Friday, April 18, 2014

Facebook, Twitter, and more

Instead of blogging everything I read or hear, I use Twitter to promote the better content I encounter online.

Twitter seems to be the replacement for RSS feeds, sadly. I miss the old, text-centric days of newsgroups, mailing lists, and feeds. Oh, well. The market has spoken. 
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Friday, April 11, 2014

The Great Sort's Result: The Middle is Dead in Congress. Really Dead.

The "Great Sort" at the local and state level, not the evils of redistricting, has changed our government — and, more importantly, our national discussions on all issues. And I do mean all issues, because studies show left/right; progressive / liberal / libertarian / conservative; secular/religious; North / South / East / West; and other ways to group people correlate to music choices, television viewing, trust in government, and much more.

How can we prove that redistricting isn't the villain behind our political discourse? Easily: we look at the Senate, which should represent entire states, not statistically modeled and gerrymandered districts. Yet, the Senate, supposedly the great deliberative body of our government, has become little more than yet another left-right battleground.
The ideological middle is dead in Congress. Really dead.
April 10 at 11:08 am

More intriguing — and harder to explain — is how the middle has dropped out of the Senate, which is not subject to redistricting and, because Senators represent entire states, self-sorting should be less powerful.

Well more than half of the Senate fit between the most liberal Republican and the most conservative Democrat in 1982. For the last two years, there has not been a single Republican with a more liberal voting record than any Democrat and not a single Democrat with a more conservative voting record than any Republican. Not one.
Personally, and purely anecdotally, I have experienced the Great Sort. More illustrative, I've been a part of it. The result is that entire regions are growing more homogenous, with islands of urban progressives dotting a nation of conservative rural and libertarian exurb voters. You can draw rings around many cities, with the "beyond" areas socially, fiscally, and internationally conservative. The outer rings are more libertarian, with white-collar workers who are fiscal conservatives, social liberals, and foreign policy isolationists. And then, you have the cities, where progressive ideologies hold sway.

The result is that states are sorting based on which states are rural and which are more urbanized. Red gets redder, blue gets bluer, at least in terms of election results. Even a slight majority of one extreme or the other leads to the election of Senators representing polarized views and depending on voters from their individuals states' majorities. Senators now ignore constituents with moderate views and those unlikely to ever support the Senators' parties.

As Chris Cillizza observes:
Taken together, there are four -- FOUR -- members of the ideological middle out of the 535 members of the House and Senate combined. That comes out to approximately .7 percent of the entire Congress. In 1982, by way of comparison, more than 75 percent of Members of Congress were part of the ideological middle.

So, in the last 30 years, the middle has lost 74 percent of its membership in Congress. And when the middle is represented by less than one percent of the entire Congress, it's not an exaggeration to say the center is gone.
I am a exurban resident. I live in a single-family home, in a limited access (single-entry, no gate) neighborhood, among college-educated white-collar professionals much like my wife and me. We are the muddled middle, unrepresented by the parties, unrepresented at the local, state, or federal levels.

Sorting occurs, naturally, in most ways. We select careers that represent our ideologies. We select workplaces that are comfortable. We choose to live among people at least more like ourselves than unlike us.

I'd be unhappy in a city, and I'd be unhappy in complete isolation. I want my space, my house, my land, but I don't want to be entirely cut-off from the comforts of the suburbs. My ideology also reflects that desire to balance independence and community.

Where I teach, and what I teach, also represent my ideological biases. I teach in a business school, at a university known for technology and research. My workplace reflects my views on work; even the school motto fits my ideology: "My Heart is the Work." That's not an institutional motto most of my colleagues in the liberal arts would embrace with zeal.

How sorted is your life? It might be more sorted than you realize.

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Friday, March 28, 2014

Notes on Economic(al) Writing

As the school year began, I started to outline a basic handbook for writing within economics. That process was interrupted by life, yet I still consider the handbook a valuable endeavor for my students and for others interested in how thinkers transmit the ideas in this field.

What are the rhetorical traditions within economics? How are these traditions shaped by other disciplines? How has the shift within economics from philosophy towards mathematical models ("science") altered the rhetoric of economists? How effective are the works of economists and scholars interested in economics?

It seems to me, and this is not based on quantitative research, that only a few economists remain influential beyond the academic realm. Yes, there are economists advising political leaders, but how effective are they as economists — versus their effectiveness as ideologues?

Helping students communicate effectively might, or might not, improve policy debates. Economists of great note were lousy communicators, though. Good communicators with minimal economic knowledge have greater influence than their scholarship (or lack of) merits. This frustrates me, and I'm sure it frustrates many who are passionate about economic research and rigor.

