade.

Without quite exactly saying it, because it would undermine his Superior Republican Morality to begin with, Gerson argues that only the federal government, led by Superior Republicans, has the ability to manage the issue of drugs with a "necessarily more complex" alternative to actual constitutional freedom, and so we come to the actual point.


The argument here is not one of whether drugs are bad for you, as Gerson would clumsily lead you to believe.  The argument, rather, is one of who should decide whether drugs are bad for you.


The Tenth Amendment to the Constitution tells us that this is an issue to be decided at the local level, within the local governments and within the states.  Michael Gerson and others of the Superior Republican Morality would have things decided at the federal level, because, of course, just like the Superior Democrat Morality regarding the environment, they just know better than you.


A conservative will join a libertarian in thinking that the federal government largely oversteps its bounds by doing something like limiting the gallons-per-flush on a toilet, or making 100 watt light bulbs illegal.  These are not, after all, life-altering choices of a moral bent for conservatives.  But drugs are.  And because the Superior Republican Morality comes into play, ultimately you just don't know what's best for you.


But the federal government sure does.  And it ain't Freedom.

Damn These Elites

From the humble, proletarian pen of a hard-working man of the people Nobel Prize Winning Professor of Economics at Princeton and the London School of Economics, to the lowly pages of a little known newspaper with small circulation New York Times comes a damning of the elites that run our lives yet another tired blaming of the Bush Administration for our economic woes.

Paul Krugman must receive a per-word raise every time he finds a way to write something less coherent than his last piece.

So it was the bad judgment of the elite, not the greediness of the common man, that caused America’s deficit. And much the same is true of the European crisis.

Needless to say, that’s not what you hear from European policy makers. The official story in Europe these days is that governments of troubled nations catered too much to the masses, promising too much to voters while collecting too little in taxes. And that is, to be fair, a reasonably accurate story for Greece. But it’s not at all what happened in Ireland and Spain, both of which had low debt and budget surpluses on the eve of the crisis. 

The real story of Europe’s crisis is that leaders created a single currency, the euro, without creating the institutions that were needed to cope with booms and busts within the euro zone. And the drive for a single European currency was the ultimate top-down project, an elite vision imposed on highly reluctant voters. 

Does any of this matter? Why should we be concerned about the effort to shift the blame for bad policies onto the general public? 

One answer is simple accountability. People who advocated budget-busting policies during the Bush years shouldn’t be allowed to pass themselves off as deficit hawks; people whopraised Ireland as a role model shouldn’t be giving lectures on responsible government. 

But the larger answer, I’d argue, is that by making up stories about our current predicament that absolve the people who put us here there, we cut off any chance to learn from the crisis. We need to place the blame where it belongs, to chasten our policy elites. Otherwise, they’ll do even more damage in the years ahead.

While the general point that we shouldn't be listening to most of the now-reformed "fiscal hawks" telling us what to do now is a good one to take from this article, the fact that Krugman couches that same argument in a finger pointing tirade at some shadowy elites (read: EVIL REPUBLICANS) is not only purely irresponsible, it's also hypocritical, particularly his shot across the bow at Alan Greenspan.

Let me give a particular shout-out to Alan Greenspan, who played a crucial role both in financial deregulation and in the passage of the Bush tax cuts — and who is now, of course, among those hectoring us about the deficit.

Apparently Krugman has forgotten, or maybe wishes all of the rest of us had forgotten, about his own prodding of Greenspan to do exactly what led us into the housing bubble and eventual crisis in the first place.

KRUGMAN: I think frankly it’s got to be — business investment is not going to be the driving force in this recovery. It has to come from things like housing, things that have not been (UNINTELLIGIBLE). 

DOBBS: We see, Paul, housing at near record levels, we see automobile purchases near record levels. The consumer is still very much in this economy. Can he or she — or I should say he and she, can they bring back this economy? 

