Signaling Stupidity to Appeal to Others

Ah, Facebook...

I get to see the types of things that my former students are thinking about. Lately, one commented about a piece in the student newspaper that failed to live up to his expectations. In the piece a student talked about her new found willingness to accept the idea that there may not be a god. This is only particularly newsworthy on my campus because people reading the piece can be assumed to believe in at least one god.

My former student was particularly offended that this published article confused theist and deist. This told him, in combination with the general tone of the article, that this person was just beginning to explore those thoughts about life and the possibility of no afterlife. His objection seemed to be that someone should reflect more before publishing such a piece.

I admire this student's high standards, but my comment to him was that the student may in fact know her audience well. Being too bold, or even, as the title of this piece suggests, being too smart -- could turn people off and mean that the article would have limited impact. If my former student were to write the article, it probably would be sophisticated, insightful, and boring to the very readers this student is trying to speak to.

I have noticed for a long time that being technically accurate can be a turn off. Being raised in the South, there is a strong requirement of embellishing that is important for communicating, or what should be called: storytelling. The "Truth" (capital T) is of very little value outside of a scientific or criminal context. In fact, I quickly realized in the south that the kind of persnickety-ness with regard to details was frowned on generally. I had to learn this in the context of my post-graduate education and I still hold some of the embellishment from these formative years.

Just like Mary Poppins said, a spoonful of sugar really helps with the medicine. Similarly, a great big pile of colorful interpretation might help with making big idea appeal to a wider audience. Someone ought to work on the power of these rhetorical approaches vis-a-vis communicating the kernel of ideas. I have always thought that fables and proverbs do a great job of communicating complex ideas and lessons. How effective would they actually be if they were forced to be accurate?

Libertarians and the Law

In a relatively casual conversation over dinner last night one of the dreaded topics came up, abortion. Now as a libertarian this can be an easy issue -- or it can become a divisive one.

In the 1970s the issue was no more than women's rights. Period. The libertarian position was that women have the best access for control over their own bodies.

Being a good guest, I did not argue with my host when she said that abortion is murder. This is a position I largely agree with. I would make the more technical claim that it is killing, but not murder.

Because of my firm commitment to methodological individualism, I presume that I could get very upset about the role of abortion in the legal system. However, over the years I have come to think about this issue in very textbook terms. I have sterilized the subject primarily because at the age of 33 I know very few people who are in the position where they must abort a baby in order to still have a life that matches their expectations.

I guess my major concern with the argument --

1. murder
2. law provides for protection against murder
3. we like that law provides for the protection of murder and we want to keep it
4. abortion is murder

-- is that I don't really understand the role of the state here. The state is an apparatus that was designed to provide consistent expectations about the behavior of other people. I have to think that there is a sufficient penalty against murder in order to remove this option from the set of means to get what I would like. The state then is a collection of negotiated rules that are rather regularly enforced. Some rules are irregularly enforced, sure, but murder is one of the most regular.

If we want to talk law, let us talk law: I cannot escape the logic that killing a fetus is related to killing a person. This is an interpretation of reality. It will largely determine your view on the subject. But let us assume that killing a fetus is killing a person. Should a woman have the prior right to be without child? Granting this right would mean that the fetus is trespassing. Safe Harbor laws would suggest that unless the fetus poses a threat the host has to allow harbor. Now, what about contributing to the cause of the fetus being there. If the woman knowingly engaged in sex without precaution during her fertile cycle, should this be enough to remove her right to expel the fetus? Even if we grant that a woman has a prior right to be without child, this still allows certain prohibitions against expelling that child into circumstances where it will not be able to survive independently. In cases where the woman had no voluntary role in creating the child then it seems clear that she can be a good Samaritan or not, again assuming she has this prior right. I think the law can certainly be used to discuss this issue.

But it does not seem to be an issue of law. It is an issue of moral aesthetics. Where I sit, a 33 year old male with a stable and nice life, the issue can be viewed as one of morality. I have that luxury. Were I to leap from the theoretical to the actual and constrain someone else's ability to act, I ought to have the most firm legal backing I can before I begin to make the legal argument that abortion is murder. As someone who has spent some time around libertarians, I do not think a consistent libertarian can start and end on the abortion is murder argument. I rather believe that the law has to articulate the set of actions that are taken responsibly from the individual's perspective. Our moral repugnance tells us that we have identified a need for improvement in this area.

The Three "P"s and the Three "I"s

I channeled my dissertation advisor today and started to teach his rule, you can't get the three "I"s without the three "P"s.

This means that (P)roperty rights, (P)rice mechanisms, and (P)rofit and loss signals are all necessary to get (I)ncentives, (I)nformation, and (I)nnovation.

For the Incentives we have a large body of economic thought which develops the conflict between pro-market and anti-market types over the role that property rights play in aligning incentives.

The basic or first-approximation approach, I argued, was to simply point out that there was free-riding in the absence of well-defined property enforcement regimes. If you simply say "to each according to their need and from each according to their ability," this will end up with little accomplished in groups larger than a family. The next step is to teach the tragedy of the commons. The result of this story is that common property does not work well. Taken literally, the commons could be sold as private property and much of the problem would go away. So far the property rights story seems to be pretty solid.

There is a breakdown when we get to the story of externalities. Because externalities indicate places where property rights are ambiguous and are difficult to enforce, we don't necessarily think that property rights would be easy to define. In the case of planting flowers in your front yard, excluding those that refuse to contribute to their upkeep might be prohibitively difficult.

So, this leads us to a debate, one that is complex and difficult. Without the informational component of prices the property question would only move the debate to the abstract and theoretical level. The beauty of Mises and Hayek is that they make the informational argument so central to their discussion that it does not require the removal of all ambiguity about assigning property rights.

The only limitation that I can think of to the informational argument is that some things cannot be priced. I don't put a price (at least a money price) on love. There is something in us that resists the application of strict measures of scarcity to love. Now, this doesn't mean that we can't compare the marginal benefit another hour with our chosen special one gives us with the marginal benefit from something like writing a blog post. What it does say is that these calculations are going to be more difficult when the market is not thick and the transactions are not cleanly observable. Who is to actually price my preferences but me?

The final leg of this discussion is in Schumpeter. His creative destruction relies on change and it is no accident that Hayek in "The Use of Knowledge in Society"ends with Schumpeter (even if he is critiquing him). Schumpeter allows for change as the entrepreneur recognizes the opportunities to put innovation into effect. Schumpeter distinguishes between innovation and invention because invention doesn't do any good until it is applied to some purpose. The very possibility of change makes economics necessary (otherwise we would only solve the economic problem once and be done).

