Thursday, September 30, 2010

Craziest hobby ever

Apparently Michigan has a law protecting civil servants from being fired for their political views, even if those views lead to the assistant attorney general following the student body president of a local university around and creating an obsessive, childish blog about him.

I really can't wrap my head around this one - he agreed to be interviewed for this story to smugly defend his unreasonable actions, and I imagine when this interview ended, Andrew Shirvell thought he'd "won" the discussion.

This story gives everyone on the blogosphere something they want. Left wing bloggers can see a religious extremist stalking a gay college student, right wing bloggers can demonstrate the unreasonable level of job protection given to civil servants and non-political bloggers get a big dose of crazy.

Why Americans distrust Islam so much

At a recent gathering I challenged a few friends to name the most popular Muslim comedian in the last ten years.

No one had an answer, but they all agreed with me when I said "Dave Chappelle." Most said they never knew he was a Muslim.

Now what can we learn from this story? It's obvious, really: Well-behaved Muslims rarely make the news.

Americans usually encounter Muslims who wear their star and crescent on their sleeve when they are harming people. America laughed alongside Dave Chappelle for years without knowing his religion. This isn't some plot by the media to shuffle the good Muslims in with the rest of society and let the bad ones represent Islam. Instead, its a failing of Muslims to announce their religion and motivations as loudly when they do good things as when they do bad.

This is a blindness to public relation tactics, as I've written before. If your group has an undeserved bad reputation, it is your responsibility to improve that reputation. Unfortunately, most of the work I've seen in this direction is in attempts to shame critics of Islam, instead of showcasing positive Islamic accomplishments.

A Steve Chapman piece this week demolished some of the myths about the scope of anti-Muslim hatred in America:

For the most part, Muslims have achieved integration and acceptance. Only a quarter of them say they have ever suffered discrimination. Most have many non-Muslim friends.

Could that be because non-Muslims do not regard them with fear and loathing? Hate crimes against Muslims do not support the charge that Americans are frothing Islamophobes. In 2008, there were only 105 anti-Muslim incidents, compared with 1,013 against Jews.

Chapman made a lot of other great points, such as the hate crimes that do happen get a lot of attention the same way airplane crashes get more attention that car accidents. When asked if Islam is more likely to encourage violence than other religions, 35 percent of Americans said yes. However, 42 percent said no.

Still, 35 percent is not zero. That's a significant portion of our nation. Are these people blinded by some irrational hatred of a foreign religion?

If they are, you have to include President Obama in that list, as he and a number of military officials warned that a small
Florida church's aborted stunt to burn a Quaran would encourage terrorism.

"You know, you could have serious violence in places like Pakistan or Afghanistan," Obama told ABC television in an interview.
He went on to say that this would turn more Muslims into terrorists and possibly cause suicide bombings in American and European cities. Anti-Christian stunts, like purposely-blasphemous art and Bible burnings, do not carry the same dire warnings of violent retribution.

The red herring here is terrorism. I agree with the defenders of Islam that its foolish to mix up the phrase "most terrorists are Muslim" with the incorrect "most Muslims are terrorists." I'm used to this fallacy, often in the form "most whites are bigots" or "most conservatives are racist." Those are false statements and people who say them are not thinking.

But terrorism isn't the only time Muslim violence and human rights violations dramatically splash across the television screen like a vial of acid on the uncovered face of a young woman. Look at the culture in Islamic states. Gay men are publicly decapitated in Saudi Arabia not by bloodthirsty mobs, but as a formal part of the legal system. Thieves there are luckier; they only have their hands cut off. Don't forget "honor killings," where typically a father kills his own daughter for crimes such as being a rape victim, trying to get out of an arranged marriage or not following the local dress code.

It wasn't terrorism when Ayatollah Khomeini commanded all Muslims to murder Salman Rushdie for writing a novel that insulted Islam. He didn't even have to write the book to deserve death; the Quaran clearly demands the execution of all apostates. Theo van Gogh was murdered for making a film highlighting the abuse of women in Islamic societies, but his assassin was merely a religious extremist, not a terrorist. What about the three-digit body count following the Dutch cartoons that criticized Islamic terrorism, wasn't that really the work of angry mobs? When two Spanish nuns were murdered after the Pope insulted Islam, was that really a terrorist act, or a hot-blooded reaction? Nidal Malik Hasan, the Fort Hood shooter, wasn't a terrorist. He just decided that there is only one response to repeated insults to Islam.

So yes, most of our Muslim citizens are better than that. An Iranian immigrant I interviewed when I was a reporter told me about how much better it is here in America where he has such wild freedoms as the right to wear short-sleeve shirts in public. The Chapman article I posted earlier revealed most Muslims in America think women are better off here - a far cry from burqa promoters of the Middle East who say the American society forces women to dress like whores.

But Christopher Hitchens showed how peaceful Western Muslims will sometimes use the terrorists and their capacity for violence to get what they want:

We are wrong to talk as if the only subject was that of terrorism. As Western Europe has already found to its cost, local Muslim leaders have a habit, once they feel strong enough, of making demands of the most intolerant kind. Sometimes it will be calls for censorship of anything "offensive" to Islam. Sometimes it will be demands for sexual segregation in schools and swimming pools. The script is becoming a very familiar one. And those who make such demands are of course usually quite careful to avoid any association with violence. They merely hint that, if their demands are not taken seriously, there just might be a teeny smidgeon of violence from some other unnamed quarter …
The reason so many Americans distrust Islam is based on what they observe. Yes, those anecdotal observations are flawed, but only to a point. The bad is louder than the good because the bad is so very, very loud.


Tuesday, September 28, 2010

The flat tax is the moderate position

I've had a passing thought lately about the flat tax - the idea that all taxpayers should pay the same percentage of their income. It has been explained well here and here. The flat tax is often cast as an extreme position, but I argue it's really the moderate position on taxation.

America instead uses a progressive tax, where people with higher incomes pay a higher percentage and people with very low incomes pay none at all. For example, the Tax Foundation reported last year that America's top one percent of tax returns made 22.8 percent of the adjusted gross income and paid 40.4 percent of federal personal income taxes.

