Panetta and Trump: Who are You Calling Chumps?

Leon Panetta:

Trump treats Americans like we’re chumps

Check out the entire interview as it was excellent. But I had to look up this old fashion word:

a person who is easily tricked : a stupid or foolish person

OK – Trump supporters are easily tricked. But Trump wants to pretend he is a young vigorous man! Chris Matthews did talk about young people who are more likely to check out Urban Dictionary than the old fashion Merriam-Webster dictionary:

Someone who does not understand the basics of life on earth. Confused easily.

Actually this is the perfect description for Trump supporters. There are more definitions at Urban Dictionary that I would submit also apply!

Prisoners of Overwork: A Dilemma

The New York Times has an illuminating article today summarizing recent research on the gender effects of mandatory overwork in professional jobs.  Lawyers, people in finance and other client-centered occupations are increasingly required to be available round-the-clock, with 50-60 or more hours of work per week the norm.  Among other costs, the impact on wage inequality between men and women is severe.  Since women are largely saddled with primary responsibility for child care, even when couples ostensibly embrace equality on a theoretical level, the workaholic jobs are allocated to men.  This shows up in dramatic differences between typical male and female career paths.  The article doesn’t discuss comparable issues in working class employment, but availability for last-minute changes in work schedules and similar demands are likely to impact men and women differentially as well.

What the article doesn’t point out is that the situation it describes is a classic prisoners dilemma.*  Consider law firms.  They compete for clients, and clients prefer attorneys who are available on call, always prepared and willing to adjust to whatever schedule the client throws at them.  Assume that most lawyers want sane, predictable work hours if they are offered without a severe penalty in pay.  If law firms care about the well-being of their employees but also about profits, we have all the ingredients to construct a standard PD payoff matrix:

There is a penalty to unilateral cooperation, cutting work hours back to a work-life balance level.  If your firm does it and the others don’t, you lose clients to them.

There is a benefit to unilateral defection.  If everyone else is cutting hours but you don’t, you scoop up the lion’s share of the clients.

Mutual cooperation is preferred to mutual defection.  Law firms, we are assuming, would prefer a world in which overwork was removed from the contest for competitive advantage.  They would compete for clients as before, but none would require their staff to put in soul-crushing hours.  The alternative equilibrium, in which competition is still on the basis of the quality of work but everyone is on call 24/7 is inferior.

If the game is played once, mutual defection dominates.  If it is played repeatedly there is a possibility for mutual cooperation to establish itself, but only under favorable conditions (which apparently don’t exist in the world of NY law firms).  The logical solution is some form of binding regulation.

The reason for bringing this up is that it strengthens the case for collective action rather than placing all the responsibility on individuals caught in the system, including for that matter individual law firms.  Or, the responsibility is political, to demand constraints on the entire industry.  One place to start would be something like France’s right-to-disconnect law.

*I haven’t read the studies by economists and sociologists cited in the article, but I suspect many of them make the same point I’m making here.

Media Continues VSP Story On Social Security

Here we go again.  We have arrived at the time for the release of the annual Social Security Administration (SSA) report.  It got the usual headlines across the media, that the SSA will "run out of money" in 2034. Most of the stories played it all scary, although noting that after the system will still pay 3/4 of what it was.  But, of course, Congress can act now to fix the system the stories say, leaving it vague what that would amount to.  Two points on this.

The first is that basically this is a repeat of the deadlines reported last year, 2034 still the year estimated for the trust fund comes to an end, the moment when the baby boomers arguably stop paying for their own retirement, as was put in place back in 1983, the year of the last major change in the system.  So, no new news on those fronts, although most of the media did not note this.  This was supposed to be dramatic new revelation.

The second is that there actually is a piece of new news, and it happens to be good.  It is that the Disability System seems to have become financially stabilized.  This was probably the part of the system that had been recently in the worst financial shape, but now it is doing much better.  However, this good news was downplayed, to the extent it was reported at all. This would have distracted from the bad news stories, which the VSPs like to push so as to suggest cuts in benefits so those tax cuts for the rich can be preserved.

Barkley Rosser

Free Speech, Safety and the Triumph of Neoliberalism

I’m reading another article about debates over free speech on campus, this time at Williams College, an elite school in the northwestern corner of Massachusetts.  A faculty petition asks to formalize and tighten the college’s policy on free speech by adopting the Chicago Principles, which state that “concerns about civility and mutual respect can never be used as a justification for closing off discussion of ideas, however offensive or disagreeable those ideas may be to some members of our community.”  Over three hundred students, however, have signed a counterpetition arguing that speech which harms minorities should not be allowed.  These disputes are interesting to me, partly because my own school, Evergreen State College, went through a conflict along these lines.

Consider for a moment the idea that speech activities can be evaluated by the emotional effects they engender.  One person’s speech makes me feel good: fine.  Another’s makes me feel terrible and should be disallowed.  What this amounts to is assessing political acts according to the utility or disutility experienced by those affected by them.  The “do no harm” criterion is a bit problematic, however, since people can also be subjected to disutility by restrictions on their speech as well as by hearing the speech of others.  If one person feels unsafe because of being silenced, but if they talk, another will feel unsafe because of the speech content, a purely rights-based framework becomes inconsistent.

I can see two ways out.  One is to put forward a hierarchy of rights-bearing, a ranking that resolves rights disputes between any two such individuals.  This seems to be implicit in the way disputes like this actually play out, but if you subscribe to the principle of intersectionality (or more subversively, the principle that individuals are not reducible to their “identities”) the ranking is indeterminate.

The other would be to allow for bargaining and side payments.  Yes, your speech makes me feel unsafe, but I will consent to it if you simultaneously agree to adopt a program I favor, give me additional personal guarantees or something else I value.  Then we are in MarketWorld, where different parties buy and sell pieces of their political agency.

You can probably sense where I’m going.  The neoliberal worldview holds that as many actions in as many spheres as possible should be evaluated according to the effect they have on individual preferences, as revealed by market choices.  Take the example of restoring salmon habitat by taking down a dam.  This is an action with economic consequences, but it is also a matter of social values—how much a community values having an environment in which wild fish, among others, can prosper.  The neoliberal approach is to interpret that value as a consumption good: what affect does salmon restoration have on your sense of preference satisfaction, on your utility or disutility?  There are various techniques that can be used to estimate this, such as a contingent valuation survey.  Instead of having to deliberate politically on the values which we want our community to uphold, giving reasons for them to try to persuade one another, we should take our preferences as given and simply record the overall effect of a proposed choice on well-being.

