Imports and Jobs

Posted on 2008-02-21 by David

I had asked whether our markets would be better served with a tit for tat approach to tariffs rather than a more dedicated insistence on free trade on imports. If I had any lingering doubts on the subject they were laid to rest after reading Why Politicians Are Wrong about Imports and Jobs. Unless the graph in that post is entirely fabricated the free markets are the beneficiaries if they import goods that have been subsidized by more closed markets at a lower price than they could produce themselves.

Admittedly the graph is a bit confusing with the vertical scale changing from the left side of the graph to the right, but the trend is that over the last 48 years imports have doubled while unemployment has been cut in half. While these imports might take specific jobs away from the country they do not reduce the total number of jobs. The turnover creates the added benefit of encouraging those in the workforce to keep improving themselves. The relative ease and complacency that would undoubtedly come from a static economy would guarantee that we would become less competitive in a global market.

Update 2/27/08: Thanks to the persistent questions of mackenzie I went back to look at the graph to see if I had missed anything. A more accurate reading of the graph (remember the confusion I talked about with the different vertical scales) shows that imports went from 4% to 16% of GDP (a four-fold increase, not double) and unemployment fell from 9% to 6% (it fell by one third rather than by one half). While the actual statistics have changed I think the conclusion remains that imports do not appear to adversely affect employment rates.

Posted in culture | Tagged | 27 Comments

Proud To Pay My Share

Posted on 2008-02-20 by David

I liked the sentiments expressed by Chad at UtahOpinions about paying a fair share for government. It’s easy to accuse those who advocate for smaller government of being stingy, selfish, or just not wanting to work for the best good of society, but many people feel like this:

Believe it or not I am proud to pay taxes to support our national interests (i.e. national security, immigration, roads, airports, etc.). But my pride ends there. . .

It is also a reminder to me why I joined the Republican party in the first place. As part of the Republican platform are these statements:

    • I BELIEVE government must practice fiscal responsibility and allow individuals to keep more of the money they earn.
    • I BELIEVE the proper role of government is to provide for the people only those critical functions that cannot be performed by individuals or private organizations and that the best government is that which governs least.
    • I BELIEVE the most effective, responsible and responsive government is government closest to the people.

Huh? You mean Republicans stand for these principles? Well, at least I know I do and I thought Republicans did.

Chad does a nice job of breaking down how much he’s paying in taxes for various government programs. Like Chad I’m proud to pay my fair share for government. I won’t go to any lengths to minimize my tax burden, I just take whatever deductions are simplest and that makes it easy for me to forget why most people find tax season such a headache – I do my taxes in a matter of two hours because I don’t do any financial contortions to reduce my tax burden.

That does not stop me from doing anything I can to remind my representatives that I’m looking for government to do as little for me as possible – I’d rather be responsible for my own success or failure without paying for a government safety net (with all it’s inflations of inefficiency) for everyone regardless of the legitimacy of their need.

Posted in State | Tagged , , | 2 Comments

No Good Delegate Answer for DNC

Posted on 2008-02-20 by David

With the debate over the role of super-delegates and the delegates from Florida and Michigan in choosing their nominee, the Democratic Party finds itself in a no-win situation. Without the unpleasant idea that the super-delegates might have to publicly buck the democratic primary voters to give the nomination to Senator Clinton, we would not hear the Clinton Campaign calling to have the delegates in those states that she won (Clinton was the only major candidate on the ballot in Michigan) seated to make the race more level.

If the party chooses not to seat delegates from those states they open the door for Republicans to attack them for not backing up their “make every vote count” rhetoric.

If they do choose to seat delegates from Florida and Michigan they face a whole range of paths to bruise themselves. First – any delegate seating will undermine the authority of the party to affect the primary schedule (that power struggle is what started this whole mess). If they choose to accept that defeat they then have to choose how to seat the delegates. They can take the existing results and hear people cry fowl who chose not to vote, or who chose to vote in the Republican primary, based on the fact that their votes would not count in the selection of the Democratic nominee. If they chose to hold new primaries in those states they have to cover the costs or persuade the states to pay for a second election and they have to choose who to allow to participate. Michigan has open primaries so they run the risk of having people vote in their new primary who already voted in the Republican primary (the reverse of what Markos advocated as Michigan arrived). If they choose to limit their primaries in any way it can only be an arbitrary line.