Now consider this: In that same year under a flat tax the top one percent would have paid about 22.8 percent of federal income. The rich would also lose access to tax shelters and loopholes that help them pay less.

If the progressive tax is one side of the spectrum, than the opposite would be a regressive tax where the rich pay a lower percentage of their income than the poor. Even worse would be a tax completely equal in dollar amount regardless of income or exemptions, such as a tax that each person is required to pay $12,000 in federal taxes each year.

No one actually advocates for a regressive or equal tax, so the middle position - the flat tax, is falsely seen as a being an extreme position when in fact it rests flatly in the middle.

Monday, September 27, 2010

Bill Clinton on positive interdependence

Just found this great talk from Bill Clinton about positive-sum games and the positive aspects of global interdependence:

Keep in mind that the localist movement this blog has become about preaches independence, not interdependence and rejects these notions without understanding them - including what trade means for peace.

Friday, September 24, 2010

The moral case for income inequality

This month featured a massive 10-part series of articles on income inequality in the United States. The widely-linked articles by Timothy Noah make the case that it's wrong for some Americans to earn hundreds of times what others make.

People who say inequality is a problem often end up implying that salaries should be as close to equal as possible, that zero inequality should be our goal. I make the case that this is unfair and immoral.

Imagine three high school students; Tom, Dick and Harry. Tom studies hard in school and goes to a Ivy league school. Dick takes the vocational program and becomes a laborer. Harry does not study and never graduates. What do their lives look like after about ten years?

Tom becomes the vice president of his firm. He works at least 60 hours every week. He is forced to miss his wife's birthday at the last minute because he has to fly to the west coast to negotiate a contract in person. He gets to see his kids about seven hours every week.

Dick becomes a carpenter. He works about 40 hours a week. He loses the last joint on two of his fingers to a circular saw accident. He gets to see his kids about 20 hours every week.

Harry becomes a clerk at a chain store. He works 35 hours each week. He stops thinking about his job the moment he leaves work. He gets to see his kids about 30 hours each week.

It's clear that Tom, Dick and Harry have very unequal lives. Tom's marriage is strained by his job while Dick and Harry are free to have rich personal lives. Dick is at serious risk of injury at work, something Tom and Harry don't have to worry about. The amount of time they get to spend with their kids varies. Tom enjoys more prestige with his job than the other two.

It's clear that these three live very unequal lives, so why should their pay be the same? Tom would be sacrificing all the extra school he paid for, all the time he doesn't spend with his family and the difficult nature of his job for nothing. Why should Harry get five times as many hours to spend with his kids as Tom does? It's magical thinking to believe that the prestige and job security Tom enjoys perfectly balances the sacrifices he makes.

Imagine the trouble a central planner would have trying to put a dollar amount on all of these factors. How much is Dick's risk of injury worth an hour? How much should Tom get for taking his job home with him and on vacations? How often does he only work 60 hours, and how much should he get in case he has to work 70 hours one week? Should Harry lose some wages for never finishing high school? How much money is an hour with ones kids worth? What if someone doesn't have a family?

Any attempt to put a dollar amount on one of those values will be arbitrary. Different people will value things differently. The fairest solution I know of is to let different wages attract people to the jobs they are willing to do.

I hear people talk about wages as if they measure someones contribution to society, like when people lament that athletes make more money than teachers.

But the flaw is that wages are not simply something given to reward people for their role in society. Instead, wages are something an employer gives up to attract people to a position.

The metaphor I like is to ask why diamonds cost so much more than water. Water is clearly more important to our existences - we have to consume it daily to stay alive, while diamonds are mostly used for aesthetic purposes. Shouldn't water be worth more, as it's in higher demand?

Well "worth" and "price" are too different things. The supply of water is much higher, and as long as it's easier to find that next glass of water than that next diamond, water will be cheaper. But if water was rare enough, the price would exceed the diamond price.

Zero-sum game nonsense

I think one of the reasons there is so much focus on inequality is that people have a zero-sum game bias; the belief that inequality is the result of the rich taking money from the poor. This is true in some examples, like the rich mayor and part-time city councilors of Bell California, but not in a free market.

David Henderson writes:

Is inequality of wages and incomes bad? The question seems ludicrous. Of course inequality is bad, isn’t it? Actually, no. What matters crucially is how the inequality came about.

Inequality of wages and incomes is clearly bad if it results from government privileges. Many people would find such an outcome unjust, but even more important to many economists is that such inequality sets up perverse incentives. Instead of producing valuable products and services for their fellow citizens, as people tend to do in free economies, people in societies based on government-granted privileges devote much of their effort to pleasing, or outright bribing, government officials. In many African countries, for example, such as Côte d’Ivoire, Ghana, and Zaire, there are stark inequalities because the government has the power to take a high percentage of the wealth of the already poor and give a large amount of it to government officials or their cronies. And in many Latin American countries, for many decades a few families have had most of the wealth and have used government power to cement their privileges.
Companies create more wealth in the world by creating something of value. Some of that wealth ends up in the hand of the company, but certainly not all of it. Therefore, it's good for society to create more wealth.

The assumption most people make is that the rich are getting richer while the poor get poorer. Anyone who studies growth understands this is not true - everyone is in fact getting richer. Noah's piece on seems to imply something in the middle - that the poor have stagnated while the rich have taken off.

This morning Tyler Cowen shared a link disproving the Marxist notion that CEO's make more money because they take wages away from their own workers. First Cowen quoted blogger Adam Ozimek:

If the top earners are screwing over their wage earners in the big companies, by pulling in excess wages, options, and perks, we should observe non-stagnant median pay for people who avoid working in firms with fat cat CEOs. Or we should observe talented lower-tier workers fleeing the big corporations, to keep their wages up. Yet no evidence for these predictions is given, nor are the predictions considered. It is likely that the predictions are false.
Then Cowen added:

And in fact isn't this precisely the opposite of what the evidence on the employer size wage-premium tells us? If large firms were better at keeping wages down, then the employer size wage-premium would be negative, since small firms would pay more for comparable workers.
Cowen proceeded to list studies going all the way back to 1911 that made the same conclusion, yet people - even those with a world view that prizes empirical evidence - continue to believe that inequality exists because CEO's cannibalize their employees.