By academic measures, neither Marx (a philosopher specializing in Epicureanism) nor Keynes (a mathematician) were "economists" with degrees in that discipline, yet we recognize that both philosophy and math shape economics as a field. These men do prove that writing well results in a lasting influence.

This summer, I intend to complete a first draft of my handbook for writing in economics. Ideally, it will be useful.

Friday, February 14, 2014

Rhetoric and Economics

Economics, as an academic discipline, remains a philosophical pursuit. This causes a "crises of identity" when students confront the notion that economics might be as much philosophy as anything else.

How might I justify this claim, when contemporary econ programs in the United States have a deeply ingrained "quantitative" and "computational" identity? How can I claim there is any crisis in a field that deeply, emotionally, attaches itself to math and "scientific" methodologies?

As readers know, I am an ambivalent believer in quantitative research and computational modeling. We need models, and they serve many purposes, but they are not "science" in the way most of the population now understands the label.

In sciences such as quantum physics, cosmology, neuropsychology, and even climatology, disagreements are common, but there are core areas of agreement. Most sciences have a certain "Duh?" set of assumptions that support current research.

Yet, economics retains its roots in philosophy, history, and political theory. Many economic debates are indisputably ideological, even debates concerning the "faith" placed in models.

As an instructor in an undergraduate economics program, I remind my students that I am not an economist, but rather a rhetorician with an interest in economics and policy debates. From my perspective, economics is a rhetorical discipline: economists seek to persuade other scholars, policy makers, and the public that their theories correctly explain interactions, transactions, and allocations. Economics is, even with scientific methodologies, inherently philosophical.

All sciences, according rhetoricians, are persuasive fields. But, economics relies more on the power of persuasion and public debates to declare "winners" and "losers" in the field than other disciplines. Economists and thinkers interested in economics use mass media, not peer-review journals, to affect policy choices.

Consider the most influential economists are media figures. Paul Krugman, Peter Morici, Mark Zandi, and others use cable television, major newspapers, and websites to promote their ideals. They are as much public intellectuals as scholars. These individuals promote political agendas, which necessarily raises questions about the nature of economics.

My students need rhetorical training. They need to understand logical fallacies and the (often sad) state of public policy debates. They need to appreciate that while most economists, like any other workers, toil in obscurity, the shapers of opinion and future research agendas are masters of rhetorical analysis and rhetorical devices.

I am working on a guide to communicating for economists. I am also reading every economics textbook I can secure. I'm reading everything from the philosophical classics to current mathematically-dense econometrics texts. I need to understand what my students know of the methods used by economists to help them better communicate with wider audiences.

Teaching my students that economics is as much philosophy as math, I am also trying to teach them that the choices of what to analyze with math are philosophical. What questions you ask are not driven solely by dispassionate math: you ask questions to which you want answers. That's an emotional process, a philosophical process.

Rhetoric and economics belong together, since the most influential economists are skilled communicators — or they have skilled public proponents.

Friday, January 3, 2014

Spreadsheet 'Humanism' is Anything But…

Jeremy Bentham, by Henry William Pickersgill (...
Jeremy Bentham, by Henry William Pickersgill (died 1875). See source website for additional information. (Photo credit: Wikipedia)
I disagree with Peter Singer on most ethical measures, and this is no exception…

Heartwarming causes are nice, but let’s give to charity with our heads - The Washington Post

The notion that we can measure what is "right" using a form of ethical calculus dates back to at least Jeremy Bentham (1748–1832) and the Principle of Utility. Bentham argued there are seven variables to consider when judging the "best" choice:
  1. Intensity of pleasure.
  2. Duration of pleasure.
  3. Certainty of consequences.
  4. Propinquity (proximity, nearness) of pleasure. 
  5. Fecundity (abundance) of pleasure.
  6. Purity of pleasure.
  7. Extent and scope of pleasure for others. 
Singer takes things in the direction of Marx, with the needs of the (desirable and productive) many outweighing individual choice of happiness. For Singer, like the Progressives of the Wilson era, the administrator class, the great minds, know exactly what we should do based on "economic" (efficiency) models. 

On one level, Singer's mathematical, "logical" approach to ethics seems reasonable and even preferable to the flaws of human evolutionary psychology. Singer admits the nature of this psychological connection to those in our community, a well-documented desire to protect and foster community bonds. But to suggest that our natures and the purpose of that same psychology is inferior to the great thinking of Singer's ethical spreadsheet is a mistake. 