Interestingly, if this same eternal nomination fight were happening in the GOP most of the problems outlined above would not exist because they chose to respond to the states that abandoned the party calendar by only stripping half their delegates so the original votes can stand and represent the votes taken without undermining party authority.

When I went searching for the Daily Kos link above, I thought it was funny to discover that Markos made many of the same arguments I just made on this issue. He recommends seating the delegates from both states and splitting them 50/50 between Obama and Clinton. Why don’t we just award an extra 200 delegates for each state that obeyed the party rules with the same 50/50 split condition while we’re at it? A 50/50 split is meaningless in deciding the nominee. It expands the pool of delegates, but adding 200 delegates to the delegate count of each candidate only means that there is a larger convention. Getting 1191 delegates to win the Republican nomination is just the same as getting 2025 delegates to win the Democratic nomination – the numbers may differ, but it all comes down to who gets 50% + 1. Besides that, the 50/50 split is unenforceable – either they have a choice, or they have no vote to cast. There’s no point in inflating the numbers to say “Welcome to the convention, check your seat for a number – odds vote for Clinton, evens vote for Obama.”

Posted in National | Tagged , , , | 2 Comments

Free Marketer’s Dilemma

Posted on 2008-02-19 by David

I’m a proponent of the value of free markets and their ability to enrich people. The problem is that the free market only works in a closed system, in other words a free market is not favored when intersecting with markets which are being manipulated. The issue of how to compensate for intersecting our supposedly free market with other markets which impose duties and protective tariffs on imported good led me to think of the Prisoner’s dilemma from game theory.

Briefly, the prisoner’s dilemma is a situation where the results of your actions will vary depending on the actions of others over whom you have no control. If one market imposes tariffs and the other does not the market with tariffs benefits at the expense of the other market. If both markets impose tariffs then the playing field is level, but both are worse off than if neither of them impose tariffs.

Thankfully there may be a solution to the problem by studying the prisoners dilemma. Our economic interactions specifically resemble a specific form of the prisoner’s dilemma called The iterated prisoner’s dilemma. Under this specific variation the interactions are repeated so that the participants have a history of interactions. In a competition of computerized players the winning algorithm was one called “tit for tat” (later improved versions have been classed as “tit for tat with forgiveness”). This kind of a strategy encourages others to play nice without simply being a doormat for those who wish to use tariffs.

Does this sound like it would work in international economics?

Posted in General | Tagged , , , | 5 Comments

Fixing America’s Woes

Posted on 2008-02-18 by David

I’m not a huge fan of Mark Towner but he caught my attention with THE 545 PEOPLE RESPONSIBLE FOR AMERICA’S WOES. My first reaction was “you know what, he’s right.” Further reflection helped me realize that it can never be as simple as voting out those 545 people. For one thing, 75 of those people are not up for reelection in any given cycle (at least 66 Senators and 9 Supreme Court Justices). Second, the justices on the Supreme Court serve for life – as they ought to – so throwing them out is not an option. Third, there is an entire federal court system below the Supreme Court that has a more continuous and immediate effect on the nation than the Supreme Court. I think you would have to count all those other federal judges as well. And fourth, what happens if we simply vote out all those who are up for reelection? We would get lots of new names in the federal government, but no real guarantee of significant change.

That fourth issue is the real sticking point against Mark’s declaration. The solution is hinted at by the work of Newt Gingrich (I’m not a real fan of Newt either) when he talks about the 513,000 elected officials throughout the country. In order to fix the problems we face, what we really need is for the millions of voters to educate themselves on the issues and elect people at all levels of government who will put government back in it’s proper place. The leaders of cities and states should demand that they be free from a federal government which would dictate the minutia of their responsibilities.

Each city and state would be free to find the solutions that best meet the needs of their citizens – which was how our country was designed to function – rather than ceding that responsibility to, or having that responsibility forcibly taken by, an overreaching federal government. We should not expect that every city and every state will look the same or act the same.We cannot expect that every person should be equally at home at any place in this vast country. Instead we should allow our more local governments the freedom to express the culture of their own citizens without fear of offending people who have no interest or connection to their locale.

Maybe we could even learn to practice a little more tolerance by doing this.