Gauge the status of the poor, not the rich

Instead of focusing on how good the rich have it, the real measure of improvements to a society are in the living standards of the poor. Checking to see if the poor are suffering is more important than envying the rich.

A college astronomy class I took described the observation that all other stars appear to be moving away from us, as if the Earth were the still center of the universe. But all positions in space are relative, and my professor said our solar system and all the stars are moving away from the spot where the Big Bang took place. The reason some seem to be moving towards it and some away from it is differences in speed. The stars moving the fastest appear to be moving in one direction, while from our position the slow stars appear to move in the other way as we outrun them.

The same thing is true for standard of living. The rich are getting richer much faster than anyone else, while the poor are getting richer at a slow rate. But most of the wealth increases the poor have enjoyed have been in the form of quality of life improvements, and as Brad Delong revealed in his famous Cornucopia paper, it's impossible to gauge standard of living increases in a meaningful way.

The way the Bureau of Labor Statistics measures standard of living increases is to compare how much it would cost to purchase a collection of common items. A major flaw here is that it ignores improvements in technology. A car from 1940 is vastly inferior to a car from 2010 that has airbags, a CD player, cruise control, low gas mileage and an alarm, but they are cast as the same item in government statistics. A computer from 1990 had a fraction of the power of a modern one. Even an iPod from a 8 years ago is vastly inferior to one from today. As these better versions replace the old ones, the poor experience an invisible standard of living increase.

Increased inequality as a natural phenomena

The most concise explanation for rises in inequality was made by economist Alex Tabarrok in his post about the gulf between Harry Potter author J. K. Rowling and classic writers like Shakespeare.

J.K. Rowling is the first author in the history of the world to earn a billion dollars. I do not disparage Rowling when I say that talent is not the explanation for her monetary success. Homer, Shakespeare and Tolkien all earned much less. Why? Consider Homer, he told great stories but he could earn no more in a night than say 50 people might pay for an evening's entertainment. Shakespeare did a little better. The Globe theater could hold 3000 and unlike Homer, Shakespeare didn't have to be at the theater to earn. Shakespeare's words were leveraged.

Tolkien's words were leveraged further. By selling books Tolkien could sell to hundreds of thousands, even millions of buyers in a year - more than have ever seen a Shakespeare play in 400 years. And books were cheaper to produce than actors which meant that Tolkien could earn a greater share of the revenues than did Shakespeare (Shakespeare incidentally also owned shares in the Globe.)

Rowling has the leverage of the book but also the movie, the video game, and the toy. And globalization, both economic and cultural, means that Rowling's words, images, and products are translated, transmitted and transported everywhere - this is the real magic of Ha-li Bo-te.

Rowling's success brings with it inequality. Time is limited and people want to read the same books that their friends are reading so book publishing has a winner-take all component. Thus, greater leverage brings greater inequality. The average writer's income hasn't gone up much in the past thirty years but today, for the first time ever, a handful of writers can be multi-millionaires and even billionaires. The top pulls away from the median.

The same forces that have generated greater inequality in writing - the leveraging of intellect, the declining importance of physical labor in the production of value, cultural and economic globalization - are at work throughout the economy. Thus, if you really want to understand inequality today you must first understand Harry Potter.

Clearly, J. K. Rowling did not steal wealth from Shakespeare, and most readers are happy to buy her books over other authors. Both libertarian Russ Roberts and progressive Matthew Yglesias chimed in with the same idea of larger consumer pools and smaller marginal costs as a main component of inequality. Yglesias captured the idea as a justification to redistribute wealth - probably the most compelling argument for that policy idea I've ever heard.

I'd like people to shift their focus from inequality and back to the standard of living. Natural inequality does not lower the standard of living, but forced equality will as top producers will innovate less if they are not rewarded. Thwarting high wages for rare skills is a recipe for poverty, not prosperity. As Milton Friedman said:

A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.


Tuesday, September 21, 2010

"Don't Ask Don't Tell" deserves an honorable discharge

There was a rally in Portland this week to encourage Senators Susan Collins and Olympia Snowe to vote to repeal the Don't Ask, Don't Tell policy that requires military members to keep silent about being gay.

As expected, the event was about sweeping condemnations and great injustices. The centerpiece of the event was pop singer Lady Gaga, who compared the policy to past injustices and yelled a lot.

I'm here because Don't Ask, Don't Tell is wrong. It's unjust. And fundamentally, it is against all that we stand for as Americans.
I get the idea that modern protesters pine for the racist early-1960s. They were born too late to participate in the civil rights marches, when the divide between good and evil was obvious and palpable. So instead, as we sweep our society for the final strongholds of prejudice, the rhetoric becomes exaggerated and the injustices of today are portrayed as equal to the injustices blacks faced in our past.

Lady Gaga's summarization of the support for the Don't Ask, Don't Tell is "unit cohesion," morale and homophobia. This leaves something important out - the protection of gay soldiers.

The first clue for young people should be the timing of Don't Ask, Don't Tell. This policy was approved by the Legislative branch in 1993 when the Democrats controlled both houses of Congress and signed into law by Bill Clinton. Even Congressman Barney Frank (D-MA) voted in favor of H.R. 2401 a full six years after he came out as gay. Why on earth would the Democrats introduce such a policy?

Because before Don't Ask, Don't Tell there was Ronald Reagan's Defense Directive 1332.14 which banned gays from the armed services. President Clinton issued his own Defense Directive 1304.26, which inserted Don't Ask, Don't tell into the annual "National Defense Authorization Act" which authorizes military spending. This was after Congress tried to keep Reagan's ban in place.

This was more than just a compromise. On Oct 27, 1992 radioman Allen R. Schindler Jr. was brutality stomped to death by a fellow Navy seaman for being gay. Then as now, a high-profile tragedy often leads to rushed legislation. With Clinton's compromise, people like Schindler wouldn't be targeted with violent hate crimes because few, if anyone, would know they were gay.

Important compromises in our history never look good to us because we forget what the alternative was. The three-fifths compromise wasn't an official racist policy; it was a way to limit the congressional power of slaveholding states. Southern states wanted to say blacks were property, except when they were counting for representatives in Congress, then they were people.