KRUGMAN: Well, as far as the arithmetic goes, yes, it is possible. Will the Fed cut interest rates enough? Will long-term rates fall enough to get the consumer, get the housing sector there in time? We don’t know

That particular exchange took place back in 2001, prior to 9/11, where Krugman surveyed the post-internet recession and proclaimed that the Fed had to pump up the housing sector.  The Nobel Prize Winning, New York Times Contributing, Princeton and LSE Economics-Teaching ELITE Krugman, was one of those people pushing us further down the Keynesian Road to Serfdom to the point we find ourselves at now.

I remember some lowly prole writing something pretty smart recently...

But the larger answer, I’d argue, is that by making up stories about our current predicament that absolve the people who put us here there, we cut off any chance to learn from the crisis. We need to place the blame where it belongs, to chasten our policy elites. Otherwise, they’ll do even more damage in the years ahead.

Vegan Bacon

And the appropriate response to it...

Fight of the Century

In January 2010, Econstories.tv launched a now infamous campaign to bring the story of the Hayek vs. Keynes economic debate to the masses via the rap battle.  "Fear the Boom and Bust" went viral, and has since garnered over 2.1 million views.

Five days ago, they released their follow up, a spectacularly deep video, both musically and visually.  The video presents the debate between Keynes and Hayek, beginning with a dual grilling before a Congressional panel, and moving to the boxing ring as they trade economic theory blows.  We end with Keynes being patted on the back by the Fed Chairman, Wall Street types, and the media at large, while Hayek is shunned, but suddenly embraced in full by a crowd of Regular People.

The message is fantastic throughout, and is an excellent continuation of the debate.  It's already gotten over 450,000 views.  Why not give it a few more?  Enjoy "Fight of the Century!"



BONUS:  Lyrics with hyperlinked relevant articles and posts from Mises.org

Chart Fu: Fisking Rachel Maddow

So there's a chart floating around the Leftosphere, that looks like it originated on Queen Maddow's blog - originally submitted by one of her loyal subjects, naturally - that is meant to set forth the idea that mean, evil Republicans are the ones responsible for our debt woes, rather than Democrats.  First thing's first, to hell with all of them.  Nobody has stopped spending or growing this government in my lifetime.  They've all just been spending on different things.

However, I do have to point out that the chart is horribly misleading (from a Liberal, no less...I know, unbelievable right?), as is the assertion by the chart-maker (Dick Seaman!) that "If voters don't understand this, the media has failed them."  Well, here is the chart...

First of all, this is an obvious shot at getting Obama off the hook for the enormous growth in spending under his watch by comparing it to past spending that took place under Republican presidents.  There is a glaring omission about this chart  that has Dick Seaman spraying his results blindly all over Queen Maddow's inbox.

TIME AND RATE OF DEBT INCREASE

By putting the presidents and their debt in a meaningful order, we can see that things are far different than Maddow's Seaman Chart would have people think.

First, we see that over the course of 8 years, Reagan increased the debt by about $1.75 trillion, or 288%, an average rate of 36% per year.

Bush I increased the debt by about $1.5 trillion, or 155%, in four years, an average rate of 39% per year.

Clinton slowed things down slightly, increasing the debt about $1.6 trillion over 8 years, an average rate of 17.3% per year.

Things ramped up again under Bush II, nearly doubling in 8 years by $4.89 trillion, but still a slower overall rate of increase than Reagan or Bush I, averaging just over 23% per year.

The chart also shows that the debt under Obama has increased by nearly 134% since taking office, about 2.25 years into his first term as President, for an average rate of 59.44% per year.  While it would seem to me to be unlikely that this rate will continue through to the end of his first term, if it did, we would expect the debt to top $25 trillion.

The resulting percentages in Maddow's Seaman Chart would burst forth with much different excitement.  We would see that the debt occurring under Reagan and the Bushes, totaling $8.14 trillion, would amount to 32% of the total debt, and that all by itself, the debt under Obama would total $14.67 trillion, or 57.8% of the total debt.

If voters don't understand this, the media has failed them.

