Top 25 Posts, July-August 2012

Top 25 based on Google Analytics pageviews in July and August, 2012. The number of pageviews is shown by each post. (There were 66,419 pageviews during this period, but, for example, 20,205 homepage views could not be categorized by post.) See the Top 10 based on May and June pageviews (many quite popular) in a bonus section at the bottom.

Note: Links open in the same window. use back-arrow to return.

  1. Dr. Smith and the Asset Bubble 5420
  2. Scott Adams’s Finest Hour: How to Tax the Rich 2937
  3. You Didn’t Build That: America Edition 1874
  4. Jobs 1393
  5. Kevin Hassett, Glenn Hubbard, Greg Mankiw and John Taylor Need to Answer This Post of Brad DeLong’s Point by Point 1248
  6. The Egocentric Illusion 1209
  7. What is a Supply-Side Liberal? 1112
  8. Corporations are People, My Friend 1038
  9. Two Types of Knowledge: Human Capital and Information 841
  10. Top 10 Posts on supplysideliberal.com (May-June, 2012) 832
  11. When the Government Says “You May Not Have a Job” 771
  12. Balance Sheet Monetary Policy: A Primer 766
  13. Is Taxing Capital OK? 690
  14. Will Mitt’s Mormonism Make Him a Supply-Side Liberal? 665
  15. Rich, Poor and Middle-Class 659
  16. Teleotheism and the Purpose of Life 645
  17. Getting the Biggest Bang for the Buck in Fiscal Policy 644
  18. The Flat Tax, The Head Tax and the Size of Government: A Tax Parable 643
  19. Miles Kimball and Brad DeLong Discuss Wallace Neutrality and Principles of Macroeconomics Textbooks  640
  20. Thoughts on Monetary and Fiscal Policy in the Wake of the Great Recession: supplysideliberal.com’s First Month 638
  21. No Tax Increase Without Recompense 626
  22. Why My Retirement Savings Accounts are Currently 100% in the Stock Market 557
  23. The Euro and the Mark 536
  24. Preventing Recession-Fighting from Becoming a Political Football 533
  25. Miles’s Best 7 “Save-the-World” Posts, as of July 7, 2012 485

Bonus: The Top 10 based on May and June (and July 1) pageviews are copied below. The pageviews through July 1 are shown by each post. (Copied from #10 above.) The list above and the list below combined include the full set of my all-time Top 25 posts. (#1 through #8 below are in my all-time Top 25.)

  1. Balance Sheet Monetary Policy: A Primer: 2213
  2. Trillions and Trillions: Getting Used to Balance Sheet Monetary Policy: 849
  3. Is Monetary Policy Thinking in Thrall to Wallace Neutrality? 795
  4. Mark Thoma: Laughing at the Laffer Curve: 699
  5. What is a Supply-Side Liberal? 678
  6. Thoughts on Monetary and Fiscal Policy in the Wake of the Great Recession: supplysideliberal.com’s First Month: 608
  7. Leveling Up: Making the Transition from Poor Country to Rich Country: 564
  8. Avoiding Fiscal Armageddon: 526
  9. Wallace Neutrality and Ricardian Neutrality: 345
  10. Future Heroes of Humanity and Heroes of Japan: 291

Posts on Politics and Political Economy through September 1, 2012

Note: The links open in the same window. Use the back-arrow to return.

  1. What is a Supply-Side Liberal?
  2. Noah Smith: “Miles Kimball, the Supply-Side Liberal”
  3. Leading States in the Fiscal Two-Step
  4. Avoiding Fiscal Armageddon
  5. Leveling Up: Making the Transition from Poor Country to Rich Country
  6. Mark Thoma: Kenya’s Kibera Slum
  7. Mark Thoma: Laughing at the Laffer Curve
  8. The Euro and the Mediterano
  9. Rich, Poor and Middle-Class
  10. Bill Greider on Federal Lines of Credit: “A New Way to Recharge the Economy” 
  11. Corporations are People, My Friend
  12. Preventing Recession-Fighting from Becoming a Political Football
  13. You Didn’t Build That: America Edition
  14. Will Mitt’s Mormonism Make Him a Supply-Side Liberal?  
  15. The Euro and the Mark
  16. How the Mormons Became Largely Republican
  17. Adam Ozimek: What “You Didn’t Build That” Tells Us About Immigration 
  18. Charles Murray: Why Capitalism Has an Image Problem 
  19. Charles Hill: The Empire Strikes Back
  20. Adam Smith as Patron Saint of Supply-Side Liberalism?
  21. Things are Getting Better: 3 Videos 
  22. Government Purchases vs. Government Spending 
  23. Mark Thoma on the Politicization of Stabilization Policy
  24. Milton Friedman: Celebrating His 100th Birthday with Videos of Milton
  25. Isomorphismes: A Skew Economy & the Tacking Theory of Growth
  26. Daniel Kuehn: Remembering Milton Friedman 
  27. Big Brother Speaks: Christian Kimball on Mitt Romney
  28. Fed Transparency and Obscurantism
  29. The True Story of How Economics Got Its Nickname “The Dismal Science”
  30. The Paul Ryan Tweets 
  31. Joe Gagnon on the Internal Struggles of the Federal Reserve Board 
  32. Matthew O'Brien on Paul Ryan’s Monetary Policy Views 
  33. Noah Smith on the Coming Japanese Debt Crisis
  34. Kevin Hassett, Glenn Hubbard, Greg Mankiw and John Taylor Need to Answer This Post of Brad DeLong’s Point by Point 
  35. When the Government Says “You May Not Have a Job”
  36. Brad DeLong’s Views on Monetary Policy and the Fed’s Internal Politics
  37. Persuasion
  38. Gavyn Davies on the Political Debate about Economic Uncertainty
  39. Larry Summers on the Reality of Trying to Shrink Government
  40. James Surowiecki on Skilled Worker Immigration
  41. Vipul Naik and Garett Jones on the Robustness of This Unbelievable American System 
  42. Josh Barro on a Central Issue of Political Economy: Poor vs. Old 
  43. Matt Yglesias on How the “Stimulus Bill” was About a Lot More Than Stimulus 
  44. Scott Adams’s Finest Hour: How to Tax the Rich 
  45. My Ec 10 Teacher Mary O’Keeffe Reviews My Blog 
  46. Occupy Wall Street Video 
  47. No Tax Increase Without Recompense
  48. Adam Davidson on Friedrich Hayek’s Miscellaneous Views
  49. Matthew O'Brien versus the Gold Standard 
  50. What is a Partisan Nonpartisan Blog?
  51. Tyler Cowen’s Review of My Posts and Tweets about Mitt Romney 
  52. Family Income Growth by Quintile Since 1950 
  53. Jonathan Rauch on Democracy, Capitalism and Liberal Science
  54. A Book of Mormon Story Every Mormon Boy and Girl Knows
  55. Bill Dickens on Helping the Poor
  56. The Magic of Etch-a-Sketch: A Supply-Side Liberal Fantasy

The Magic of Etch-a-Sketch: A Supply-Side Liberal Fantasy

I, Mitt Romney, have been reading my cousin Miles’s new blog in the last few days instead of watching the Republican Convention, and I’ve had a political conversion experience. It’s annoying Miles didn’t start sooner. It’s a little late in the game for me to be changing my political philosophy yet again, to Supply-Side Liberalism, but I guess one more political transformation won’t hurt. I am already through the Republican primaries, which gives me room to maneuver. And although my magic Etch-a-Sketch that wipes out everything I have ever said in the past looks like it could give up the ghost of its last bit of magic charm at any time, I think if I use it right now, it will still work once more.  It is also annoying that there are a lot of policies Miles hasn’t even talked about yet, but I’m getting the sense that it’s closer to where I was at when I ran for Senator and for Governor in Massachusetts than where I have been lately, so I’ll fill in the gaps that way.  

The only trouble is, here I am waiting to go out there and give my acceptance speech and there is no time to work up a new speech. Maybe a little creative reinterpretation will do the trick. All right, here goes, I’m shaking the magic Etch-a-Sketch to erase everything I’ve said before, and I’ll figure out as I go along how to reinterpret the words of my acceptance speech to be consistent with Supply-Side Liberalism. OK, no more time, I have to go out there…

Mr. Chairman, delegates. I accept your nomination for President of the United States of America.

I do so with humility, deeply moved by the trust you have placed in me. It is a great honor. It is an even greater responsibility.

Tonight I am asking you to join me to walk together to a better future. By my side, I have chosen a man with a big heart from a small town. He represents the best of America, a man who will always make us proud - my friend and America’s next Vice President, Paul Ryan.

In the days ahead, you will get to know Paul and Janna better. But last night America got to see what I saw in Paul Ryan - a strong and caring leader who is down to earth and confident in the challenge this moment demands.

I love the way he lights up around his kids and how he’s not embarrassed to show the world how much he loves his mom.

But Paul, I still like the playlist on my iPod better than yours.

Not much content there I need to worry about. If I can just win this election, I’ll have four years with Paul at my side to bring him around to my new way of thinking.  

Four years ago, I know that many Americans felt a fresh excitement about the possibilities of a new president. That president was not the choice of our party but Americans always come together after elections. We are a good and generous people who are united by so much more than what divides us.

When that hard fought election was over, when the yard signs came down and the television commercials finally came off the air, Americans were eager to go back to work, to live our lives the way Americans always have - optimistic and positive and confident in the future.

That very optimism is uniquely American.

It is what brought us to America. We are a nation of immigrants. We are the children and grandchildren and great-grandchildren of the ones who wanted a better life, the driven ones, the ones who woke up at night hearing that voice telling them that life in that place called America could be better.

They came not just in pursuit of the riches of this world but for the richness of this life.

Freedom.

Freedom of religion.

Freedom to speak their mind.

Freedom to build a life.

And yes, freedom to build a business. With their own hands.

This is the essence of the American experience.

We Americans have always felt a special kinship with the future.

When every new wave of immigrants looked up and saw the Statue of Liberty, or knelt down and kissed the shores of freedom just ninety miles from Castro’s tyranny, these new Americans surely had many questions. But none doubted that here in America they could build a better life, that in America their children would be more blessed than they.

Boy, what I had in this speech works great, as long as I interpret it in a way that is opposite to what I said about immigration policy before I used my magic Etch a Sketch backstage. What Miles said in “You Didn’t Build That: America Edition” works perfectly. Even the Statue of Liberty reference works great now that I am strongly pro-immigration.  

But today, four years from the excitement of the last election, for the first time, the majority of Americans now doubt that our children will have a better future.

It is not what we were promised.

Every family in America wanted this to be a time when they could get ahead a little more, put aside a little more for college, do more for their elderly mom who’s living alone now or give a little more to their church or charity.

Every small business wanted these to be their best years ever, when they could hire more, do more for those who had stuck with them through the hard times, open a new store or sponsor that Little League team.

Every new college graduate thought they’d have a good job by now, a place of their own, and that they could start paying back some of their loans and build for the future.

This is when our nation was supposed to start paying down the national debt and rolling back those massive deficits.

This was the hope and change America voted for.

It’s not just what we wanted. It’s not just what we expected.

It’s what Americans deserved.

You deserved it because during these years, you worked harder than ever before. You deserved it because when it cost more to fill up your car, you cut out movie nights and put in longer hours. Or when you lost that job that paid $22.50 an hour with benefits, you took two jobs at 9 bucks an hour and fewer benefits. You did it because your family depended on you. You did it because you’re an American and you don’t quit. You did it because it was what you had to do.