Likewise, the Separate but Equal doctrine that justified segregation was a compromise. Without it, you would have seen blacks banned from public restrooms without a place to go. Instead, we saw blacks with different bathrooms. Awful, yes, but it was still progress.

It's no secret that the quality of the alternative water fountains and other facilities was lower. However, this was a direct violation of the doctrine, not an embodiment of it. The reason we ended up with "separate but unequal" was that the written doctrine was not enforced.

Without these hated compromises, we would have seen slaves counted as full people when determining how many representatives to give southern states, and blacks would have had less access to public facilities. The next generation will look at proposals to offer gays "civil unions" the same way.

Without Don't Ask, Don't Tell, gays would still have been discharged from the military, only their superior officers would have the added ability to seek them out for dismissal.

However, 2010 is not 1993. Modern members of the armed services are not as hostile to gay comrades as the previous generation was. Don't Ask, Don't Tell needs to go away. It served its duty and now it's time to retire the policy. But let's not smear the service it performed. Don't Ask, Don't Tell deserves an honorable discharge.


Saturday, September 18, 2010

Amusing locavore line

From Michael Lewis's amazing plain-English telling and unexpectedly amusing story of the Greek debt crisis.

Most of what the monks eat they grow themselves within a short walk of the dining hall. Crude silver bowls contain raw, uncut onions, green beans, cucumbers, tomatoes, and beets. Another bowl holds bread baked by the monks, from their own wheat. There’s a pitcher of water and, for dessert, a soupy orange sherbet-like substance and dark honeycomb recently plundered from some beehive. And that’s pretty much it. If it were a restaurant in Berkeley, people would revel in the glorious self-righteousness of eating the locally grown; here the food just seems plain.


Friday, September 17, 2010

A Naomi Klein reader

I have nothing of value to add to the criticism of Naomi Klein's anti-capitalism book The Shock Doctrine, I simply wanted to collect all of the great reactions from economists in one place.

Brad Delong goes first because he's an out-and-out liberal and his criticism is the most blunt when he says it doesn't meet minimum intellectual standards. He goes on to say that the books endorsement by Joe Stiglitz is a black mark on his record. Delong, who also linked damning anti-Klein posts here and here, said a quote from Keynes on Trotsky applies to Klein:

Granted his assumptions, much of Trotsky's argument is, I think, unanswerable.... But what are his assumptions? He assumes that the moral and intellectual problems of the transformation of Society have been already solved--that a plan exists, and that nothing remains except to put it into operation.... An understanding of the historical process, to which Trotsky is so fond of appealing, declares not for, but against, Force at this juncture of things.... All the political parties alike have their origins in past ideas and not in new ideas and none more conspicuously so than the Marxists. It is not necessary to debate the subtleties of what justifies a man in promoting his gospel by force; for no one has a gospel. The next move is with the head, and fists must wait...
Tyler Cowen wrote a review of the book for The New York Sun. It's pretty harsh, despite Cowen's claim that he enjoyed reading it. It's hard not to link the entire review, so here's a tidbit:

Ms. Klein's rhetoric is ridiculous. For instance, she attaches import to the fact that the word "tank" appears in the label "think tank." In her book, free market advocates are tarred with the brush of torture, because free market advocates often support unpopular policies, and torture also often supports unpopular policies. Clearly, by her tactic of freewheeling association, free market advocates must support torture. Often Ms. Klein's proffered connections are so impressionistic and so reliant on a smarmy wink to the knowing that it is impossible to present them, much less critique them, in the short space of a book review.

Rarely are the simplest facts, many of which complicate Ms. Klein's presentation, given their proper due.

First, the reach of government has been growing in virtually every developed nation in the world, including in America, and it hardly seems that a far-reaching free market conspiracy controls much of anything in the wealthy nations.

Second, Friedman and most other free market economists have consistently called for limits on state power, including the power to torture.

Third, the reach of government has been shrinking in India and China, to the indisputable benefit of billions.

Fourth, it is the New Deal — the greatest restriction on capitalism in 20th century America and presumably beloved by Ms. Klein — that was imposed in a time of crisis.

Fifth, many of the crises of the 20th century resulted from anti-capitalistic policies, rather than from capitalism: China was falling apart because of the murderous and tyrannical policies of Chairman Mao, which then led to bottom-up demands for capitalistic reforms; New Zealand and Chile abandoned socialistic policies for freer markets because the former weren't working well and induced economic crises.
Cowen does say she's in the right when she says market advocates value markets over democracy, but this is in a post coated with stark criticism of all her other ideas.

Johan Norberg wrote what I find to be the most in-depth criticism of the book. It was enough to earn a response from Klein. He called into question her claim:

That between 25 and 60 percent of the population is discarded or becomes a permanent underclass in countries that liberalize their economies.
The data in her response that she used to justify this claim was:

  • Unemployment in Bolivia was between 25% and 30% in 1987 (page 186. Source: Mike Reid, “Sitting Out the Bolivian Miracle,” Guardian (London), May 9, 1987.)

  • 25% of Russians lived in desperate poverty in 1996 (page 300. Source: Russian Economic Trends 5, no. 1 (1996): 56–57 cited in Bertram Silverman and Murray Yanowitch, New Rich, New Poor, New Russia: Winners and Losers on the Russian Road to Capitalism (Armonk, NY: M.E. Sharpe, 2000), 47.)

  • Unemployment for black South Africans more than doubled from 23% in 1991 to 48% in 2002 (page 272. Sources: “South Africa: The Statistics,” Le Monde Diplomatique, September 2006; Michael Wines and Sharon LaFraniere, “Decade of Democracy Fills Gaps in South Africa,” New York Times, April 26, 2004.)

  • Unemployment in Poland was at 25% in some areas in 1993 (page 241. Source: Mark Kramer, “Polish Workers and the Post-Communist Transition, 1989–93,” Europe-Asia Studies, June 1995)

  • 40% of young workers were unemployed in Poland in 2005 (page 241. Source: Andrew Curry, “The Case Against Poland’s New President,” New Republic, November 17, 2005)

  • 59% of Poles had fallen below the poverty line in 2003 (pages 241-242. Source: Przemyslaw Wielgosz, “25 Years of Solidarity,” August 2005.)
  • Norberg replied to Klein with a slam dunk:

    In my paper I wondered why she provided us with neither an explanation for what this means, nor a footnote or source. Now we know, because in her response she openly admits that this is just her own summary of different (and sometimes incomparable) statistics on poverty and unemployment from a brief period and sometimes only a year from no more than four countries — Bolivia in 1987, Russia in 1996, some areas of Poland in 1993 and so on. She doesn't even use data series, but newspaper articles and books with information on just that particular year.

