Could the Revolution Have Been Avoided?

I’m not going to bother linking to the Vox.com article in which one of the juice-boxers has a clickbait post arguing that the colonies would have been better off if they hadn’t rebelled against England. I knew what his reasons were without reading it: the abolition of slavery, the treatment of the natives, and the joys of a constitutional monarchy and parliamentary system. I’m also not going to bother linking to any of the several refutations of the original article. I’ll just add my own observation that Canada is Canada because the Thirteen Colonies became the United States. Who knows what the history of the Commonwealth would have been like without the Revolution?

The question I will pose is much, much simpler. Could the Revolution have been avoided? Let’s quote from an authoritative source on the subject:

He has refused his Assent to Laws, the most wholesome and necessary for the public good.
He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.
He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.
He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.
He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.
He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.
He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.
He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.
He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.
He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.
He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.
He has affected to render the Military independent of and superior to the Civil power.
He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:
For Quartering large bodies of armed troops among us:
For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:
For cutting off our Trade with all parts of the world:
For imposing Taxes on us without our Consent:
For depriving us in many cases, of the benefits of Trial by Jury:
For transporting us beyond Seas to be tried for pretended offences
For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:
For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:
For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.
He has abdicated Government here, by declaring us out of his Protection and waging War against us.
He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.
He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.
He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.
He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

The “he” in question was the king. Nova Scotia did not, apparently, experience any of the above or if it did its citizens were more tolerant of them.

It sounds very much to me as though revolution was not begun frivolously but because there was no other alternative. If there was no alternative, I don’t see much reason to moon about how nice it would have been if the revolution had never happened.

In conclusion I’ll just mention that, had the Thirteen Colonies remained British colonies there is no way that Napoleon would have sold Louisiana and in all likelihood I’d be speaking French right now.

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What’s Wrong With This Picture?

I think that Donald Trump is a provocateur and a buffoon. His shtick was old 30 years ago and he doesn’t have enough money to pay me to watch his TV program. However, I wish the author of this piece would explain a little more what he means and choose his words very carefully:

(CNN)Call it “Latino Spring.”

There were no mass demonstrations in the streets, but Latino protesters amassed online. Their focus? The hurtful anti-Mexican comments made recently by Republican presidential candidate Donald Trump.

Latinos gathered in social media circles to condemn, plot and retaliate against Trump with such fervor in the past two weeks that they caused three multibillion dollar media companies to back away from him: Univision, NBC and Televisa.

And on Wednesday, Macy’s announced that it was removing Trump merchandising from its stores after 700,000 people signed a MoveOn.org petition.

Trump’s remarks have produced something he and many others likely didn’t intend or anticipate — a galvanizing moment for Latinos across America and beyond. It’s a massive display of zero-tolerance for hateful remarks, and one that carries the weight of a rapidly expanding population carrying $1.5 trillion in buying power. Plugged in and bilingual millennials helped lead the charge. It was the first time in the history of Latino advocacy in America that such an effective response sprang from the ground up.

Does he really think that Mexican-Americans are in a similar situation to that of Arabs in Tunisia, Egypt, and Syria? That an idiot saying mean things is exactly the same as being hanged, shot, or nerve-gassed? If he doesn’t mean that, what does he mean?

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Chicago Wants to Tax Streaming Services

Chicago, desperate for revenue, has decided to push its power to impose transaction and amusement taxes about as far as they will go, wants to tax Chicagoans’ use of NetFlix, Spotify, and even online reference services used by businesses like YCharts:

Chicagoans who pay to stream movies and music from services like Netflix and Spotify will now need to fork over an additional 9 percent for the privilege, as will Chicago businesses that pay to use everything from real estate to court databases online, under a decision the city quietly made recently to expand its taxing power.

The added costs are the result of a ruling by the city Finance Department that extends the reach of ordinances governing two types of taxes — the city amusement tax and the city personal property lease transaction tax — to cover many products streamed to businesses and residents alike.

My offhand guess is that the city’s move has two problems: jurisdiction and vagueness. I can see the argument for taxing local services just as local theaters are taxed but it’s a lot harder for me to see how the city has any authority over services provided by companies that don’t have a physical Chicago presence. Additionally, everything on the Internet is arguably a service. How can you tax NetFlix and Hulu but not Youtube? Isn’t a search engine a service? Why wouldn’t the tax apply to Google or Microsoft as well? Because the services are “free”? They’re not free to their customers, the businesses that pay for search priority.

If this law holds up at all, I wouldn’t be a bit surprised if the city ends up paying more in legal fees that it can realize in revenues.