The link of these three "I"s to the Three "P"s is strong. Prices generate information, but only in the presence of profit and loss. Property rights give incentives and help prices to form better information. Innovation is not possible without some picture of the world created by the entrepreneur who has local knowledge.

Thank you Peter B.

Schumpeter and Innovation

Schumpeter is famous for creative destruction. However, what happens when the destruction is emphasized more than the creativity? What if the creativity is not immediately obvious?

Did anyone know that Velcro would be the next show fastener when it was created? I doubt it. Some discoveries are made by mistake. Most searches for particular answers take you down paths turning out far different than you would have thought. Many prototypes are far different than their mass produced grandchildren.

For these reasons and more the existence of creativity might be hidden, but the existence of destruction is highly visible to those that experience it. For many romantic reasons we think of people that have been doing something a certain way for generations as unimpeachable. However, there is asymmetry toward those that come up with a more efficient and exciting way to do something. Is this because early adopters are just really bad at sharing their enthusiasm over the new products?

In grad school we used to say all the time: "The market loves you," every-time some new consumer surplus was identified. This also manifest itself in Deidre McCloskey's line: "Why are there no folk songs for capitalism?"

Schumpeter's thesis in Capitalism, Socialism, and Democracy can be summarized in the following way: Over time people focus less on the creative and more on the destructive. This suggest something like constant attention paid to the misery that is created by changes over time while the possibilities that are opened up are appreciated at decreasing rates over time. If we plot these, we get a equilibrium where the line crosses the decelerating function of creativity (like the Solow growth model, for those in the know).

This means that unless creativity is actively appreciated, it can be lost in the complaints about how so many are being left out of the advantages of the modern world. Nassau Senior suggested that the luxuries of today become the decencies of tomorrow and the decencies of today become the necessities of tomorrow. This theory suggested that people's expectations change over time about what is necessary. Today's necessities include a color TV, for even the most poor people in the US have this item, considered a luxury 50 years ago. The case for access to medicine is the most striking. Hardly anyone could have heart surgery 50 years ago. Now it is often covered for everyone with health insurance.

What a dramatic change! I think what Schumpeter and Senior teach us is that we need to compose the folk songs for capitalism. Don't be ashamed to sing loudly and proudly about how much the market loves you. If you don't love it back, progress could leave you.

Julian Simon will never be wrong because of the entrepreneur

In his post from Friday, Michael discusses Baumol’s thesis that some industries respond less to capital augmentation and high cost of labor than others do. He suggests as an example health care, which is very labor intensive and will most likely remain labor intensive because a significant part of the service itself is human interaction (unlike haircuts maybe).

Michael explains that because of the existence of such goods, he is not comfortable with the argument that high cost of labor, or high opportunity cost generally, provide a sufficient incentive for innovation. Michael’s main concern is not with health care, though, but instead with oil and specifically transportation fuel. Basically, the question is, what happens if the high opportunity cost of using oil are not sufficient to generate innovation that will lead us away from a dependence on oil? Oil is getting more expensive and it will most likely continue to get more expensive for the near future (note that this does not really have anything to do with capital augmentation). We have not yet come up with a good alternative transportation fuel, however, or for that matter with a good alternative substance to make plastic with (corn based plastics* excluded). Therefore, my interpretation of the implication is that we might need to intervene somehow (Note: this is not Michael’s claim!) to bring about innovation and the development of substitute energy sources.

So, here is my shot at a defense of the market advocates against intervention: I thought about it for a little bit but I could not think of an example of the destruction of a civilization that was caused by the high cost of a product or raw material. I might just be oblivious though, so I would very much appreciate any examples you know of. Most of the time, when a civilization declined, it is pretty easy to trace the causes of the decline back to political institutional factors, not the depletion of a resource (I am thinking Rome, the Dutch Republic, Ancient Venice …). That leads me to believe that market advocates might not be so wrong after all, when they argue that innovation in the market place is a function of increasing opportunity cost. We humans are great at finding substitutes for things because we are really entrepreneurial, especially in the face of high opportunity cost. So we will find an alternative transportation fuel and we will reduce our dependence on oil, because higher prices are a sufficient incentive for entrepreneurial innovation. And because we have always been able to do so in the past.

You might ask why we do not respond the same way to institutional failure, i.e. why do we not innovate and find a substitute for a political institution when it is set to ruin us? Well, Mises and Kirzner would probably say that it is because there are no price signals in politics. Without price signals, it is impossible to fully internalize the costs and benefits of any action. When you do not fully internalize the cost of your action, you are a lot less sensitive to the high cost consequences of your actions. One of our neighbors has a dog, which runs around by itself all the time and does its business in the yards of the entire neighborhood. The dog’s owner does only bear the full cost of his dog’s business, if it is done in his yard. He therefore does not care to keep a tighter leash on his dog. Similarly, when you cannot fully internalize the benefits of your action, you are less likely to innovate. If I do not expect to have full property rights over a cure for cancer and the proceeds from its sale, I will not look for one. In politics, entrepreneurs who come up with institutional designs that could safe us all are not systematically rewarded (other than with fame maybe). Therefore, they are less likely. Entrepreneurship is absent, or at best unsystematic.

Given this understanding of the relative likelihood of entrepreneurial solutions to problems in markets vs. politics, I am lead to believe that we are much more likely to find a substitute for oil and a cure for all of our environmental problems in the context of the market than we would be in the context of regulation or politics generally. Therefore, my response to the argument that some production processes are less likely to experience capital augmentation is “So what?” and “It has not hurt us in the past.” We will find a substitute for oil and we will be fine. In short, I am with Julian Simon.

_____

* As an aside, we have had a spoon made of the plastic alternative stuck in our front yard for about 7 months now and it has not bio-degraded as advertised.

Baumol Cost Curse / Disease

Modern economies are wonderful things. If you really want to re-enact the middle ages, you should eat a healthy portion of your own soil or insects and develop scurvy. Not to mention let go of a few of your personal liberties.

