Blogs are so over
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That’s what I’m hearing, after the pending demise of Andrew Sullivan’s venture. Well fuck that. Fuck your monetization. Fuck your SEO keywords. Fuck your snackable content. Fuck your clickbait. Clear your mind of trivialities and inanities. Don’t waste time arguing with idiots. Tune out the noise. Seek a higher level of consciousness. Get laid.

I plan to leave my nine-to-five gig at the end of this year. And. This. Place. Will. Rock.

I’m on Facebook and Twitter all the time, but I predict the endless drive to “monetize” them will make them shittier and shittier. There will always be an audience for discussions deeper and more substantive than are possible on FB or Twitterville. I don’t need thousands of people to have a rewarding conversation, and I don’t need to get rich.

Maintain, people. We have work to do.

truckin

I’m with Waldo, that’s where
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WaldoHi folks. I’m too fucking lazy to write on hiatus. I still have a full-time job that does not permit me to blog during work hours, and getting up the energy to write after work has been hard. Another factor is the comments here have been pretty sparse, compared to the good old days of MaxSpeak. I miss the give and take. Everybody seems to vent on Twitter, Facebook, and newer platforms I’m too old to figure out.

I’m trying to get up some longer pieces that will have a wider audience. When they publish I will cross-post them here.

I do expect to get more active once my nine-to-five job becomes part-time, or I leave it completely. I’m tanned, rested, and ready. That will happen this fall, I hope.

Thanks for asking.

 

The Story of Thanksgiving, updated for 2014
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“It was wonderful to find America, but it would have been more wonderful to miss it.” – Mark Twain, The Tragedy of Pudd’nhead Wilson

(See also this and this.)

MaxSpeak Summary: the Puritan Christian fundamentalists, of whom the Pilgrims were a subgroup, were murderous, treacherous swine who made a treaty with the indigenous people around Plymouth until they had enough forces to wipe them out. This they later did with smallpox and guns, unless they were able to sell them into slavery, all of course for the greater glory of Jesus Christ.

turkeyWait a minute. That wasn’t quite right. Let’s try it again. Here’s how it goes.

The Puritans in England were subject to religious persecution, lo unto death. They needed a homeland where they could survive as a people and live in peace. They tried to settle in the Netherlands, but it proved inhospitable. Only the possibility of the New World seemed to beckon. It was a land without a people, and they were a people without a land. Puritan leader John Winthrop promised his followers, “If any who dwell in this new lande there bee, they will greete us as liberators.”

Upon settling around Plymouth, the first Puritans (Pilgrims) established amicable relations with the Wampanoag Nation. The Wampanoag had already been depleted by disease brought by previous settlers. They were also subject to aggression by other Native American groups, so their alliance with the Puritans became an outpost of peace, freedom, and enterprise in the New World.

As more Puritans arrived, they required more breathing space. Sadly, Puritan relations with the Wampanoag began to deteriorate. It was discovered that human rights violations had been committed by the Wampanoag sachem, Massasoit. The Puritans suddenly realized their ally was actually history’s greatest monster.

The Wampanoag, like other indigenous peoples, lacked a modern system of property rights. They did not see fit to build fences, put up street signs, or securitize sub-prime mortgages. The Puritans remedied these defects of indigenous culture. Through the workings of the dynamic, efficient market, the Puritans ended up owning all the property, and Native Americans themselves became classified as property.

Taking umbrage at this advance of Judeo-Christian civilization, the indigenous people reduced themselves to terrorism. Some were sufficiently maniacal as to sacrifice their own lives in order to murder innocent settlers. There was a veritable cult of death. Their giant warriors, with faces like demons, would willfully run into hails of bullets. Underlying this irrationality was a primitive religious belief system that celebrated exterminating one’s enemies, as well as the consumption of locoweed and psychedelic mushrooms.

In short, the natives hated the settlers for their freedom and no longer greeted them as liberators. They meant to extend their dominion over the entirety of Europe by summoning the Great Spirit as a weapon of mass destruction.

As a matter of self-defense, the Puritans were compelled to rise to the challenge of this clash of civilizations and wage a preemptive war of extermination salvation for both the terrorists and the societies that nurtured them. There was no middle ground; you were either with them or against them. The settlers’ periodic, totally accidental slaughter of women and children was tragic, painfully regretted collateral damage. Relatives of the victims were amply compensated with beads and trifles.