But driving home late from that second job, or standing there watching the gas pump hit 50 dollars and still going, when the realtor told you that to sell your house you’d have to take a big loss, in those moments you knew that this just wasn’t right.

But what could you do? Except work harder, do with less, try to stay optimistic. Hug your kids a little longer; maybe spend a little more time praying that tomorrow would be a better day.

I wish President Obama had succeeded because I want America to succeed. But his promises gave way to disappointment and division. This isn’t something we have to accept. Now is the moment when we CAN do something. With your help we will do something.

Now is the moment when we can stand up and say, “I’m an American. I make my destiny. And we deserve better! My children deserve better! My family deserves better. My country deserves better!”

So here we stand. Americans have a choice. A decision.

I think that text about what has happened during the Obama administration still works. I liked that line “I wish President Obama had succeeded because I want America to succeed” before and I still like it now. And I still like that line “But his promises gave way to disappointment and division.” As for “division,” President Obama really has been fomenting anger at the rich, when both Miles and I agree that the rich are very important for the economy, as he wrote in “Why Taxes are Bad” and that post that really started to turn me around 180 degrees: “Rich, Poor and Middle Class.” In that post, Miles was wrong about where I was at when I started reading his blog, but now he has convinced me. I am so grateful for that magic Etch-a-Sketch.

Now for the Neil Armstrong reference and my bio. I won’t have to change any of that. 

To make that choice, you need to know more about me and about where I will lead our country.

I was born in the middle of the century in the middle of the country, a classic baby boomer. It was a time when Americans were returning from war and eager to work. To be an American was to assume that all things were possible. When President Kennedy challenged Americans to go to the moon, the question wasn’t whether we’d get there, it was only when we’d get there.

The soles of Neil Armstrong’s boots on the moon made permanent impressions on OUR souls and in our national psyche. Ann and I watched those steps together on her parent’s sofa. Like all Americans we went to bed that night knowing we lived in the greatest country in the history of the world.

God bless Neil Armstrong.

Tonight that American flag is still there on the moon. And I don’t doubt for a second that Neil Armstrong’s spirit is still with us: that unique blend of optimism, humility and the utter confidence that when the world needs someone to do the really big stuff, you need an American.

That bit “when the world needs someone to do the really big stuff, you need an American” was over-the-top. How did that get in there? Shakespeare, and even Jesus, weren’t Americans! But they did big stuff indeed. At least the open immigration policy I am now committed to will guarantee that a large fraction of all the people in the world who do big things become Americans.    

That’s how I was brought up.

My dad had been born in Mexico and his family had to leave during the Mexican revolution. I grew up with stories of his family being fed by the US Government as war refugees. My dad never made it through college and apprenticed as a lath and plaster carpenter. And he had big dreams. He convinced my mom, a beautiful young actress, to give up Hollywood to marry him. He moved to Detroit, led a great automobile company and became Governor of the Great State of Michigan. 

My Dad’s generation really was impressive, including my Dad’s first cousin Camilla Eyring Kimball, who married Spencer W. Kimball. And Camilla’s brothers and sisters earned a lot of college degrees when that wasn’t common early in the 20th Century, including Henry Eyring, who became a world-renowned chemist. And boy am I glad Camilla’s husband  Spencer W. Kimball did the hard work of praying to get that revelation from God giving the priesthood to blacks. That was one of the best days in my life when I heard about that. 

We were Mormons and growing up in Michigan; that might have seemed unusual or out of place but I really don’t remember it that way. My friends cared more about what sports teams we followed than what church we went to.

Religion is one area where I am not going to go along with Miles. I still believe in Mormonism, which is a lot different from the religious views Miles expressed in “Teleotheism and the Purpose of Life.” And I’ll take my sure confidence in an afterlife over Miles’s attempts to console himself in “The Egocentric Illusion” about the absence of an afterlife any day. And I know there are miracles in the world today. What else do you call my magic Etch-a-Sketch? But religion is one area where, in America, it is OK to disagree. And if I take out the religious details, those posts had good positive views in other ways. OK, must keep going:     

My mom and dad gave their kids the greatest gift of all - the gift of unconditional love. They cared deeply about who we would BE, and much less about what we would DO.

Unconditional love is a gift that Ann and I have tried to pass on to our sons and now to our grandchildren. All the laws and legislation in the world will never heal this world like the loving hearts and arms of mothers and fathers. If every child could drift to sleep feeling wrapped in the love of their family - and God’s love – this world would be a far more gentle and better place.

Mom and Dad were married 64 years. And if you wondered what their secret was, you could have asked the local florist - because every day Dad gave Mom a rose, which he put on her bedside table. That’s how she found out what happened on the day my father died - she went looking for him because that morning, there was no rose. 

My mom and dad were true partners, a life lesson that shaped me by everyday example. When my mom ran for the Senate, my dad was there for her every step of the way. I can still hear her saying in her beautiful voice, “Why should women have any less say than men, about the great decisions facing our nation?”

I wish she could have been here at the convention and heard leaders like Governor Mary Fallin, Governor Nikki Haley, Governor Susana Martinez, Senator Kelly Ayotte and Secretary of State Condoleezza Rice.

As Governor of Massachusetts, I chose a woman Lt. Governor, a woman chief of staff, half of my cabinet and senior officials were women, and in business, I mentored and supported great women leaders who went on to run great companies.

I grew up in Detroit in love with cars and wanted to be a car guy, like my dad. But by the time I was out of school, I realized that I had to go out on my own, that if I stayed around Michigan in the same business, I’d never really know if I was getting a break because of my dad. I wanted to go someplace new and prove myself. 

Those weren’t the easiest of days - too many long hours and weekends working, five young sons who seemed to have this need to re-enact a different world war every night. But if you ask Ann and I what we’d give, to break up just one more fight between the boys, or wake up in the morning and discover a pile of kids asleep in our room. Well, every mom and dad knows the answer to that.

Those days were toughest on Ann, of course. She was heroic. Five boys, with our families a long way away. I had to travel a lot for my job then and I’d call and try to offer support. But every mom knows that doesn’t help get the homework done or the kids out the door to school.

I knew that her job as a mom was harder than mine. And I knew without question, that her job as a mom was a lot more important than mine. And as America saw Tuesday night, Ann would have succeeded at anything she wanted to.

Like a lot of families in a new place with no family, we found kinship with a wide circle of friends through our church. When we were new to the community it was welcoming and as the years went by, it was a joy to help others who had just moved to town or just joined our church. We had remarkably vibrant and diverse congregants from all walks of life and many who were new to America. We prayed together, our kids played together and we always stood ready to help each other out in different ways.

And that’s how it is in America. We look to our communities, our faiths, our families for our joy, our support, in good times and bad. It is both how we live our lives and why we live our lives. The strength and power and goodness of America has always been based on the strength and power and goodness of our communities, our families, our faiths.

That is the bedrock of what makes America, America. In our best days, we can feel the vibrancy of America’s communities, large and small.

All of that still sounds great. I like the emphasis on community.  Now I think I pivot to criticism of Obama. Let’s see here…

It’s when we see that new business opening up downtown. It’s when we go to work in the morning and see everybody else on our block doing the same.

It’s when our son or daughter calls from college to talk about which job offer they should take….and you try not to choke up when you hear that the one they like is not far from home.

It’s that good feeling when you have more time to volunteer to coach your kid’s soccer team, or help out on school trips.

But for too many Americans, these good days are harder to come by. How many days have you woken up feeling that something really special was happening in America? 

Many of you felt that way on Election Day four years ago. Hope and Change had a powerful appeal. But tonight I’d ask a simple question: If you felt that excitement when you voted for Barack Obama, shouldn’t you feel that way now that he’s President Obama? You know there’s something wrong with the kind of job he’s done as president when the best feeling you had was the day you voted for him.

The President hasn’t disappointed you because he wanted to. The President has disappointed America because he hasn’t led America in the right direction. He took office without the basic qualification that most Americans have and one that was essential to his task. He had almost no experience working in a business. Jobs to him are about government.

On the size of government issue, I think Miles has a political winner in his proposal in “Avoiding Fiscal Armageddon” to call for a constitutional amendment limiting government spending to less than half of GDP. If the Democrats resist it, they’ll be admitting that they plan sometime down the road to run more than half of the economy through government. If the Democrats go along, America will have a crucial constitutional protection against encroaching government in the future–now that would be a legacy. 

I learned the real lessons about how America works from experience.

When I was 37, I helped start a small company. My partners and I had been working for a company that was in the business of helping other businesses.

So some of us had this idea that if we really believed our advice was helping companies, we should invest in companies. We should bet on ourselves and on our advice.

So we started a new business called Bain Capital. The only problem was, while WE believed in ourselves, nobody else did. We were young and had never done this before and we almost didn’t get off the ground. In those days, sometimes I wondered if I had made a really big mistake. I had thought about asking my church’s pension fund to invest, but I didn’t. I figured it was bad enough that I might lose my investors’ money, but I didn’t want to go to hell too. Shows what I know. Another of my partners got the Episcopal Church pension fund to invest. Today there are a lot of happy retired priests who should thank him.

That business we started with 10 people has now grown into a great American success story. Some of the companies we helped start are names you know. An office supply company called Staples - where I’m pleased to see the Obama campaign has been shopping; The Sports Authority, which became a favorite of my sons. We started an early childhood learning center called Bright Horizons that First Lady Michelle Obama rightly praised. At a time when nobody thought we’d ever see a new steel mill built in America, we took a chance and built one in a corn field in Indiana. Today Steel Dynamics is one of the largest steel producers in the United States.

These are American success stories. And yet the centerpiece of the President’s entire re-election campaign is attacking success. Is it any wonder that someone who attacks success has led the worst economic recovery since the Great Depression? In America, we celebrate success, we don’t apologize for it.

We weren’t always successful at Bain. But no one ever is in the real world of business.

That’s what this President doesn’t seem to understand. Business and growing jobs is about taking risk, sometimes failing, sometimes succeeding, but always striving. It is about dreams. Usually, it doesn’t work out exactly as you might have imagined. Steve Jobs was fired at Apple. He came back and changed the world.

It’s the genius of the American free enterprise system - to harness the extraordinary creativity and talent and industry of the American people with a system that is dedicated to creating tomorrow’s prosperity rather than trying to redistribute today’s.

Wow, not only is this part of the speech great, after watching the videos Miles assembled in his post “Milton Friedman: Celebrating His 100th Birthday with Videos of Milton,” I realize that I am saying the sort of thing Milton would say if he were here.  

That is why every president since the Great Depression who came before the American people asking for a second term could look back at the last four years and say with satisfaction: “you are better off today than you were four years ago.”

Except Jimmy Carter. And except this president.

This president can ask us to be patient.

This president can tell us it was someone else’s fault.

This president can tell us that the next four years he’ll get it right.

But this president cannot tell us that YOU are better off today than when he took office.

That part of my speech was always pretty carefully worded. And it really hasn’t been fair of Obama to blame his predecessor Bush for the Great Recession. It was a collective failure on the part of many people. The kinds of experiments Miles talked about in “Dr. Smith and the Asset Bubble” make it look like human beings are naturally prone to create asset bubbles when they interact in asset markets. And the high leverage in the way we do mortgage finance made a bubble in housing so much worse for the economy. If only someone had listened to Robert Shiller and Andrew Caplin about how to do housing finance before it was too late to avoid the financial crisis. Miles’s post “Reply to Matthew Yglesias: What to Do About a House Price Boom” makes me realize that I need to bring Shiller and Caplin into my administration, if I can persuade them to come on board. There is a lot to think about there, but I have to get back to my speech:

America has been patient. Americans have supported this president in good faith.