Baumol's thesis concluded that while productivity was rising virtually across the board, the hidden cost was on things that respond little to capital-augmentation. His example is a live-orchestra. It took 250 people to perform a concert in 1750 and it still does today. Now, I have always laughed off this concept because compact disks and MP3s have made the marginal cost of listening to this performance virtually zero. But in 1993 Baumol resurrected his thesis by applying it to health care, and this was published in my favorite journal:

If you think about health care, you will start to realize that good health care is a function of personal relationships -- services. These relationships cannot be augmented by machines the same way that you can get more widgets from a worker by giving them a row of widget stamping machines and training them to monitor and maintain the machine. For pressure ulcers (bed sores), as one example, the patient needs to be clean, dry, and massaged on a routine basis (the sore develops local gangrenous material as a result of damp skin that has insufficient blood flow, a similar to trench foot anywhere there is contact between your body and the bed). All attempts to mechanize relief to this problem seem to fail.

In medicine you need highly skilled people to do tasks that are difficult to scale. Like someone who learns to play a violin, a proper nurse is a very talented artist. Because the increases in productivity here are small, the cost of the level of service rises in proportion to the opportunity costs.

Market advocates might respond that when the opportunity cost gets high enough, the incentive to find a capital-based solution will be so great as to create the needed innovation, but I am not particularly comfortable with necessary but not sufficient arguments. Similar to the market response to the energy crisis, the rising price of oil creates a necessary but not sufficient incentive to innovate alternative energy solutions.

I will continue to work on this idea and most likely post additional comments on it. I would love your thoughts!

Experts and Non-expert Experts

As a professor, much of your identity is wrapped up in how people see your profession or discipline of study. Much of this might come from a value judgement made during a survey course the person took in undergrad or the TED talks listened to while the individual worked out.

Economics is special because it suffers from the attention of almost everyone. Diana posted on Sunday that Krugman has two persona, the nobel-winning economist who pushed out the frontiers of the science, and the NYT columnist. It is this latter character that we encounter in the campus community and that I encounter when talking with my family. During the 2008 election cycle, I actually tried to talk to my family about the economic issues. They looked at me dumbfounded and said: Isn't there a consensus in your profession? Why would you disagree with the nobel prize winner?

Diana focuses on the political nature of this, but there is something really banal about expertise. Non-experts remain resilient to economic arguments in the face of a real-live economic discussions rehearsed live in face-to-face contact. I can only assume that Diana and I are unconvincing as experts.

The one thing that the process of education has taught me is that nicely wrapped packages of ideas in academics should be avoided like the plague. Anything which appears simple is deceptively so. The industry of wrapping complex ideas into sound bytes is one that I begrudgingly accept as permanent. How do we then deal with the popular wisdom of our profession? It is unlikely that a physics professor encounters people remaining confident about some of the cutting edge research in string-theory despite being told that they are omitting a key argument. Even if I have watched 200 TED-talk like summaries of string theory I am likely to defer to the expert on matters of physics.

Why is that different in Economics?

The difference appears to be the normative content of economics. The string-theory implications that would destroy much of the European enlightenment consensus in science are small shock compared to that which the economic rhetorician encounters on a continual basis. Economics can be used to justify almost anything. There are as many arguments as there are people, not only because preferences matter, but because the facts are diverse enough and people lean on statistics for almost point they would like to score in a political debate. Do you think that growth would be higher if we had spent twice as much on road construction? There is an economist that has rate-of-return figures to back you up. Do you think that government spending is wasteful vis-a-vis private infrastructure development, just search the web for papers on that and contact your expert. Seeing that these are not contradictions but compliments means that you are thinking like an expert, not an opportunist.

It takes a practitioner of economics to point out the strengths and weaknesses of these arguments. The practitioners for hire, the public intellectuals, are certainly there simplifying the issues and removing the necessary complexity for the consuming public. But just like the history professor that Diana encountered, this false confidence gets you something rather dangerous. When non-experts confuse these public intellectuals with the authority of a decided professional opinion and start to spread this misinformation, we have a responsibility to reinforce the lesson of ambiguity. Paul Krugman and TED talks are no substitute for actually studying a subject. It seems that in the later case we are more willing to learn the lesson.

Trusting Markets and Not Getting What you Want

While watching "Goodbye Lenin" a few years ago, my friend Adam made fun of me. We were watching the beginning of the movie where the mother of the main character dictated letters to the socialist manufacturers giving feedback on the products they had produced. She felt it was her duty to the common good.

The implication was that this is what I do, and too often. I give unsolicited feedback on my experiences in real time, constantly. This, it is implied, is a rival to the market. Perhaps I think that I live in East Germany?

I call hotlines and complain when restaurant service is less than stellar. I fill out comment forms. I spend a great deal of time responding to surveys for those companies that I patronize often. Does any of this make sense?

The great thing about a market economy is that unsuccessful businesses are allowed to fail. But we are reminded all the time of businesses that are both failures (based on the promise of a certain level of service) and good enough to stay in business. How is it that this persists in a market economy? See Alchien.

This results from an overly simplified dichotomy between patronage or not. The typical response is to say that there are many imperfections in the market. We see barriers to entry and we see large firms that have brand recognition survive just on the fact that people know the quality of the product they will receive.

Does this dichotomy make us abandon the market concept? I think there is a difference between a cold Burger King sandwich that is supposed to be hot and a full-blown socialist economy. Ironically, the perfectly discriminating monopoly gathers more information than the perfect competition model.

Why would anyone give other types of feedback. I have debated people in the past who assert that market prices contain all relevant information. Certainly over large arcs this could be useful in predicting who stays in business, but there are significant sources of information that cannot be reduced to price. We can simply start with the hypothesis that businesses that do not have customer feedback will not stay in business, and if shown to be false, assume that customer feedback is irrelevant.

I prefer to think about markets as more complex. Price is a good first approximation. There are a number of things that can be better understood by prices in a thick market. However, as soon as you remove the assumptions 1) non-bundled goods and 2) thick market; we are in a different territory altogether. Most goods are bundles. Even a cone of ice-cream is a bundle of services rendered and location. Further, imagine an ice cream good enough to justify a sub-par cone...

How we talk about cost without simplifying this to simply the realized money-price is important. I continue to exploit the opportunity to raise non-price costs for bad behavior because I believe that all things too have downward sloping demand curves vis-a-vis disapprobation and upward sloping supply curves vis-a-vis approbation. This encourages my tendency to complain...

Are Fast Food Items a Market Failure?

As I write this I notice that I have once again chosen a bad (for by health) meal for lunch today. Being that I "know" I wanted to eat healthier, it is hard to explain my choice for the convenience of TacoTime over the more difficult process of thinking about how to get a healthier meal [demonstrated preferences]. This must mean one of two things is going on:

In the first case, I could be a victim of perverse incentives. Perhaps it is the market's fault that my particular preferences are not available in the market. I would like either something that is salad based or something that is bean based that I could get at the drive-thru window of a restaurant. Maybe we, as a fast-food eating nation, are just stuck in bad habits.

