Sunday, August 10, 2014
I've been to Walmart twice in the last 2-3 weeks...
... and both times found exactly what I was looking for... good quality, good price. Am I a bad person? My reading of the evidence is that when Walmart comes to town, working folks' wages go down but the prices they pay for stuff go down enough to compensate. I love the rainbow of people I see and hear at my Mountain View store. I don't think Walmart competes with mom and pop in Mt. View... more likely Target and Kohl's. But if I'm going to continue to shop there, maybe it's about time I ponied up some money to UFCW's organizing efforts. Everyone deserves a living wage.
Can Music Be Perfect? Vol. 43
Benny Carter was so cool, and you have to dig those pants. 1977, man! That's the incomparable Niels-Henning Ørsted Pedersen with the swift little fingers, looking and sounding extremely snazzy. Ray Bryant and Jimmie Smith rounding out the quartet on piano and drums.
Saturday, August 9, 2014
Robert Solow...
... is coming up on his 90th birthday. Hat tip to Brad DeLong for bringing this excellent 2012 essay by Professor Solow to my attention. Is it politically incorrect of me to say that I hope when I am Bob Solow's age I can guide a spoon to my mouth, nevermind write insightful essays about 20th century political economy...?
The BIG picture
A Basic Income Guarantee is the natural policy for implementing an eg-lib (egalitarian-libertarian) political philosophy, if that appeals to you as it does to me. The idea is neither more nor less than what it sounds like: the government would guarantee each person a basic income, financed through taxation. BIG redistributes income no questions asked and lets you decide what to do with the money. Of course there are some details to work out: most importantly how much, and with what kind of taxation to fund it, but also whether the payment will go to individuals or families, etc.
Milton Friedman was famously an advocate for a version of BIG– which is known as the negative income tax (NIT) to economists– on sound libertarian grounds: if you must redistribute income, do so in a way that minimizes market distortions and paternalistic meddling.
Uncle Milty notwithstanding, BIG generally has received more support from the left than the right in the United States. Take a glance at the U.S. BIG network's advisory board and you find such lefty stalwarts as Fred Block, Nancy Folbre, and Frances Fox Piven (her first name misspelled!). But BIG has apparently made a comeback among some of the free-market crowd, as indicated by this recent CATO essay by Matt Zwolinski. Zwolinski sees BIG as a "pragmatic" replacement for most of the modern welfare state, one which could accomplish the redistributive goals of the welfare state at a much lower economic cost.
At an abstract level, Zwolinski's claim relates to an idea from economic theory known as the second fundamental theorem of welfare economics: the efficiency of the free market system can be consistent with income redistribution, so long as you redistribute resources "lump sum" and then leave prices and quantities free to adjust. This compatibility between leveling and the market led Amartya Sen to suggest that the second theorem "belongs to the revolutionists' handbook."
In the real world, the second theorem could never be fully operationalized, because any form of redistribution that pays attention to people's position in the income distribution is not "lump sum," and therefore creates inefficient incentives. In the real world, furthermore, the conditions for the market to achieve efficient outcomes are generally violated by a variety of market failures, such as externalities (e.g. pollution).
So, in the real world, we must decide between complex and imperfect alternative arrangements for redistribution and government regulation. Benefits and costs must be estimated and compared, and political feasibility and stability considered. Regarding the net benefits from replacing the welfare state with BIG, Mike Konczal has a pretty convincing take-down of Zwolinski's claims for BIG savings. Basically, the U.S. welfare state doesn't have all that much fat, so there's just not much to be gained. The EITC (earned income tax credit) is already a variant of the NIT, with a work requirement added on. Programs like EITC, Medicaid, and SNAP (food stamps) operate effectively with admirably low overhead. Disincentive effects are likely modest. Near-universal public social insurance programs such as Medicare and Social Security may, for reasons of scale and state compulsion, overcome some market imperfections that would likely afflict a fully privatized system of social insurance under BIG transfers. So we can't be confident that a BIG would make matters better rather than worse, even from a pure efficiency standpoint.