How can I suggest that cold, analytical thought is wrong? How can anything other than a spreadsheet approach to ethics be "right" — especially for one teaching in a leading business school? Aren't numbers always the truth? 

No, numbers are not always the truth. Numbers lead to eugenics, euthanasia, denial of care, and a Brave New World ethical model. Algorithms without morality is a dangerous, horrible thing. It is dehumanizing, not humanist in the least. 

Let's consider an extreme reading of Singer's spreadsheet logic. 

I am a playwright and screenwriter. I write comedies, not high art. The money people pay for tickets to theater does not feed the starving. It does not cure diseases or end wars — at least not directly. Many of the artists are hedonists, and more than a few indulge in some self-injurious behaviors. Money is spent on pleasure, not benefiting anyone… or is that the whole story?
Far from great literature, Uncle Tom's Cabin opened eyes and hearts to the abolitionist movement. Plays (and movies) depicting various groups in positive ways also change hearts. Art, meaningless and unproductive, turns out to be extremely important. The "wasted money" reflects an investment in the most human of endeavors: improving ourselves. 
The people giving money to and supporting "Batkid" in San Francisco might not impress Singer, but he's assuming the personal investment in helping one five-year-old boy ends at that moment. Instead, when you connect with one person, maybe you'll connect to others. 

When a great expert like Singer tells people they are wrong to help Make-A-Wish or some other charity because other charities are more economical (efficient), that's insulting. It ignores how our connections build and grow, how one good act leads to others. 

If I give to a cat shelter (a personal cause), that does not mean I dislike humanity, or other species of animals. Connecting to cats humanizes me. It makes me aware of other creatures, not only cats. That is how the human experience is lived: connections lead to other connections and realizations.

Give to Batkid? Yes. And then you might think about other cancer patients. You might support the Cancer Society, increasing research funding, and take other actions. Giving to Batkid doesn't accomplish anything in Singer's spreadsheet humanism, because purely economic models overlook how psychology connects small, wasteful deeds, to bigger deeds and a better world. 

Singer's approach? It could not only be wrong, but dangerous. I don't want mathematical models to determine who is or isn't worth helping based on dollars and other metrics. That's the "scientific" logic that led us to the worst of the twentieth century: eugenics, apartheid, experiments on "lesser" humans, et cetera.

Help others because it makes you feel alive. Connect with people. That's humanism. Free will, acting on emotion, might be superior to any math. 

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Friday, December 27, 2013

Christmas Thoughts and Libertarian Ideals

If you believe in small government (and small business), how do you defend those ideals when confronted with arguments that "government is necessary" to help those in need? (Put aside the idiotic "needs" from cell phones to high-speed Internet connections now supported by government.)

Here's my answer:

Do something for your community. If you don't want activist government, you need to support charitable non-governmental organizations. Unless you give time, energy, resources, and money, to various causes, then progressives are going to have a more valid argument that government is the preferred charity.

My success in life is possible only because other people voluntarily helped me achieve more. The list of supporters is long, beginning, with my parents, grandparents, and extended family. My wife, my in-laws, and many friends also helped me along the way. Then there are the strangers who donated to the universities I attended, making scholarships possible.

I did not succeed on my own; success came with the help and mentoring of others.

These were not government officials or federal programs. These were family, friends, and strangers in my communities doing good deeds that they wanted to do. And in return, I hope to give to my community, friends, and family members.

We can mock the left for their "You didn't build that!" stupidity, because it wasn't government that contributed to my success or that of many others. It was other people, acting as individuals and groups because they wanted to help — not because they were forced to do so.

If those of us favoring small government don't get involved and fail to help others, we'll end up surrounded by yet more "compassionate" government.

Political Christmas means people telling us what Jesus, the Old Testament Prophets, and the Pope might believe is the proper role of government. Progressives, Anglo-American liberals, democratic socialists, and so on, are busy telling us how heartless, un-Christian, un-caring, and un-compassionate libertarian and conservative ideals are.

Because, clearly, the only "charity" that counts is what government does for people.

Rejecting the notion that a government that relies on the threat of force to take and redistribute wealth and income is not charitable is insufficient to win arguments about charity and what is or is not compassionate. I recognize this is not politically correct, but a majority will always support taking wealth from the minority. It's also easy to believe that the wealthy or the high-income earners somehow cheated to reach the top. (Not that some don't cheat or manipulate the system — which is another reason to dislike powerful government, which inevitably drifts towards favoritism.)