The second case, I could simply be confused about my preferences. I didn't even look on the menu to see if there were bean based options on the menu. It is a "Mexican" place after-all. [I just checked, they have veggie and bean burritos, BTW]. What sells, after all, is not the most healthy food option.

Neither of these satisfies my conflicted desires. I think to myself there should be more healthy options when I need a fast food lunch. Menus need more options and maybe I would find something that I both like and is good for me. I would still need it to be prepared quickly and packaged conveniently. It would be so much better if I could change everyone else's preferences to suit my vision of myself as a better person.

One such plan is to tax foods that make people obese. The idea is that these foods, because they are both cheap and delightful are over-consumed. Americans are certainly fatter, but are they happier? The claim is that they are happy in the moment but are not correctly accounting for the cost later on. Fatty foods and lots of meat is unhealthy. Besides this, the social cost of obesity raises the cost to provide universal health care. This social cost seems to dictate that something be done [assuming we hold the provision of universal care constant].

What would a world look like with a fast-food tax? Well, maybe McDonald's would have a new menu that complied with a heath food, fast food regulation. This would force the company to invest in packaging that could keep fruits and vegetables fresh and appetizing. Perhaps if beans and lettuce were not taxed like hamburgers and tacos, it would be easier for these restaurants to achieve scale in the more healthy items, which would help with the diversity of options and the packaging choices.

But I think instead this type of fast food would lose business, and the consumer would lose a very quick meal option. I just don't buy it that people will make special plans to go and eat salad at their local McDonalds. Perhaps fast-food should go out of style. But I tell you, as I write this, I am appreciative of not having to make my own meal for lunch so that I could have time to think about the economic implication of that meal instead.

Grow the "Capital-Augmented Labor Productivity"

I get excited about capitalism, this is no surprise. But I want to provide a particular example which I share with my undergraduates. I hope that it makes you excited as well.

I call this approach, grow the "Capital-Augmented Labor Productivity." I tell the students about a trip I took to Sao Paulo and how I saw a very large team or workers digging in on the side of the interstate, doing road construction, absent any earth moving equipment. I then compare this to the presence of capital in the US and talk about why this might be the case, why we have such a different picture of road construction in the US vs. in Brazil.

The answer, which I reward with my enthusiasm, is that there are low opportunity costs for labor in Sao Paulo. It is a low-skilled job and there are plenty of places in Brazil where people are just happy to have work outside of the home. This means that there is low competition among employers for wages.

I also point them to China, where there have been incredible changes in the working conditions of manufacturing labor around Shanghai and Beijing. In fact, the economist reports in their special issue on China that employers are beginning to look further inland, along the rivers, for new sources of cheap labor bringing manufacturing jobs and infrastructure development to people whose opportunity costs have remained low despite monster growth in China for the last few decades.

I mention to them that some people call this exploitation. I call this growing "Capital-Augmented Labor Productivity." In the wake of the companies seeking to exploit workers there is a increase in skills, increase in standard of living, increased capital investment. All of these are consistent with rising wages. Wages can only rise when productivity rises. One way of increasing productivity is through education (both how to use capital, and how to be a better worker). Both of these seem to increase all of our humanitarian measures. So this "exploitation" of workers around the world makes everyone better especially when it is consistent with monotonically increasing productivity of the workers.

The only way that we can be successful in a global economy is to become more productive. This can mean a variety of things. What it certainly means is that the globe is constantly getting more productive per worker. What I predict is that this greater affluence will make everyone better off. Who doesn't want to be on board with that?

Biased Experts

Michael already wrote this week about the Op-Ed by Brad Delong that we listened to over dinner on Monday. This specific Op-Ed is from October of last year, but Delong has been making similar arguments in the wake of the recent plunge of U.S. treasury yields after the earthquake in Japan. He argues that the fact that the interest rate is so low suggests that the U.S. government should borrow more right now. In the older Op-Ed he even goes so far as to suggest that it would not be a bad thing if a country that got in trouble because of excess borrowing ever had to borrow money from the IMF. I have no way of accessing these arguments as reasonable. Fair enough, in theory interest rates reflect the risk of borrowing. But should we not at least question that theoretical ideal in the face of bond rating histories like Greece’s and the similarly sudden drop in the ratings for mortgage backed securities during the recent financial crisis? But beyond that, it seems insane to me to suggest that it is ok and in fact commendable for a government to borrow money until there is no longer a private investor around willing to lend. Is Delong really arguing that we should emulate the example of Argentina/Greece? Or is he being chomskeyesque and merely making a populist argument?

Now my question is, is it ok for well-known Economists to be out there as public intellectuals making arguments that are pretty obviously bad economic arguments? It seems deceptive for people like Krugman and Delong (as well as people doing the same thing on the other side of the political divide) to use their reputation as experts to make political arguments without explaining that they are arguing from a politically biased position that ignores some of their economics expertise as well as readily available evidence. Don’t get me wrong, I generally think that economics is mostly a normative enterprise and that different assumptions can get you different answers. However, some of the stuff I have read seems like a recipe for economic suicide no matter what your assumptions are.

An additional downside of such bad economic arguments, beyond the potential economic consequences, is a lot of confused rhetoric in the public. For example, I met a history professor last year who told me she loved Paul Krugman and that she really enjoyed learning about economics from him in his New York Times column. She in fact corrected a student in an argument he was making because she was so convinced that she knew better because of what she had read in the NYT. I tried to tell her that Paul Krugman in the NYT is not Paul Krugman the Nobel Prize winning economist, but I was unsuccessful at getting her to actually hear me.

I guess the only consolation I have is that public opinion formation is still a competitive decentralized process. As long as there is plurality in opinion and as long as bias is distributed somewhat normally, we can still get sensible public opinion, which is an important constraint (at the margin) on government excess, at least some times. Going back to the original question about experts and bias though, I think the best tool we have to defend against such bias is general skepticism. Now all I have to do is to figure out a way to teach my students to be skeptics.

Do Categories help Analysis or Hinder?

One of my pet peeves is the use of categorical thinking.

I might need to explain this a bit before opining. The basic case for categories is politics. The right/left dichotomy. Here I know something is correct because it has to be correct to justify my political party's take. This can be no more than identifying "good" and "evil." These distinctions in politics avoid loaded terms and say, right and wrong -- US and THEM.