Those Native Americans who were willing to live in peace and submit to Biblical law were provided with alternative living arrangements, under the protection of the government. Sadly, they proved unequal to the rigors of modern society and eventually disappeared, although they were given the opportunity to experience Democratic Capitalism before their demise.

Today we, “the people who build square things,” celebrate Thanksgiving in tribute to their memory, and to the invaluable assistance they unselfishly
provided for the Christian arrival to America.

Now please pass the gravy.

ScreenHunter_14 Nov. 26 12.49

Memories of development
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My comrade the Sandwichman traces the sad devolution of thinking about public investment in the U.S. Check out the signatories to the letter at the top: Henry Wallace, Frances Perkins, Harry Hopkins, Harold Ickes, Wesley Mitchell. Giants! How did we get stuck with Gene Sperling and Rahm Emanuel? Jack Lew?? Oh please.

????One thing that got lost was the idea of taking advantage of economic downturns to launch new public works projects. I think this is still a good idea, and I’m not the only one.

Contrary to one argument in the post, however, I would not include the stimulus resulting from a project in a benefit-cost calculation. The reason is that it is useful to know benefits and costs abstracting from where we are in the business cycle. That should be the principal criterion, in principle. The stimulus piece is worth knowing as an inducement to accelerating investment during downturns, like the one we are still in, so it should figure in the decision, but it’s a categorically different number.

Alas, it is hard to know benefits and costs. There is a sophisticated, finely-wrought methodology for conducting such analyses. Typically the data required is not available. Moreover, the analysis is flawed by virtue of the fact that it is performed by humans who always operate in a political setting. The customer for a study may have a benign view of a project, or a jaundiced one. He will get what he wants, either way. In a political environment that is adverse to new initiatives —  projects, regulations — benefit-cost analysis is routinely deployed as a bludgeon to kill innovation. Nobody did a cost-benefit analysis of welfare reform in 1996, nor have they since. The politicians wanted it and they got it. What they don’t want, they first say should be the subject of cost-benefit analysis. I would not say the practice evolved to preclude new investment; rather, the politics evolved to create a professional environment adverse to progress. I think the Sandwichman is saying that too.

Big projects are risky, but there is a remedy: do lots of big projects. Some will work out well, others will be white elephants, and on average we will be all right. The wisest principle can be found in Tom Cruise’s big debut film, Risky Business.

I was talking about this with the avowed libertarian economist Bill Niskanen before he passed away, and he actually agreed with me. Suppose it was 1870. Should we build a bridge connecting Brooklyn to Manhattan? Would it have been possible to compute a favorable benefit/cost ratio for this project? Quite possibly not. How about the Panama Canal? People died building both of these things. Very great costs.

It’s not so far-fetched in the current context. We think we have a better methodology, but do we have the data and foresight to gauge benefits and costs of new, innovative projects? What’s the benefit of a modern electric grid? I doubt anybody knows, but I still think it’s worth building.

Perhaps the greatest weakness of the methodology lies in the task of measuring costs and benefits occurring over some extended period of time. To this end future flows are discounted by some rate that purports to equate values in different time periods. If the interest rate is ten percent, $1.10 a year from now is worth a dollar today. Put aside that we’re prognosticating future events like crazy people. There is a more interesting thing going on.

Climate change is going to seriously fuck with the human race. You know that, right? So imagine a blow to those living 200 years from now in the amount of $100 trillion. (Assume no inflation.) A discount rate of 3% is pretty modest, as these things go. How much is that $100T worth to us in present value? The answer is less than $271 billion. The implication is that we should be willing to pay no more to eliminate that risk, today, than $271 billion, even though the hit to those living in 2214 would be more than 369 times higher. We are applying a far lesser weight to their well-being than to our own. They might not forgive us, but we’ll be long dead, so what the fuck.

You might be willing to put a price on carbon calculated to bend the curve on emissions, but I hope you won’t be deluded enough to think you can, or should, calculate a price based on the present value of future harm to humanity. The vanity of economists today knows few bounds. But in 1928 one of the greatest economists, by the name of Frank Ramsey, referred to the conduct of such an exercise as “ethically indefensible and arises merely from the weakness of the imagination.”

The better operating principle is to reverse the current and long-standing emphasis in U.S. public policy characterized by the late John Kenneth Galbraith as favoring “private affluence and public squalor.”