Do something. Take action. Change the world for the better. Doing nothing is not a solution and certainly not a defense against creeping government.

Friday, November 22, 2013

Unintended Consequences: Ending Filibuster Creates Tyranny of the Minority

United States Senate Seal
United States Senate Seal (Photo credit: DonkeyHotey)
"Senator Kaine espousing the radical, radical notion of majority rule. That is now on tape, sir," Chris Hayes said Thursday night (21 Nov 2013).

And he couldn't be more wrong.

In theory, the GOP could control the Senate with members elected from states representing less than 25 percent of the nation. The math is simple: win lots of small, rural states, and you have a majority in the Senate, while needing only a minority of American voters. 

Can Chris Hayes and numerous other pundits (and politicians) be so dense as to not recognize that a minority of voters nationally, but representing majorities in small aging states, could elect a GOP majority in the Senate? And no, this isn't some gerrymandering trick, since Senators are elected state-wide. It's simply a fact that the rural states could dictate policy for the majority… within two or three election cycles.

[See the MSNBC clip at: A Historic Day: Nuclear Option in the Senate]

Progressive politicians, activists, and commentators are revealing their political biases, not some inherent commitment to the (bad) idea of majority rule. "Majority rule" would change the Senate, or even abolish it. And for a group supposedly dedicated to "minority rights," I've never understood their passion for direct democracy that an old fable attributed to many sources (including Ben Franklin, without much evidence, and H. L. Mencken among others), described as two wolves and a sheep voting on what to eat for dinner. Direct democracy is not what our system embraces, and for good reasons.

Regardless of your views on direct democracy, the "majority rule" nonsense overlooks a basic, statistical truth: Republicans are likely to control the Senate within the next three election cycles, and could control the White House. This presents a quandary for those progressives claiming "majority rule" is good for the Senate and good for the United States. Do you mean a majority of Americans, or a majority in the Senate? Right now, those might be the same, but that's not likely to hold true — just as it isn't true in the House.

Republicans are unlikely, for many reasons we can debate, to hold or win Senate seats in California, New York, Illinois, New Jersey, and several other states. But, they are likely to hold or gain seats throughout the sparsely populated middle-regions of the nation. There will be a GOP majority in the Senate, representing a minority of voters. Caring more about President Obama getting his way, progressives have set the table for the GOP to do whatever it wants in the near future.

I don't like either party having a lot of power. I like stalemates and gridlock.

Thanks to the Democrats ending the filibuster on judicial and cabinet nominations, the GOP will likely kill it off entirely. And, with reconciliation and other parliamentary maneuvers, it isn't as if the filibuster was strong on legislative issues anyway.

A president could, therefore, appoint justices, ratify treaties, and approve agency regulators without California, New York, Illinois, New Jersey, or other populous states having any voice in the choices.

Rural America could (and likely will) dominate the policy choices affecting urban centers that are political mirror images to their rural brethren.

Welcome to "tyranny of the minority" brought to you in the name of "majority rule" in the Senate.

As Richard Arenberg wrote in August:
Should the Democrats choose to trigger the nuclear option, a majority of senators might represent as few as 17 percent of the population using their own counting methodology. Stretching the hypothetical a little farther, a quorum requires only 51 senators. Therefore, 26 senators from 13 states representing a mere 4 percent of the population could provide the simple majority to change the rules!
— from "Save the Filibuster"

Sen. Tom Harkin has led the charge to "reform" the Senate. His argument is that the current situation is undemocratic because Republicans in the House and Senate represent a minority of voters. That is true, as the GOP representatives actually won 1.4 million fewer votes than the Democratic minority in the House. But, Harkin's call to end the filibuster is based on a flawed premise. Again, he overlooks that the Senate grants Wyoming and Idaho the same power as California and New York.

Sen. Harkin once stated:
"We simply cannot govern a 21st Century superpower when a minority of just 41 senators, representing potentially as little as 11 percent of the population, can dictate action — or inaction — not just to the majority of senators but to a majority of the American people."
Okay, Sen. Harkin, but will you at least admit you're not promoting "democracy" so much as your political ideology and the current president? You have not created a more democratic Senate — and you might have done quite the opposite. Will Sen. Harkin protest when the GOP has 51 senators, mostly from small states? What if 40 percent of American's elect a majority to the Senate? Is that democratic?

