Darker Than Black

When I read this article I immediately thought of the wisecrack that when a color darker than black is invented, New Yorkers will wear that:

A British company has produced a “strange, alien” material so black that it absorbs all but 0.035 per cent of visual light, setting a new world record. To stare at the “super black” coating made of carbon nanotubes – each 10,000 times thinner than a human hair – is an odd experience. It is so dark that the human eye cannot understand what it is seeing. Shapes and contours are lost, leaving nothing but an apparent abyss.

Sadly, the cost of a fabric made along these lines would probably be high enough that its use in apparel is unlikely for some time. Not that that will stop some people.

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The Future of Payrolls Is Flexibility

Mort Zuckerman takes note of the dog in the manger of recent job reports:

The Obama administration and much of the media trumpeting the figure overlooked that the government numbers didn’t distinguish between new part-time and full-time jobs. Full-time jobs last month plunged by 523,000, according to the Bureau of Labor Statistics. What has increased are part-time jobs. They soared by about 800,000 to more than 28 million. Just think of all those Americans working part time, no doubt glad to have the work but also contending with lower pay, diminished benefits and little job security.

While there may be a kernel of truth in his explanation:

There are a number of reasons for our predicament, most importantly a historically low growth rate for an economic “recovery.” Gross domestic product growth in 2013 was a feeble 1.9%, and it fell at a seasonally adjusted annual rate of 2.9% in the first quarter of 2014.

But there is one clear political contribution to the dismal jobs trend. Many employers cut workers’ hours to avoid the Affordable Care Act’s mandate to provide health insurance to anyone working 30 hours a week or more. The unintended consequence of President Obama’s “signature legislation”? Fewer full-time workers. In many cases two people are working the same number of hours that one had previously worked.

Since mid-2007 the U.S. population has grown by 17.2 million, according to the Census Bureau, but we have 374,000 fewer jobs since a November 2007 peak and are 10 million jobs shy of where we should be. It is particularly upsetting that our current high unemployment is concentrated in the oldest and youngest workers. Older workers have been phased out as new technologies improve productivity, and young adults who lack skills are struggling to find entry-level jobs with advancement opportunities. In the process, they are losing critical time to develop workplace habits, contacts and new skills.

I don’t think it presents the complete picture. The great, largely untold story of the last several decades is the number of workers for whom total compensation has been falling.

The Obama Administration may have exacerbated the preference for temporary and/or part-time workers but it didn’t create it. Consider the graph above. That represents the growth in the number of temps from 2001 to 2012. Ebbs and flows obviously follow the business cycle but there’s one factor that jumps out of the graph: the number has always been growing. Even when the economy was shedding jobs at a furious rate the number of temps was increasing.

The reasons for that are clearly complex and include not only the PPACA but the many other regulations governing companies based on the number of full-time employees, the increasing dominance of large companies, and the lower total cost that temporary employees may represent.

The reality today is that the future of payrolls lies in flexibility and that will inevitably mean more temps and fewer full-time permanent employees. It might even be that in many sectors of the economy full-time permanent jobs will go the way of defined benefit pension plans and fully company-paid healthcare insurance. Policy needs to catch up with reality.

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The Real Healthcare Reform

There’s a sentence early on in Robert Samuelson’s column about Medicaid and the PPACA that he lets pass too quickly:

The further truth is that Medicaid also threatens to crowd out spending for many traditional state and local functions: schools, police, roads, libraries and more.

Since 1990 per capita spending by the government of the state of Illinois has grown at three times the rate of inflation. It has grown faster than incomes in the state by a substantial margin. It has grown faster than the state’s GDP. It has grown faster than the state’s revenues.

The two biggest line items in the state’s budget are Medicaid and public pensions. Both are growing fast, faster than we can afford. The state’s thirst for revenues is driving companies and people from the state at the highest rate of the fifty states.

If you wonder why I keep harping on healthcare costs as the most needed healthcare reform need, look no farther.

Contrary to some opinion, it is not true that healthcare costs have stopped rising. They are merely rising more slowly than they were before. They are rising, coincidentally, at just about three times the non-healthcare rate of inflation.