My reading is that the core psychological principle of neoliberalism, that life is an accumulation of moments of utility and disutility, is alive and well within certain sectors of the “left”.  A speech (or email or comment at a meeting) should be evaluated by how it makes us feel, and no one should have the right to make us feel bad.

I realize I will be accused of trivializing, that I’m not appreciating how bad speech can make some of us feel.  And I agree that the degree of disutility in relation to the political context matters.  Some speech has as its primary purpose making others suffer, through insult or instigating fear, and has little or no persuasive intent.  That’s hate speech, and I don’t see a problem with curtailing it.  Arguably, much of the “provocative” right-wing babble, whose goal is to demean and threaten rather than change minds, falls under this stipulation.  But what distinguishes hate speech is not simply the degree of anguish it evokes but also its lack of any other motive.  Giving an antiwar speech may well cause similar anguish among family members who have lost loved ones in battle, but if the purpose is political, to persuade and enlist, it should be evaluated on political grounds, not its impact on utility.

It’s the greatest power of an ideology that it can seep into the worldview of those who claim to oppose it.

Statistical Significance and the Sweet Siren of Self-Confirmation: A Reply to Taylor

Just as Ulysses had himself chained to the mast of his ship so he wouldn’t succumb to the lure of the Sirens, John Ionnidis and others have argued we must bind ourselves to the discipline of statistical significance lest we fall victim to confirmation bias.  Some researchers will want to proclaim they have found earth-shaking results even if they are enveloped in noise, and others will try to dismiss genuine findings of no effect, even if that is where the data point.  The only way through the choppy seas of statistical investigation (sorry!) is to adhere unstintingly to the decision rule that everything else first depends on whether p is less than or greater than .05.

So says Timothy Taylor, citing Ionnidis:

The case for not treating statistical significance as the primary goal of an analysis seems to me ironclad. The case is strong for putting less emphasis on statistical significance and correspondingly more emphasis on issues like what data is used, the accuracy of data measurement, how the measurement corresponds to theory, the potential importance of a result, what factors may be confounding the analysis, and others. But the case for eliminating statistical significance from the language of research altogether, with the possibility that it will be replaced by an even squishier and more subjective decision process, is a harder one to make.

I don’t think Taylor understands what the issue is.  The question raised by the critique of null hypothesis statistical testing and its centerpiece, the asterisk-earning designation of statistical significance, is not whether we should compute p-values—we should certainly continue to do this or something very similar—but whether a particular cutoff like .05 should be used as a lexicographic decision rule.  As it stands, that’s the role significance plays.  If a finding holds with p < .05 it can then be examined for its provenance (data, model selection) and magnitude; if not it is considered an error or at best a sign of dubious attachment to continue to regard it as evidence.  First check a result’s significance, then look at the rest of the story.

The attack against significance testing is about this decision rule.  I won’t repeat all the arguments for why the rule is misguided; read the Nature comment.  The only point I want to make here is that the practical effect of first categorizing all results according to how many asterisks they receive is to make every other consideration secondary.  Really, is a result of a well-designed study with a highly plausible statistical model that comes in at p = .06 less constitutive of evidence than a result from a questionable study that comes in at .04?

p-values are important!  The first thing I look at is the ratio of effect size to standard deviation, but there’s so much more.  What about the sampling strategy?  What about the measurements of key variables—are they really proxies for the true variable of interest (they often are), and if so how good are they?  How much confidence should I have in the statistical model?  Is this subjective, as Taylor claims?  Yes and no.  The evaluation I make is a matter of judgment, but it can be defended or challenged on the basis of objective aspects of the study, provided the research is sufficiently documented.

There might still be a case for significance as a sorting device if there were a requirement that each piece of research produce a determinate, yes-no verdict on the question of interest.  This is the classic argument, in fact.  It is up to this particular study to make a determination on whether a hypothesized effect exists, and any significant doubt is sufficient to require a “no”.  So we set up the no-effect null, and only if we get a low enough p for a deviation from it (a low enough proportion of times we would expect to get an effect at least this large on repeated samples from a population with this dispersion if the true effect were zero) will our finding have survived the first possible “no”.  The ritual around pre-selection of the null and the cutoff criterion (critical threshold) is about protecting this all-important first test from any contamination emanating from our self-interest.  That’s what Ionnidis and Taylor are appealing to.

But the researcher does not have to make a determinate decision about the research question on the basis of a single study, or even a single variant of the same study.  The evidence for a potential effect of interest, to be convincing, should not only come from well-designed, well-analyzed work; it should also, as far as possible, come from a diversity of methods and sources.  We should have simulations, large-N observation studies, lab-style or natural experiments, utilizing a variety of samples and analytical methods.  Even in the limiting case of a single study, every attempt should be made to generate diversity within it: partitioning into sub-samples, trying out multiple estimation models.  In that case there is no need for a binary decision rule for a single finding; what matters is the constellation of evidence over the range of findings.  Of course, the individual researcher or research team does not have to be the locus of this judgment.  But even if they are, once we have dropped the requirement for a binary decision based on a single finding, lexicographic rules that require us to ignore whole swaths of our results can only weaken the evidentiary base we rely on.

In practice, the demand that a study generate magic asterisks in order to see the light of publication has led to lower quality, less credible and less reproducible research in economics as in many other fields.  It has led to exaggerated, unwarranted confidence in dubious claims and steered the profession away from questions of high importance that are difficult to resolve using available data, which is what the significance filter means when it is yoked to peer review.  There is an alternative: consider the evidence substantively, its quality and diversity.  If we don’t know how to do that as a research community, we aren’t going to be rescued by an arbitrary dichotomy of p > or < .05.

Trump Drops The Other Iran Oil Shoe

US SecState Pompeo announced early today that the waivers granted to 8 nations allowing them to continue to import oil from Iran will not bee renewed when they expire in early May.  I am not sure of the identity of three of those nations, but the big five are China, India, Japan, South Korea, and Turkey.  None of them have made any public statement so far, nor has Iran.  It has been announced that Saudi Arabia and the UAE and maybe also Iraq will increase oil production to offset this, nevertheless the price of Brent crude rose about 3 percent today, with WTI close behind.