My dissertation reader, David Levy, has a great paper which I am always promoting called, The Technological Obsolescence of Scientific Fraud. I am loosely translating the argument here: Someone imports a particular desired outcome into their formation of hypothesis even if the explicit question might be scientific, for example: What are the effects of the minimum wage?

That hypothesis can be tested with a widely diversified set of analytical tools. We, as researchers, choose the tool which is able to test the hypothesis. Because there are no rules for which tools apply to certain questions, we might implicitly choose the tool that comports with the expected outcome. Hence, the array of options created by science has allowed a back door into justifying our expected outcome that is built into the standard means of analysis. We opportunistically choose data sets and, as the paper emphasizes, pick the estimators from computer-based statistical programs, that appear to give the most plausible results. It should be no surprise that by the end of our research we get the significant variables expected. Since this is not what the English language dictionaries refer to as "fraud," but has the same result, the paper suggests that fraud should have been tautologically eliminated through the advance of technology.

Now, I use this example as part of categorical thinking, because it seems hard to imagine that in a world where social issues are tested by thousands of people using different estimators which do not result in confusion among the consumers of the resulting information. The discourse becomes a shouting match which further reinforces the categories.

I have recently come to lampoon this tendency in social science as equivalent to going to a meteorology conference and attending a panel on why only one thing that matters: low pressure, because this is where precipitation occurs. This panel is further devoted to why we should not confuse people with talk about high pressure. In this fantasy world there would be a separate panel, scheduled at the same time, arguing the exact opposite: High pressure (after-all low pressure is the absence of high pressure). My conclusion is supposed to be implied, but what I mean to say is that both High and Low pressure are important distinctions and work together in concert. Why would anyone isolate one as the primary cause?

Categories were meant to help simplify analysis. For instance, when I teach balance of payments, I talk about how Dollars flow to China for goods and then flow back to the states in some form (capital or goods and services). The other side of this transaction is the Yuan, but to stop at each point of the process and invert the analysis could be confusing. I simplify the logic in order to build the initial round of intuition and then add to this later. Similarly, when describing High and Low pressure, it would make sense to step back from the apparent cycle and describe where the term High pressure comes from. It would be nice to motivate the discussion with a particular point-of-view. However, the categories were never meant to be taken as a serious dichotomy, anyone that has looked at the range of pressures on a meteorological map knows that there is a continuum with a center that is conveniently labeled. The High pressure center over Seattle could be lower than the High pressure center over Milwaukee.

Similarly in social science, categories do not actually exist in the world. The categories are created to make sense of the world. The categories, just like statistical estimators, exist only as tools. To have fetishes for certain tools over others means that you are becoming ideological or narrow in your analysis. I certainly appreciate the division of labor in science, but what I fear comes with these silos of technical tools is the "Gnosticism" of hierarchical thinking. Each school of thought believes they have priority vis-a-vis the other. We run dangerously close to assuming that Low pressure just doesn't exist when we spend too much time emphasizing the categories. We miss the forest for the tree we are facing two inches from our eyes.

What role do academics have in stepping back and talking about the forest? I can only assume this is dictated by the market for our opinions. Relative to supply the demand for opinions is very low. I think there is a reason for this. There might be something about intuition that tells people in general that academics do poorly in giving a complete picture of any event. One thing that I think is crucial in the next generation is to develop a science of interdisciplinary studies. The PPE project that Peter Boettke runs and the book series that he edits is a good start. What about uniting behind this banner and helping our consumers to sort out producers of useful information? We have a market test to pass and we must provide a differentiated product.

My suggestion is to abandon categories as a crutch. Make clear which window into the debate we are looking through at any moment in time, but don't pretend it is the only one. Let our consumers know that the extra strain of the ambiguity in our answers is worth it in the end and remind them of this often. I don't think anyone can win the category battle. It seems to take us away from the issue motivating the research rather than toward understanding the issue.

Chomskyesque

I have a love/hate relationship with Noam Chomsky.

On the one hand he is a public intellectual and promotes the erudition that made me love academics. I loved listening to his lectures and these were a primary target of my searches as an undergraduate student on what seems a very primitive internet back in the 1990s.

On the other hand his logic always made me feel sick, just like eating too much pizza with extra pizza sauce. I would choke on some of the claims and verbally exclaim, "come on!," when he was opportunistic with facts or skipped over several steps in logic.

Still, I maintained a fascination with Chomsky. He was what I imagined a good representative of the left's sympathies would be. He also had better logic than that on cable news. For a young student, this was enough.

Recently, Diana has been frustrated at Brad DeLong's status as a public intellectual. We listened to an op-ed read by voice software over dinner the other night (note that link is to a Soros funded media aggregator). His claims seemed to be incomplete. He filled in the gaps with narrative meant to embellish and compel listeners to a certain interpretation. When I say that he is opportunistic with the facts, I point specifically to his description of Greece and his volte face in his commentary on England. See for yourself. I am happy to discuss this in the comments.

What strikes me as unusual is that he lampoons the new Prime Minister's position on expectations. Given the changing position on sovereign debt in the world, it seems like DeLong's claim: low interest rates are a signal to borrow as much as you can temporarily cheap money; is misleading. Presumably, and admittedly I am reading this into his column, DeLong wants to grow the scope of government with the use of bonds rather than taxes in the current period. But we know that as debt grows the interest rate will rise (simple a priori economics, supply and demand). In the future, taxes will have to rise if rolling the debt over into new forms is not a possibility because of higher interest rates. What DeLong omits is that this would be contractionary at some point in the future. With Keynes firmly in his corner, he seems to think that we will be richer in the long-run and therefore can afford contraction in the future.

To counter DeLong's claims of the banality of the bond-spending policy please see "Democracy in Deficit" which explains why our democratic system will expand the budget to the limit systematically.

But you really don't have to think that hard to dispense with the bond-spending policy. All you really need is the identity: "g > r" (thank you T. Cowen). That is, that if growth is greater than the interest rate, everything is fine. As long as continued government spending increases growth in the economy, then you are OK. So let us examine what this means in more detail.

I teach my students that the first thing that the government does has the highest rate of return. The folks at the government are here to help, at least given their stated intentions. Rule of law, (e.g. providing a legal system, contract enforcement, and transparency) is a really high rate of return items. It is tricky to implement, and we can go a great deal of political philosophy on the specifics, but the return is there and high.