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Good Instincts Can Make Bad Laws

E. J. Dionne writes about the situation unfolding on our border:

Let’s stipulate: This is a difficult problem. Unless the United States is willing to open its borders to all comers — a goal of only the purest libertarians and a very few liberals — we will face agonizing choices about whom to let in and whom to turn away.

Moreover, it’s clearly true, as The Post editorialized, that “there is nothing humanitarian in tacitly encouraging tens of thousands of children to risk their lives, often at the hands of cutthroat smugglers, to enter this country illegally.”

But instead of dealing with this problem in a thoughtful way reflecting shared responsibility across party lines, President Obama’s critics quickly turned to the business of — if I may quote Beck — seeking political gain.

I think we need to stipulate a few more things. First, exploiting this crisis to seek comprehensive immigration reform rather than being content to address the problem at hand is baldfaced seeking of political gain.

Second, Mr. Dionne proposes no solutions. It’s easy to avoid politicizing a crisis when you don’t propose any solutions at all.

Third, releasing these kids onto American streets or into the hands of people whose identity or veracity we have no way of verifying is no more responsible than putting them on the tops of railroad cars heading north.

Mr. Dionne concludes:

All the pressure now is to change the Wilberforce Act so it would no longer apply to Central American children. There’s a strong logic to this. The law does create a powerful incentive for unaccompanied minors from Central America (which is not that much farther away than Mexico) to seek entry, en masse, to our country.

But there is another logic: that the anti-trafficking law really did embody a “good” instinct by holding that we should, as much as we can, treat immigrant children with special concern. Do we rush to repeal that commitment the moment it becomes inconvenient? Or should we first seek other ways to solve the problem? Yes, policymakers should be mindful of unintended consequences. But all of us should ponder the cost of politically convenient indifference.

The problem here is that good intentions are not enough to make good laws. Again, Mr. Dionne is silent on what should be done.

I’ll repeat my prescription. First, deal with the humanitarian crisis. Give the kids shelter, food, clothing, and medical care as appropriate and do it as close to the border as possible. We should be spending our money on food rather than air fare. Concurrently with that, amend the law. At the very least provide for expedited hearing procedures.

The third prong of our solution should be bilateral negotiations with Mexico and the countries of origins of these young people. The mass immigration could not occur without their tacit consent. Repatriation into a safe environment is IMO the optimal solution. Efforts that don’t point in that direction are seeking something less than optimal.

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Milestone

I’ve just noticed that some time in the last week The Glittering Eye exceeded 2 million visitors.

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Lament

By way of preamble, a recent Quinnipiac University poll has found that 54% of voters do not believe that the Obama Administration is competent:

American voters say 54 – 44 percent that the Obama Administration is not competent running the government. The president is paying attention to what his administration is doing, 47 percent say, while 48 percent say he does not pay enough attention.

David Dayen longs for an executive branch that is capable, competent, and engaged. After noting the harm that loss of credibility does to liberal government he writes:

There’s only one way to restore credibility: through efficient, quality government programs that establish high standards among the public. But one misstep can ruin years of diligent work. The FHFA might have a perfectly sound program that will really benefit homeowners. But until they stave off the lingering mistrust, they will simply serve as representatives of a Government Who Cried Wolf.

I’m afraid he will continue to wait.

My own view is that President Obama is tremendously competent at the things that engage his interest. He’s interested in getting elected. He’s interested in raising money. He’s interested in getting his way on policy. He’s not interested in the mechanics of government.

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Efficiency Wages

In the past I’ve said that the reason that wages in the financial industry are so high is that it’s like a room filled with money and the people who work in it are covered with glue. There’s actually a term for that, “efficiency wages”, and Tim Worstall mentions it in his recent Forbes piece that uses ex-CEO of CalPERS, Fred Buenrostro’s guilty plea on charges of corruption as a jumping-off point.