Supposedly some of Trump's advisers warned him against this action, presumably putting themselves in danger of being part of the next round of underlings to get fired for being insufficiently subservient.  The situation is potentially aggravated by Trump calling up General Hiftar in Libya and offering support for his drive to take over the whole country. Based in Benghazi, he has moved on Tripoli, reportedly with the encouragement and financial support of the Saudis.  The drive has apparently stalled out, which could lead to production cuts in Libya, although I think the admin people may be betting that Hiftar will win, which might lead to a stabilization of production there.

My guess is that why Trump is doing this now is to provide some distraction from the ongoing discussions of the Mueller Report, with his followers loud proclamations of "no collusion! no obstruction!" appearing not to be convincing anybody not already hooked onto Fox News.  Trump has had considerable success at imposing his will on the world regarding economic sanctions aginst Iran, even as all but a handful of nations strongly disapprove of his removing the US from the Iran nuclear accord, which Iran has continued to follow.  It is a bit absurd that in bragging about the supposed success of their policies, the Trump people have pointed to that as a success, even though supposedly this deal was simply awful.  As it is, their claims this will lead to a new and better deal completely lack credibility.

Indeed, this looks like a potentially much more dangerous situation.  If these major nations obey Trump (I suspect some will not), Iran might be tempted to take more aggressive action, with blocking the Straits of Hormuz among the more serious.  This would really spike the price of oil, and quite possibly trigger a war.  This may be what the Trump people want, with their real policy apparently being "regime change."  However, so far the only regime change seems to be rising influence of hardliners, with a new hardline commander for the now sanctioned  Revolutionary Guards being appointed.  He has been talking about missiles getting fired on Israel from Lebanon by Hezbollah.  Is this what Netanyahu really wants?

I think those who think the Iranian regime will easily be overthrown are more deluded than those who advocated invading Iraq (and some of them are the same people, see John Bolton especially).  This has the potential of really seriously distracting people from the Mueller Report, but not at all in a good way.

Addendum: I have just seen it pointed out that the key player in how this turns out is the largest customer for Iranian oil, China.  Nobody knows, but some are predicting they will reduce purchases from Iran, but not end them.

Another odd tidbit is that there are rumors on the oil price sites that this might kill the existing OPEC deal, which could end up tanking the oil price from its $60s-70s levels down to $40. Probably not, but this move certainly destabilizes the markets leaving nobody knowing what is going to happen.

Another Addendum:  In WaPo this morning they report that the othet three nations are Greece, Italy, and Taiwan, and that they have already stopped buying Iranian oil under US pressure.  Also, apparently Japan has been stockpiling oil from there ans has stopped further purchases already in anticipation of just this move by the US.   OTOH, both China and Turkey are talking about not obeying the US order.  No word out of either India or South Korea so far.

Bolton says that this is all designed to make Iran be a "normal country," as if Saudi Arabia were such.  As it is, indeed the hawkish new leader of the Iranian Revolutionary Guards has spoken publicly of possibly blocking the Straits of Hormuz, as I suggested they may well be contemplating.

Barkley Rosser

Happy Birthday, Vladimir!

No, not Vladimir V. Putin.  He was born on October 7, 1952, although I can understand how any reader might assume it was him, given that he has just had a great victory with the Mueller Report "exonerating" his fan boy in the White House from engaging in criminal conspiracy with him, much less getting on fan boy's case too seriously over his repeated lies and attempts to obstruct justice, allowing VVP to return to overtly lying by denying that Russia had anything to do with the 2016 election, even though the Mueller Report details extensive such efforts and Mueller even indicted several Russians (conveniently sitting in Russia and not getting prosecuted) for those efforts.  Heck, Rudy Giuliani and most of Fox News will not disagree with his lies, or at least they will say the efforts were just fine and necessary to save us from the awful Hillary whose private phone and emails could get hacked by dangerous foreign powers such as, well, Russia.

The birthday Vladimir is Ulyanove, aa, Lenin, whose  corpse continues to lie in the Mausoleum on Red Square, despite a few efforts by VVP to remove it.  However, every time VVP has made such efforts he has been stymied by loud opposition from the still there if not very strong Communist Party, as well as longstanding disagreements over where the corpse should go.  Lenin is not a figure like Gorbachev whom VVP openly reviles for weakening the Soviet/Russian state, nor is he one that VVP is actively trying to rehaabilitate, such as Joseph Stalin, whom he admires as the Great National Leader during the Great Patriotic War.  No, he mostly ignores today's birthday boy, regarding whom I think he has mixed feelings and does not know quite how to deal with.  Best just to leave his corpse be in the Mausoleum with minimal comment.

As it was, Vladimir Ulyanov/Lenin was born 149 years ago today, 1870, exactly 100 years before the first Earth Day in the US, which, yes, today is the 49th anniversary of that event, organized by the late senator from Wisconsin (whom I met), Gaylord Nelson.  I have posted on this in the past, but at the time, harder line Marxists at radical UW-Madison jeered at that first Earth Day, both because it distracted people from remembering Lenin on his centennial (clearly a capitalist plot) and also because it was distracting people from opposing US imperialism in the Vietnam War.  Heck, reduced auto emissions?  I remember well certain people sneering at that as something to spend any time worrying about, especially as concern about overpopulation was clearly a Malthusian, anti-Marxist, racist, reactionary, colonialist plot, and so on and on.  Really.  That was what was said, including by some people I still know, but do not remind them of that.  But, hey, the whole thing was a plot by Richard Nixon and his capitalist cronies to distract everybody from the Vietnam War.  Yeah.

Needless to say as of today this all looks ironic, if not absurd, even if it did not do so at the time, although it must be admitted that a lot more people are thinking and talking about Earth Day today than the fact that it is Lenin's birthday.  Those old Marxist-Leninists were right about worrying about that one.  And not having the leader of Russia making mention or fuss about it just really sticks it in.

But the real irony is that today being strongly for the environment as expressed in the Green New Deal is the hallmark of being a "democratic socialist," something that remains very poorly defined.  That old "Brown Marxism" that worried about coal miners getting laid off because of those darned auto emissions are gone or moved over to support Donald Trump, although his fan boying VVP in Russia might look familiar to some of those folks from 1970, especially those in groups that also cuddled up to the then Soviet Union.  Life is funny.