Studies also show that rate of return on things like infrastructure are quite high. We can debate the knowledge problem and talk about private provision, but we don't dispute the rate of return -- if government does it, it will produce economic growth. As we move down the line the rate of return argument starts to fall away as the government controls resources and actually destroys more information through the implementation of plans than is justified by the free-rider problem of "market failure." At some point the rate of return measured in growth is lower than the interest rate because of the distortions of centralized decision making. We can debate where this is, but I just assert it as a theoretical approach.

Now DeLong seems to argue that government growth is consistent with rates of return that are always in excess of the interest rate -- so he doesn't worry about this problem. But, picture a world where interest rates double or triple, as they would with an increased risk of a sovereign debt crisis. Once interest rates start their upward journey they are likely to rise quickly as the unraveling begins. The debt service portion of the budget would rise if the country tried to roll the debt over into new bonds which are priced higher (from the G, perspective).

So issuing bonds would be less attractive. Taxes would have to rise to service the debt that is coming due because we would not want to issue as much new debt. Spending would start to be cut for the same reasons, we have been financing spending through bonds for a very long time. As we cut programs, and we assume that we cut the lowest rate of return programs first (a bad assumption if we want to preserve social programs which don't necessarily show up in rate of return arguments) then we unravel. The growth continues to fall, the interest rate continues to rise and the situation has become critical. All remaining productive capacity in the economy goes to servicing debt.

This story can lead to a miserable period of low growth or to the collapse of the government as a result of fiscal crisis. Encouraging this outcome by becoming a cheerleader of borrowing to spend is strange, even from a politically committed economist. It is even stranger when we consider some very interesting global dynamics.

The BRIC countries are growing. I love this increase in happiness BTW, but this means that Brazil, Russia, India, and China all are slowly becoming self-sufficient. As people there get rich, they will start to consume their own products. Rather than throwing American Dollars back into the treasury securities as China has been doing for decades, they can start selling products domestically and to each other eroding the need for their high rates of saving and the vehicle of aggregate saving they have been using, the US treasury. This also implies that interest rates will rise.

The long-term picture seems to suggest that bonds will be less useful in policy outside of the short-term (I am biting convergence theory heavily here). While DeLong is technically right, we CAN borrow. The implicit argument that we SHOULD borrow is not a positive argument. He is politicking and not producing economic analysis.

The reason I relate this to Chomsky is that, it is strangely fascinating to peak underneath this argument and view it as the state-of-the-art for a public intellectual. This term, public intellectual, therefore becomes pejorative. While it is important in guiding the debate, I think it is rightly viewed by the academy as contemptuous. I propose we label this Chomskyesque, to reward the rhetorician and path-breaker who paved the way.

Aside: Please view this post on Chomsky from DeLong which is particularly ironic

Nuclear Reactors and Seismic Activity

I hate pain and suffering. Even when it happens to other people.

The events surrounding the disruption of a nuclear reactor, its backup, and its secondary backup were catastrophic. The reaction to these events seems to be more emotional than sensible. I have been debating with my more worried friends about the policy implications of these events. They seem to think that we should ban nuclear reactors from any area with seismic activity.

Before we consider this, maybe we should make a comparison to an event that is older and look at it with the benefit of hindsight. The Gulf spill last year was horrible. As I understand it this was again the case of a freak event causing a problem sufficient to overcome the connection to the drilling pipe and at least two redundant countermeasures set up to keep the pipe closed in case of such an event. My claim in that case was that the level of redundancy in safety measures was clearly too low relative to the cost of the broken pipe.

I don't know how we settle on two backups as the optimal number of back-ups. Both in the oil spill case and in the nuclear reactor it seems that the risk justified a bit more redundancy. My friends who want to ban nuclear power outright for Japan seem to be missing the economic argument that there is always a price that justifies doing less of something. If the correct number of redundant measures is high enough we will have the same think happen if we ban nuclear power or if we require safety measures sufficient to have the same effect.

This was all I was debating, but somehow I got public choice thrown back in my face. The claim was that banning was a better commitment than regulations because regulations would be shaped by greedy politicians and lobbyists. I like that my progressive friends are learning public choice, but it bothers me that they are applying it inconsistently.

I am making a simple Pigouvian point, that we can internalize the social costs by increasing regulation. I am not entirely in support of this position, but I didn't think that it would be subverted so easily by the claim that it was not draconian enough. Who knew?

What is teaching?

In our time teaching is best described as preparing individuals for the next step in life. We expect people to take a few years to learn to speak, walk, get along with others and then we put them in school so that they can learn skills that are not as well learned in the home.

Kindergarten is to prepare for grade school, which prepares you for junior high. At this point you are prepared for high school which is about getting into a good college. When our students arrive, they can think a variety of things that are untrue about college --

1) they are going to be given the secret of their chosen profession and become an asset when equipped with that knowledge;

2) they can think that they are being punished and have contempt for the whole process which results in a membership card required to get a job they should have been given anyhow;

3) they could be in college because that is where the single people of their age are - for obvious reasons.

I have written, before, about how I think that writing should be a craft as opposed to an art. But when I walk down the halls of the university I am convinced that school is becoming less of a craft. I observed today an older student who was back in school to get a masters. He was fired from his job and does not have other options without the masters. He is enjoying it, mostly, and talks frequently in classes, a bit too much actually. It is a bit of a consumption experience for him, but when he talks to other students about what it will take to succeed, they give him quite a bit of deference. He knows something about what it means to turn these abstract habits into a paying job, something that is not taught in school.

This made me think that we should not fear the concept of trade schools. I think we have a bad idea about them. Some things can only be learned in the context of application. Engineering might be one. Business is certainly one. When I was a student at Alabama, the MBA students were consulting with different firms and, if they and their results were liked, were offered jobs there at the end of the projects. This seemed to make sense -- the elimination of Asymmetric information for both parties.

I may be naive, but my vision of what would work in school is to have classes that were more geared around what people needed to know in a functional way. If your major at least was structured this way, it might make the electives more fun and relaxing. We might see students do well in a humanities class because it is an opportunity to do something different. I don't see this in my school. I see people generally valuing completing a degree but not earning one. They have no idea what it used to mean to accumulate the skills and insights required for a degree back when it meant more relative to the general public. By making the Bachelors a virtually universal expectation, we robbed it of some of its motivational capital.

I think more classes should structure the learning goals around some aspect of the craft of becoming educated. For Humanities this means that students should learn to think creatively and learn how to write. For engineering, perhaps students should offset some of their expenses by doing instructor led consulting (where they could be fired if they don't perform consistently).