As a stand-alone substitute for the welfare state, BIG suffers from other criticisms that can be leveled against libertarianism. Some people are simply not capable of making good decisions for themselves: young children, addicts, people with severe emotional or developmental disabilities. Libertarians love to level the charge of paternalism against liberals, but nearly everyone agrees that (gender-neutral) paternalism may be called for in some cases. And not all children or dependents are blessed with a qualified or benevolent "pater" or "mater" to spend their BIG for them; who else is there, if not the state?
Political feasibility and stability are further concerns. Political support for Medicare and Social Security spring in considerable part from the view that people pay into the systems and are entitled to take benefits out. The sense of entitlement that follows from payroll contributions is a feature of Social Security by design, according to a well-known quote attributed to FDR:
Having acknowledged all these drawbacks of the BIG idea, I still can't help thinking it deserves a bigger place in our political landscape. Politically, it represents a potential source of common ground between the liberal left and libertarianism. Is that enough to reconfigure our heavily polarized political space? By itself, no... but throw in immigration reform, personal and civil liberties, and anti-militarism, and who knows?
Economically, I have read enough sci-fi and witnessed enough advances in computing and robotics to agree with those who are seriously concerned about a future in which capital, with its highly concentrated ownership, displaces much of the demand for labor. No, not technological unemployment... just technological immiseration. Making BIG part of the mainstream political agenda now is a way politically and institutionally to set the stage for decoupling income and private property. Friedman meets Marx... why not?
Milton Friedman was famously an advocate for a version of BIG– which is known as the negative income tax (NIT) to economists– on sound libertarian grounds: if you must redistribute income, do so in a way that minimizes market distortions and paternalistic meddling.
Uncle Milty notwithstanding, BIG generally has received more support from the left than the right in the United States. Take a glance at the U.S. BIG network's advisory board and you find such lefty stalwarts as Fred Block, Nancy Folbre, and Frances Fox Piven (her first name misspelled!). But BIG has apparently made a comeback among some of the free-market crowd, as indicated by this recent CATO essay by Matt Zwolinski. Zwolinski sees BIG as a "pragmatic" replacement for most of the modern welfare state, one which could accomplish the redistributive goals of the welfare state at a much lower economic cost.
At an abstract level, Zwolinski's claim relates to an idea from economic theory known as the second fundamental theorem of welfare economics: the efficiency of the free market system can be consistent with income redistribution, so long as you redistribute resources "lump sum" and then leave prices and quantities free to adjust. This compatibility between leveling and the market led Amartya Sen to suggest that the second theorem "belongs to the revolutionists' handbook."
In the real world, the second theorem could never be fully operationalized, because any form of redistribution that pays attention to people's position in the income distribution is not "lump sum," and therefore creates inefficient incentives. In the real world, furthermore, the conditions for the market to achieve efficient outcomes are generally violated by a variety of market failures, such as externalities (e.g. pollution).
So, in the real world, we must decide between complex and imperfect alternative arrangements for redistribution and government regulation. Benefits and costs must be estimated and compared, and political feasibility and stability considered. Regarding the net benefits from replacing the welfare state with BIG, Mike Konczal has a pretty convincing take-down of Zwolinski's claims for BIG savings. Basically, the U.S. welfare state doesn't have all that much fat, so there's just not much to be gained. The EITC (earned income tax credit) is already a variant of the NIT, with a work requirement added on. Programs like EITC, Medicaid, and SNAP (food stamps) operate effectively with admirably low overhead. Disincentive effects are likely modest. Near-universal public social insurance programs such as Medicare and Social Security may, for reasons of scale and state compulsion, overcome some market imperfections that would likely afflict a fully privatized system of social insurance under BIG transfers. So we can't be confident that a BIG would make matters better rather than worse, even from a pure efficiency standpoint.