Anyway, folks, happy birthday to old Vladdie Ulyanov, and also, have a Happy  Earth Day, you all!

Barkley Rosser

USMCA, the International Trade Commission, and Kevin Hassett

Tracey Samuelson of Market Place writes:

USMCA would slightly boost U.S. economy, says ITC report - On Thursday, the International Trade Commission released its assessment of the projected economic impact of USMCA, President Trump's proposed replacement for NAFTA. The report shows the new deal is projected to boost the U.S. economy by .35% when fully implemented.

I will to read this report after I get over laughing at the latest from Menzie Chinn who quotes Kevin Hassett:

Two-thirds of U.S. CFO’s expect a recession by summer of next year, but White House Council of Economic Advisers Chair Kevin Hassett believes the economy shows no signs of slowing down. “There’s so much momentum right now,” he told FOX Business Stuart Varney on Friday. “It just seems almost impossible that there would be a recession by the summer of next year.”

You should watch what turned out to be a really stupid interview on Fox Business covering not only on the alleged impossibility of a recession and how Hassett fluffed off Trump pressuring the FED to lower interest rates. Hey Kevin – if it is impossible for there to be a recession, why lower interest rates? Never mind that for now and listen to how Hassett declared USMCA to be the best trade deal and how it would increase GDP by $100 billion in the first year. Did the ITC really say that? Update: The report can be found here. It does say on page 37:

The results of the industry- and provision-specific analyses were then jointly integrated into an economy-wide model that provided estimates on the combined impact of the agreement on the U.S. economy, including key economic indicators such as GDP, trade, and employment. The economy-wide model estimates that USMCA would likely increase GDP by about 0.35 percent ($68.2 billion), employment by about 0.12 percent (176,000 full-time equivalent jobs), and exports to Canada and Mexico by about 5.9 and 6.7 percent ($19.1 billion and $14.2 billion), respectively.

But let’s turn to page 43:

The economy-wide model estimates the U.S. economy’s complete adjustment to the full implementation of USMCA, which is assumed to be year 6 after USMCA enters into force. Therefore, the estimates show the impact of the modeled provisions after the economy has responded to the changes in USMCA. The estimates show the incremental effects of USMCA relative to a baseline that reflects the U.S. economy in 2017 and assumes that no other changes to the economy unfold. The model is long term and does not estimate effects during a transition.

It would have been nice had Hassett’s noted the gains were long-term and came to a mere 0.35% of GDP. No – he suggested to Stuart Varney that yuuuge benefits would occur in the first year. Yes – even the chair of Trump’s CEA lies about everything!

That One Sentence

On March 25, Matt Taibbi wrote in Rolling Stone:

On Sunday, Attorney General William Barr sent a letter to Congress, summarizing the findings of Special Counsel Robert Mueller’s Russia investigation. The most telling section, quoted directly from Mueller’s report, read:

“[T]he investigation did not establish that members of the Trump Campaign conspired or coordinated with the Russian government in its election interference activities.”

That one sentence should end a roughly 33-month national ordeal (the first Russiagate stories date back to July 2016) in which the public was encouraged, both by officials and the press, to believe Donald Trump was a compromised foreign agent.

"That one sentence" unexpurgated:

Although the investigation established that the Russian government perceived it would benefit from a Trump presidency and worked to secure that outcome and that the Campaign expected it would benefit electorally from information stolen and released through the Russian efforts, the investigation did not establish that members of the Trump Campaign conspired or coordinated with the Russian government in its election interference activities.

What Is The "Collusion Delusion,"?

The Trump crowd has long claimed that there was "no collusion, " repeatedly in many venues.  Somehow the MSM picked up on this screed, and so it is out there that indeed that the Mueller Report  declared that there was "no collusion," a phrase that somehow Trump himself long put out there for his followers long before the Mueller Report came out. 

But, in fact up front in the Mueller Report they made it clear that they were not  investigating "collusion." They only briefly discussed the term, but the bottom line was that there exists no legal definition of this term. The final point in the report was that "collusion" is not even a "term of art" in the  legal system  Therefore, they simply ignored thereafter in the inquiry.

Bottom line is that there is massive evidence for collusion, that legally undefined form of half-baked cooperation that never got the level of coordination and conspiracy.  They were massively colluding, but never ccould get it together to engage in an organized mutually benefiicial operation to influence the election.  They were too incompetent to put  it together, although they made great efforts to do so, The obvious example was the meeting in Trump Tower in June 2016. The Russsians wanted certain Putin-related cronies exempted from the Magnitsy law, while the Trump people wanted more dirt on HRC than the Russians were willing to give then, although soon after they delivered the goods.

Barkley Rosser

Childrens' Day And The UN Convention On The Rights Of Children

Associated with the UN Convention on the Rights of Children is a Universal Childrens' Day.  It is November 20, the date that in 1959 the UN adopted the first version of the Convention, which had 10 articles.  It is celebrated in many nations, but not in the US.

A competitor is International Childrens' Day, also called the International Day for the Protection of  Children.  This is June 1 and was declared in Moacow in 1950.  It is also widely celebrated, mostly in former or current socialist or communist nations, and is a big deal in Russia in particular even now, a national holiday.  It is also not celebrated in the US.

Curiously there is an official Childrens' Day in the US, although almost nobody pays attention to it.  It is  the second Sunday in June, a week before Fathers' Day, which way dominates it, although MOthers' Day way dominates both of them.  Ironically, given its current obscurity, the US one was the first one established, back in 1857 for that date by a Universalist minister, Rev. Douglas Leonard in Chelsea, Masssachusetts.

At least 90 nations have an official Childrens' Day, with a variety of dates for this.

The matter of the US starting Childrens' Day but then coming to ignore it has a parallel with International Womens' Day, founded in 1909 in Brooklyn by socialist Clara Zetkin. It is widely celebrated around the world, and a big deal in many nations, including Russia.  But it is only barely recognized, mostly by feminists, in the US now.

Mothers' Day was founded by pacifist and Methodist, Anna Jarvis, in Grafton, West Virginia, in 1908 on its current date.  The US Fathers' Day was started the same year nearby in Fairmont, West Virginia.  Jarvis would later come to be unhappy with the crass commercialization of Mothers' Day.