I want to get out of the habit of seeing our students as kids that are preparing for something else that is important. We owe it to them to see them as young professionals that are filling in gaps in their credentials. Adolescence is long enough without subsidizing the hook-up scene. Besides, having a purpose in your daily activity should make you more attractive to your potential partners anyhow...

The Stagnation?

Perhaps there is someone who would both read this blog and not know of the book:

The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History,Got Sick, and Will (Eventually) Feel Better by T. Cowen

However, I will only point out two reasons it is thought notable. 1) because it is a e-book only release which is relatively short. For an academic book this is great because it eliminates the filler most academics seem compelled to include in their books. 2) It has been widely talked about by people both pro and anti-market.

Cowen seems startled somewhat by its reception among self-titled libertarians. Afterall, he claims that there is a stagnation. If fans of small government thought that they have a case against big government at all, surely the growth in government over the past 50 years would have caused stagnation?

This strikes me as noteworthy, especially since Cowen, when I was in school at GMU, was a fan of staying that government is a luxury good. When income rises you want more of it (generally speaking).

This is particularly interesting considering a hot debate in the regulation literature. A 2001 working paper by Edward L. Glaeser and Andrei Shleifer, The rise of the regulatory state, is a good example of the basic hypothesis. The modern regulatory state rose because of legal failure, that is, legal decisions failed to reach an efficient, stable, or lasting consensus for future activity among the group they were intended to regulate. Basically, this is a critique of constitutional political economy from the Chicago-Virginia (Coase-Buchanan) perspective.

Diana and I are very interested in developing this line of inquiry. If it is true that legal precedent does a poor job of establishing a clear and permanent legal consensus, then regulation has to be at least considered. In a working paper, which we have presented at conferences in the past, we argue that the regulation of medicine, specifically blood donation, was controlled by a regulatory action motivated by pure public choice concerns. We argue that the outcome was worse than what had already been established in legal opinion but not yet taken place. We think that regulation is just as suspect if not worse than the process of the courts.

Since I believe that Shliefer's work (this paper with Glaeser and others of his) points to the best arguments against the idea of a constitutionally limited government with democracy; I also am willing to view Cowen's argument as a cleverly updated version of Schumpeter's thesis about the demise of capitalism in Capitalism, Socialism, and Democracy. Cowen makes a bold assertion and dares us to prove him wrong. If there is no stagnation (as I assumed in my knee jerk reaction ) despite increases in the scope of government over the last 50 years, then we have no reason to lament this change in government. I know that we could have higher growth -- but at some level I am willing to appreciate that the unseen benefits of growth will always fail to win minds compared to the visible poverty that persists even with the intervention.

Cowen shows us that stagnation is normal in a process of growth. Russ Robert's this week mentioned Kuznets Curves which predict that income inequality increases during periods of growth but converges later. These theories show us that there is some regularity in the world driven by a more complex process. We shouldn't expect high growth all the time, sometimes we prioritize fairness over growth.

I tend to be on the side of the heroic vision of capitalism which I believe is best illustrated by Hernado De Soto's claim in his book, The Mystery of Capital, that allowing people access to capital is the economic equivalent to nuclear fission. But, I am willing to look out the window and see people being prevented from having access to this by the banality of "frictions" in the developing world. [This is putting it nicely, but these frictions should occupy another blog post in the future] At the end of the day, we have to come to terms with the fact that people want intervention in order to grow at moderate rates in order to signal social justice. Growth that occurs too quickly might be on net positive for the society, but there is something psychological about high growth rates that cause moralizing among voters (or the mob in general). I have called this repugnance in other places. I will talk more about this in the future, but for now, I think it is sufficient to link this stagnation idea to the moderation of growth rates implied by Schumpeter and Kuznets in rapidly growing (or recently rapidly growing) economies. Linking this to the regulation theory of Shliefer means that we have a causal process for the growth in regulation partially identified.

Now off to think more about Mises's work, Interventionism.

The Anatomy of Peace in Teaching

I just finished reading The Anatomy of Peace (AoP), which is a follow up to Leadership and Self-Deception (I have not yet read the latter). Leadership and Self-Deception is mostly a business book. The Anatomy of Peace applies the concepts from Leadership and Self-Deceptions to familial interactions between parents and children or between spouses. Both books are written by the Arbinger Institute, which is run by Terry Warner, a philosophy professor from BYU (he doesn’t seem to be on faculty there currently, but I can’t find any other affiliation either).

AoP is written as a novel, which is very different from what I have come across in the self-help/business isle. The style makes it a very quick and intuitive read, which was nice. The main idea of the book is that we are all stuck in boxes of “self-deception.” We enter such boxes whenever we choose to act not according to our senses/desires (I would call it intuition), but instead betray our senses. For example, if I see an empty cart abandoned in the middle of a grocery parking lot, my sense is to return it to one of the cart returns because it represents an obstacle to me and other drivers. If I choose not to return the cart, I betray my intuition. To reconcile this sense with what I failed to do, I come up with excuses that result in a state of mind the book calls “a heart at war.” It might help to think of a heart at war as a wall of justifications that I am building up around myself. This wall contains all the little failures that my subconscious has accepted as failures and that my conscious is battling to excuse (this is my language here). Such walls or boxes make it harder for me to follow my sense in interactions that follow and so a vicious cycle of boxes building up all around begins.

The book suggests ways to get out of the box and obtain a heart at peace. The authors argue that heaving a heart at peace is the foundation for a person’s ability to successfully master interactions with others and build relationships (see reconstruction of Arbinger Institute Pyramid below). The central step to getting out of boxes is to see others as persons and not objects. Whenever we fail to do so, we construct boxes around us.

I really enjoyed reading this book for a number of reasons, but one of the most interesting lessons I draw from it relates to teaching. Recently, one of my friends posted on Facebook that you can’t be a good teacher unless you love your students. Michael and I both had trouble with that message because we often struggle to love our students, even though we might agree that that’s the goal. I really don’t think you can love every student and I don’t believe in a general sense of love for my students either. Every honest teacher has had experiences with students that have made his stomach turn and have kept him awake at night. While I was reading the book, I therefore decided that I would like to suggest a slight alteration to my friend’s message: You can’t be a good teacher, unless your heart is at peace with your students. This slight variant on the original message makes it much easier for me to agree and draw out some implications. If you have ever stood in front of a classroom, you have quickly learned that treating your students as objects that have to be overcome to get to the real deal, i.e. research maybe, or your hobby, results in much grief and bad teaching evaluations. Teaching is a lot more fun and rewarding for both you and the students, if you try on your students’ perspective once in a while and deliver a product that they can get excited about. This applies to other interactions with students as well: I have had trouble balancing my teaching responsibilities with the amount of research I would like to do ever since I started my job here at Utah State. I think that that is mostly the case because I somehow got the impression that I have to respond to my students every need to get the best teaching evaluations possible. What I have learned in reading AoP is that what really matters is not doing everything imaginable to accommodate my students, but rather to be honest and tell them where my limits are when they reach them. Doing so would be treating them like persons rather than objects.