But today, the time has come to turn the page.

Today the time has come for us to put the disappointments of the last four years behind us.

To put aside the divisiveness and the recriminations.

To forget about what might have been and to look ahead to what can be.

Now is the time to restore the Promise of America. Many Americans have given up on this president but they haven’t ever thought about giving up. Not on themselves. Not on each other. And not on America.

What is needed in our country today is not complicated or profound. It doesn’t take a special government commission to tell us what America needs.

What America needs is jobs.

Lots of jobs.

Getting more jobs is one thing I know how to do now. The problem with the Democrats’ Keynesian stimulus measures was not that they wouldn’t work, but that a big enough stimulus of that sort would explode our national debt. Miles’s idea of Federal Lines of Credit gets stimulus without much ultimate addition to the national debt. All of Miles’s posts on Federal Lines of Credit listed in “Short-Run Fiscal Policy Posts through August 23, 2012” make a pretty good case, so I think I can sell the idea. It is great that no one has any preexisting political opinion about Federal Lines of Credit because the idea is so new. And some of the other ideas for fiscal stimulus besides Federal Lines of Credit aren’t bad either, like the ideas in “Leading States in the Fiscal Two-Step” and “What to Do When the World Desperately Wants to Lend Us Money.” And if we empower the Fed to buy a wide range of assets like the Bank of Japan can, and I appoint members of the Fed who are comfortable with what Miles says in “Balance Sheet Monetary Policy: A Primer” and “Trillions and Trillions: Getting Used to Balance Sheet Monetary Policy” it looks like we can get a huge amount of stimulus from monetary policy, too. From Miles’s post “Wallace Neutrality and Ricardian Neutrality” and some of the other things I saw when I followed some of the link trails, it sounds as if it would help a lot to appoint a few Market Monetarists to the Fed when I get the chance. Ben Bernanke needs to be pulled in that direction more and pulled less in the direction of the monetary policy hawks, as I can see after having followed the link in “Brad DeLong’s Views on Monetary Policy and the Fed’s Internal Politics.” It would be pretty interesting to appoint Brad DeLong to the Fed, but my fellow Republicans will give me enough trouble just for working to give the Fed the authority to buy a wider range of assets, so I had better not try to appoint Brad.  Back to my speech:

In the richest country in the history of the world, this Obama economy has crushed the middle class. Family income has fallen by $4,000, but health insurance premiums are higher, food prices are higher, utility bills are higher, and gasoline prices have doubled. Today more Americans wake up in poverty than ever before. Nearly one out of six Americans is living in poverty. Look around you. These are not strangers. These are our brothers and sisters, our fellow Americans.

His policies have not helped create jobs, they have depressed them. And this I can tell you about where President Obama would take America:

His plan to raise taxes on small business won’t add jobs, it will eliminate them;

Reading “Is Taxing Capital OK?” and “Corporations are People, My Friend” made me wish all over again that I could just eliminate the corporate tax altogether, but even if I’m elected president, that will be too hard politically.    

His assault on coal and gas and oil will send energy and manufacturing jobs to China;

I wish this weren’t here in the speech! What am I going to do? Somehow Miles’s Tweets about the need to kill coal got through to me–especially that argument that coal is almost all carbon and so burns to create a huge amount of carbon dioxide. It really puts me in a bind. The magic Etch-a-Sketch wiped out my pro-coal speeches. But here I am again sounding pro-coal. Maybe if I do enough to foster nuclear energy, the fracking revolution in natural gas and research to bring down the cost of solar energy, the market will take care of killing coal for me. Oh, well, even if it is bad policy, I probably needed to sound pro-coal to have a chance in some of those swing states anyway. My conversion to Supply-Side Liberalism didn’t make me a political saint. 

His trillion dollar cuts to our military will eliminate hundreds of thousands of jobs, and also put our security at greater risk;

His $716 billion cut to Medicare to finance Obamacare will both hurt today’s seniors, and depress innovation - and jobs - in medicine.

I still like having a strong military, though thinking of the military as a jobs program is a little odd. I guess that statement was OK. On the $716 billion cut to Medicare, I wonder if now that he’s my running mate, the Etch-a-Sketch magic extended far enough to wipe out Paul’s previous statements about cutting Medicare?  

And his trillion-dollar deficits will slow our economy, restrain employment, and cause wages to stall.

Oh rats! That sentence sounds like bad economics to me now. Doesn’t it work mostly the other way? Low aggregate demand leading to deficits? At least most people will just hear this sentence as “deficits are bad,” which–other than technical slippage between “deficits” and “long-run effect on the national debt”–is basically true when there are plenty of ways to stimulate aggregate demand without a big increase in the national debt.   

To the majority of Americans who now believe that the future will not be better than the past, I can guarantee you this: if Barack Obama is re-elected, you will be right.

It is not great to have the “Obama will be bad” statement after those weak sentences, but I do think that, since my conversion to Supply-Side Liberalism, I will be better than Obama. 

I am running for president to help create a better future. A future where everyone who wants a job can find one. Where no senior fears for the security of their retirement. An America where every parent knows that their child will get an education that leads them to a good job and a bright horizon.

And unlike the President, I have a plan to create 12 million new jobs. It has 5 steps.

The main thing I am going to do in the short run for jobs is Federal Lines of Credit and empowering the Fed and appointing some Market Monetarists to the Fed, rather than the 5 steps I have written into the speech. But I don’t see any reason why I can’t create 12 million new jobs with those tools. Let me think of the 5 steps I have written into the speech as long-run economic policy.  

First, by 2020, North America will be energy independent by taking full advantage of our oil and coal and gas and nuclear and renewables.

As I was thinking before, I can do a lot to foster the fracking revolution in natural gas production, the next generation of safer, largely waste-free nuclear reactors and research for cheaper and cheaper solar power. I hope that kills coal, or I am going to feel a little guilty.  

Second, we will give our fellow citizens the skills they need for the jobs of today and the careers of tomorrow. When it comes to the school your child will attend, every parent should have a choice, and every child should have a chance.

I am glad I have this in my speech. Better schools are a great way to help the poor, and school choice is a great way to get better schools, as Miles said when he flagged Adam Ozimek’s post in “Adam Ozimek: School Choice in the Long Run.” For the public schools that lots of kids will still be going to, I like Miles’s ideas in Magic Ingredient 1: More K-12 School–not just lengthening the school year, but making sure that with high school graduation students can have the credentials for a wide range of jobs. The affront to freedom and harm to the poor from the excessive licensing requirements that Miles talks about in “When the Government Says ‘You May Not Have a Job’” really make me angry. And those restrictions are terrible for economic growth too.

Third, we will make trade work for America by forging new trade agreements. And when nations cheat in trade, there will be unmistakable consequences.

Freer trade will help a lot. And there is something odd about China buying so much of our national debt. Is that really even a good idea for them?  

Fourth, to assure every entrepreneur and every job creator that their investments in America will not vanish as have those in Greece, we will cut the deficit and put America on track to a balanced budget.

What happens to the national debt really is an issue. Having ways to stimulate the economy without ultimately adding much to the national debt will help immensely there. 

And fifth, we will champion SMALL businesses, America’s engine of job growth. That means reducing taxes on business, not raising them. It means simplifying and modernizing the regulations that hurt small business the most.

Regulations are like a hidden tax. Even if someone could persuade me that big corporations need more regulation (and I’m not stupid, I understand the “too-big-to-fail” problem), I would still think we can do with less regulation for small businesses.  

And it means that we must rein in the skyrocketing cost of healthcare by repealing and replacing Obamacare.

Here I am just fine.  Miles’s proposal in “Evan Soltas on Medical Reform Federalism: In Canada” to take the money from abolishing the tax exemption from employer-provided health insurance and give it to the states as block grants to provide universal coverage somehow in each state is just the ticket. We’ll have a lot of different experiments in the different states. I thought my health care reform plan in Massachusetts worked pretty well, but not so well that it should have been rolled out as a one-size-fits-all national program in Obamacare without any further experimentation. Here I can have a principled opposition to Obamacare based on humility. I had a great health care plan, but Obama made the mistake of not allowing other plans their day in court with a state-level real-world test. The posts Miles indexed in “Health Economics Posts through August 26, 2012” provide plenty of ideas to try that Miles shamelessly borrowed from other smart people.  

Today, women are more likely than men to start a business. They need a president who respects and understands what they do.

And let me make this very clear - unlike President Obama, I will not raise taxes on the middle class.

Whew, on this one, I think I can just squeak by through claiming (over furious objections by some in my own party, I’ll bet) that Miles’s great proposal in “No Tax Increase Without Recompense” isn’t really a tax increase, since the extra taxes imposed can be fully cancelled out by the tax credit for public contributions to decentralized nonprofit efforts to make America better. That dodge will make impossible arithmetic possible, as the need for government spending is reduced by those decentralized efforts. I’ll have to work up to this one to get it past my fellow Republicans in Congress, but the political capital I’ll get from all the jobs created by the extra aggregate demand from Federal Lines of Credit will go a long way toward making that possible. I am not sure 10% of income over $75,000 a year per person will be enough given all of the things that need to be done, but whatever it takes, I’ll try to push it through Congress.     

As president, I will protect the sanctity of life. I will honor the institution of marriage. And I will guarantee America’s first liberty: the freedom of religion. 

I am glad my speech was written to talk about abortion policy in code here, using “sanctity of life.” With my magic Etch-a-Sketch wiping out all my previous statements, maybe I can go back to where I was when I was running for office in Massachusetts. And I can’t think of a better way to “honor the institution of marriage” than to do everything possible to foster marriage rights for gays. It’s good to be on the right side of that issue again. Thank you, Etch-a-Sketch! I think I’ll wait until after the election to go there, though. There are some Republicans who would stay home on election day if I came out for gay marriage between now and then. And who could be against freedom of religion? And as far as the coded meaning goes, medical reform Federalism will probably solve the issue the Catholic Church had with Obamacare.    

President Obama promised to begin to slow the rise of the oceans and heal the planet. MY promise…is to help you and your family.

I have been worrying a lot about global warming ever since reading what Miles had to say about that at the beginning of “Avoiding Fiscal Armageddon,” but I think this attack on Obama is totally appropriate just as an attack on his grandiosity. (Come to think of it, Miles shows some of the same kind of grandiosity, but I’ll forgive him for that in view of the number of ideas I’ll be stealing.) That line “MY promise…is to help you and your family” is better than I thought, in view of that paper of Miles and his coauthors that I stumbled on that found that in personal choices, people value “the well-being of you and your family” more than anything else.

I will begin my presidency with a jobs tour. President Obama began with an apology tour. America, he said, had dictated to other nations. No Mr. President, America has freed other nations from dictators.

Every American was relieved the day President Obama gave the order, and Seal Team Six took out Osama bin Laden. But on another front, every American is less secure today because he has failed to slow Iran’s nuclear threat.

In his first TV interview as president, he said we should talk to Iran. We’re still talking, and Iran’s centrifuges are still spinning. 

I know Miles agrees with me about the importance of keeping Iran from getting nuclear weapons from what he said at the very beginning of “Avoiding Fiscal Armageddon.” In any case, this is something I feel strongly about.   

President Obama has thrown allies like Israel under the bus, even as he has relaxed sanctions on Castro’s Cuba. He abandoned our friends in Poland by walking away from our missile defense commitments, but is eager to give Russia’s President Putin the flexibility he desires, after the election. Under my administration, our friends will see more loyalty, and Mr. Putin will see a little less flexibility and more backbone.