System Fail: ADA trumps OSHA for biggest lack of common sense

So you walk into Chipotle and order a burrito.  They ask you what you want on it, following the Subway model of sandwich building, and you walk down the line adding black beans and rice and whatever else you'd like to stuff your face with at that particular moment, uncaring as to the future state of your bowels.  Your burrito is finished for you and you take your seat and chow down.

Unless you're in a wheelchair, in which case the 45" high counter - designed at this height for the ergonomic health of Chipotle's employees and to comply with various OSHA lawsuits, along with the actual benefit of increased productivity - is too high for you to see over.  This is when Chipotle, in order to best accommodate all of its customers, actually brings the food around the counter to you, providing you the highest level of service imaginable, to ensure that you, like anyone else, can see what it is you would like to have on your burrito.

But still, that damn, counter!  That counter isn't fair.  You don't want to be treated any differently that anyone else, even though you are different.  You want to be able to shuffle through the Chipotle line three lousy inches at a time like all the rest of the cattle, damnit!  It's time to sue!  And so it goes, all the way to the Supreme Court, who refuses to hear Chipotle's claims that you are frivolous and lawsuit happy, and so the 9th Circuit's ridiculous ruling stands:

The barrier "subjects disabled customers to a disadvantage that non-disabled customers do not suffer," the Ninth U.S. Circuit Court of Appeals ruled in July in a case from San Diego County. The ruling came on the 20th anniversary of the Americans with Disabilities Act, which requires businesses to treat disabled patrons equally and remove unnecessary obstacles.  Maurizio Antoninetti said in his lawsuit in 2005 that a 45-inch barrier at Chipotle restaurants in San Diego and Encinitas blocked his view of the counter, where customers can inspect each dish, choose their order and watch it being prepared. 

Chipotle said it met wheelchair users' needs by bringing them spoonfuls of their preferred dish for inspection before ordering. But the appeals court said that doesn't match "the customer's personal participation in the selection and preparation of the food."

Let's set aside for a minute the absolutely ludicrous assertion that the court has rested on the idea that "the customer's personal participation in the selection and preparation of the food" at Chipotle has become a right, and focus more on the end result of this fiasco.

After the appeals court ruling, company spokesman Chris Arnold said Chipotle was retrofitting restaurants with "a new counter design that eliminates any concern regarding wheelchair accessibility."

Chipotle has over 1,000 locations, and 26,500 employees.  I can imagine a counter that will work for the end purpose for this, one that will, perhaps, display the ingredients on an angle, at a lower elevation, but that is going to require thousands and thousands of employees, every day, to bend over farther than normal, repeatedly, and perhaps far enough, over and over, to eventually cause back problems.  Perhaps this will happen, and perhaps some blood sucking enterprising lawyer will assemble a massive class action lawsuit, leaning on OSHA, against Chipotle's viciously non-ergonomic counters.

I only hope, at that time, that this lawyer will remember to include Maurizio Antoninetti and the 9th District Court of Appeals as parties to that lawsuit along with Chipotle.  Because if it weren't for them, all of those future thousands of Chipotle employees, would have been standing upright all day instead.

Ferris Bueller's (Indie) Day Off

This is probably all the funnier to me because I just watched Ferris yesterday (next to Empire Records, one of my favorite, "there's nothing good on background noise movies").  Scenes from the movie cut and set to emotionally overtoned piano music to make you think it would be something more along the lines of 500 Days of Summer.

This is the magic of editing, something Ace recently found out is capable of stealing about two hours of your life if you're not paying attention.  However, whereas he was pissed that the Adjustment Bureau sucked instead of being awesome, in this case, I would be supremely pissed to find out that Ferris Bueller's Day Off is an amazing comedy that I would have never seen, instead of some stupid, overly sappy teen drama.

Rand Paul on Balancing the Budget

The Senator, as usual, is one of the most clear, concise, responsible voices on the toughest topic facing our federal government.  He goes after the proposals from both sides as insignificant and inconsequential, and implores the American people to get after Congress to get responsible and make the necessary cuts to be a functional government.