There is a much older Fathers' Day celebrated  by Roman Catholics since the Middle Ages.  It is on St. Joseph's Day, March 19.

Anyway, I think there may be a link between the ignoring of Childrens' Day in the US, even thought it was started here compared with how it is treated in many other nations, and the bizarre refusal  of the US alone among UN nations not  to ratify its Convention on the Rights of Children.

Barkley Rosser

UN Convention on the Rights of the Child

After Peter Dorman's latest post this seems appropriate to follow up.  Very recently I was at a talk where somebody spoke on the United Nations Convention on the Rights of the Child.  A theme of the talk was how few Americans know about this UN Convention while most reasonably well informed people in virtually the entire rest of the world know about it.  A first version of it was passed  by the UN in 1959.  A second round was in 1989.  I do not know what the US's position was on the first round, but on the second round, while the US signed it in 1995, it was never ratified by the Senate and never has been.  Right wing Christian types claimed it took away rights of parents over their children, although any reasonable examination of it shows that is nonsense.  Up until 2015, Sudan and Somalia also were with the US in not ratifying it, but then both of them did so, leaving the US to be the only nation on earth (or at least in the UN) not ratifying it.

Unsurprisingly there may be more reasons now why the current Senate will not raritify it as it looks like US behavior on our southern border is in open violation of parts of the Convention.  It has 42 articles, and the fact that so many nations have accepted it is a sign of how really uncontroversial it should be.  There is no reasonable reason to oppose any of the 42 articles.  Anyway, I shall simply note a few that are now especially unfortunate now given recent US conduct. (these are the simpler versions for children):

Article 5: You have the right to be given guidance by your parents and family.

Article 9: You have the right to live with your parents unless it is bad for you.

Article 10: If you and your parents are living in separate countries you have the right to get back together and live in the same place.

Article 18: You have the right to be brought up by your parents, if possible.

Article 20: You have the right to special proetection and help if you can't live with your parents.

Article 22: You have the right to special protection and help if you are a refugee. A refugee is someone who has to leave their country because it is not safe for them to be there.

That will do.  The speaker I learned this from urged us to inform people in the US about this given how little it is known, although I imagine there are some of you reading this who know of this. But I did not, and I am ashamed that I did not.  So here I am, doing my best.

Barkley Rosser

Economics, the Realm of Money and the Significance of GDP Growth, with an Application to Child Labor

What’s economics?  There are two answers.  One is it’s the sphere of human activity encompassing the production and distribution of goods and services, which has sometimes been referred to as provisioning.  This is quite a lot but not everything.  It includes meditation classes but not meditation, making and selling binoculars but not bird-watching, etc.  The problem is that it includes so much of human life that it is barely a delineation at all.  From this perspective farming is part of the economy, and so is shopping for food, cooking the food at home, and even piling some of it on your plate.  It’s a matter of debate whether eating the food should qualify as economic, not to mention the trip to the toilet sometime later.  (I think the answer should be yes to the toilet part.)

Then there’s a much narrower conception that confines itself to just the money economy, things that are produced for sale, paid labor, and money congealed into financial assets and obligations.  This is largely what mainstream economics is about, although it claims to be about human well-being in a much more encompassing sense, using welfarism as a bridge between the empirical world of markets and the putative substrate of “utility”.

In the end, the reason for attaching a label like economics to some portion of human activity is practical: to guide a division of labor that allows us to balance the demand for specialized expertise with the need to remain aware of the interconnections that matter in real life.  I suspect the line ought to be drawn differently for different motivating questions, different types of societies, maybe even different individuals and their intellectual skills and backgrounds.

What I want to suggest is a way of thinking about the relationship between these two conceptions.  Think of the money economy as the fungible component of provisioning.  That’s what money does: everything that’s exchangeable for money is exchangeable for everything else with this same property.  The non-monetary economy is not fungible; there are limited options for parting with some elements of it for more of other elements.  Restaurant cooking is part of the fungible world.  I can spend more money eating out, or I can save up and buy a camera, or piano lessons or a savings account that allows me to eat out more ten or twenty years from now.  Cooking at home is only slightly exchangeable.  I can cook less in order to do something else with that particular bit of time, but unless I use the time to acquire money the number of things I can exchange with cooking is limited.

So how much does fungibility matter?  The one thing fungible goods do have going for them is a range of choice, since if you have any of them you can exchange them for others.  Otherwise there is no relationship between how fungible an activity or good is and how important it is to my well-being.  Love is right up there at the top of values, and it is famously nonfungible: money can’t buy me love.  Some environmental impacts are fungible, some aren’t, since the interdependent character of ecological relationships sets severe limits to the notion of chopping the natural world into pieces that can be managed through generalized exchange.  Political goods, like freedom and democracy, aren’t fungible at all.  Health?  In some ways yes, in others no.

An important consideration is that fungibility matters more the more widespread it is.  In societies where only a very few goods and services are exchanged for money—which means most societies in most periods of human history—the money economy plays a relatively small role in human well-being and the dynamics of social change.  The increasing extent of fungibility as a core characteristic of modernity is equally why the money economy now matters much more to us.  This is an important consideration in debates about the role of GDP growth as a guide to economic and social policy.  It is objectively true to say that monetary measures of prosperity like GDP per capita (or better, median measures of money income or consumption) are vitally important today, because a large portion of what people need is part of the fungible universe.  It is also true, however, that many essential goods are still not fungible and will probably never be, so a fixation on monetary indicators is a serious mistake.  Access to higher levels of money income matters more to nearly everyone in the world than was the case in former times, but it’s still not everything—not even close.

I’ve thought about this in connection with child labor.  Even before the rise of child labor “protagonism”, that opposes efforts to eliminate child labor in the name of respecting children’s agency and opposing eurocentrism, I encountered resistance to the notion that children should be in school rather than working full-time at home or in the fields.  By trying to reduce child labor I was advancing the monetary economy over the competing claims of the traditional economy of household and kin, of the intergenerational transmission of culture and knowledge through joint work, of self-provision.  And it was true.  But when I thought about the world these children would be living in over the decades to come, it seemed clear to me that enough of what they needed for a good life would be in the fungible realm that lack of education would mean a lifetime of deprivation.  That isn’t true for each single child, but it will probably be true for the vast majority.  Seeing the matter in purely monetary terms is simplistic, but still seems to me to be the proper starting point.