We will honor America’s democratic ideals because a free world is a more peaceful world. This is the bipartisan foreign policy legacy of Truman and Reagan. And under my presidency we will return to it once again.

I don’t see any problem with what I had in my speech here. But Jonathan Rauch’s talk that Miles flagged in “Jonathan Rauch on Democracy, Capitalism and Liberal Science” gives me the idea that I can send a strong pro-freedom message by awarding Jonathan Rauch the Presidential Medal of Freedom if I can just get elected.   

You might have asked yourself if these last years are really the America we want, the America won for us by the greatest generation.

Does the America we want borrow a trillion dollars from China? No.

Does it fail to find the jobs that are needed for 23 million people and for half the kids graduating from college? No.

Are its schools lagging behind the rest of the developed world? No.

And does the America we want succumb to resentment and division? We know the answer. 

The America we all know has been a story of the many becoming one, uniting to preserve liberty, uniting to build the greatest economy in the world, uniting to save the world from unspeakable darkness.

Everywhere I go in America, there are monuments that list those who have given their lives for America. There is no mention of their race, their party affiliation, or what they did for a living. They lived and died under a single flag, fighting for a single purpose. They pledged allegiance to the UNITED States of America.

That America, that united America, can unleash an economy that will put Americans back to work, that will once again lead the world with innovation and productivity, and that will restore every father and mother’s confidence that their children’s future is brighter even than the past.

That America, that united America, will preserve a military that is so strong, no nation would ever dare to test it.

That America, that united America, will uphold the constellation of rights that were endowed by our Creator, and codified in our Constitution.

That united America will care for the poor and the sick, will honor and respect the elderly, and will give a helping hand to those in need.

No problem in that passage. It is going to be easier to afford that strong military with the public contribution program I am stealing from Miles’s post “No Tax Increase Without Recompense,” though I may have to adjust the rate from what he said. And that public contribution program will do a lot more to take care of the poor and the sick and to honor the elderly than we do now. I just need to be careful not to cut back on direct government programs until we are really confident that the decentralized efforts from the public contribution program are taking care of things in specific areas. Miles’s reminders in his post “Will Mitt’s Mormonism Make Him a Supply-Side Liberal?” of the Book of Mormon’s teachings about the duty to help the poor stiffen my resolve on that front.

That America is the best within each of us. That America we want for our children.

If I am elected President of these United States, I will work with all my energy and soul to restore that America, to lift our eyes to a better future. That future is our destiny. That future is out there. It is waiting for us. Our children deserve it, our nation depends upon it, the peace and freedom of the world require it. And with your help we will deliver it. Let us begin that future together tonight.

Bill Dickens on Helping the Poor

In my post “Rich, Poor and Middle-Class” I wrote 

I am deeply concerned about the poor, because they are truly suffering, even with what safety net exists. Helping them is one of our highest ethical obligations. I am deeply concerned about the honest rich—not so much for themselves, though their welfare counts too—but because they provide goods and services that make our lives better, because they provide jobs, because they help ensure that we can get good returns for our retirement saving, and because we already depend on them so much for tax revenue. But for the middle-class, who count heavily because they make up the bulk of our society, I have a stern message. We are paying too high a price when we tax the middle class in order to give benefits to the middle-class—and taxing the rich to give benefits to the middle-class would only make things worse. The primary job of the government in relation to the middle-class has to be to help them help themselves, through education, through loans, through libertarian paternalism, and by stopping the dishonest rich from preying on the middle-class through deceit and chicanery. 

In his correspondence with Bryan Caplan, Bill Dickens gives a good picture of what government efforts to help the poor currently look like. The distinction between the suffering of the poor and the struggling of the middle class is clear in Bill’s description. Bill is arguing against Bryan’s desire to reduce support for the poor.  He argues persuasively that since the Clinton-era Welfare Reforms, government efforts to help the poor have been appropriate.

Note that because of the nature of the argument with Bryan, Bill does not address here the question of whether more should be done to help the poor.  There are two terms in what Bill writes that may need some explanation: “memes” and “leaky bucket.” Here is a link for “memes.” I didn’t find a good link for “leaky bucket." "Leaky bucket” is a metaphor economists use for the idea that a government policy intended to help the poor often has unintended side effects: (1) the poor acting in ways that make it more likely that they will get help and (2) those who are better off acting in ways that make it more likely that they won’t be asked to help.  

Since Bill’s argument is long, let me give you some of the highlights of what Bill writes to Bryan:

So this is the crux of it. You subscribe to two central right-wing memes: government coddles the poor and won’t make them face the tough choices everyone else does, and welfare recipients are overwhelmingly lazy and undeserving. Anyone with firsthand experience dealing with a wide range of the poor or those receiving government assistant (with the later being only a small subset of the former) knows these two things to be false.

Overwhelmingly those on public assistance were full of regret and/or a sense of hopelessness that they are fated to their condition. They know they should have worked harder in school, they know they should be working to support their family, they know it would be better if their children’s father was there to help support their kids. There is no shortage of hectoring from society, welfare caseworkers, family members, and the media. Consider that even before the passage of TANF most women on welfare worked at least some during every year (on or off the books). Most welfare mothers are not drug abusers or alcoholics (when they have been tested only a tiny fraction fail). A lot had their children with a husband or boyfriend they had hoped to marry. A lot of the AFDC caseload cycled on and off welfare as people made repeated attempts to return to work (attempts that were often stymied by lack of adequate child care - one of the most common reasons for returning to welfare was being fired by a low wage employer for missing work when child care arrangements fell through).

Over and over when I talk to people about government income support programs I’m told that they have no objection to giving money to the truly needy, but that they don’t like supporting lazy bums who don’t like to work. When I tell them that overwhelmingly government support goes to families (usually single women) with children they don’t believe me.

Now let’s consider the case of a bucket that was probably too leaky and needed to be replaced. As you know I was converted by my experience with Clinton’s welfare reform task force to the belief that AFDC needed to be time limited. Over and over I heard young women tell me that they didn’t think much about having a baby because that is what people in their world did. “You get to be 16, you get yourself a baby and you get yourself a check and an apartment.” AFDC as a career choice was a serious problem back then. But even as we went around preparing the welfare reform we heard over-and-over again that the word was out that welfare was going away and you were going to have to do something else now. Starting in the early 90s - long before TANF actually limited benefits to 2 years - AFDC caseloads started dropping and ultimately dropped enormously. 

People know they make bad decisions. They often know when they are making them that they are bad. Telling them that they are being stupid isn’t news to them. Find ways to change the system to help them make better decisions and I’m all with you. Take money away from children because their mothers and fathers made bad choices I’m very disappointed. Overlook all the people who are receiving aid not because of bad choices, but bad luck and I’m more than disappointed - I’m angry.

… I’m not “outraged” by people who don’t want to pay taxes to support the government transfer system. A few of them may be selfish and/or racist jerks. There are few enough of them that I could care less. I believe that most people with that view are misinformed about who gets government transfers, how the programs are administered, the amount of the benefits, and how much of their taxes go to such programs. I think the vast majority of people, if they knew the facts, would not object to paying taxes for the system.

To me, given what I know, what Bill says has the ring of truth to it. But I would be interested in any evidence anyone has that contradicts what Bill says, especially anything that contradicts the passages I have quoted.

A Book of Mormon Story Every Mormon Boy and Girl Knows

Today is a big day for Mormons. In a few hours, Mitt Romney will accept the Republican nomination for President of the United States. Mormons have come a long way from being a persecuted minority in the 19th Century to this moment. In 1838, the Mormons were driven out of Missouri: Lilburn Boggs, governor of Missouri, issued Missouri Executive Order 44, which read in part

…the Mormons must be treated as enemies, and must be exterminated or driven from the State if necessary for the public peace…

A few years later, with similar opposition brewing in Illinois, Joseph Smith, the founder of Mormonism, ran full-out for President of the United States on a third-party ticket, hoping among other things to gain Federal protection for the Mormons. But he lost that race, and a few years later, in 1844, Joseph Smith was murdered by a mob while in prison awaiting trial. Seeking safety, the main body of Mormons followed Joseph Smith’s successor Brigham Young to what would become Utah, with Brigham Young himself arriving in the Salt Lake valley on July 24, 1847. (The anniversary is a big celebration every year in Utah on July 24, rivaling the celebrations on July 4.) Ten years later, President James Buchanan sent an army out to Utah to bring the Mormons under subjection to the Federal government in what became called the “Utah War.” In 1887, Congress passed the Edmunds-Tucker Act, upheld by the Supreme Court in 1990, which disincorporated the Mormon Church and confiscated all of its property. So to have a Mormon nominated by a major party for President of the United States means a lot to Mormons. And it means a lot to me. Mormonism is no longer my religion. (See my posts “UU Visions” and “Teleotheism and the Purpose of Life.”) But the Mormons are still my people.  

It is important for Americans to understand the Mormons in their midst. I hope the reports are true that say Mitt will speak more freely about his Mormonism tonight. (See for example Anna Fifield in the Financial Times: “Romney ready to reveal his Mormon soul.” and Colleen McCain Nelson and Patrick O'Connor “Mormon Faith to Take the Stage.”)

I want to add to that understanding by telling you an important Book of Mormon story–one that deserves to be pondered carefully: the story of Nephi and Laban. My telling of this story (not the story itself) is a parable, and in this is like my post “The Flat Tax, the Head Tax, and the Size of Government: A Tax Parable.”

My title “A Book of Mormon Story Every Mormon Boy and Girl Knows” is an exaggeration, but not by much. The story of Nephi and Laban is one of the most memorable stories in the Book of Mormon. And it comes in the third and fourth chapters in the entire Book of Mormon, so it is often one of the few stories read by those who begin to read the Book of Mormon and quit partway through. It is also a story alluded to obliquely many times later on in the Book of Mormon, since the “sword of Laban” that Nephi takes as a result of his confrontation with Laban becomes one of the key symbols of Nephite kingship.

The Book of Mormon is free online here.

In the third chapter of the Book of Mormon, Nephi’s father has a dream, in which God commands him to send his sons from their desert exile back to Jerusalem to ask Laban for a copy of the words of God (as they existed as of 600 B.C. or so in Israel)–a copy of the words of God that were written on “plates of brass.” (The “brass plates of Laban” should not be confused with the golden plates that Joseph Smith said he was given millenia later. Some Mormon scholars think the “brass plates” might actually have been made of bronze.) Nephi’s family needed these records of God’s word because they were soon to head on a journey across the ocean to the American continent, far away from Israel.