Google's Self Driving Car

Closed course, through cones and some pretty tight driving.  A lot of people wouldn't be able to drive this particular course like this.  The coolest part is probably at the end where we see how the car recognizes its surroundings.  Pretty unreal, and VERY cool.

On Teachers Unions

I've been watching the whole episode up in Wisconsin and have been fairly amused by the happenings across the board.  This has been the most entertained by political drama that I think I can remember being.  I've largely stayed out of the debate, as I have with much of anything for a while, as I've been incredibly busy with both work and in my personal life, and haven't sat down to formulate my thoughts on the matter.  I ventured into the fray a little bit over at my favorite leftwing lunatic blog, d r i f t g l a s s, and admittedly made an ass of myself, mostly because I felt like stirring up the rats nest.

While the post itself is fairly inane nonsense attempting to tie Walker to the Koch brothers (driftglass is one of the more vehement "vast right wing conspiracy" bloggers I know of, and of the general Liberal ilk of "everyone on the Left is smarter than everyone on the Right, so every idea on the Right is stupid, and I never have to prove it so I'll just be snarky"), three of the comments were fairly instructive to me.  The first was from a commenter called "double nickel" who informed me after I expressed my thoughts that I see no reason for teachers unions to exist, that I am an asshole.  Touche to that.  Well argued and a very reasonable way to carry on a conversation.

A more important comment to me, however, was one from "zombie rotten mcdonald" who responded to my assertion that I find it nonsensical that there should be a public sector union for anything, least of all for the white collar professions.  His response:

It used to be that white collar professionals were protected by demand for their services; good working conditions and wages were necessary to attract decent employees. But In our new, exciting Republican Wage-slave economy, employers are perfectly happy to hold people hostage to employment and most especially, health care. 

Unions created the middle class. And that aggravates the Koch brothers no end.

First of all, I will largely agree that unions created the middle class.  I agree that history bears this out, and vehemently agree that private sector unions were, and remain, necessary to bring stability to wages for workers, and prices to the end client.  An organization like UAW over history has been indispensable to bringing good wages and benefits to auto workers.  They have vastly overreached of late and continue to do so at the peril of the industry itself, but they have been immensely important in bringing a voice to the working class against a small group of employers that collectively can tip the scale of an entire economy.

This comment, despite the commenter not intending it, makes a very strong argument for privatization of most any service that is currently monopolized by the government.  Services such as firefighting, law enforcement and teaching, for example, have little or no private sector equivalent, and are therefore compensated at a rate that is determined only by the local government that oversees them.  I will set aside the professions of firefighting and law enforcement where individuals put their lives on the line in service to the safety of the public and focus on the the collective bargaining of the white collar governmental professions.

White collar professionals in the private sector are indeed protected by demand for their services.  This is the reason that there is not a union for say, civil engineers or project managers.  There is a general ceiling to what the market will bear compensating those positions, to be sure, and one is unlikely to rise above that ceiling unless he or she has management potential and can eventually command some form of percentage bonus structure or profit sharing, but since there are always many different employers willing to compensate these positions they are always likely to garner good salaries and benefits.  Private companies continue to require the best and brightest to remain competitive in the quality of service their clients expects, for what their clients will pay.  The constant demand for high level performance yields a relatively constant supply of well compensated positions.  But this is not the case in white collar government work because there is only one possible major employer: the government.

White collar government workers and the supporters of their union, might be quick to make the elementary observation that this is all the more reason for public sector unions.  Somebody has to negotiate for better wages and benefits, because they've got nowhere else to go!  Ignoring the fact that many governments cannot afford what they are currently paying the positions, hence the current dilemma, this qualifies as a monstrous distortion of the marketplace by the government.  This is the argument for something like a school voucher program.  Put money back into the hands of the people, and the market would self regulate to more of a balance of people sending their kids to private schools.  More private schools offsetting the public schools would create a better market for teachers, allowing compensation for teacher positions to be driven by the market, rather than by political lobbying by the union.