Unions: Protect the Unproductive!

"What has four legs in the morning, two in the afternoon, and three at night?"

Just like in many other areas of life, unions are a great idea in theory.

We live a life where we start out completely dependent, spend way too long earning our marketable skills, and then as soon as we get a skill, that skill starts to become obsolete. There are younger, stronger, more-confident people flooding the market every day.

From the organizer's of union's perspective this is a curse.

From an economist's perspective this is growth.

These two groups seem unable to reconcile, unless you are willing to assume the preferences of the union can be generalized. Most of us are producers of one thing and consumers of a great many. Because we are consumers from many other producers, we wish that they would not have a union for their workers. We don't want the higher prices that that would signal.

This means that the classic public choice issue is created. I want more favorable rules governing my particular trade and less-favorable rules over those trades which make the things I consume more expensive. Public choice expects that the squeaky wheel gets the grease. Those groups that are very effective in lobbying (homogeneous concentrated groups) are going to win. This was precisely the case in South Africa during apartied. Numerical minorities in the American south ran slavery, with a whip.

Unions are always justifiable to those whose wages they raise. No one is going to argue with higher wages for beautiful women, so to speak. Walter Williams commented once that, given many people willing to be a secretary in the 1960s, a surplus, was it any surprise that beautiful young women were more competitive for the job? Opening up competition for jobs across the spectrum to women eliminated this once dominant bias and made women better off.

Check out this article in the NYT: The struggles of Men

Unions take away the one thing that low-skilled people can use to get jobs they otherwise would not be considered for -- lower wages. Unless we assume being poor is a chronic condition that should be treated by quarantine, we should favor paying people their marginal product (even when that product is very low) and allowing them to build skills in areas that interest them. A system of open competition is consistent with skill-building, as opposed to ignoring the problem.

Instead we glorify union's attempt to deny the truth about life captured in the opening quote. In Wisconsin this argument has hit a particularly sensitive margin, the payment of teachers. In Utah, they have suggested ending tenure for all faculty at the university where I work. I see unions for teachers as unnecessary, perhaps I am more convinced for researchers who make controversial claims (as my own theory would suggest, bias). However, do we really think that getting rid of teaching unions at both levels would be equivalent to a decrease in the quality of teaching (or of research)? The argument is more about keeping unproductive people secure in their jobs. I predict it would be easier to fire bad teachers and cost much more to hire good teachers. Notice, I am claiming that the effect on spending would be ambiguous, but I guess it would increase budgets as good teachers command very high wages or transfer (assuming they could demonstrate their competence by something like, getting their students accepted into a good university on scholarship).

I predict that if something like this happened education would look more like the sports industry has in the last 20 years. College football coaches salaries have increased 25 times at the high end in the last 20 years. Coaching tenure is short, a few bad years ends the run. This might give a union rep a nightmare, however, talented teachers would love to be in such a system. Only lousy ones or the incredibly risk-adverse ones should fear such a plan. I aim to provoke, but why not create a system that would encourage excellence and punish mediocrity?

The Daily Show Advocates for a Draft

In what I can only understand as a continued frustration with the wars Bush started and Obama failed to end, the argument was made by Allison Stanger, prof. at Middlebury College in VT, that the existence of contractor based armies allowed wars to be perpetrated without the public outcry which a war fought with a draft would be accompanied.

Follow this link to the Stanger interview:

[At 2:10 on the transcript]:

JS: "Is the dirty secret of this is that it is being done this way now, you mentioned Vietnam, because we don't have a draft. If we had a draft these jobs wouldn't be necessary to contract out..."

AS: "Well, That is a great point, and that is precisely why I think we need to have a public discussion about this transformation in the way we fight wars, because without contractors we would have to have a draft to fight those two wars and with the draft we would obviously have a very different political situation on our hands..."

JS: "It almost like an interesting 'Catch-22' ... If we uh... uh... we are fighting these wars with contractors ... If we had a draft we wouldn't need the contractors... My guess is that if we had a draft we wouldn't have the wars... My guess is Iraq would have been a much more... I mean

[Spirited Applause from the Audience]

JS: "Afghanistan perhaps... But, Iraq... If there were a draft people would have been less inclined to go [garbled]"

AS: "You are right, you have absolutely nailed it, you are absolutely right..."

[End Transcript at 3:07]

I consider one of the great triumphs of American history the overcoming of the draft. I have never been more convinced that I have less in common with the John Stewart crowd than I was last night. This interview, Mr. Stewart's seeming unwillingness to see the evil of the draft for his desire to focus on the evil of the Bush wars, and the crowd's reaction have alienated me from this particular interview.

I cannot treat advocacy for a draft, the ability for a government to force its citizens to war, as a misunderstanding. Something else is more important than liberty to Mr. Stewart and Ms. Stanger. I don't want to speculate, but this interview strikes me as dark.

I believe in a market, even for war, in fact -- especially for war. The idea that we should use a draft because we can't constrain our government from starting unjust wars (regardless of the merits of this particular example) is incredible. Just because this is possible when they have access contractors, does not mean that it is less possible when they can conscript. Conscription has been the tool of tyrants fighting unjust wars since the dawn of monarchy. We should, rather, place limits on the size of government and the budget for the military industrial complex. It seems both John and Allison would rather have a large state that can tell you to grab a gun and stand in front of our "enemies" for whatever happens to be the politically correct person to shoot at on that day.

I find this to be a very gross failure of political thinking on Mr. Stewart's part. I am ashamed to have chosen his show last night as my form of entertainment.

New Blog: drliberty.com

http://www.drliberty.com/

This new blog focuses on health and free markets. It is a journal which details the frustrations of a doctor who wants to help people, but faces the types of good meaning restraints that people impose when they want to emote their way through policy.

The law of unintended consequences suggests that attempts to get free lunches always backfire.