Political science
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If I need a new career I think I could take up political punditry. Little in the way of knowledge or skills is required. For evidence we could look at the assorted explanations for yesterday’s vote. They include:

Turnout. Democratic voters didn’t come out to vote. Sometimes this is boiled down to younger voters, single women voters, or minorities. In other words, people who might vote for Democrats didn’t come out and vote for Democrats.

The Map. Then we hear about ‘the map.’ It refers to the predominance of so-called ‘red states’ whose senators and governors were up for reelection. Red states are dominated by people who don’t vote for Democrats.

In other words, Democrats lost because people didn’t come out to vote for them, or the people who did vote didn’t vote for them. See? You too could be a political expert.

I’m also dubious about the race argument. People supposedly vote Republican because they don’t like black people. But in two cases, black candidates on the Republican side won. Senator Tim Scott of South Freakin Carolina won in a walk, and Mia Love of Utah got a decent margin of victory to became a new member of the House of Representatives. True, there are only two of them, but they won in two of the most conservative states in the U.S. Why? Whatever bothers white folks about Obama doesn’t bother them about Tim Scott and Mia Love. Or Herman Cain, for that matter. Of course, the GOP doesn’t lack for successful women candidates either. I’m not suggesting the Republicans are a fount of enlightenment on race and gender policies, and underneath their animus in that context is some primordial prejudice, but it’s not as simple as a knee-jerk rejection of non-white/non-male faces.

 

An Andy Update
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Quoth Gov. Cuomo:

Ask yourself: If he were more liberal, he would have done what? What more could I have possibly done? You’re gonna use the tax code just to take money from the rich and give it to the poor? That’s not liberalism. That’s confiscation! Liberalism was ‘Lift up the poor.’

This gentleman could eventually make the Clintons look like Fabian socialists.

 

 

McLovin’ it
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anigif_enhanced-buzz-2635-1381917341-10Jacobin
magazine’s Seth Ackerman picks up his favorite chew toy, Matthew Yglesias of Vox, doing the economics of the minimum wage. To be clear at the outset, I think it’s perfectly fine for Yggy to take on diverse topics in which he is non-expert. He’s smart, prolific, writes well, and provokes worthwhile discussion. His economic commentary is usually worth reading, though susceptible to the ‘never in doubt’ syndrome.

The basic target of the Vox piece is whether the U.S. minimum wage could go up to $20 an hour without causing mass job losses. Yglesias is reacting to a New York Times story about the blissful status of minimum wage workers in Denmark, another Nordic social-democracy where everything is better except maybe the food and music.

I think Brother Ackerman overthinks and overworks this question, as far as criticism of Vox goes. Yglesias’ basic argument is an exceedingly brief blog post; it’s not a monograph. Said argument, really not more than an assertion, is that Denmark manages to keep employment high not because of a high minimum wage but thanks to their system of “education, training, active labor market policy, and regulation.” The finger-wagging implication is that the high Danish minimum wage depresses their fast-food employment and could do so much more in the U.S., given our medieval social welfare system.

The Times article notes a number of differences between the U.S. and Denmark that purportedly cloud any comparison of minimum wage effects, but on closer reading, all of them are true differences but at best irrelevant to any such comparison. For instance, it is noted that the fast food industry is more profitable in the U.S., so that means we can’t manage a higher minimum wage? In fact it strengthens the argument for a higher U.S. wage.

The only relevant factoid in the Vox article, via the Times story, is that there are more McDonalds establishments in the U.S. than in Denmark. This means nothing. A minimally relevant comparison would be to the fast food industry as a whole in Denmark, or better, the low-wage sector as a whole. And who says we need a bigger low-wage sector, anyway? The proof in the Danish pudding is their good overall labor market conditions.

So Ackerman is using a sledgehammer to liquidate a flea. He shows there is no correlation between the number of McD franchises and the McWage, which proves more than is necessary.

How high should our minimum wage be? Without doubt it could be higher than the $10.10/hr level proposed by our socialist-Islamist president. I’d assign the wage-setting authority to a triumvirate consisting of John Schmitt, Dean Baker, and Larry Mishel. A special pen surrounded by barbed-wire fencing would be available to dissenting economists who wanted to lodge a protest, in keeping with the current state of civil liberties in the U.S.