This brings me to driftglass commenter, "CC," who left this impassioned comment (while taking me hugely out of context):

Paul K said "...it's teachers working 9 months a year in pleasant conditions..." 

Yep. Pleasant conditions. 25-30 kids an hour each day in a room with no windows with intermittent heat/air, especially at the change in season; outdated equipment; kids that come to school sick; high stakes tests; being shit on (I mean advised) by asshats (I mean concerned citizens) like you; chalk dust; white board markers; poor lighting. Yep conditions are perfect. 

I'd agree that I only work for 9 months of the year. Can I remind you that I plan and grade on my own time (also on the weekends) bringing my weekly hourly work time to somewhere in the area of 70-80 hours a week. So if I spread that over the entire 52 week year (with no time off ever) I would put in about 48 to 55 hours a week. Sounds like a great job for $70K a year...oh wait, it will take me 25 years to reach that pay. 

Couple that with the fact I'll take a month in the summer to take a required class (on my own dime) as well as run classes for other dedicated teachers--correction--brothers and sisters. 

Teachers unions, while we fight for better pay for teachers, also fight for better conditions for students, better teaching materials, better administrators and school board officials. All of this in addition to trying to provide a quality education for students. 

The job is so difficult and stressful that more than 50% of teachers don't make it past the first 5 years. But you're right, screw it, get rid of unions so that you can pay teachers $8 an hour to balance the budget. 

I love the work that I do and I do my job well. But try to tie me to my job by my love of it and I'll walk and many of my counterparts will do the same thing. Guess what? We are good at other things. Private sector beware. Teachers will take your jobs.

I'll throw a little irony on the fire here by taking the "I have black friends" approach to defending against being called racist, and say that one of my best friends is a teacher.  I know quite well how hard she has to work to keep pace with the paperwork end of things, and she's teaching early childhood, so there's not even homework to deal with.  It was stressful enough at one point when she was preparing for the beginning of the school year that several of us got together with her for big group preparation sessions, helping her prepare materials for her classroom, deep into the night.  This was just preparing for the beginning of the year.  She's been one of the busiest people I know since the year started, besides.  She always is.  The amount of work that teachers do on their own time is phenomenal, and it's absolutely the unfortunate tragedy of our lifetime that they are not paid better than they are.

But when we look at the relationship between the teacher and the employer, the perception among the unionized is that there is only one way to achieve better wages and benefits, and that is to support the union.  The flaw in this idea, however, is that, as FDR knew, the relationship between government and its employees is fundamentally different from the relationship between the private sector and its employees.  Government has always paid its employees less than the private sector, and offset that by providing vastly superior benefits.  This grew out of the nature of working for the government being one of serving the public.  Government workers were assumed to be people who were sacrificing their private earning potential to serve the public for a certain amount of time, before going back to their own lives.  Only when the government monopolized certain industries, such as education, and working for the government necessarily became a career pursuit, did a union also arise, the view being that falsely espoused by CC, that the government would pay teachers $8/hour just to balance the budget.

This is nonsense because the government also sets values like the minimum wage and the cost of living allowance.  These are meant to be guideposts for the private sector that the government sets in its role as referee.  If the government didn't also at least follow these guideposts, its legitimacy as referee would be reduced to zero.  Also making this nonsense is that when government does need to hire white collar positions that are not unionized, they are not paying people $8/hour to do them.  The aforementioned civil engineers and project managers are positions that the government also hires, and that are hired by the government at compensation packages that rival that of the private sector.  If they did not rival those of the private sector, the people simply wouldn't go work for the government.  This would also be the case in a privatized, open market teaching industry.

What would not be the case in a privatized, open market teaching industry is what we see today:  a gigantic, overly-bureaucratic employer attempting to balance its books, that's wound up in a ludicrous political showdown with a gigantic, overly-bureaucratic employees union that is pitching the biggest sore loser shit-fit this side of Kanye West simply because it no longer has the employer in its hip pocket.

Two Feet of Snow in Chicago

It's more than you might think...