As Arenberg argues, advocacy groups are making similarly mistaken arguments:
The advocacy group Common Cause, arguing that the filibuster is unconstitutional, told the federal court that the Senate's cloture rule requiring 60 votes to cut off debate gives, "senators elected from 21 states that may contain as little as 11 percent of the U.S. population an absolute veto power over bills, resolutions and presidential appointments supported by senators who represent 83 percent of the people of the United States."
I do not support direct democracy, for many reasons. The Founders gave us an Electoral College, a bicameral legislature, indirect appointment of senators (something lost to the 17th Amendment), three branches of government, and many other impediments to sudden "mob rule" in this nation. Majorities tend to trample minority rights, with the best of intentions.

As a libertarian, classical liberal, I prefer to limit the power of government. Changing the filibuster will make it easier for government to pursue bad (but trendy) ideas. The new rules give more power the executive branch, which is always a bad idea. The new rules also give more power and influence to the extremists in both parties, since those voices are the new "filibuster" within each party.

Consider a president with 52 or 53 senators from his or her party. The loud radicals will demand ideologically pure appointments to cabinet posts, regulatory agencies, and the judicial benches. The radicals, representing the most loyal and active party voters, are likely to become all-powerful. So, you end up with tyranny of the majority even when the party in power does represent a majority of voters. Most voters are centrists, not party loyalists… and those centrists have lost the power to be heard as of this week.

Thanks Democrats for supporting a non-democratic, non-republican, non sequitur of a reform.
Tangent: The quote about sheep and wolves, like so many "quotes" has at least six "sources" according to books and websites. Maybe we can vote on which is the "correct" source — democracy in action, determining "truth" even if it is wrong.  In the end… we just don't know the source for certain, only those retelling the fable. With reasonable certainty, we can conclude it was not first said by Ben Franklin.
—  See: Fake Quote: Lunches with Wolves  
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Friday, November 15, 2013

Thinkers in Disagreement: Admitting Flaws (and Worse)

English: Murray Rothbard in the 90's
English: Murray Rothbard in the 90's (Photo credit: Wikipedia)
One of the questions I've been asked is how I can reconcile drawing bits and pieces of my personal views on economics and politics from individuals with disagreements. The answer is simple: we each create a personal philosophy drawing from experiences and those thoughts to which we are exposed. We embrace some ideas and reject others, even the ideas of someone we admire.

Some of the ideas and views expressed by thinkers I admire deserve to be rejected — that's true in economics, philosophy, and other disciplines.

I lean towards Austrian economic theories, but not without skepticism.

A name that comes up when I mention Austrian economics is Murray Rothbard. He's dismissed in the same way some dismiss Ayn Rand. (Rothbard quickly rejected Rand as a "cult" leader.)

"Rothbard was a fascist, racist, conservative." I'm paraphrasing, but that's the charge against him. I suppose I could mention the flaws of Woodrow Wilson or Franklin Roosevelt in response. Humans are imperfect, and some of those imperfections are repugnant looking backwards.

The shame is that Rothbard was a serious, thoughtful economist. And he could be wrong on many things.

I admire some of the works of Murray Rothbard, but I don't agree with his radical libertarianism and rejection of popular democracy. Not that I endorse direct democracy, either: I like the republican form of the U.S. Constitution and its protection of minority opinions. The Ludwig von Mises Institute and Cato Institute both produce interesting scholarship, reflecting Rothbard's co-founding of each, but they also tend to assume investors and producers are always "good" for society. There are some serious problems with the von Mises Institute — and to deny those would be wrong.

I am not a social conservative, and the von Mises Institute was shaped by a conservatism I reject. There's little doubt that some of the institutes supporters are racists or at least "racialists" of some sort. If you can stand anywhere near David Duke, I don't understand you. ("Scholars" associated with the institute praised Duke — feel free to "Google" the topic of "racism von mises institute" or read about Lew Rockwell, former head of the institute.)

It is not my personal classical liberalism. But, I do not reject all that the institute publishes. I read critically.

My friends know that I read everything I can, from anarchists to socialists, and all thinkers between. Politics and economics are intertwined, in unpredictable ways. Libertarians occupy the entire political spectrum, as I've mentioned before in this space. I can learn from all, if I'm skeptical.

Ludwig von Mises wrote against racism, but many of the people associated with the Institute that bears his name at least tolerate the worst in our society. Rothbard did not actively reject racists or racist ideas. Sadly, neither did von Mises. Both men took "libertarianism" to allow and even empower racism through the notion of free association. If a private business can exclude clients, that does permit and encourage racism.

Rothbard defended Malcom X, while criticizing Martin Luther King, Jr. He supported the idea that free association should allow races to voluntarily segregate. I firmly believe the opposite, that integration and variety leads to a more creative and adaptable society.