    Astonishingly, Naomi Klein calls this way of handling statistics and producing general conclusions on the effect of particular policies "standard practice." Well, it might be standard practice for some Canadian leftist fanzines, but at university we usually call it "rubbish." Not just because of the lack of data, but also of the biased choices — there is no explanation for the particular selections, it's not that they liberalised more than others, or that they are representative, and the years chosen are not the most recent ones, or from a particular period after liberalisation. It is that she found countries and years when things were really, really bad.

    For example, I don't think that Klein just happened to pick the one year Bolivia's unemployment was 25-30 percent and just forgot to mention that it was soon reduced to less than 10 percent. And it is probably no coincidence that she looks at mass unemployment in Poland 15 years ago, and not today when it has been reduced to less than 10 percent. We don't have to mention that one of her statistics on Poland in 2006 comes from a 2005 article to see that something is very, very strange here.

    If I took four other countries, other regions and/or other periods I would easily get the opposite result (for example if I looked at liberalisers like Estonia, Ireland, Iceland and Australia that Klein never writes about because they are too peaceful, democratic and successful).

    The fact that Klein thinks that this is serious research is actually much more damaging for her than any of the conscious distortions that I have examined elsewhere.

    If you want unbiased data you obviously can't cherry-pick countries and years, you have to look at longer periods and more countries. But if you do, you get the opposite results — the more liberal economy, the lower the unemployment and poverty rates, is the consistent result. And this is the reason why Klein never even tries.

    That's really all you need to read. Norberg also summarized her arguments and his additional criticisms of them.

    In her book The Shock Doctrine, Naomi Klein introduces three arguments:

    1. Economic liberalisation is unpopular, so those who want to liberalise often hope for a crisis of some sort, so that they can implement their reforms when people can't resist — a form of "disaster capitalism" that they have learned from the Chicago economist Milton Friedman.
    2. Economic liberalisation in recent decades has most often been the result of this "global strategy," of reformers taking advantage of political violence, military coups, war and natural disasters.
    3. This liberalisation, especially after 1990 when global capitalism lapsed into "its most savage form," has resulted in widespread poverty and unemployment.

    What Klein failed to respond to

    In my briefing paper on Naomi Klein's book I show that those three claims are false.

    1. Klein doesn't find any economists who believe in this "global strategy." She has to take Milton Friedman's quotes out of context to give that impression. The closest thing she ever comes is one economist who once asked a question at a seminar about whether high inflation might build a pro-reform consensus.
    2. Since economic liberalisation has happened in almost all countries in the world to some extent in the last decades, Klein can pick examples of reforms taking place in dictatorships and in times of war and natural disasters. But if you look at the whole world and use statistics instead of anecdotes, you see that reforms have gone the furthest in peaceful democracies, and the era of "savage capitalism" has been the era of democracy — the number of electoral democracies increased from 76 to 121 between 1990 and 2007, according to Freedom House.
    3. Since 1990, worldwide GDP per capita has increased by a third and absolute poverty has been reduced from 42 to 26 percent according to brand new World Bank statistics (updated since I wrote my paper). 76,000 people were lifted out of extreme poverty every day under "savage capitalism." And there is a strong correlation: The more economic freedom in a country, the lower the poverty and unemployment rates are.
    In addition, someone took the time to contrast video clips of Klein's claims about Milton Friedman with clips of what Friedman actually said:


    Thursday, September 16, 2010

    Obama adminstration tortures, assassinates

    Did I wake up in Bizarro World?

    WASHINGTON — The Obama administration, fresh off a victory in persuading federal judges to dismiss a torture case for fear of revealing state secrets, is divided over using similar tactics to try to block a lawsuit over government efforts to kill an American citizen accused of ties to Al Qaeda.
    And the right-wing rag that printed this lede paragraph? The New York Times.


    Monday, September 13, 2010

    It's all about the tomatoes

    If there's one piece of produce that keeps coming up in local food issues, more than any other crop, it's the powerful tomato.

    Tomatoes are a staple ingredient in modern cuisine, integral in salads, sandwiches, soups, stews, sauces and condiments. The United States Department of Agriculture estimates the average American eats 22 pounds of tomatoes each year, and half of that is in ketchup and tomato sauce.

    Tomatoes are also a wonderful example of the positive effects globalization can have on culture. The Etruscans brought pasta with them when they were assimilated into Roman culture and the Spanish brought the first tomatoes to Italy in 1522 all the way from Peru. This mixing of culture and plant life has shaped Italian cuisine into something incredible, something that would have been impossible if they had remained restricted to local, native ingredients.

    Locavores claim that local tomatoes taste much better than what the grocery stores sell because the delay between harvesting and consumption can take a week. Tomatoes that are bred for transportation have to be tougher and thus blander, while the fragile "heirloom" tomatoes that local farmers sometimes grow taste much better.

    I've expressed skepticism at that idea of heirloom tomatoes tasting better, as people's expectations can trick their taste buds. However, a Freakonomics blog interview with agricultural economist Daniel Sumner brought up this pesky, inconvenient exchange:

    Q: Do you have a personal garden at home? If so, what are your major crops and why?

    A: We have lemons, plums, peaches, nectarines, oranges, and apricots in the backyard. We used to grow tomatoes, but the local tomatoes here are quite tasty and available during the same months when our backyard tomatoes are producing. Also, any friends and neighbors are happy to share their crops during the peak seasons.

    Sumner is critical of the environmental and economic arguments of the localist movement, but his specific mention of tomatoes showed me that its likely there are some taste differences in specific crops. In the same interview he also mentioned strawberries:

    I love to go out and buy strawberries from the little two-acre field a couple of miles from my house. Some days by the time I get there he has sold out of his daily harvest from that field and he will try to sell me the bigger prettier ones from his “other field.” But one taste is enough to make me wait for a day.
    Unlike tomatoes, strawberries are something I will eat unprepared and after eating a few local strawberries I had to admit that they do taste better. Unquestionably.