I do not believe in efficiency wages for a simple reason: they rely on a flawed theory of human nature. The reason that avarice is listed as one of the 7 Deadly Sins is that it’s not self-limiting. There is no wage, salary, inducement, or reward that is high enough to discourage someone who would otherwise steal from you from doing so. I think it’s almost exactly the opposite. If your love of money is great enough, you’ll do anything to get it. If you’re hiring risk-takers, the risk you’re assuming increases.

The reason to pay high wages is that the employees are worth it. No other reason.

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You Cahn’t Get The-ah from He-ah II

If I had a nickel for every analysis of our present economic situation that doesn’t include a prescription for fixing things and, even more importantly, a viable path for accomplishing that, I’d be a wealthy man. The latest of the genre is Joel Kotkin’s piece at Forbes. In it he correctly, in my view, characterizes our present economy as a “plutonomy” and, again correctly, notes that there will be no return to robust growth until more people participate in the recovery. He concludes:

How to drive growth to these and other productive sectors may require not only changes in government policy but also reacquainting the investor class with the virtues of long-term growth, productivity and the revival of the mass economy. Perhaps once they do investors might earn something other than intense dislike from the rest of the population.

We have now returned to the “zero-sum game” problem I mentioned in my previous post this morning. The beneficiaries of the present economy apparently want others to lose even more than they want to win. Or they believe that when others lose they in fact win. You can’t run a republic that way.

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Summing Up Hobby Lobby

Law prof Brett McDonnell sums up the Hobby Lobby decision:

Burwell vs. Hobby Lobby answered two questions, and each answer channels core liberal principles.

The first question was: Can for-profit corporations invoke religious liberty rights under RFRA? The court answered yes. HBO’s John Oliver nicely expressed the automatic liberal riposte, parodying the idea that corporations are people. It is very funny stuff.

It is not, however, especially thoughtful stuff. The court does not argue that corporations are just like real people. Rather, it argues that people often exercise faith collectively, in organizations. Allowing those organizations to assert religious-liberty rights protects the liberty of the persons acting within them. The obvious example is churches, usually legally organized as nonprofit corporations.

The real issue is not whether corporations of any type can ever claim protection under RFRA — sometimes they can. The issue is whether for-profit corporations can ever have enough of a religious purpose to claim that protection.

To me, as a professor of corporate law, liberal denial of this point sounds very odd. In my world, activists and liberal professors (like me) are constantly asserting that corporations can and should care about more than just shareholder profit. We sing the praises of corporate social responsibility.

Well, Hobby Lobby is a socially responsible corporation, judged by the deep religious beliefs of its owners. The court decisively rejects the notion that the sole purpose of a for-profit corporation is to make money for its shareholders. This fits perfectly with the expansive view of corporate purpose that liberal proponents of social responsibility usually advocate — except, apparently, when talking about this case.

The court’s conclusion that RFRA can protect corporations forced it to face a second question: Does the contraceptive mandate violate religious liberty rights in a way that the government cannot justify? The court said it does.

Here is what is for me the critical point:

Is RFRA a conservative power grab giving religious lawbreakers a “get out of jail free” card?

History suggests otherwise. RFRA reversed Justice Antonin Scalia’s 1990 opinion that denied protection to Native Americans who used peyote in religious ceremonies. The dissenters in that case were Justices Harry Blackmun, William Brennan and Thurgood Marshall — three of the leading liberals in the court’s history. Those liberals lost in court, but Congress vindicated them three years later by passing RFRA.

Democrats controlled both the Senate and the House at the time, and RFRA passed by a 97-3 vote in the Senate and unanimously in the House. That is not a typo.

That means most of those who voted for RFRA and the president who signed it into law were lawyers. The Dictionary Act has defined the word “person” when used in federal law as applying to corpotations since 1947. It is simply not credible that among all those lawyers none of them were aware of that.

In other words, the decision was simply a matter of black letter law and re-affirmed profoundly liberal principles.

Peter Berkowitz summarizes the majority position:

First, treating corporations as persons with rights involves a familiar form of legal reasoning whose purpose is to vindicate the rights of the persons who own and control corporations.

Second, there is no sound legal reason to deny to for-profit corporations the sort of exemption HHS had already implemented for nonprofit organizations.