As a stand-alone substitute for the welfare state, BIG suffers from other criticisms that can be leveled against libertarianism. Some people are simply not capable of making good decisions for themselves: young children, addicts, people with severe emotional or developmental disabilities. Libertarians love to level the charge of paternalism against liberals, but nearly everyone agrees that (gender-neutral) paternalism may be called for in some cases. And not all children or dependents are blessed with a qualified or benevolent "pater" or "mater" to spend their BIG for them; who else is there, if not the state?
Political feasibility and stability are further concerns. Political support for Medicare and Social Security spring in considerable part from the view that people pay into the systems and are entitled to take benefits out. The sense of entitlement that follows from payroll contributions is a feature of Social Security by design, according to a well-known quote attributed to FDR:
“We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics.”BIG, transparent dole that it is, may be politically vulnerable in the long run. (A partial exception would be a BIG based on shares of a commonly held resource, such as dividends on the Alaska Permanent Fund, directly linking the payment to property rights.)
Having acknowledged all these drawbacks of the BIG idea, I still can't help thinking it deserves a bigger place in our political landscape. Politically, it represents a potential source of common ground between the liberal left and libertarianism. Is that enough to reconfigure our heavily polarized political space? By itself, no... but throw in immigration reform, personal and civil liberties, and anti-militarism, and who knows?
Economically, I have read enough sci-fi and witnessed enough advances in computing and robotics to agree with those who are seriously concerned about a future in which capital, with its highly concentrated ownership, displaces much of the demand for labor. No, not technological unemployment... just technological immiseration. Making BIG part of the mainstream political agenda now is a way politically and institutionally to set the stage for decoupling income and private property. Friedman meets Marx... why not?
New Air
Henry Threadgill and Cassandra Wilson should hang out together more often. That's Fred Hopkins and Pheeroan akLaff on bass and drums.
Thursday, August 7, 2014
If I were a religious person...
... I could at least have some hope that Bush and Cheney will burn in hell for their sins. But I'm not, and I don't...
Now, the Kurds have been battling a group of militants from ISIS who are using powerful American weapons they took from the battlefield, left by the Iraqi Army."Jihadists Rout Kurds in North and Seize Strategic Iraqi Dam"
“They are literally outgunned by an ISIS that is fighting with hundreds of millions of dollars of U.S. military equipment seized from the Iraqi Army who abandoned it,” Mr. Khedery said.
Tuesday, August 5, 2014
Guardians of the Galaxy
I average one of these summer comic-book blockbusters a year. I enjoyed this one more than most. Too much noise and mayhem, but that comes with the territory. The dialogue, such as it is, is generally witty; the pop soundtrack is programmed to appeal to the baby boomers (e.g., me) in the audience, presumably attending with their grandchildren; and the visuals are often arresting: my advice when you get bored with the action sequences is to treat it as an art film, ignore the plot, and let the colors and geometries wash over you.
Good: Chris Pratt, the only person who is acting here... cute, relaxed, and charming; Groot, the tree guy played (supposedly) by Vin Diesel... nice to know that he can be propagated from a cutting.
Bad: The wise-ass talking raccoon; Glenn Close's hair; lame and uninteresting villains.
Ugly: Preview for the latest Dumb and Dumber sequel. We have the drones... why can't we take out Jim Carrey?
Good: Chris Pratt, the only person who is acting here... cute, relaxed, and charming; Groot, the tree guy played (supposedly) by Vin Diesel... nice to know that he can be propagated from a cutting.
Bad: The wise-ass talking raccoon; Glenn Close's hair; lame and uninteresting villains.
Ugly: Preview for the latest Dumb and Dumber sequel. We have the drones... why can't we take out Jim Carrey?
Saturday, August 2, 2014
Climate myths
Nice of Bob Frank to "shatter" six myths that he claims are holding back action on climate change, but frankly (ha ha), they've been shattered countless times before. No amount of scientific consensus or reality checking is going to move the Republicans on this issue, so any progress at the national level will continue to consist of executive action, which of course is vulnerable to presidential elections and Supreme Court constraints. The best hope is that state and local governments, and idiosyncratic entrepreneurs like Elon Musk, continue to push the envelope on policy and technology solutions. Slim hope, to be sure.
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