    This lends credibility to the taste hierarchy of tomatoes. I'm spending a little more time on this small aspect than I normally would because it is an admission of a flaw in something I've written before, and I don't want to rush over it.

    What are heirloom tomatoes?

    Having heard the term "heirloom tomato" thrown around so long, I finally looked it up. From CNN's food snob blog Eatocracy:

    Here's the deal. Heirloom seeds come from plants that have remained genetically unchanged and have been open-pollinated (by insects, birds, wind, etc.) for at least 50 - or some say 100 - years. This means no hybridizing with other varieties of plants. This has its ups and downs.

    On one hand, the Amish Paste or Beefsteak tomato you're biting into tastes the same as it would have in your grandfather's day. It hasn't been genetically modified to select durability or uniform appearance over flavor, so while it might be lumpy and bumpy, and appear any color from moon-pale, purple, pink or black to gold, green, yellow, brown and zebra-striped, chances are it's going to be luscious, or growers wouldn't have bothered propagating the line.

    On the other, a cruelly short shelf life and thin skin can cause havoc for a farmer who's looking to transport a harvest, and many varieties haven't been bred for disease resistance - hence the devastation wrought by last year's blight. Also - some people just like a uniformly round, red, taste-free tomato.

    Let them have the bland, beauty pageant supermarket 'maters. We'll hold out for the ugly stuff.
    Organic blogger Gary Ibsen, who specializes in tomatoes, makes the case for heirloom tomatoes less about taste and more about warding off the apocalypse:

    In the past 40 years, we've lost many of our heirloom varieties, along with the many smaller family farms that supported heirlooms. The multitude of heirlooms that had adapted to survive well for hundreds of years were lost or replaced by fewer hybrid tomatoes, bred for their commercially attractive characteristics.

    In the process we have also lost much of the ownership of foods typically grown by family gardeners and small farms, and we are loosing the genetic diversity at an accelerating and alarming rate.

    Every heirloom variety is genetically unique and inherent in this uniqueness is an evolved resistance to pests and diseases and an adaptation to specific growing conditions and climates. With the reduction in genetic diversity, food production is drastically at risk from plant epidemics and infestation by pests. Call this genetic erosion.

    The late Jack Harlan, world-renowned plant collector who wrote the classic Crops and Man while Professor of Plant Genetics at University of Illinois at Urbana, wrote, "These resources stand between us and catastrophic starvation on a scale we cannot imagine. In a very real sense, the future of the human race rides on these materials. The line between abundance and disaster is becoming thinner and thinner, and the public is unaware and unconcerned. Must we wait for disaster to be real before we are heard? Will people listen only after it is too late."

    It is up to us as gardeners and responsible stewards of the earth to assure that we sustain the diversity afforded us through heirloom varieties.

    So it sounds like heirloom tomatoes could provide a bulwark against diseases and carry the last genes of tasty produce.

    A Scientific American article from last year says otherwise. It turns out the heirloom tomatoes have little chance against disease and their taste is a result of growing styles - not genetics:

    Famous for their taste, color and, well, homeliness, heirloom tomatoes tug at the heartstrings of gardeners and advocates of locally grown foods. The tomato aficionado might conclude that, given the immense varieties—which go by such fanciful names as Aunt Gertie's Gold and the Green Zebra—heirlooms must have a more diverse and superior set of genes than their grocery store cousins, those run-of-the-mill hybrid varieties such as beefsteak, cherry and plum.

    No matter how you slice it, however, their seeming diversity is only skin-deep: heirlooms are actually feeble and inbred—the defective product of breeding experiments that began during the Enlightenment and exploded thanks to enthusiastic backyard gardeners from Victorian England to Depression-era West Virginia. Heirlooms are the tomato equivalent of the pug—that "purebred" dog with the convoluted nose that snorts and hacks when it tries to catch a breath.

    "The irony of all this," says Steven Tanksley, a geneticist at Cornell University, "is all that diversity of heirlooms can be accounted for by a handful of genes. There's probably no more than 10 mutant genes that create the diversity of heirlooms you see."


    The selection of these traits has taken a toll on the heirloom's hardiness: They are often plagued by fungal infections that cause the fruit to crack, split and otherwise rot quickly. Wild plants must continuously evolve to fend off natural pathogens, points out Roger Chetelat of the Tomato Genetics Resource Center at the University of California, Davis. But in their quest for size, shape and flavor, humans have inadvertently eliminated defensive genes. As a result, most possess only a single disease-resistance gene.

    Perhaps that's the price to pay for a good, flavorful fruit? Hardly, Chetelat says, because the heirlooms' taste may have less to do with its genes than with the productivity of the plant and the growing environment. Any plant that sets only two fruits, as heirlooms sometimes do, is bound to produce juicier, sweeter and more flavorful fruit than varieties that set 100, as commercial types do. Plus, heirlooms are sold ripened on the vine, a surefire way to get tastier results than allowing them to mature on the shelf.
    So all of this fawning over heirloom tomatoes is about a slow, land-intensive and inefficient growing style, where each vine is only allowed to grow two tomatoes. This is essentially a luxury good, like a hand-made pair of shoes, where a skilled craftsman charges much more than a factory-produced version for those who can afford it. Saying everyone should only eat heirloom tomatoes is like saying everyone should eat caviar and turn up their nose at anything less.

    I'm reminded of what Jeffrey Steingarten wrote in his chapter Salt Chic in It Must've Been Something I ate. Gourmets claim that expensive sea salt gives a superior taste to iodized salt, but when given a taste test with the salt in a prepared entree, they were unable to tell the difference. Food snobs still make a huge deal out of the ingredient, but it loses its edge when combined with a flurry of other tastes and textures.

    Tomatoes will stand out in a salad or when eaten solo, but the premium someone pays for a luxury tomato is wasted when it's cut up and incorporated into a dish with ten other items.

    Local foods suffer from seasonal availability

    Because the tomato is the unofficial mascot of the locavore movement, I did the math to see what fraction of the year they can actually get fresh, natural tomatoes here in Maine. The answer is a mere one-quarter of the year.