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The Obama Foreign Policy Strategy

I found Steve Postrel’s post at Strategy Profs interesting, if only because it reinforced for me in the foreign policy sphere what I think is the case of his policies in the domestic arena. After quoting a WSJ piece that recounted how, following the 2012 election, the president convened his foreign policy team and asked that they blue sky foreign policy objectives for a second term. Here’s what they came up with:

What emerged was a sweeping and fundamental re-orientation of U.S. foreign policy, highlighted by four initiatives: conclude a nuclear deal with Iran; renew diplomatic relations with Cuba; elevate climate change to a national-security issue; and complete a free-trade deal with Asia.

to which Steve responds:

This set of four disconnected initiatives, whatever their individual merit (my personal scoring vector: -10, -1, -2, 5) does not add up to anything like a coherent foreign policy or national security strategy. Not surprisingly, the WSJ article goes on in great detail to describe how the actual imperatives of the United States’s foreign environment–aggression and irredentism from Russia, China, and Islamic State, as well as the continuing battle with militant Islamic supremacists globally–impinged on and “crowded out” much of Obama’s agenda.

This dog’s breakfast of random objectives, even if achieved, would do little or nothing to make the U.S. stronger or safer or to advance American ideals. It is not attached to a serious diagnosis of threats and opportunities, strengths and weaknesses, or adversary and allied incentives. None of the four objectives materially reinforces another, nor do they work together to accomplish a coherent foreign-policy goal.

but what they are, very much like the “stimulus package” and “healthcare reform”, are a grab bag of Democratic Party nostrums, some going back decades.

Hat tip: memeorandum

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Nothing Up My Sleeve

There’s an interesting analysis of the findings in president’s report on the economy on middle class income growth at RealClearPolitics. As it turns out only 15% of the slow growth can be explained by income inequality:

Given all the attention given to the issue of growing inequality, especially between those at the top and the other 90 percent you might think that was the major economic problem facing the nation. But no, it turns out that the biggest source of the slowdown is the poor performance of productivity since 1995 compared to the earlier postwar period.

The question the President’s Council of Economic Advisers (CEA) asks is what if productivity growth from 1973 to 2013 had continued at the rate of the previous 25 years from 1948-1973? The answer is that the typical household would have had an additional $30,000 in income. (CEA report, p. 33)

The CEA goes on to ask parallel “what if” questions about income inequality and female labor force participation. How much better off would the typical middle class household be if income gains had been broadly shared after 1973 and female labor force participation had not levelled off after 1995? These changes produce smaller effects on middle class incomes of $9,000 and $3,000 respectively. However, all three factors combined can explain a whopping $50,000 in income foregone by our typical family. In other words, these families would have almost twice as much income if it hadn’t been for the decline in productivity growth, the rise in income inequality, and the levelling off of female participation rates.

The very large role of slower productivity growth is surprising. After all, we have seen an explosion in technology fed by the increasing power of computers. Smart phones, driverless cars, computer-assisted design and manufacturing, robots, drones, and the innovations they have made possible should have boosted productivity smartly. But as Nobel-prize winning economist Robert Solow once quipped, ” You can see the computer age everywhere but in the productivity statistics.” So what’s going on here?

So, what is going on here? They offer several explanations:

  • Exhaustion of “pent-up innovation”
  • Reduced public investment
  • Dislocations following the collapse of the Bretton Woods system
  • Oil shocks
  • They’re happening but you just can’t measure them

To those I would add globalization, the transition of business investment overseas, and major social change. And I don’t see how you can ignore the enormous rise in government transfer programs resulting in an enormous percentage of the American people becoming wholly or partially dependent on various government programs. That accounts for most of total federal, state, and local government spending nowadays.

However, please take note of something important here and courtesy of the president’s own economic advisors.

An important factor in prestidigitation is misdirection. The patter, the costumes, extraneous gestures, the pretty girl, and so on. The entire idea being to focus your attention on something other than what’s actually going on. The president’s advisors are telling us that emphasizing income inequality is misdirection. It’s not that it’s not a problem. It’s that our most signficant problems lie elsewhere.

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The Wrong Direction

Here’s another example of the economy moving in the wrong direction. Factory orders fell in May, as they did in April and march:

Orders to U.S. factories fell in May by the largest amount in three months, while a key category that signals business investment plans dropped for a second month.

Factory orders declined 1 percent in May from April, when orders retreated 0.7 percent, the Commerce Department reported Thursday. Orders in a category that serves as a proxy for business investment were down 0.4 percent.