Do I support free association? Sure, but I don't like groups based on race, religion, or gender. I do believe business operate in a "public space" and are subject to some restrictions. I'm not a believer in "anarcho-capitalism."

I can appreciate Rothbard in the same way I might appreciate Nietzsche, Sartre, or Heidegger: by taking bits and pieces to form my own philosophy. On racism, Ludwig von Mises did write the following during WWII:
Omnipotent Government
by Ludwig von Mises

The present war would never have originated but for anti-­Semitism. Only anti-Semitism made it possible for the Nazis to restore the German people's faith in the invincibility of its armed forces, and thus to drive Germany again into the policy of aggression and the struggle for hegemony. Only the anti-Semitic entanglement of a good deal of French public opinion prevented France from stopping Hitler when he could still be stopped without war. And it was anti-Semitism that helped the German armies find in every European country men ready to open the doors to them.

Mankind has paid a high price indeed for anti-Semitism.

How Rothbard and von Mises could later tolerate racism in the name of freedom escapes me. At the very least, even in a "free market of ideas" you need to speak out against racism and other forms of hate.
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Friday, October 25, 2013

Backlog of Topics

People have asked why this blog isn't more active — after all, there isn't a lack of important fiscal and cultural topics to address. I do have a dozen or so posts started, but not finished, and even more ideas on my "to-do" list. The challenge has been time, as it often is.

A quick rundown of topics I still hope to address:

The Republican Party and Democratic Party repulse me. They each want to control my life, just in different ways. Neither represents freedom. They vilify each other, without understanding the value of compromise and leaving us alone.

The government shutdown was stupid. I've written before that we shouldn't have a "debt ceiling." It was an idiotic idea to solve a real problem: Congress can't seem to control itself. The debt ceiling is a "Stop me before I spend again!" plea for help… from one Congressional cohort to the next. The real solution? Pass annual appropriations on schedule, via regular order.

Democratic politicians associate any call for state and local control with the Confederacy's invocation of "States' Rights" to defend slavery. The absurdity seems to escape most commentators in the media and a fair number of academics. One or two racists in any "Tea Party" gathering suffice to support this tenuous linkage. (The anti-semites I saw at "Occupy" events don't seem to garner the same type of attention, but plenty of anti-business rhetoric is thinly veiled racism.)

Most people are economically ill-informed. Even if they were better informed, I fear emotional choices would always trump logic.

I can't stand religion in politics, which is one reason I spend a fair amount of time studying religion. That's not a contradiction: if you can cite vile, disgusting portions of scripture supporting slavery, infanticide, sexism, and other antiquated ideas, then that should invalidate using scriptures for anything more than selective private inspiration. If you want to "live like Jesus" or some other great prophet, monk, wise man, or whatever, good for you. Many great people have been religious. Just don't mix "faith" with good governance. We are shaped by our beliefs, but don't preach to me.

Why the heck does government license marriages? I understand that marriages are contracts, but that should be the extent of any government involvement. When I want a contract, I go to a lawyer and file papers with a county clerk. That should be it. Spineless "libertarians" and "social progressives" quickly argue that they don't endorse polygamy or other alternative lifestyles: only marriages between two adults. Me? I don't care. As long as all involved are adults, marry whomever you want. If there were no benefits to being married, versus being single, problem solved. Treating "couples" differently is a form of bias.

Marijuana legalization? Suddenly the progressives are all for states' rights. I'm simple: legalize whatever people want to do to themselves as adults. Institute draconian punishments for harming others while impaired. Punish dangerous behavior, like driving impaired. If you destroy your health, though, don't ask the rest of us to pay for it.

Campaign donations are in front of the Supreme Court, yet again. Free speech includes buying newspapers or broadcast media. Therefore, why shouldn't someone be allowed to buy any number of ads? Full disclosure is fine by me; I don't buy the argument that you have the right to say anything anonymously. If you can't stand up and speak, sit down and shut up. If I want to spend every penny I have on ads supporting a politician, let me be that stupid, as long as I'm willing to take responsibility for my donations. I'd love shorter political campaigns and less spending. But, I'm not willing to curtail free speech.

Yes, I need to blog more. I need to vent.

Friday, September 20, 2013

Robert J. Samuelson: The Minimum Wage Muddle

I dislike the notion of a "minimum wage" but recognize that it isn't about to be abolished. And, there is the sad reality that many companies don't recognize that employees are the value behind any business or non-profit. Organizations are their people.