    Growing season in Maine is from May to early October, or about five months. The plants take a minimum of 58 days to produce edible fruit, so the edible season is down to just over three months.

    This season can be extended using heated greenhouses, but this compromises the philosophy that people should only eat where food can be grown outside as nature intended. It's also damaging to the environment to spend energy heating plants when they can be grown in other parts of the world outside year round.

    The solution for committed locavores is to preserve the tomatoes for the rest of the year.

    It's rather odd to realize that the relentless example local food activists always turn to in the tomato is such a brief phenomena out of the year. This one-quarter of the year figure assumes locavores will be picking tomatoes out of their gardens each week. In practise, its much less because tomatoes lose most of their flavor a few hours after they are picked, according to a Science Wire article:

    Once a fully ripened tomato is picked, its flavor deteriorates quickly. There are more than four hundred compounds, aromatic as well as flavorful, in the fruit. They all act in concert to let you know you are eating a tomato rather than a turnip. After the fruit is picked, these compounds rapidly deteriorate. Just two hours off the vine, a tomato has lost some of the factors that make it taste so good. The flavor also suffers if a ripe tomato is kept for more than a few hours in a refrigerator.
    Most farmers' markets are open once a week, so assuming those tomatoes are picked right before they are sold, those localvores only get the benefit of fresh tomatoes once a week during the growing season, or about 14 days out of the year.

    So while I admit there are some taste preferences to be found in heirloom tomatoes, the same can be said for a $90 box of chocolates. It's up to the consumer to decide if the taste is worth paying for.


    Friday, September 10, 2010

    The right to discriminate against customers

    I hope my bitterness isn't showing.

    When I was in cub scouts, our den spent two weeks writing, building and practicing all of the components of a puppet show. We had a big cardboard box we made into a theater and the puppets were static figures on the end of popsicle sticks.

    Attending the puppet performance meant my mom and I had to delay an extra day to leave for a family trip up north. It was held in the middle school gymnasium.

    So after the performance, I asked my Mom what she thought of our work. I've never forgotten the conversation that followed.

    She was unable to make any sense of the puppet show because a small pack of screaming infants were running lose the entire time. The audience could see the sloppy figures we made, but no one could hear a word of the script we had written. All of that effort was wasted.

    Angered, I asked my mother why people would bring unruly infants to a live performance. She said it was a family event, so all children are welcome.

    That never sat right with me, and a news story this week has touched off the debate about what right people have to be free of disruptive children.

    The Olde Salty's Restaurant in North Carolina printed off some signs saying screaming children will not be tolerated, and the staff will evict any table that includes an unruly child. Children in general aren't banned - but the ones who make a scene are asked to leave until they calm down. Angry parents have said restaurant owner Brenda Armes is discriminating.

    And they're right.

    Just as customers are free to discriminate against restaurants they don't want to patronize, businesses should be free to turn away customers they don't want. In this case it's clear that Brenda Armes does not have some deep resentment of children - she just wants her customers to have an enjoyable atmosphere. She use discretion to sort out the troublemakers - people who are caught in the act of disrupting others.

    The weird defense of some offended parents is that they can't control their children - a mild admission of irresponsibility. However, how does that justify bringing loud children into unwelcome restaurants? If I had a dog that leaks a thick, black ichor everywhere I go, I would not take it over to a friend's house. How would saying "I have no control over how much slime comes out of my dog" change the fact that I am harming others?

    The popular culture has learned the term "externality" from economics in terms of corporate pollution, and it applies equally to this case. A screaming child destroys the enjoyment of the strangers around him or her. Those people have not been presented with a choice to be in that situation, or reaped any benefits from the child. They are paying a cost for an action they had no role in.

    Two sides of the same coin

    The right for businesses to discriminate was recently mishandled by Rand Paul. Simply put, businesses already have an incentive not to discriminate - it hurts profits. Even racist business owners know that dollar bills spend the same, no matter who they came from, and it's foolish to turn paying customers away. This is well understood by multiple Nobel Prize-winning economists, including Gary Becker and Milton Friedman.

    In addition, customers will avoid businesses that they think unfairly discriminate, so being caught discriminating is a dangerous game.

    The market does a good job of preventing discrimination. It does an even better job when the public opposes discrimination, such as the modern opposition to racism. This is compared to government solutions to discrimination, which only kick in when it becomes politically popular. If the public supports racism, then the government will pass things like Jim Crow instead.

    While the market failed to prevent "whites only" businesses in the South, government action didn't prevent it either because that's what the public supporte.

    Gay marriage supporters do not pretend that a majority of the public support their position. They are counting down until that shift happens to change the laws. Why? Because when government is allowed to be involved in discrimination, the side it chooses depends on the whim of the public. Institutional discrimination and anti-discriminatory laws are two sides of the same coin.

    Government involvement in discrimination also has other consequences; false positives, fraudulent accusations, firms need to spend resources to protect themselves from these mistakes and some firms are discouraged from hiring the targeted groups to protect themselves from hiring a potential liability.

    There are also the losses of freedom to business owners. Roger Pilon of the Cato Institute asked:

    Suppose you're an Italian restaurateur and you want to have only Italian men as your waiters because that's the ambience you want. Shouldn't you be able to do that?
    By the same token, I would be opposed to a law banning screaming children from all restaurants. It should be the choice of business owners to keep out people they think will disrupt customers. If it turns out the policy was a mistake, the loss of business will force the owners to repeal their own rules.

    But they can't change the law if hurts their profits. They may end up going out of business.

    But profits are up

    Back at Olde Salty's Restaurant, the decision to discriminate has not hurt profits. Brenda Armes said sales are up. Some of this can be attributed to all the media attention her restaurant has received, but most of it appears to be because customers like the policy.

    After all, don't people without children have the right to a restaurant where they can be left in peace? It's clear enough people want it.

    Last year I went to the midnight release of Watchmen. Half an hour in a baby started screaming in one of the seats. I realize it's hard to find a babysitter that late, but when you become a parent you have to make some sacrifices, such as not being able to see a movie the split-second it's released.

    Shouldn't the theater owner be able to have a policy keeping young children out of movies for adults? Movie goers were mad that these people were not thrown out. As a customer, would you be more or less likely to attend a movie theater that banned all loud people, regardless of their age?