In response to his father’s report of this dream, Nephi responded in a way that has inspired many Mormons to obey Mormon Church leaders in the leaders’ role as “mouthpieces” of God:

And it came to pass that I, Nephi, said unto my father: I will go and do the things which the Lord hath commanded, for I know that the Lord giveth no commandments unto the children of men, save he shall prepare a way for them that they may accomplish the thing which he commandeth them. (1 Ne. 3:7)

After Nephi and his brothers traveled back to Jerusalem, Nephi’s older brother went to Laban and asked him for the brass plates recording the words of God. Laban’s response was to threaten to kill Nephi’s brother. Nephi’s brothers were then ready to give up, but Nephi was determined:

But behold I said unto them that: As the Lord liveth, and as we live, we will not go down unto our father in the wilderness until we have accomplished the thing which the Lord hath commanded us. (1 Ne. 3:15)

Nephi suggested taking all of the wealth his family had left behind in Jerusalem to try to buy the brass plates from Laban, explaining to his brothers:

Wherefore, let us be faithful in keeping the commandments of the Lord; therefore let us go down to the land of our father’sinheritance, for behold he left gold and silver, and all manner of riches. And all this he hath done because of the commandments of the Lord. For he knew that Jerusalem must be destroyed, because of the wickedness of the people. For behold, they have rejected the words of the prophets. Wherefore, if my father should dwell in the land after he hath been commanded to flee out of the land, behold, he would also perish. Wherefore, it must needs be that he flee out of the land. And behold, it is wisdom in God that we should obtain theserecords, that we may preserve unto our children the language of our fathers; and also that we may preserve unto them the words which have been spoken by the mouth of all the holy prophets, which have been delivered unto them by the Spirit and power of God, since the world began, even down unto this present time. (1 Ne. 3:16-20)

When they all went to talk to Laban with their valuables to trade for the brass plates, Laban was happy to take their valuables, but had his guards chase Nephi and his brothers off instead of giving them the brass plates. This occasioned a serious quarrel between Nephi and his brothers, in which Nephi’s brothers’ beating of Nephi was interrupted by an angel. Nephi’s brothers Laman and Lemuel were still not convinced:

And after the angel had departed, Laman and Lemuel again began to murmur, saying: How is it possible that the Lord will deliver Laban into our hands? Behold, he is a mighty man, and he can command fifty, yea, even he can slay fifty; then why not us? (1 Ne. 3:31)

Nephi gave a rousing reply:

And it came to pass that I spake unto my brethren, saying: Let us go up again unto Jerusalem, and let us be faithful in keeping the commandments of the Lord; for behold he is mightier than all the earth, then why not mightier than Laban and his fifty, yea, or even than his tens of thousands? (1 Ne. 4:1)

While his brothers hid outside of the walls of Jerusalem, Nephi sneaked into the city and toward Laban’s house, without a specific plan, but following his sense of inspiration. Near Laban’s house, he found Laban lying on the ground, drunk. Now comes the crux of the story, as Nephi faces an ethical dilemma. Nephi writes:

And I beheld his sword, and I drew it forth from the sheath thereof; and the hilt thereof was of pure gold, and the workmanship thereof was exceedingly fine, and I saw that the blade thereof was of the most precious steel. And it came to pass that I was constrained by the Spirit that I should kill Laban; but I said in my heart: Never at any time have I shed the blood of man. And I shrunk and would that I might not slay him. And the Spirit said unto me again: Behold the Lord hathdelivered him into thy hands. Yea, and I also knew that he had sought to take away mine own life; yea, and he would not hearken unto the commandments of the Lord; and he also had taken away our property. And it came to pass that the Spirit said unto me again: Slay him, for the Lord hath delivered him into thy hands; behold the Lord slayeth the wicked to bring forth his righteous purposes. It is better that one man should perish than that a nation should dwindle and perish in unbelief. And now, when I, Nephi, had heard these words, I remembered the words of the Lord which he spake unto me in the wilderness, saying that: inasmuch as thy seed shall keep mycommandments, they shall prosper in the land of promise. Yea, and I also thought that they could not keep the commandments of the Lord according to the law of Moses, save they should have the law. And I also knew that the law was engraven upon the plates of brass. And again, I knew that the Lord had delivered Laban into my hands for this cause—that I might obtain the records according to his commandments. Therefore I did obey the voice of the Spirit, and took Laban by the hair of the head, and I smote off his head with his own sword. (1 Ne. 4:9-18)

After that, by using Laban’s clothes and armor and his own acting skills, Nephi was able to get the brass plates and escape with them.  

The key point I want to make about this story is that–because of God’s commandment by the Spirit when he was face to face with Laban–Nephi felt he was temporarily exempted from God’s earlier commandment “Thou shalt not kill,” without having to change his overall ethical outlook. Nephi went on to become a good king after his people arrived on the American continent with no indication that he had become more bloodthirsty as a result of killing Laban. Mormons sometimes debate among themselves whether Nephi could have gotten the brass plates by impersonating Laban without

killing

Laban–and some even ask whether Nephi, although inspired on other occasions, was really inspired on this occasion–but the majority opinion is that since God told Nephi to kill Laban, Nephi did the right thing. The story of Nephi and Laban, with its message of obedience to God and the need to sometimes break one rule for a higher purpose, while remaining a rule-abiding person in general, is a not-insignificant part of what makes believing Mormons the people they are.  

Postscript

For my own views on a potential ethical dilemma in my own life that has some degree of structural similarity to the one addressed in this post, see my post 

“What is a Partisan Nonpartisan Blog?”

Jonathan Rauch on Democracy, Capitalism and Liberal Science

Jonathan Rauch gave a talk at a Campus Freedom Network Conference summarizing the argument in his book “Kindly Inquisitors: The New Attacks on Free Thought.” In addition to the link under the picture of Jonathan above, here is a link to a nice piece by Greg Lukianoff flagging the video: 

Jonathan Rauch on Why Free Speech is Even More Important than You Thought.

I loved Jonathan’s talk. I was struck by the similarities between Jonathan’s arguments for academic freedom in this video and Milton Friedman’s arguments for capitalism in the videos I marshalled in Milton Friedman: Celebrating His 100th Birthday with Videos of Milton.

The key elements of what Jonathan calls “liberal science” are its decentralization (no one in particular is in charge) and its rules. The discipline of criticism is just as necessary for ideas floated in the academy as the discipline of the market is for enterprises. However painful systems of trial and error are, if we interfere with the systems of trial and error, we will be saddled with errors.

Although in this video Jonathan is talking mainly about liberal science and only in passing about capitalism, the parallels made me appreciate the strength of Milton’s arguments even more than I had. And Milton’s arguments in turn, by the parallels, strengthen Jonathan’s case for liberal science. Finally, the arguments for both liberal science and capitalism strengthen the case for democracy; and the arguments for democracy strengthen the case for both liberal science and capitalism.

Postscript: Speaking of decentralization, some government functions (such as taking care of the poor) might be better served if they could be decentralized to nonprofit organizations. In particular, such decentralization allows a trial and error process to work its magic as donations shift away from the least effective nonprofits to more effective nonprofits. Because people love freedom, such decentralization of certain government functions has other advantages as well, as I argue in my post “No Tax Increase Without Recompense.” In that post, I propose a way to make sure such nonprofit efforts are adequately funded.

The Great Recession and Per Capita GDP

Although recessions in the United States are officially determined by a committee of the independent and nonpartisan National Bureau of Economic Research (NBER)–usually long after the fact–a rough-and-ready definition of a recession is the period of time when real GDP (the actual amount of goods and services produced) is falling, if it falls for a period of at least six months. This period of time when real GDP is falling is very different from the period when real GDP is “in the hole” compared to its peak, let alone the period when real GDP per person is in the hole.

For the same level of GDP,

GDP/Population goes down when Population goes up

and Population in the United States is growing.

Americans are used to real GDP not only growing, but keeping up with the growth of population, plus a couple of percent more each year. This link shows a graph of real GDP per capita since the beginning of the Great Recession. Since at least the beginning of 2008, real GDP has been doing quite a bit worse than Americans are used to.

Catherine Mulbrandon has made a great set of graphs on her Visualizing Economics website.

Here is a graph showing the history of the logarithm of real per capita GDP in the U.S. since 1871. With the logarithm on the vertical axis, the slope of the curve shows the percentage growth rate.  

Here is a graph showing the history of real per capita GDP in the U.S. since 1871. You can see what the miracle of compound growth does.  

Two Types of Knowledge: Human Capital and Information

Human Capital and Information. Knowledge can be either “human capital” or “information.” The difference is the resource cost of transferring a body of knowledge from one person to another. Here is the classification scheme I have in mind:

Human capital is knowledge that is hard to transfer.

Information is knowledge that is easy to transfer.

(This is a specific technical meaning of the word “information” for economics. I use the word “information” in a more general philosophical sense in my post “Ontology and Cosmology in 14 Tweets.”) Note that a given body of knowledge can shift from one category to another when technology changes. The words of the Iliad and the Odyssey were “human capital” when the only means of transferring this knowledge was oral transmission and memorization. When printing arose, the words of the Iliad and the Odyssey became “information." (See Albert Lord's The Singer of Tales on the original oral transmission of the Iliad and the Odyssey.)

Now comes the mid-post homework problem. Read Daniel Little’s description of the knowledge of how to fix machines or my abridged version of it just below, and classify the knowledge of how to fix machines as human capital or information. Here is Daniel Little’s opening paragraph:

There is a kind of knowledge in an advanced mechanical society that doesn’t get much attention from philosophers of science and sociologists of science, but it is critical for keeping the whole thing running. I’m thinking here of the knowledge possessed by skilled technicians and fixers – the people who show up when a complicated piece of equipment starts behaving badly. You can think of elevator technicians, millwrights, aircraft maintenance specialists, network technicians, and locksmiths.

Here is Daniel’s account of the level of difficulty of transferring this knowledge, based on his conversations with a fixer of mining machinery: 

I said to him, you probably run into problems that don’t have a ready solution in the handbook. He said in some amazement, "none of the problems I deal with have textbook solutions. You have to make do with what you find on the ground and nothing is routine.” I also asked about the engineering staff back in Wisconsin. “Nice guys, but they’ve never spent any time in the field and they don’t take any feedback from us about how the equipment is failing.” He referred to the redesign of a heavy machine part a few years ago. The redesign changed the geometry and the moment arm, and it’s caused problems ever since. “I tell them what’s happening, and they say it works fine on paper. Ha! The blueprints have to be changed, but nothing ever happens.”

I would trust Tim to fix the machinery in my gold mine, if I had one. And it seems that he, and thousands of others like him, have a detailed and practical kind of knowledge about the machine and its functioning in a real environment that doesn’t get captured in an engineering curriculum. It is practical knowledge: “If you run into this kind of malfunction, try replacing the thingamajig and rebalance the whatnot.” It’s also a creative problem-solving kind of knowledge: “Given lots of experience with this kind of machine and these kinds of failures, maybe we could try X.” And it appears that it is a cryptic, non-formalized kind of knowledge. The company and the mine owners depend crucially on knowledge in Tim’s head and hands that can only be reproduced by another skilled fixer being trained by Tim.

In philosophy we have a few distinctions that seem to capture some aspects of this kind of knowledge: “knowing that” versus “knowing how”, epistime versus techne, formal knowledge versus tacit knowledge. Michael Polanyi incorporated some of these distinctions into his theory of science in Personal Knowledge: Towards a Post-Critical Philosophy sixty years ago, but I’m not aware of developments since then.

As a practical matter, Polanyi’s distinction between “knowing how” (formal knowledge) and “knowing that” (tacit knowledge) is so important for the costs of transferring knowledge from one person to another that it closely parallels the distinction between human capital and information.

Pure Technology. Let me assume that your answer to the homework problem is the same as mine: knowledge of how to fix machines has a large element of human capital. This has an important consequence: “technology” as we usually think of “technology” is not just made of the easily copied “recipes” that Paul Romer talks about in his Concise Encyclopedia of Economics article “Economic Growth.”

Suppose for the purposes of economic theory, we insist on defining “pure technology” as a recipe that can be cheaply replicated. Then “technology” in the ordinary sense has an element of human capital in it as well as “pure technology,” much as “profit” in the ordinary sense has an element of return to capital in it as well as “pure profit.” The pure technology for mining would include not only

  1. a plan for how the machines are used and repaired, but also
  2. a plan for having new operators learn how to operate the machines and for having new machine repairers learn from more experienced machine repairers. 

The “technology” in the ordinary sense is human capital for using and repairing the machines–that is, already embedded knowledge produced from 1, 2 and learning time.