Posted in National | Tagged , , | 2 Comments

Our Chinese Finger Trap

Posted on 2008-02-16 by David

Socialism is like a Chinese finger trap. Playing with it just a bit look harmless and even fun, but once you start on that road it much easier to get further trapped than it is to free yourself.

Chinese Finger Trap

Image based on stuck for lyfe by Chris Martin.

I read a great example of this in the comments on an article about some proposed seatbelt legislation – specifically the following interchange:

No mandate please | 8:43 a.m. Feb. 14, 2008

If I don’t want to wear a seatbelt, that’s my business. But the sponsors of this bill will cry…”it’s about safety”. Let’s all be honest. Bottom line…it’s not about safety. It’s about revenue. It’s about mining the drivers in Utah for more money over a silly (soon to be) law.

Legislators should stick to real issues. Seatbelt laws are unconstitutional.

Anonymous | 9:06 a.m. Feb. 14, 2008

How many people out there are not willing to wear a seatbelt but more than willing to sue the insurance company for injuries sustained for not wearing a seatbelt.

Anonymous | 9:18 a.m. Feb. 14, 2008

It is your business as long as you don’t expect Utah taxpayers to pick up your medical bills if you are out of work or disabled. Sort of like a smoker. Do it if you want but don’t expect me to pay your bills if you end up with cancer.

Really? | 9:18 a.m. Feb. 14, 2008

Do you really think that not wearing a seat bealt is just your business? Let’s say you don’t have insurance, like many Utahns, who is going to pay your medical bills? You will probably end up on Medicaid and the tax payers will have to pay for you… now let’s say you do have insurance. Do you think there is a possibility that my insurance rates will go up because of your expensive medical bills? Now let’s say you have a wife and kids, and you die due to your neglect, what happens to them? They may go on public assistance as well. They start getting Social Security death benefits. Can you see that more is at stake than “your business”?

YES REALLY | 9:38 a.m. Feb. 14, 2008

Hey Really… Yes I think it is just my business or whoever it is that chooses to not wear a seatbelt. You have a good point on the insurance statement, but that is just one of many things that could make your rates go up or have people get on public assistance. People can start getting Social Security death benefits from anything that might take someones life. I have to agree with the above comment, I do believe its not about safety, it really is about the money. We should have a choice whether or not to wear a seatbelt. Remember this is America.

Sagacious Inquisitor | 9:58 a.m. Feb. 14, 2008

To Really.
Sadly, your comments are based on the Socialistic notion that somehow society is responsible for me. Granted, Socialism is the dangerous system into which we have already slipped too far.

Once we already have a little socialism – such as government paying the costs of health care for those who can’t afford the choices they have made – it gets easy to use that as a lever to argue that the choices they make are no longer theirs to make but are within the reach of government to make those choices for them. The problem is that each time such an argument is made it becomes that much more difficult to be free to make our own choices – responsible for the consequences of our choices, and not responsible for the choices of others.

It is too easy to paint proponents of individual responsibility as uncaring towards those who are less fortunate than they are, but that is an unfair characterization of the position. I am fully in favor of helping someone in need. I absolutely desire that doctors be paid for their time and effort on behalf of people who cannot afford the health care they need.

The difference is that I believe we do a disservice to those who receive such help when the help comes from a nameless, faceless, impersonal government agency rather than coming from caring neighbors or relatives. Not only do they feel no urgency to improve their situations or to repay the kindness they have received in their time of need when aid comes from such an impersonal source, but it is impossible for government to fully tailor that aid to their specific situation which opens up the misfortune of some people to be used as an opportunity for gain by other unscrupulous people. With caring individuals involved in rendering the needed assistance there are greater safeguards against those who would take such advantage and more incentive for those receiving aid to lift themselves as much as possible.

If the vehicle of government could be used to eliminate social ills such as poverty or homelessness we would have found that solution after decades of government intervention. For all the efforts to use government for those noble ends we show little if any progress.

Posted in culture, pictures | Tagged , , , | 6 Comments

More on Consumption

Posted on 2008-02-15 by David

A great comment led me to this video – which everyone should see:

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Rhetoric Overshadows Facts

Posted on 2008-02-15 by David

The well titled post, The World Is Not Going To End This Weekend, illustrates how easily an issue can be skewed simply by blurring the facts. Quoting from a post at the Politico which contains the rhetoric surrounding the debate about extending the Protect America Act Timothy Lee goes on to show the truth:

. . .” a measure to extend the Foreign Intelligence Surveillance Act as the deadline approaches. The measure, which failed 191 to 229, would have extended the bill an additional three weeks”. . .