My first problem with the national minimum wage is that any nationwide standard ignores the cost of living variations from region to region. Beyond that, we have issues of how to set a minimum wage, how to index it to inflation, and many other complicated issues. If you set rates by region, would you also have regional inflation indices? What about tiered minimums, based on age or other variables? There are already odd exemptions to the minimum wage, namely in the dining industry.

Should there be a full-time minimum wage apart from a part-time minimum? How many people working 40-hour weeks earn the minimum wage? If they do earn the minimum, for how long do they earn this before their first raises? How long before a full-time worker at the bottom does earn more than the poverty-line? And are we using a national or a regional measure of poverty?

But, there is pressure to raise the minimum wage. What would the results be? Probably insignificant if you consider the job market who is paid minimum wage. The following Robert Samuelson column is a good read. As usual, I'm including only excerpts, so follow the links and read the original column.
The Minimum Wage Muddle
By Robert J. Samuelson, Published: September 11, 2013

We're now engaged in another divisive debate over the minimum wage and its offspring, the "living wage." We've been here before, because both sides seem to have strong arguments. On the one hand, raising wages by government fiat seems a job-killer. Economics 101 teaches us that if you increase the price of something — including labor — people will buy less of it. On the other hand, guaranteeing that full-time work protects against poverty seems a decent standard. The present federal minimum ($7.25 an hour) [see] doesn't do this. At 40 hours a week, it amounts to $15,080 a year; that's above the government's poverty-line for a single person ($11,702 in 2011) [see] but not for a family of four ($22,811).
Raising the minimum wage causes employers to reconsider hiring new employees, expanding the hours of existing employees, and other decisions potentially helpful to workers. With the Affordable Care Act already causing some employers to cap hours (and benefits), increasing the minimum wage is likely to add another barrier to labor market growth.

Increasing the cost of each worker? Employers will automate what they can. They will find ways to have "exempt" (salaried) workers do more — since that's a fixed labor cost. You might not see an immediate increase in unemployment, but the labor market will stall.

Already, the poor are unemployed. There are many reasons for why someone might not be participating in the labor market, but the reality is that labor participation rates are falling, with the lowest participation rate in three decades already dragging the economy. When nearly two-thirds of adults living in poverty are not working, the minimum wage does not matter to a sizable population: non-workers. Not working at $10 an hour pays as much as not working at $2 an hour. Nothing.
Most of the poor don't have jobs, and even those who do typically don't work full time. In 2011, 46.2 million people were below the government's poverty line. Of these, 26.5 million were of working age (18 to 64), but fewer than 40 percent worked at all and only 10 percent had full-time, year-round jobs.
As Samuelson observes, only 10 percent of those below the poverty line work full-time, year-round jobs. That's a national average, though, and does not reflect the reality of our nation's largest state. California is a great example of how data on employment and income are best viewed regionally. I would encourage Samuelson to view this article and accompanying infographics:
California minimum wage hike would boost pay for more than 1 million full-time workers
By Phillip Reese
Last Modified: Friday, Sep. 13, 2013 − 10:40 am

The state legislature on Thursday voted to raise the minimum wage from $8 an hour to $10 an hour -- a change that would affect about 1.5 million full-time, year-round California workers, according to a Bee review of U.S. Census data. That's about 14 percent of the state's full-time workforce.
Of course, there is an important variable that seems to predict a low-wage existence. As Reese's column notes:
More than a third of California's full-time workers earning less than $10 an hour do not have a high school diploma. Another third have no college experience. Only about 10 percent have a high school degree.
The above is a bit confusing ("high school degree"), but many of the working poor receive equivalency diplomas, via the General Educational Development (GED) exams. So, though they do not have a diploma, but they do qualify to attend the state's open-enrollment community colleges. That's a great thing, since it gives people a second chance. Unfortunately, people who didn't graduate traditional high school have an even harder time completing college.

I've argued in previous posts that we need to encourage more personal responsibility. Public school is free, and few people have valid excuses for not completing high school. If we're going to complain about the widening gap between rich and poor, we should also admit that some pretty simple correlations exist.

Graduate, don't do drugs, work (even low-paying jobs), get married (and stay married), and wait to have children until you can afford the expenses. Again, I've written about these simple correlations in the past. The cultural gaps between the rich and the poor are significant; we must get children raised in poverty through our schools, and they must graduate with meaningful high school diplomas reflecting genuine skills and knowledge.

As a native Californian, I do support expanding the community college network — but that's unlikely as the state now caps enrollments and even how many units students can complete. The system is top-heavy and fees are increasing, but the college system remains more affordable than in most states. [Tangent: I would kill the high-speed rail project and move the funds into education and existing infrastructure. California is a prime example of government misallocating funds… by popular vote!]