Economic Metaknowledge. In addition to straight ideas or recipes, Paul Romer emphasizes the importance of meta-ideas:

Perhaps the most important ideas of all are meta-ideas. These are ideas about how to support the production and transmission of other ideas. The British invented patents and copyrights in the seventeenth century. North Americans invented the agricultural extension service in the nineteenth century and peer-reviewed competitive grants for basic research in the twentieth century.

There are many meaning of the prefix “meta.” Paul is using “meta” so that “meta-X” means “things in category X to foster the production and transmission of things in category X.” When another meaning of “meta-” might otherwise intrude, let’s use “economic meta-X” for this meaning. Then with the distinction between human capital and information in hand, there are at least four types of economic metaknowledge–knowledge to foster the production and transmission of knowledge:

  • Meta-human-capital: human capital to foster the production and transmission of human capital. (Teaching skill is the most important example.) 
  • Economic meta-information: information to foster the production and transmission of information. (Many of the most important software programs are in this category: Microsoft Office, the software behind Social Media such as Tumblr, Twitter, and Facebook, TiVo’s software, the software behind the web itself…. Also, computer science and electrical engineering journals on library shelves contain some economic meta-information. In its time, a 17th Century printer’s manual would count.)
  • Human capital to foster the production and transmission of ideas. (Research skill– including the skill of writing academic papers–is a good example.)
  • Information to foster the production and transmission of human capital. (The contents of Daniel Willingham’s book Why Don’t Students Like School? are an excellent example that I highly recommend. He draws his suggestions for teaching from the U.S. Department of Education’s What Works Clearinghouse)

Extra Credit: Figure out how Paul Romer’s meta-ideas listed above–patents and copyrights, agricultural extension services, and peer-reviewed competitive grants–fit into this fourfold division of economic metaknowledge.

Rumsfeldian Metaknowledge. According to Colin Powell (as excerpted in the Appendix below and given more fully at this link) we can blame Donald Rumsfeld’s unchecked insubordination in disbanding the Iraqi Army for some portion of the long hard slog we faced in the War in Iraq since 2003, but Donald did coin a memorable description of another kind of metaknowledge. Here is the 21-second video, and here is the transcript:

[T]here are known knowns; there are things we know that we know.

There are known unknowns; that is to say there are things that, we now know we don’t know. But there are also unknown unknowns–there are things we do not know, we don’t know.

Metaknowledge in this sense of knowing what one knows and knowing what one doesn’t know often has great economic value, whether in daily life, business and policy making. But metaknowledge in this Rumsfeldian sense–even economically valuable Rumsfeldian metaknowledge–should be distinguished from “economic metaknowledge” as I define it above.

Appendix.Here is what Colin Powell wrote:

When we went in, we had a plan, which the president approved. We would not break up and disband the Iraqi Army. We would use the reconstituted Army with purged leadership to help us secure and maintain order throughout the country. We would dissolve the Baath Party, the ruling political party, but we would not throw every party member out on the street. In Hussein’s day, if you wanted to be a government official, a teacher, cop, or postal worker, you had to belong to the party. We were planning to eliminate top party leaders from positions of authority. But lower-level officials and workers had the education, skills, and training needed to run the country.

The plan the president had approved was not implemented. Instead, Secretary Donald Rumsfeld and Ambassador L. Paul Bremer, our man in charge in Iraq, disbanded the Army and fired Baath Party members down to teachers. We eliminated the very officials and institutions we should have been building on, and left thousands of the most highly skilled people in the country jobless and angry—prime recruits for insurgency. These actions surprised the president, National Security Adviser Condi Rice, and me, but once they had been set in motion, the president felt he had to support Secretary Rumsfeld and Ambassador Bremer.

The Litany Against Fear

Tomorrow I am going to the dentist, and in all probability will need a root canal. One thing that has been helpful to me in the past in facing the medium-sized fear appropriate to the dentist’s chair is the Bene Gesserit litany against fear, from Frank Herbert’s Science Fiction blockbuster Dune. Here it is:

I must not fear.

Fear is the mind-killer.

Fear is the little-death that brings total obliteration.

I will face my fear.

I will permit it to pass over me and through me.

And when it has gone past I will turn the inner eye to see its path.

Where the fear has gone there will be nothing.

Only I will remain.

What is a Partisan Nonpartisan Blog?

I have thought for a while that I should have a post explaining the meaning of my header’s subtitle: “A Partisan Nonpartisan Blog.” Here is the interpretation:

“Partisan” means I am passionate about policy and cultural issues.

“Nonpartisan” means I don’t belong to any pre-existing “team,” whether Republican, Democratic, Libertarian, Green, etc.

My experience in blogging and tweeting during the presidential election contest between Barack Obama and Mitt Romney has clarified for me what that means in practice. In November, I will step into a voting booth and make a choice. But I don’t want advance intimations of that choice to cloud my treatment of each issue. Although I have to set priorities about what I write about, if I do write about an issue, my commitment is to try as hard as humanly possible to give you my unvarnished opinion on that issue–even if, according to an exaggerated sense of my own importance, expressing my unvarnished opinion on an issue would hurt the chances of the candidate I think I am more likely to vote for by a tiny amount. (Here, I can only barely stand to do without the word economists use for a tiny amount: “epsilon,” drawn from calculus.) If I ever waver from that commitment, I will think hard about choosing a new subtitle for my header.

If you ever think the priorities I am setting for what I write about are skewed, please use the “Ask Me Anything” button on my sidebar or make a comment to a post to nudge me toward dealing with the issues you think I should be dealing with. On issues, posing questions for me will have a big effect. But to avoid distraction from a focus on the issues, I will be slow to answer questions about which candidate I support when I think that different, reasonable weightings of the importance of various issues could lead to different candidate preferences–even for someone who has the same views on the issues that I do.

In a fractal recapitulation of the “team-loyalty versus unvarnished opinion on each issue” conflict, fidelity to the truth can sometimes hurt the overall thread of one’s argument on an issue. Here, fidelity to the truth has to come first. Let me list the legitimate excuses: (a) there is no duty to mention facts that seem to run against one’s argument that are actually unimportant and could easily be answered; (b) for clarity it is permissible to defer dealing with even important, widely-known facts until a commenter sets up the Q part of the Q&A; and (c) human language always deals in approximations, especially in short-form essays. But for a blogger who hopes to have the trust of readers, it is never OK to say something one knows to be false and misleading, even in the service of what one might think is a higher Truth. Or to make a slogan out of the wisdom of my best friend Kim Leavitt:

“We are in trouble if we let our devotion to Truth get in the way of our devotion to truth.”

All humans are fallible, so I may slip at some point. But I shudder at the thought.

Learning Through Deliberate Practice

This link gives a taste of the kind of thing you can read in a book I highly recommend: The Talent Code: Greatness Isn’t Born, It’s Grown by Daniel Coyle. In order to learn a lot, you need to 

  1. put in the hours and
  2. study effectively during those hours.

To study effectively, you need to do a lot more than “going over things” several times. You need to identify what you don’t completely understand and zero in on it to figure it out.  You need to wonder how each idea relates to everything else you have learned. You need to get to the point where you can write your own exam questions and answer them, carefully thinking through what it would make sense for the instructors to test.    

The human mind has a natural tendency to skitter away from things that are hard to understand. Effective study requires you to resist that tendency like a bad addiction. You need to turn toward the ideas that are hardest, not away from them.

Adam Ozimek: School Choice in the Long Run

Many programs to help the poor create incentives not to earn too much, which discourages hard work. By contrast, improved schooling raises the incentives to work hard at a career because the range of job choices is so much greater after better schooling. So I have long thought of school reform as an ideal avenue for helping the poor. And since monopolies and near-monopolies tend to perform poorly, I have long been a passionate advocate of school choice. In “School Choice in the Long Run,” Adam Ozimek provides a subtle discussion of evidence for the benefits of school choice.

Update: In a related post, Matthew DiCarlo provides a good discussion of why attrition “Student Attrition is a Core Feature of School Choice, Not a Bug.”  

The Egocentric Illusion

Link to David Foster Wallace’s Kenyon College Commencement Address (audio with subtitles)

This is one of my annual sermons to the Community Unitarian Universalists in Brighton, Michigan. I gave it on June 1, 2009. In it, I build on David Foster Wallace’s 2005 Commencement Address at Kenyon College. I also talk here about some of the practical consequences of what I have learned from my research on happiness with Bob Willis. Here is a link to an old version of our paper “Utility and Happiness” that is more accessible than the current, more technical (and unreleased) version.

You can see the video of my talk at this link.


I will begin this sermon with a confession.  I am self-centered.  But I have an excuse.   The normal human brain is designed by evolution to generate the egocentric illusion: the illusion that the owner of a particular brain is the center of the universe.

This egocentric illusion is useful in many ways.  In particular, learning the difference between self and non-self is a basic task of mental development, accomplished by most of us some time in infancy.  Without knowing which patch of the universe we directly control and will feel pain when hurt, we would have trouble navigating in the world.  This awareness of self versus non-self is accomplished by what might be described poetically as a special glow emanating from the part of one’s consciousness that keeps track of the part of universe that is “me.”  Moreover, even those things one recognizes as “non-self” are seen in relation to one’s own position, both literally and metaphorically. 

While useful, the egocentric illusion also causes a great deal of the grief and suffering and misbehavior that we are prone to.  It can also contribute to an inordinate fear of death: one’s own personal death is a bad thing, but not quite as bad as the egocentric illusion makes it seem.

As is true for other illusions, it is good to see the egocentric illusion for what it is.  David Foster Wallace spoke eloquently about the egocentric illusion at Commencement at Kenyon College a few years before his own death–in a way that just might loosen the hold of this illusion on those who hear what he had to say.  Let me give an abbreviated version of his remarks and then give some of my own, sparked by his.  As you will see, hearing what David Foster Wallace has to say inspires a certain bluntness about the realities we face.  He began by telling this story: 

There are these two young fish swimming along, and they happen to meet an older fish swimming the other way, who nods at them and says, “Morning, boys, how’s the water?”  And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, “What the hell is water?”

He was making the point that we often swim in the egocentric illusion without noticing it, as fish swim in water.  As he explained:

Everything in my own immediate experience supports my deep belief that I am the absolute center of the universe, the realest, most vivid and important person in existence.  We rarely talk about this sort of natural, basic self-centeredness, because it’s so socially repulsive, but it’s pretty much the same for all of us, deep down.  It is our default setting—hard-wired into our boards at birth….

Other people’s thoughts and feelings have to be communicated to you somehow, but your own are so immediate, urgent, real—you get the idea.  But please don’t worry that I’m getting ready to preach to you about compassion or other-directedness or the so-called “virtues.”  This is not a matter of virtue—it’s a matter of my choosing to do the work of somehow altering or getting free of my natural hard-wired default setting, which is to be deeply and literally self-centered, and to see and interpret everything through this lens of self.  

If not for the sake of virtue, why does David Foster Wallace think we would we want to break free of the egocentric illusion?   Fundamentally because if one has no other way to approach life, things will get either painful or boring or both.  Here is some of what he said on that topic:

Think of the old cliché about “the mind being an excellent servant but a terrible master.” …I submit that this is what the real, no-bull value of your liberal arts education is supposed to be about:  How to keep from going through your comfortable, prosperous, respectable adult life dead, unconscious, a slave to your head and to your natural default setting of being uniquely, completely, imperially alone, day in and day out. 