Third, the exemption that the court upheld in Hobby Lobby was limited to “closely held” or family-run, for-profit corporations. The precedent is unlikely to be invoked by large publicly traded corporations because of the diversity of religious and nonreligious views of their owners.

Fourth, the majority opinion assumed that the government did have a compelling interest in providing cost-free access to contraception, including the four methods in dispute in Hobby Lobby.

Fifth, the court concluded that the federal government must honor the Hahns’ and Greens’ sincerely held religious beliefs because it had alternative means to accomplish its goal of ensuring women’s cost-free access to contraceptives. HHS, as the court pointed out, had already worked out an effective accommodation with nonprofit religious organizations.

How then to explain the agonistic reaction to the decision? In the Trib Heidi Stevens suggested that the decision’s opponents are outraged at a loss of power and power is a zero-sum game. You cannot maintain a republic on the basis that for you to win the other side must lose. The best you can hope to accomplish is a temporary, narrow majoritarianism.

Mr. Berkowitz proposes something else:

Still more pronounced, however, is the evident aversion among prominent progressives to living in a society with those who disagree with them about religion and reproduction. So great is their distaste for the diversity of views characteristic of a liberal democracy and so strong is their resolve to control the conduct of others that they are willing to mischaracterize the other side’s opinions, warp the facts, and politicize the law.

I think there’s an even more likely possibility: today’s progressives are not liberals.

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Farming the Bottomland

I grew up on the banks of the Mississippi and when I was a kid a common sight, particularly on the Illinois side of the river was the miles and miles of crops planted in the bottomland, the low-lying land adjacent to the river, sometimes nearly up to the water’s edge. That is floodplain, the Mississippi does flood, and practically every year you’d hear demands from farmers whose crops had, predictably, been flooded out for assistance from the state or federal government.

The bottomland was extremely rich and fertile and easy to till. When you won, crops were large and you won big. When you lost, you could lose everything.

This morning I read a plea to save Miami:

“Climate change is no longer viewed as a future threat round here,” says atmosphere expert Professor Ben Kirtman, of the University of Miami. “It is something that we are having to deal with today.”

Every year, with the coming of high spring and autumn tides, the sea surges up the Florida coast and hits the west side of Miami Beach, which lies on a long, thin island that runs north and south across the water from the city of Miami. The problem is particularly severe in autumn when winds often reach hurricane levels. Tidal surges are turned into walls of seawater that batter Miami Beach’s west coast and sweep into the resort’s storm drains, reversing the flow of water that normally comes down from the streets above. Instead seawater floods up into the gutters of Alton Road, the first main thoroughfare on the western side of Miami Beach, and pours into the street. Then the water surges across the rest of the island.

The effect is calamitous. Shops and houses are inundated; city life is paralysed; cars are ruined by the corrosive seawater that immerses them. During one recent high spring tide, laundromat owner Eliseo Toussaint watched as slimy green saltwater bubbled up from the gutters. It rapidly filled the street and then blocked his front door. “This never used to happen,” Toussaint told reporters. “I’ve owned this place eight years and now it’s all the time.”

The sad fact is that Miami is a terrible place for a large city. The average elevation of the city is 6 feet and its highest elevation is around 40 feet. Sea level will inevitably vary and you will have storm surge to contend with. What was true eight years ago may not be true today and what’s true today won’t be eight years from now. That’s a fact of life with or without global climate change.

The creation of the city of Miami, largely a 20th century project, is the equivalent of farming the bottomland. Enormous fortunes have been made by land developers, construction companies, and others eager to capitalize on the gold rush that began in earnest in the 1920s. Housing prices are high not the least because there’s so little land suitable for development.

Our reaction to Miami’s problems caused by rising tides should be identical to the reaction to the policy with regards to the floodplain of the Mississippi. We should resist the temptation to aid the city and over time it should be bought out and returned to nature.

That’s an obvious political non-starter. What will happen is that Miami, home to many elderly people who vote, will organize and successfully receive assistance for what was always inevitable and could never be prevented, again with or without global climate change. The rent-seekers we will always have with us.

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