FISA is not expiring this weekend. FISA was passed in 1978 and isn’t slated to expire ever. What’s going to expire this weekend is the Protect America Act, which gave the president some additional spying powers beyond those he enjoyed under FISA. And in fact, even that is misleading, because all that’s really going to expire is the ability to authorize new surveillance activities. The PAA allowed the government to authorize surveillance programs for a year, which means that any surveillance programs that have already been approved will continue to be authorized until August at the earliest.

What this means is that the only real effect of the PAA’s expiration is that if a new terrorist suspect comes to the government’s attention, and he makes a phone call or sends an email that passes through the United States, then the government would need to fill out the extra paperwork required to get a FISA warrant in order to surveil that call. This paperwork can be filled out after the interception begins, so we’re not talking about the NSA missing any important phone calls, we’re just talking about [a bit more paperwork].

This same kind of fudging happens from activists on both sides of most issues. It’s no wonder that the average voter who only knows what they see in the media has such a hard time seeing any debate completely clearly. Their views are almost always being skewed based on the news they receive.

In the midst of all our government social engineering maybe we could make a law to outlaw such abstraction in our news – but I guess that would be counterproductive every time a politician wants to make an emotional appeal to the country.

Posted in National | Tagged , , | 5 Comments

Income vs Consumption

Posted on 2008-02-14 by David

I found it fascinating to read You Are What You Spend to see how different the economic picture is depending on the way we measure economic position.

. . . renewed attention is being given to the gap between the haves and have-nots in America. Most of this debate, however, is focused on the wrong measurement of financial well-being.

It’s true that the share of national income going to the richest 20 percent of households rose . . . while, families in the lowest fifth saw their piece of the pie fall . . .

Income statistics, however, don’t tell the whole story of Americans’ living standards. Looking at a far more direct measure of American families’ economic status — household consumption — indicates that the gap between rich and poor is far less than most assume, and that the abstract, income-based way in which we measure the so-called poverty rate no longer applies to our society.

Comparing the richest 1/5 of society with the poorest 1/5 using different metrics leads to widely different conclusions on the gap between those two groups.

  • Income ratio – 15 : 1
  • Income per person – 8.2 : 1
  • Consumption ratio – 3.8 : 1
  • Consumption per person – 2.1 : 1

Simply adding in the per person statistic cuts the gap in half and moving from an income base to a consumption base (which largely indicates standard of living) makes the gap 1/4 of what it might appear on the surface.

I’d love to see how this has changed over time. We know that the income gap has increased, but I’ll bet that the statistics would show that the consumption gap has decreased between the top and bottom income groups over time. If I’m right, the reason for this is that we have taught the poorest 1/5 to spend what they don’t earn and we have ingrained the expectation that they should be able to do that into our government which has adopted the same policy for itself.

Posted in culture, National | Tagged , | 3 Comments

Face to Face

Posted on 2008-02-13 by David

I was privileged to attend a meeting with our Lieutenant Governor this morning and I enjoyed meeting a few of those who have provided ideas to blog about as well as valuable feedback. It was quite enjoyable.

While we were talking with Lieutenant Governor Herbert (is there any legitimate way to shorten that title?) I came to appreciate even more the crucial need to keep the lines of communication open between government officials and voters. One thing that I really liked the sound of is a program called Be Ready Utah. The whole premise of the program is to be prepared to address emergency situations effectively at the ground level before larger levels of government (county, state, federal) are able to organize and lend a hand. I like that idea – in fact that should be the basic premise behind most of the functions that we expect of the government (think education).

What disappointed me was that I had never heard of this valuable program. I even went to website of the state government and discovered that there are no apparent links to the program (I found it by searching for the title of the program and close wasn’t good enough). Other issues we discussed, such as transportation and education, illustrated how we can suffer from poor communication between government and citizens (think back to the voucher debate).

I think that serious bloggers (meaning those who are blogging about serious topics of public interest) have the potential to enhance those lines of communication at every level of government – especially if we can come together in promoting a robust discussion of the important issues being addressed by our civic leaders.

Posted in State | Tagged , | 2 Comments