After describing at some length the kind of thing “day in and day out” means, with all of the “boredom, routine and petty frustration” that goes into our daily lives, David Foster Wallace says this: 

If you’re automatically sure that you know what reality is and who and what is really important—if you want to operate on your default setting—then you, like me, will not consider possibilities that aren’t pointless and annoying.  But if you’ve really learned how to think, how to pay attention, then you will know you have other options.  It will actually be within your power to experience a crowded, loud, slow, consumer-hell-type situation as not only meaningful but sacred, on fire with the same force that lit the stars—compassion, love, the sub-surface unity of things.  Not that this mystical stuff’s necessarily true: The only thing that’s capital-T True is that you get to decide how you’re going to try to see it.  You get to consciously decide what has meaning and what doesn’t.  You get to decide what to worship…

Because here’s something else that’s true…. There is no such thing as not worshipping.  Everybody worships.  The only choice we get is what we worship.  And an outstanding reason for choosing some sort of God or spiritual-type thing to worship—be it J.C. or Allah, be it Yahweh or the Wiccan mother-goddess or the Four Noble Truths or some infrangible set of ethical principles—is that pretty much anything else you worship will eat you alive.  If you worship money and things—if they are where you tap real meaning in life—then you will never have enough… . Worship your own body and beauty and sexual allure and you will always feel ugly, and when time and age start showing, you will die a million deaths before they finally plant you… . Worship power—you will feel week and afraid, and you will need ever more power over others to keep the fear at bay.  Worship your intellect, being seen as smart—you will end up feeling stupid, a fraud, always on the verge of being found out.  And so on.

Look the insidious thing about these forms of worship is not that they’re evil or sinful; it is that they are unconscious.  They are default settings. ….  And the world will not discourage you from operating on your default settings, because the world of men and money and power hums along quite nicely on the fuel of fear and contempt and frustration and craving and the worship of self.   Our own culture has harnessed these forces in way that have yielded extraordinary wealth and comfort and personal freedom.  The freedom to be lords of our own tiny skull-sized kingdoms, alone at the center of all creation.  This kind of freedom has much to recommend it.  But of course there are all different kinds of freedom, and the kind that is most precious you will not hear much talked about in the great outside world of winning and achieving and displaying.  The really important kind of freedom involves attention, and awareness and discipline, and effort, and being able truly to care about other people and sacrifice for them, over and over, in myriad petty little unsexy ways, every day.  That is real freedom.  The alternative is unconsciousness, the default-setting, the “rat race” –the constant gnawing sense of having had and lost some infinite thing. 

…. None of this is about morality, or religion, or dogma, or big fancy questions of life after death.  The capital-T Truth is about life before death.  It is about making it to 30, or maybe 50 without wanting to shoot yourself in the head.  It is about simple awareness—awareness of what is so real and essential, so hidden in plain sight all around us, that we have to keep reminding ourselves, over and over: “This is water, this is water.”  

It is unimaginably hard to do this, to stay conscious and alive, day in and day out. 

The note at the top of the online Wall Street Journal article back in September laying out this address said “Mr. Wallace, 46, died last Friday, after apparently committing suicide.”  David Foster Wallace’s suicide hints at just how difficult the battle was for him.  Not all battles are won.  But we can still win where he ultimately lost.     

When I think about what David Foster Wallace said, I see three helpful responses an awareness of our own egocentric illusion can lead us to.  The first is that we can take advantage of our egocentric illusion, that focuses our consciousness on many things that are nearby and controllable, to enjoy our domestic lives even when some external things are not as we would wish.  Many things bring quiet pleasure, regardless of what is going on at work or in the world at large.  For example, I personally think that watching TV is underrated.  The disdain of TV by many elites is out of step with the improvement in experience and the quality of what one watches that automatic time-shifting with a TiVo or other digital video recorder can bring.  Moreover, in my view the quality of the best shows has increased markedly ever since the ability to sell DVD’s of good shows has enabled TV production companies to afford to produce more intelligent shows.  When I say “intelligent shows” I don’t mean anything high-brow, but shows like Heroes, Lost, Alias, Kings, Buffy the Vampire Slayer, How I Met Your Mother, Dollhouse, Battlestar Galactica, Babylon 5, etc. Critics sometimes speak of long novels such as War and Peace as allowing more time for character development and buildup.  But the best TV shows are like 24-hour movies, with much more time for character development and buildup than the typical 2 or 3 hour movie in the theater, and can be watched consecutively when you wait to get the DVD’s or download them.   

Another kind of quiet pleasure is being in good health and free from pain.  Although good health and freedom from pain are in large measure out of our control, people often don’t realize the extent to which these things are in their control.  My sociologist colleague Jim House has found that there is a huge and widening difference in health at older ages between those who have a college education and those who don’t.  Since I doubt it is what people learn in college itself that does this, imitating the health habits of the typical college-educated person should work for those without a college education as well.  One dimension of pain that is more avoidable than many people realize is pain from tight muscles and the skeletal misalignments that tight muscles can cause.   After computer work gave us both serious shoulder pain, my wife Gail and I got so much relief from seeing skilled massage therapists that she did an intensive year of training this past year to become a massage therapist herself.  And I believe it is not just my own bias that I think she is a very good one. 

I have been involved in academic research on happiness.  The grand meaning of happiness is a life well-lived, which is a deep subject for many sermons, much religious and philosophical discussion, and difficult wrestling with unavoidable choices.  But when psychologists and economists study happiness, they are working with data that tells us much more narrowly whether people have positive feelings or negative feelings.  Happiness in this narrow sense of feeling happy is something well within the orbit of our individual egocentric illusion and something over which we have considerable control.  Genes matter, and there is not much yet that we can do about them.   Antidepressants are appropriate for some people and not for others.  But there are many other controllable things known to be associated with happiness: sleep, exercise, music, time spent with friends, time spent in other enjoyable activities, meditation, and habits of clear, balanced thinking that some people learn from psychotherapists and other people learn from religious teachings—such as an attitude of gratitude.   Because most of these things are time-consuming, it takes sacrifice to be happy.  Ever since my psychologist colleague Norbert Schwarz pointed out that sleep contributes to happiness, I have been trying to get more sleep.  But there are many other things I can’t do if I am determined to get 8 hours of sleep a night.  My morning transcendental meditation also takes a chunk out of my day.  

One of the interesting things about happiness that can confuse people about what it takes to be happy is that good news about anything makes people happy for a while: a short time for small items of good news, and a long time for large items of good news.  Similarly, bad news about anything makes us unhappy for a while.  For the most part, this fact about happiness doesn’t directly give you much leverage for feeling happier.  For one thing, these doses of happiness that come with good and bad news are temporary. Also—and this is basic—most of us are already doing everything we can to bring about good news and forestall bad news for ourselves.  But if you understand that good and bad news about anything affects happiness, but only temporarily, it highlights the things I listed that do have long-run effects on happiness: sleep, exercise, music, time spent with friends, time spent in other enjoyable activities, meditation and good habits of thought such as an attitude of gratitude.  Also, if you pay attention to what news gives you a burst of happiness and what news gives you a burst of unhappiness, you may learn something about what you care about that will be useful to you.  

While the egocentric illusion is a mostly neutral or even helpful force when we are enjoying ourselves alone or with friends who are favorably disposed toward us in an uncomplicated way, it causes us grief in the arena of social and professional competition.  Think of David Foster Wallace’s examples of automatic daily misery:  wanting money and things to keep up with the Jones’s, wanting beauty to look better than the competition, wanting power to be able to put others down instead of being put down oneself, wanting to be the smartest kid on the block.  The trouble here is that while my egocentric illusion seems to put me at the center of the universe, the other guy’s egocentric illusion seems to put that guy at the center.  So the other person will fight like tooth and nail to make sure the universe as he or she sees it is in good order by having the seeming center of his or her universe be a high point.  Even if he or she is just being honest, rather than mean, he or she will have a tough time being properly impressed with me.   People vary in this, but most of us have at least one person in our lives who regularly puts us down.  

Like our close relatives, the chimpanzees, we are wired to respond to competition and to pecking orders.  Thinking about status and rank in social groups we care about can dominate our consciousness almost as much as severe hunger, thirst or physical pain.  Earlier, I gave a benign view of desire for things such as music CD’s and DVD’s of entertaining TV shows.  Why is it then that the desire for things gets such a bad rap?  I believe it is because many of the things we want we don’t want for the things themselves, but rather for how they contribute to, or make us feel about, our own social status and rank.   My wife and I had some acquaintances whose house we only visited once, many years ago, but I still remember the expensive-looking uncomfortable chairs they had. 

I have to say that social rank in itself is probably good for happiness.  But all of our fretting, slaving and sacrificing of other good things for the sake of social rank can be very bad for happiness, particularly when we fail to get what we want.   And those who do get the social rank they want, unless they are extraordinarily gracious, often make others feel bad.   

In view of the automatic daily misery of competition whenever it is not going splendidly, the second helpful response to an awareness of the egocentric illusion is to step back and remember how little everyone else is really thinking about you anyway.  There are practical consequences of where each of us fits in the social pecking order, but the burden only gets worse if we add to these practical consequences the emotional beating that we are tempted to give to ourselves over not being higher up.  Remembering clearly how each person is at the center of his or her own perceived universe may not always make us feel better in a direct way, but at least the vertigo of that wild picture of overlapping universes can distract us from our pain.

The third helpful response to an awareness of the egocentric illusion is to step back from everyone’s egocentric illusion and think about the good of everyone.  This may be the only response to the egocentric illusion that works in extremum.   I often think about getting old and creaky and dying.  I am not a fan of death.  It is hard on those who die and hard on those left behind.  Whatever the pain he suffered in living, David Foster Wallace did all the rest of us a grim disservice by killing himself—among other things the obvious disservice that there are books we will never be able to read because he will never write them now.   More routinely, our experience is impoverished by each person we know who dies.  For each of us, it makes sense to dread our own death at least as much as the collective loss of all those who would be left behind.  And indeed, we should add to that the loss of our own experience of life because of our own death.  But my death is not the end of the experiencing universe, as the egocentric illusion would have it.  There will be people left behind to experience, to feel, to think, to build and create. 

In the face of death, or serious illness that makes it hard for our daily personal experience to be positive, taking the perspective of all the other people now and in the future who do and will experience life is one of the few solaces we may be able to find.  Almost all of us have the power to significantly improve the perceived life experiences of others by an amount that stacks up quite well against our ability to improved our own perceived life experiences.  Sometimes what we can do for ourselves is bigger, sometimes what we can do for others is bigger, but the amount we can do for others is usually at least a big fraction of what we can do for ourselves, especially when illness or impending death limits our ability to help ourselves. 

Let me end by getting personal.  Up until I was 39 or 40 years old, I genuinely believed in an afterlife, and like most people assumed my afterlife would be a pleasant one.  Then I decided I did not believe in God.  I had always thought that an afterlife would require someone powerful to make it happen.  So not believing in God meant I did not believe in an afterlife either.  Realizing that most likely there was no afterlife was a big item of bad news for me.  It made me less happy than I normally would have been for several years.  That unhappiness caused me to think.    Then and sometimes now, I tried to imagine the intelligent aliens who might be recording my consciousness digitally for later cybernetic resurrection, but I have lacked enough social support for that belief for it to be all that reassuring.  What has helped me is reminding myself of the Buddhist belief that the self is an illusion.  If the self is an illusion, then death is not quite as terrible, in exactly the way I have been describing.  My death will be a tragedy as will yours.  But neither my death nor yours will be the end of the universe, nor the end of consciousness, nor even the end of humanity.  The world will go on, and what we do while we are alive can make it go on in a better or worse way.  Sometimes I imagine consciousness as one light that shines through many windows.  It is true that the information flows between the separate windows of consciousness are limited compared to the information flows within each window of consciousness, but that does not stop us from identifying our deeper self with consciousness itself, which does not die with my death or yours.         