    Monday, September 6, 2010

    Can't we treat Islam the same as other religions?

    There's a lot of attention going to a Florida church that plans to burn a copy of the Quran on Sept. 11.

    I realize there is a lot of talk about how Americans treat Muslims today, and for good reason - there is a lot of anger being directed at innocent Muslims. However, Christians have been in that boat for as long as I can remember. Bible burning never gets this much attention, and a quick google search churns up tons of photographs and videos of the act.

    When trendy artists showed off a crucifix soaked in urine and a painting of the Virgin Mary stained with elephant dung, Christians were angry. They wrote letters to the editor, made lengthy speeches and boycotted art galleries.

    Compare that to the rather tepid form of blasphemy that Muslims usually endure, such as the Danish cartoons in 2005 which lead to more than 100 deaths, or the murder of Theo van Gogh after he made a film about the violence women face in Islamic cultures. The creators of South Park were bullied into changing an episode earlier this year. From the New York Times:

    Cognizant that Islam forbids the depiction of its holiest prophet, Mr. Stone and Mr. Parker showed their “South Park” characters agonizing over how to bring Muhammad to their fictional Colorado town. At first the character said to be Muhammad is confined to a U-Haul trailer, and is heard speaking but is not shown. Later in the episode the character is let out of the trailer, dressed in a bear costume.

    The next day the “South Park” episode was criticized by the group Revolution Muslim in a post at its Web site, The post, written by a member named Abu Talhah Al-Amrikee, said the episode “outright insulted” the prophet, adding: “We have to warn Matt and Trey that what they are doing is stupid, and they will probably wind up like Theo van Gogh for airing this show. This is not a threat, but a warning of the reality of what will likely happen to them.”
    It's true that the anti-Muslim fervor in New York City recently lead a young man to stab a Muslim cab driver with the intention of murdering him simply for his faith. Mosques have also been the target of vandals. This is a terrible wave of hate crimes.

    But in fairness, so are the attacks on Mormon churches. Some members of the religion organized an anti-gay marriage campaign in California, so all Mormons are being held responsible by the vandals. A Mormon bishop was murdered a week ago, but it wasn't worthy of national news.

    Muslims deserve to be treated fairly in America. They are not below the other faiths, but they're not above them either. All I ask is that we treat them the same as any other religious group.


    Thursday, September 2, 2010

    Overpopulation is not a threat

    A deranged Malthusian extremist took several people hostage at the Discovery Channel headquarters this week before being shot by police. No one else was injured. His demands revealed a hatred of humanity, capitalism and technology. James Lee was concerned that the human population growth would destroy the planet as it consumes all of the world's resources.

    In 1968, Paul Ehrlich, a biologist who specializes in butterflies, stepped beyond his realm of expertise when he wrote The Population Bomb. It has the lowest consistent reviews on Amazon I have encountered:

    That's because Ehrlich made specific predictions about the carnage that would follow as humanity tore itself apart for the last of the Earth's resources. He said England probably wouldn't be around by the year 2,000 and that prices of food and raw materials would climb and climb. The opposite has happened, but Ehrlich - who still teaches at Stanford University - has never reversed his views.

    Business professor Julian Simon famously challenged Ehrlich to a $1,000 wager in 1980. Ehrlich was allowed to select five commodity metals - nickel, tin, copper, tungsten and chromium - and essentially bet if they would go up or down in price over the next decade.

    All five went down. To his credit, Ehrlich paid up.

    But why did he lose? The planet has finite resources and they are consumed as we harvest them.

    Well yes, but as Simon wrote in his book The Ultimate Resource, human ingenuity is one resource that doesn't get used up. As technology advances, we are able to take materials out of nature and find uses for them. Things like petroleum, platinum and uranium were useless to our ancestors. We also get more efficient with the resources we already have. Simon proceeded to trounce all of the claims from the fearmongers and showed that the fear of running out of resources goes back to ancient civilizations.

    And the Amazon reviews? Off the hook:

    The population phobia of 2010

    James Lee demanded that the Discovery Channel change it's programming to propagandize his pet views. For example, his fourth demand:

    Civilization must be exposed for the filth it is. That, and all its disgusting religious-cultural roots and greed. Broadcast this message until the pollution in the planet is reversed and the human population goes down! This is your obligation. If you think it isn't, then get hell off the planet! Breathe Oil! It is the moral obligation of everyone living otherwise what good are they??
    Which is similar to demand number six:

    Find solutions for Global Warming, Automotive pollution, International Trade, factory pollution, and the whole blasted human economy. Find ways so that people don't build more housing pollution which destroys the environment to make way for more human filth! Find solutions so that people stop breeding as well as stopping using Oil in order to REVERSE Global warming and the destruction of the planet!
    It's a little bit of a stretch to call Lee a localist for his quest to "solve" international trade, but there's a strong possibility he believed in food miles with this talk.

    I'm also not going to call Lee a racist, even after he wrote this as demand number five:

    Immigration: Programs must be developed to find solutions to stopping ALL immigration pollution and the anchor baby filth that follows that. Find solutions to stopping it. Call for people in the world to develop solutions to stop it completely and permanently. Find solutions FOR these countries so they stop sending their breeding populations to the US and the world to seek jobs and therefore breed more unwanted pollution babies. FIND SOLUTIONS FOR THEM TO STOP THEIR HUMAN GROWTH AND THE EXPORTATION OF THAT DISGUSTING FILTH! (The first world is feeding the population growth of the Third World and those human families are going to where the food is! They must stop procreating new humans looking for nonexistant jobs!)
    Lee thinks of the entire human population as pollution, not just Hispanics. By itself this paragraph is interchangeable with something a nationalist hate group would publish, but with Lee's mindset it really doesn't have anything to do with race. The Sierra Club - the environmentalist group that published The Population Bomb - took a firm stance against immigration because they saw it leading to population density, but caved when they were criticized as being motivated by racism.

    Sadly, this issue will never die. Just as mercantilism, placebo medicine and belief in ghosts crops up generation after generation, the overpopulation fallacy will be back. Empirical evidence and carefully-tested theories are the path to deeper truths, not mere common sense.