Is Stephen Moore a Gold Bug?

A lot of the criticisms of putting the twin village idiots known as Herman Cain and Stephen Moore on the FED assert that they are gold bugs. Kate Riga watched CNN when Erin Burnett interviewed Stephen Moore on this allegation:

Stephen Moore tries to flip-flop on the gold standard — but Erin Burnett is prepared and armed with a montage of his past statements

Watch and enjoy! Now Moore did say he would prefer targeting an index of commodity prices, which led me to FRED and its Global Price Index of All Commodities. Moore has not be all that specific how his commodity price target would work but let’s speculate his index would be a lot like this one. Suppose the FED targeted commodity prices to be where they were in 2005 since this index is based where it would equal 100 in 2005. Just imagine how a Moore monetary policy would have worked say during the booming 1990’s. Commodity prices were low so his policy prescription would have been massively expansionary during a booming economy. For much of the period from 2007 to 2014, we would have had a contractionary monetary policy even as U.S. aggregate demand was often incredibly weak. In other words, his commodity price based monetary policy would be about as destabilizing as was monetary policy under the gold standard.

Elizabeth Warren Wants to Collect More in Corporate Profits Taxes

John Harwood reports:

Democratic presidential candidate Elizabeth Warren proposes raising $1 trillion in government revenue from a new tax on profits of the largest corporations. The proposed surtax would prevent Amazon and other companies with profits exceeding $100 million from wiping out their tax liabilities altogether. Instead of taxable corporate income as defined by the IRS, the 7% surtax would apply to profits companies report to their investors.

A lot to like. Look – I hated that 2017 tax scam, which we were told would clean up how corporations are allowed to shield income by all sorts of tricks including transfer pricing manipulation. Alas, its complexity was a boondoggle for shifty tax attorneys rather than simplification and closing loopholes. So proposals to “repeal and replace” this awful tax deform are highly welcomed. But this part of Harwood’s reporting was dreadful:

Warren cited two high-profile examples: Amazon has reported $10 billion in 2018 profits but zero in U.S. corporate taxes; Occidental Petroleum has reported $4.1 billion in profits and also paid zero.

He was just on MSNBC again talking about how Occidental Petroleum makes a lot of profits but reports little U.S. taxable income. Any Wall Street Journal reporter should know to check the 10-K filing for U.S. based oil multinationals as it is often the case that most of their income is generated by foreign oil producing affiliates. Since Harwood could not be bothered, I did. Its pretax income was $5603 million in 2018 and I was surprised to learn that $3431 million was generated in the U.S. with the remaining $2177 million generated in other nations where oil profits often are taxes at very high rates. In fact, this company paid $1014 million in foreign income taxes. Now as far as the claim that it paid zero U.S. income tax, that is not what they reported to their investors as the 10-K filing noted U.S. income taxes were $463 million. A 13.5 percent effective tax on its U.S. sourced income sounds low to me but it is not zero.

The Inverted Vulgar Quasi-Marxist Victim Cult

The propagandist will not accuse the enemy of just any misdeed, he will accuse him of the very intention that he himself has and of trying to commit the very crime that he himself is about to commit. -- Jacques Ellul, Propaganda: The Formation of Men's Attitudes

And you know something is happening, but you don't know what it is. Do you, Mister Jones? -- Bob Dylan, Ballad of a Thin Man

Candace Owens testified today at the House Judiciary Committee hearing on hate crime. Shorter Owens: the real victims of hate crime are conservatives and the perpetrators are Democrats. The stunt hijacked the hearing.

Ted Lieu playing Owens's homage to Hitler probably made an impression on people who already know that Owens is a grifter and that the Republican members of the committee are sleazebags for inviting her but it didn't cancel out the sabotage. The Guardian posted a tweet from journalist Christopher Mathias which nicely summed up the outcome:

That incompetence, however, was entirely on the Democratic side. The Republicans came to deflect and they succeeded. The Republicans know their script. The Democrats seem to be stuck in 1973 waiting for Howard Baker to suddenly appear and make everything right again.

Owens's shtick should be no mystery. It's essentially the propaganda game plan laid out by William S. Lind that I have documented in a four part series here. Eventually, I intend to revise and edit into a single piece but in the meanwhile here are links to the four parts:

Nazi executioner judge: "Political correctness is worse than Nazi tyranny."

Copycat Crime and the Conscience of a "Cultural Conservative" part one

Copycat Crime and the Conscience of a "Cultural Conservative" part two

Unreading Marcuse's "Repressive Tolerance"

France’s Fiscal Dilemma Solved

I was struck by this morning’s headline in the New York Times:

No doubt this was intended as irony, but that itself is ironic, since the “unrealistic” attitude it sums up is actually a good starting point for policy.  France has one of the world’s better welfare states, and it should be preserved and enhanced.  French taxes are very high—almost half of national income—and should be cut.  Carbon needs to be priced far more comprehensively and aggressively than Macron’s idiotic gas surcharge, but that can be done with little or no additional net taxes.  (Hint: rebate.)

So what squares this circle?  France’s budget deficit is way too small, about 2.6% of GDP the past two years.  Given the slack in its economy (over 9% headline unemployment) and rock bottom real interest rates, France would be wise to cut taxes and preserve spending even if the gilets jaunes had never existed.  Of course, it is prohibited from doing this by the eurozone’s Stability and Growth Pact, but that’s an argument against the Pact, not the policy.

Nothing I’ve said goes against standard macroeconomic advice.  The reason for bringing it up is that headline, and the article that follows it, which recycles a facile putdown of populism that is both economically ignorant and disdainful of social needs.  Come to think of it, that could be a good way to describe Macron and the political circle he represents.

Does Cochrane Really Understand the Latest on Minimum Wages?

John Cochrane thinks we liberals who think higher minimum wages can do some good by offsetting monopsony power fail to grasp labor economics. He is citing some work by Jeffrey Clemens, Lisa B. Kahn, and Jonathan Meer. Alas his blog post screwed up the link to this interesting paper:

Compensation consists of a combination of cash and non-cash attributes, and depends on worker productivity. We also allow for the possibility of a bargaining wedge whereby the firm pays less in total compensation (cash and non-cash benefits) than a worker’s marginal product. When the minimum wage rises above the prevailing wage (cash payment) but below a worker’s marginal product, the firm will shift the mix of compensation towards cash and away from non-cash benefits, but will still find it worthwhile to employ the worker. This distortion can create losses to worker welfare which, if large enough, will push workers to prefer their outside option of nonwork. We also show that, in the presence of a bargaining wedge, the welfare effects of minimum wage increases are non-monotonic. In general, wage gains associated with increases in worker bargaining power will tend to improve welfare, while wage gains that are accommodated through reductions in non-cash benefits can reduce welfare.