Much of the weakness in May reflected a big 35.3 percent fall in demand for commercial aircraft. But even outside of the volatile transportation category, orders were up only a tiny 0.1 percent. The lackluster showing suggests that manufacturing is still struggling with challenges such as lower energy prices and a strong dollar, which dampens exports.

Durable goods, items expected to last at least three years, dropped 2.2 percent in May, even weaker than a preliminary report last week that had estimated a 1.8 percent drop. Orders for nondurable goods edged up a slight 0.2 percent.

This economy needs more business investment, not less. You’re not going to get that by increasing taxes, raising the minimum wage, or raising the income threshold for mandatory overtime pay.

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June Jobs Report Mixed

In fairness Nelson Schwart at the New York Times probably has it about right:

Good, but hardly great.

The economy added a healthy 223,000 jobs last month, the Labor Department reported Thursday, but other indicators, showing wages growing slowly and jobless Americans remaining on the sidelines, painted a grayer picture.

Indeed, while the unemployment rate fell to 5.3 percent, the lowest in seven years, that was driven largely by an exodus of people from the work force, rather than more Americans finding work. Moreover, the strong job gains for April and May, which had led many analysts to predict that the economy was picking up steam, were revised downward by 60,000 jobs.

The emphasis is mine. Yes, this is the lowest the unemployment rate has been in this business cycle. It is also the lowest the labor force participation rate has been in almost 40 years. That incomes are flat is better than if they had declined but a decline in the LFPR while incomes remain flat means that the trend towards increasing income inequality is continuing if not accelerating.

Overall, I think you’d need to be pretty desperate to try to portray the June report as a good jobs report. We’re not going to build a strong economy on the basis of more sales clerks, fast food workers, and workers in subsidized industries.

What bugs me most of all about the situation is that the politicians are undoubtedly going to try to tread water right through 2016. “Not disastrous” is news good enough for them.

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Chicago Goes Ferris Bueller

The city of Chicago seems to have taken a day off today. My commute, usually bumper to bumper at ten miles an hour, which usually takes me anything from an hour to an hour and a half, took a half hour.

The easy commute allowed me to savor the dramatic effect of low-lying clouds. How low? The city skyline was obscured so I’d say no more than 1,000 feet.

When I greeted one of my colleagues, noting that everyone seems to have taken a day off, he responded “Ain’t it great?”

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Those Darned Lazy Unscrupulous Greeks

As also might be expected the editors of the Wall Street Journal blame the situation in Greece solely on the Greeks:

But whatever Greeks choose, it’s at least clear that they can no longer hold the rest of Europe hostage to their politics, and that they are responsible for their own pain. It’s a tragedy for the poorest Greeks in particular, but better for Greece to serve Europe as a lesson than as a model.

Is it really true that the bankers who issued loans to the Greek government were simply outwitted by a bunch of Greek con men? Whatever happened to due diligence?

IMO the more likely explanation is that the bankers knew exactly what they were doing and issued loans they knew could never be repaid, secure in the knowledge that their alleged “risks” would be backstopped by the European Central Bank and the IMF. Or, in other words, there were con men on both sides of the deal.

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The Awful Truth About Overtime

As you might expect the editors of the Wall Street Journal don’t think much of the Obama Administration’s move to expand the number of workers eligible for overtime pay:

The regulation will cover huge swathes of the economy, from retail to finance, technology, food workers and nonprofits. The White House is crowing that the rule could qualify an additional five million workers, while the liberal Economic Policy Institute estimates the number will be closer to 15 million. The President’s timing is no accident, coming as it does after his rift with Big Labor over trade. Automatic overtime is supposed to heal that political wound.

Yet there is no free lunch, and for many of these workers the raises will be an illusion. In the private economy, unlike the government, there are consequences to ordering a higher price for labor—one of which is less labor. Recall ObamaCare, with its redefinition of the 40-hour work week to 30 hours for the purposes of the employer mandate. This has caused many low-margin businesses to cut worker hours below 30 a week.

In the gallery of horrors they catalog in their editorial, they mysteriously do not include the most obvious consequences of the move, two trends already gaining steam, of using illegal workers, mostly immigrants, or temporary workers, many also immigrants brought in on H1-B or L1 visas. Neither of these groups of workers are in a position to complain about overtime, demand overtime pay, or even report their employers for infractions. The employers hold cudgels more powerful than overtime pay—the threat of deportation.

I can only speculate why the WSJ editors omit the two mostly outcomes but it might be because they support them.

As for the Obama Administration, good intentions are not enough to make good policy and some even question their intentions.

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