In summary, let us enjoy a high-quality egocentric illusion in our private lives in cooperation with our friends and loved ones, avoid getting too wrapped up in struggles between competing egocentric illusions, and cultivate a perspective that embraces all consciousness as precious, even if for no other reason than to salve our distress at knowing that my limited window of consciousness and your limited window of consciousness are both doomed to be shattered at different times within a few short years.  

Note: The other two of my Unitarian-Universalist sermons that I have posted so far on this blog are “UU Visions” (which includes a brief account of my religious journey) and “Teleotheism and the Purpose of Life” (which is the best statement of my current religious beliefs).

No Tax Increase Without Recompense

The slogan “No taxation without representation” played a key role in the American Revolution. There is great wisdom in this slogan. First of all, it recognizes that taxation is necessary. Benjamin Franklin famously wrote in a 1789 letter to Jean-Baptiste Leroy

Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.

May the Constitution of the United States of America continue to long endure! And may we someday be free of death and taxes. But freedom from death and taxes will not come in my lifetime. Indeed, in his piece 

“The Reality of Trying to Shrink Government,”

Larry Summers makes a persuasive case that anything like our current expectations for what government should do cannot be funded without substantial government revenue increases in the future. The reason is that one of the largest tasks our government has taken on is helping older Americans. As the ratio of older Americans to younger Americans increases that task becomes more difficult.

Japan and most nations in Europe are already ahead of us in being subject to the heavy burdens governments face from an aging population.

This is an important factor in the debt crises they face.

There is one way for America (and the other rich nations) to escape the fiscal difficulties of taking care of an aging population. That escape hatch is dramatically more open immigration, which I urge as a matter of basic ethics in “You Didn’t Build That: America Edition” and “Adam Ozimek: What ‘You Didn’t Build That’ Tells Us About Immigration.’”

But for the rest of this post, I will consider what we need to do in tax policy if American politicians, for whatever reason, stubbornly refuse to live up to the words engraved on the Statue of Liberty. In the better case of dramatically more open immigration, what I say below should still be helpful in the context of lower overall tax rates than if current quite-restrictive immigration policies continue.

The second dimension of wisdom in the slogan

“No taxation without representation”

is the idea that, if taxes are necessary, we should at least demand something in return for our taxes–something beyond the government spending itself. Members of the English parliament used the need of kings for tax revenue to establish this principle of asking for something in return for taxes using the earlier slogan “redress of grievances before supply." 

Polycarp ably explains on the Straight Dope website:

The Speaker of the House of Representatives is the title for its presiding officer, as noted, by paralleling the English institution, where there was a Speaker of the House of Commons. And this name came about for historical reasons: back in the early days, when the law was the king’s commands, the Lords and Commons were convened to (1) approve taxes for the benefit of the realm, e.g., defense, the idea being taxes people had a voice in were less resented than those levied by the king alone, and (2) advise the king on the people’s needs and wants, so that he was informed on conditions throughout the realm. To ensure their concerns got listened to, they adopted a policy of "redress of grievances before supply”, i.e., “deal with our complaints before we vote you any money.” They would draft up bills of grievances outlining what was wrong and suggesting what the king might do about it, which eventually took the form of draft legislation prepared for the king to approve. (This is why a not-yet-passed law is a “bill”) The person who would bring the result of the Commons’ deliberations before the King in formal address was its presiding officer, the person who would speak to HM for it – and hence its Speaker.

In my post “Scott Adams’s Finest Hour: How to Tax the Rich,” I wrote:

…human beings want many things, including many intangibles. It is my belief that we can do much better at harnessing these other desires for the common good than we have.

In particular, if we give people something in return for their taxes that increases with the amount of taxes they pay, then their motivation to avoid taxes will not be as strong. Scott Adams himself wrote in “How to Tax the Rich” about 

…how the rich can feel good while the rest of society is rifling through their pockets.

I can think of five benefits that the country could offer to the rich in return for higher taxes: time, gratitude, incentives, shared pain and power.

To encapsulate the idea that–especially if current policy is being altered–the government should give people something in return for their taxes other than just the government spending, let me propose two slogans with the same basic meaning. The formal version is 

No tax increase without recompense.

The colloquial version is 

No tax hike without something to like!

I hasten to say that–especially when leaving aside the benefits of the government spending itself–it would be overoptimistic to hope that the “something to like” will be enough to make those being taxed more heavily actually feel better off. The aim is to lessen the sting and lessen the motivation to avoid the tax.

It might seem utopian to think that these twin slogans could carry any weight in the political sphere. But the Republican Party–stiffened in its resolve by the amazingly effective Grover Norquist–has come surprisingly close in the last few years to enforcing a rule of no tax increases at all at the Federal level. So I do not think it unreasonable to hope to enforce a rule of “No tax increase without recompense.”  On the other side, to those who think that Grover Norquist’s rule of no tax increases at all is too powerful to disobey, let me say that budget constraints are powerful things.

Holding things together in anything like the way to which we are accustomed is likely to be impossible without substantial revenue increases in the future. And any substantial need for revenue increases will hit close to home: there are not enough superrich; so a tax hike that makes a big difference on the revenue front is likely to hit the many who are moderately rich–such as economists, doctors and lawyers–not just the few who are very rich. Therefore, as a matter of self-interest, as well as out of public-spiritedness, I believe it is of great importance to come up with good proposals for tax hikes with something to like. Combining a tax increase with some kind of recompense is crucial both to avoid any hint of class warfare that could fray the social fabric and to keep tax distortions as small as possible. Here, I will make a specific proposal that is so ready to hand that many others have suggested something similar. But the details matter, and I will present my own version. 

Even many economists who otherwise want to simplify the tax code have recognized the special status of the charitable deduction. Greg Mankiw wrote in the New York Times:

THERE are certain tax expenditures that I like. My personal favorite is the deduction for charitable giving. It encourages philanthropy and, thus, private rather than governmental solutions to society’s problems.

The substantive merit of the tax deduction for charitable contributions is also an important point in Matt Yglesias’s post “Tax Reform is Hard and It’s Not Just Politics.”  In my proposal, I want to steer a course between partially balancing out a tax increase by expanding the current tax deduction for charitable contributions and partially balancing out a tax increase by following the proposal Tom Grey gives in his comment to “Scott Adams’s Finest Hour: How to Tax the Rich”:

How about 100% tax credits for …

donating directly to a Federal Gov'tProgram.

Thus, the rich who wantmore Social Security, donate their taxes to that cause.  Or those who want more defense.

I’m pretty sure the rich would donate more taxes if they could choose where their money goes (despite the obvious ease of gov’t budget-makers just reducing the amount of other gov’t spend ).

Heck, such 100% tax credits could, and should, be available for all real taxpayers (not legal fiction corporations).

A key inspiration for my proposal is a trio of tax credits in Michigan State tax law, the public contribution credit, community foundation credit and homeless shelter/food bank credit. Although these credits are severely limited in size, up to that limit they mean that, together with the benefits of the Federal deduction, a taxpayer can get back over 70% of his or her contribution. But the set of organizations eligible for these three Michigan state tax credits is much narrower than the set of organizations eligible for the Federal tax deduction for charitable contributions. My interpretation of the intent of the law is that these three tax credits are meant to encourage people to give in ways that reduce the amount of direct government spending needed by the State of Michigan. For my proposal, let me define a “public contribution” as follows:

A public contribution is a donation to a nonprofit organization meeting high quality standards that engages in activities that (a) could be legitimate, high-priority activities of Federal or State governments and (b) can to an important extent substitute for spending these governments would otherwise be likely to do.

My proposal is to raise marginal tax rates above about $75,000 per person–or $150,000 per couple–by 10% (a dime on every extra dollar), but offer a 100% tax credit for public contributions up to the entire amount of the tax surcharge.

The reason I am not proposing a simple expansion of the current charitable deduction is that I want to make sure that the program helps ease government budget problems in a big way. (Note that, in addition to substituting to an important extent for government spending, these public contributions would crowd out some fraction of regular charitable deductions and increase government revenue in that way.) On the other side, though Tom Grey’s proposal of choosing which government program to support is great for a portion of existing taxes (as I think he intended it) I don’t think it goes far enough for a tax increase. 

Now let me paint the picture of the kinds of effects I think this program of public contributions (the  tax surcharge plus 100% public contribution credit up to the amount of the tax surcharge) would have:

  1. Many creative people, with more money to work with, would think of brilliant new ways to help the poor, as well as continuing and expanding tried-and-true ways of helping the poor. 
  2. Scientific and medical research would be much better funded than currently.
  3. Foreign aid going to ordinary people, not dictators, would dramatically increase. 
  4. It would be possible to fund better and cheaper ways to take care of older Americans in their own homes and delay any need for them to go into nursing homes. 
  5. Needs that the government is slow in meeting could be addressed more quickly.

The substitute-for-government-spending test in the proposed law is not meant to prevent the total amount of public contributions for some things from going above what the government would do under the current system. Its purpose is simply to make it possible for the government to cut back on some types of spending to an important degree. Although religious congregations would not be directly eligible for public contributions because of the legitimate-activity-of-government test, many already have associated nonprofit organizations that could be eligible. And a large fraction of religious donations are from people who earn less than $75,000 per year. Support of arts enjoyed mainly by the rich, such as opera, might not meet the high-priority test, although the fine arts would still be eligible for the usual deduction for charitable donations. Setting the public contribution goal at 10% of annual income above $75,000 per person should be enough to ensure that nonprofit activities eligible for the public contribution credit are much better funded despite any crowding out or relabeling of existing contributions. There would probably be some reduction in funding for activities not considered important enough to qualify as public contributions–which would occasion much debate about exactly where to set the boundary between “public contributions” and regular charitable contributions–but setting priorities is not a bad thing. 

On the part of the relatively high-income taxpayers who are subject to the combination of tax surcharge and 100% public contribution credit, many would look at the unchanged amount they actually pay the government in the end, after the tax credit, and not think of it as a net tax increase at all. Being required to devote 10% of income above $75,000 per person to public contributions would take some getting used to, but after a while, I think many people would have fun with it. Parents could teach their kids about their social responsibilities by discussing as a family where to devote the family’s public contributions. People might become involved in volunteer work in the same organizations to which they had directed their public contributions. There is joy in giving, and by providing a choice of which organization to give to, my hope is that the joy of giving would be only partially muted by the requirement of giving to some appropriate organization. 

James Madison wrote in the Federalist # 51:

If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.

Since we are not angels, most of us need very strong encouragement to give as much to public causes as the health of our Republic requires. Since those who govern us are not angels, it is best that many of the details be left to each of us to decide individually. To the extent possible, let’s have the government specialize in those important tasks that for one reason or another are not as emotionally rewarding for individuals to donate to and let individuals make decisions about those tasks that are.

People love freedom. Tax increases cannot help harming freedom to some extent. On the cost side, a program of public contributions like the one outlined above comes close to minimizing the harm to freedom from a tax increase. And the benefit side is substantial. In addition to the benefits of steering far away from national bankruptcy, it is hard for me not to think it would be a better world, with greater soft power than ever for the United States of America, if we adopted a program of public contributions like the one I have outlined. 

 

For more on this idea, see "How and Why to Expand the Nonprofit Sector as a Partial Alternative to Government: A Reader’s Guide"