In many ways, this dates to a 1980 paper by Walter Wessels (“The effect of minimum wages in the presence of fringe benefits: An expanded model,” Economic Inquiry), which the authors cite. Wessels assumed a perfectly competitive model where government interference lowered worker total compensation. Wessels published later papers, which alas the authors did not cite. In 1994, the Journal of Labor Research presented an extension of Wessels thinking that incorporated monopsony power entitled “Minimum wages and the wessels effect in a monopsony model” by J. Harold McClure:

The Wessels model suggests that firms respond to increases in the minimum wage rate by decreasing the level of fringe benefits — an action which produces an inefficiency effect that lowers workers’ utility and the supply of labor. Standard models of monopsony, however, argue that wage floors prevent the exercise of market power and increase employment. I show that wage floors, even with fringe benefit curtailment, may increase employment by lowering the marginal expense of labor. Employee utility and employment will rise somewhat but not as much had the firm acted competitively in setting both wages and fringes.

The “worker bargaining power” bit may be alluding to this monopsony power argument even if the authors did not cite this 1994 paper. The authors did note:

When we compare wage changes to changes in employer coverage, we find that coverage declines offset a modest fraction of wage gains for very low wage workers and a larger fraction for moderately higher wage workers. In very low paying occupations, the coverage decline offsets an average of roughly 10% of the rise in the wage bill. We cannot reliably measure changes in employer contributions on the intensive margin, which may also decrease in response to increases in the minimum wage. Therefore, the 10% average offset is composed of some workers who lose coverage entirely and some workers who maintain coverage and receive wage gains. We find offsets of 25% and 60% for workers in the next lowest paying occupation groups, respectively.

If I’m reading this correctly, total compensation rises even if fringe benefits decline – which is more consistent with the monopsony version of the Wessel model than the perfectly competitive version. Of course this is not the message that Cochrane has conveyed to the readers of his blog.

Trump Has Birth Nations Skipping Generations

Starting around 2011 or so, Donald Trump began to get a lot of attention on the looney racist right in the US by becoming one of the leading advocates of birtherism, the claim that Barack Obama was born in Kenya rather than Hawaii.  Of course, Obamam's father was born in Kenya.

Now, curiously, Trump is at it again, although now involving his own family.  He has taken to claiming that his father was born in Germany.  His father's father was born there apparently, with the name "Drumpf."  But by all accounts I know of, Trump's own father was born in The Bronx in New York City.  It seems he is playing a reverse form of birtherism here, although it may be an effort to assert a stronger connection to the erstwhile "Master Race" of the Nazi movement.

Of course, it may also be that this is simply part of a more general mental breakdown, given the rather large number of either blazingly false or just blazingly stupid things he has been coming out with in the last several weeks.

Barkley Rosser

Unreading Marcuse's "Repressive Tolerance"

William S. Lind's cultural Marxism conspiracy theory boils down to the claim that in his essay, "Repressive Tolerance," Herbert Marcuse "called for tolerance for all ideas and viewpoints coming from the left and intolerance of all ideas and viewpoints coming from the right" and that college administrators and professors have put Marcuse's proposal into practice in the form of "Political Correctness."

Marcuse did indeed make a statement that seemed to propose exactly that: "Liberating tolerance, then, would mean intolerance against movements from the Right, and toleration of movements from the Left." The problem with taking the proposition literally, however, is that on the very first page of his essay, Marcuse had already dismissed it with the awareness that,"no power, no authority, no government exists which would translate liberating tolerance into practice." The proposition, he added, was intended "to open the mental space in which this society can be recognized as what it is and does."

Approximately 6,000 words of dense verbiage intervene between Marcuse's discounting of the proposition and his restating it in stark, attention-getting terms. The casual reader could be forgiven for having forgotten the initial disclaimer along the way. What is implausible, though, is that college administrators and professors would have collectively adopted the formula as gospel while expressly ignoring the caveats. In fact, in a 1968 postscript to his 1965 essay, Marcuse indicated that his proposition had encountered "virulent denunciations" which he attempted to counter with a restatement of its rationale and acknowledgement that the practice he called liberating tolerance "already presupposes the radical goal which it seeks to achieve."

Marcuse's postscript apologia is hardly more convincing than his original essay. The problem, in my view, is that Marcuse attempted to illustrate a terminological paradox with a "counter-paradox." His diagnosis -- that "tolerance" in an administrated state rife with propaganda is not all it is cracked up to be -- was apt. But he clumsily succumbed to the temptation to offer a prescription. And since he realized that there is no pat solution, he offered a pseudo-cure instead, in the form of a facile "thought experiment."

It may well be that the crude, simplistic slogan of "intolerance against movements from the Right, and toleration of movements from the Left" would have appealed to student radicals in the 1960s, in which case, Marcuse's popularity would have been due more to incomprehension than to affirmation. But among his peers, even in the Frankfurt School, there was no such luck. Correspondence between Marcuse and Theodor Adorno from 1969 show Marcuse's defensiveness in response to Adorno's tense disapproval of his "undialectical" activist sympathies:

You know me well enough to know that I reject the unmediated translation of theory into praxis just as emphatically as you do. But...

Like you, I believe it is irresponsible to sit at one’s writing desk advocating activities to people who are fully prepared to let their heads be bashed in for the cause. But...

Meanwhile, Max Horkheimer "too has joined the chorus of my attackers" while Habermas was publicly warning against "left fascism." By the early 1970s, Marcuse's brief moment of notoriety was rapidly fading.

Marcuse's paradoxical fable of "liberating tolerance" (and intolerance) was not even the most pernicious part of his "Repressive Tolerance" essay. The same social conditions that make "tolerance" abstract and spurious, Marcuse argued, also "render the critique of such tolerance abstract and academic, and the proposition that the balance between tolerance toward the Right and toward the Left would have to be radically redressed in order to restore the liberating function of tolerance becomes only an unrealistic speculation." So, there you have it, folks! Herbie has been giving you the jive and now he's telling you it's all jive. What, oh what... is to be done?