Basically, the places with better outlooks economically have more high school and college graduates. Remember, the Reese column in the Sacramento Bee addresses only California, yet we know education is key to success, period.

One of the interesting facts about the minimum wage is that many people earning low wages are in school, working towards better wages. It's interesting that the people going to school are working jobs, while the school dropouts are doing… who knows what they're doing. It's not work, and it's not school.

I've had people say they don't think it is "fair" to be a student, trying to go through school, while not earning a "living" wage. I'm sorry, but it is perfectly fair. Students earning minimum wage do not bother me; they are neither experts nor are they usually the heads of households.

Returning to Samuelson, we are reminded that a third of the low-wage earners are members of families well above the poverty line:
[All] low-wage workers aren't poor. "There's a big distinction between low-wage workers and low-income families," says economist David Neumark of the University of California at Irvine. About a third of minimum-wage workers, he says, come from families in the top half of the income distribution, with annual incomes of $50,000 or more.
Most of my friends in college worked at low-wage jobs. They parked cars, waited tables, took movie tickets, and stocked store shelves. They weren't from poor families, and many were not from the middle class. Yet, the majority of my friends worked, and worked a lot of hours. They were learning in the classroom and in the workforce.

If you increase the minimum wage, employers will gravitate even more towards those excellent students as entry-level employees. If I have to pay employees more, I'm going to hire better employees. That might increase productivity, allowing me to hire fewer new employees while growing a business.

Although employees won't be fired because of the higher minimum wage, don't expect any job growth. Instead, expect increases in productivity.
…[Economists] disagree whether past increases in the minimum wage destroyed jobs. One group of studies finds little or no effect; these studies usually compare employment levels in states that have raised their minimums above the federal level with nearby states that haven't changed their minimums. Without job loss, it's a no-brainer to raise the minimum, argue Sylvia Allegretto and Steven Pitts in a paper for the Economic Policy Institute, a left-leaning think tank. Adjusted for inflation, it's now 23 percent lower than in 1968, they say [see]. By contrast, Neumark and others find that minimum-wage increases have reduced employment. Every 10 percent increase may cut teen jobs by 1.5 percent; a 30 percent wage increase implies job reductions of almost 5 percent. A higher minimum involves a "trade-off of higher wages for some against job losses for others," says Neumark.

Not surprisingly, a study by two economists at Texas A&M finds that the minimum wage's biggest adverse effects are on future job growth, not current employment [see].
The Los Angeles Times offered a simple defense of increasing the minimum wage, a view the EPI has advanced: fast food has to be prepared locally. Yes, it does, but does it need to be prepared by as many people as are currently working in a McDonald's or Burger King?

My wife and I order sandwiches at "GetGo" ( once a month or so. You walk up to a screen, not a person, and use photos of ingredients to assemble your virtual sandwich. Once you approve of the items, you can pay and the sandwich is made-to-order. One person works behind the counter in most GetGo Kitchen areas. The ingredients are pre-measured and the oven is pre-timed for any toasting.

McDonald's has adopted similar kiosks for ordering in Europe. Automation of the burger assembly process is being tested. That would remove the one person at a GetGo. Imagine a conveyor system creating a sandwich or burger? Well, it can already be done.

See this video for how fast food will respond to higher wages:

Only academic economists and editorial writers cannot see the future after the wages are increased. Didn't these people see the "Jetsons" as children? The machines are rising, and they'll rise faster if wages jump suddenly.
…[Large] abrupt increases in the minimum would almost certainly kill lots of jobs. That's the danger of "living wage" proposals, which often involve steep increases. Striking fast-food workers want $15 an hour. In Washington, the D.C. Council has passed legislation (the mayor must still approve or veto it) that would require Wal-Mart to pay $12.50 an hour, roughly 50 percent higher than the city's existing minimum, $8.25.
Our local Wal-Mart (or Walmart, as the signs now read) features eight self-checkout lanes. Self-service propane dispensers, water refills, and movie rentals are also available in the store. The remaining workers might earn more, but fewer of them will be necessary. In the end, Walmart will save money and pass along only a portion of that savings to employees. You could pay the "cashier" at the front of the self-checkout twice as much as he or she earned, and Walmart still comes out ahead: eight employees replaced with one is a winning strategy.

After the minimum wage increases, I expect the scholars and politicians supporting the idea will find a way to blame businesses for the lack of job growth. It's always the fault of business… always.
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