Indeed, such a redressing seems to be tantamount to the establishment of a "right of resistance" to the point of subversion. There is not, there cannot be any such right for any group or individual against a constitutional government sustained by a majority of the population. But I believe that there is a "natural right" of resistance for oppressed and overpowered minorities to use extralegal means if the legal ones have proved to be inadequate.

Andreas Baader invoked this "natural right of resistance" at his 1968 trial for arson, with the outcome that he was sentenced to three years imprisonment for political vandalism that caused no injuries and relatively modest property damage. So much for Marcuse's objection to sitting "at one’s writing desk advocating activities to people who are fully prepared to let their heads be bashed in for the cause."

Closely reading Marcuse's "Repressive Tolerance" essay gives me a new insight into what Lind is doing with his cultural Marxism hoax. Lind has appropriated Marcuse's theme of there being a regime of repressive tolerance but has inverted its origin and attributed it to Marcuse's "liberating tolerance." Marcuse's "mental space," "unrealistic speculation" or petitio principii that "already presupposes the radical goal which it seeks to achieve" is recycled by Lind as the actual persecution endured by conservative students under the imagined regime of "cultural Marxism."

Copycat Crime and the Conscience of a "Cultural Conservative" part two

...it would be absurd to subscribe to the author the unintended consequences of an author's statements without considering the circumstances which surround them. It is, however, equally absurd to pretend that the ideological history of a work's consequences are entirely extrinsic. -- Jürgen Habermas

With all its limitations and distortions, democratic tolerance is under all circumstances more humane than an institutionalized intolerance which sacrifices the rights and liberties of the living generations for the sake of future generations. -- Herbert Marcuse

As we saw from his March 17 webcast, William Lind was not inclined to consider taking any responsibility whatsoever for the (presumably) unintended consequences of his rhetoric. This is not to say, however, that he isn't eager to take credit for political influence his ideas may on powerful state actors.

In his March 24 webcast, Lind revealed the "scoop" that his initiative may have inspired President Trump's executive order to protect conservative speech on university campuses. "We have," Lind boasted, "what I think is the inside story on one of last week's news events -- mainly the President Trump's announcement that 35 billion dollars worth of federal funding for higher education is going to be tied to freedom of thought and expression on college and university campuses." According to Lind, what happened is that, as a board member of a conservative group of Dartmouth University alumni, he wrote a memo -- subsequently forwarded to the White House by a well connected board member -- that recommended substantially the steps taken by Trump in his executive order.

This, by the way, is a basic rule of politics. If you're going bottom-up you come in as a supplicant. You're either ignored or kicked in the teeth. The way you get something to happen politically is to come in top-down. You come on… you come down on the center you're targeting from a higher political level. Well there's no higher level obviously than the White House.

Lind made it plain throughout his eleven minute discourse that the "freedom of thought" he is seeking to protect is specifically conservative thought ("we all know very well what happens to conservatives on campus -- how often they are persecuted.") As Lind read from his memo:

The problem of discrimination against conservative faculty, students and outside speakers by colleges and universities is not restricted to Dartmouth. It has become general throughout academia. The same college administrators and faculty members who demand diversity in all things also require uniformity in the one area most important to any academic institution – thought. And the ideas that contradict political correctness -- including arguments for free markets, traditional morals and Western Judaeo-Christian culture -- are subject to censorship. Faculty, students and speakers who express conservative views find their careers threatened, face college discipline or are simply shouted down with no penalties imposed on those who threaten violence.

The origin of these practices is Herbert Marcuse's essay on liberating tolerance, which called for tolerance for all ideas and viewpoints coming from the left and intolerance of all ideas and viewpoints coming from the right. This is what college administrators and professors now mean when they call for tolerance. 

Lind took the timing of Trump's announcement -- just a couple of weeks after Lind sent his memo -- and the specific inclusion of targeting research funding to indicate strong circumstantial evidence that his memo was pivotal. "So I think there's a pretty good chance circumstantially that it was our initiative that brought this about and if so again we have watched the mother of all Zeppelin strikes on the cultural Marxists." Here he repeated the image he had introduced earlier in his account: "So what President Trump did this week there is a large Zeppelin raid directly on the enemy's base and that's significant."

Lind continued on for three minutes on implementation of the policies announced by Trump before returning yet again to the trope of aerial bombardment:

The deep state obviously is going to hate all this because it's populated by cultural Marxists, including in the trump administration, and they're going to do their best to sabotage this with the old bureaucratic rule: delay is the the surest form of denial. They will be hoping to make sure nothing happens and nothing changes at least 'til the end of President Trump's first term. So we're gonna have to watch this carefully. If it… if it is implemented and implemented forcefully as it needs to be. 

Lind and his co-hosts concluded their discussion of this conservative free thought initiative with a "jocular" exchange on bombing universities:

Brent: Well there you have it. if you want the cutting edge in conservative activism -- right-wing activism -- look no further than TR. 

William Lind: Absolutely. And if this doesn't work, we're gonna tell Jeff to get back in his Cobra and launch an airstrike.  

Jeff Groom: That would actually work because the Cobra uses a Hellfire, which, as you know, Bill, attacks from the top down on things. It doesn't fly in armour, but flies in top down where armour's thinnest.  

William Lind: And I can't think of anything that colleges and universities more deserve than Hellfire.  

Jeff Groom: Yeah we're gonna get the November variant so just it's a thermobaric one not the tank killer we need the thermobaric one -- burn everything out… 

Thermobaric weapons are one of the class of fuel-air explosives (FAEs). According to Human Rights Watch: 

FAEs are more powerful than conventional high-explosive munitions of comparable size, are more likely to kill and injure people in bunkers, shelters, and caves, and kill and injure in a particularly brutal manner over a wide area. In urban settings it is very difficult to limit the effect of this weapon to combatants, and the nature of FAE explosions makes it virtually impossible for civilians to take shelter from their destructive effect.

Remember though, folks, the real victims here are the conservatives being persecuted for compulsively joking about incinerating their political, ethnic and religious enemies.

In part four of this series, I read Herbert Marcuse's "Repressive Tolerance" so you don't have to.