I haven’t posted much on this subject because I find it distastefully sordid. Now that a rarely nearly-unanimous Congress has passed a law calling for the federal government’s Epstein files to be made public, possibly with some redactions, I thought I’d comment on it.

Although at the time of this writing no court cases had been filed opposing the release of the files, I expect there to be some and I don’t know what the ultimate outcome of those will be. It is my understanding that some of the files are grand jury documents that aren’t supposed to be publicized.

Personally, I have no problem with the release of the files but I doubt they’ll be the “smoking gun” that Democrats seem to be longing for and if they are they’ll be a gun that fires in both directions. At his Substack Matt Taibbi writes:

The list of high-ranking politicians from both parties who traveled with or took money from Epstein — Donald Trump and Bill Clinton included (what was the latter’s “humanitarian” visit to Siberia with him about?) — boggles the mind. A character like Epstein can only thrive in a world where law enforcement and intelligence are fully intertwined with financial and sexual corruption, to the point where one has to entertain the idea that significant numbers of politicians are compromised, perhaps even in a form of systemic blackmail. That isn’t an easy thing to believe. In the words of the disgraced and disgraceful writer Michael Wolff, whose ostentatious presence at the middle of this story casts doubt on all of it, Epstein represents “the kind of insiderism that is mostly just a figment in outsiders’ fantasies.”

Since my “last delusions” about public figures were shattered more than a half century ago I won’t be at all surprised by anything that might emerge from those files. Or nothing for that matter.

In his most recent Substack post economist Scott Sumner affirms a point I’ve been making here:

Put simply, societies become progressively richer by producing lots of stuff that rich people like—things that are “unaffordable” to average people. Places that understand this (Switzerland, Singapore, UAE, etc.), do much better than places that obsess with producing lots of stuff for poor people. If you don’t want to gentrify slums, then you’ll end up with lots of slums.

and especially:

America has roughly 8 times as many jobs as Canada because we have roughly 8 times as many people. And that’s true even if 5% of our workforce is unemployed. Bring in 10 million more workers from overseas, and we’ll end up with roughly 10 million more jobs and still have 5% unemployment. Similarly, even if 10% of homes are empty or owned by foreign investors, if you build another 10 million homes, you’ll have roughly 10 million more homes occupied by American residents. Gimmicks like rent control and 50-year mortgages don’t solve the problem, you need more housing output.

Many cities require developers to set aside a certain percentage of new housing units for “low income” buyers or renters. These regulations are effectively a tax on new construction and reduce the output of new homes. Because output equals abundance equals affordability, housing affordability mandates effectively make housing less affordable.

The “law” forms the title of his post: “Output is abundance is affordability”. “Output” means more stuff. More houses. More cars. Not charging more for the same number of houses, cars, etc. That latter is the weakness of trying to transition to a service economy. You don’t become richer as a society that way but you do end up with shortages of stuff like houses that can’t be imported, particularly if regulations limit the pace at which the stuff, e.g. houses, can be produced.

Shorter: we need more output.

The editors of the Wall Street Journal give their opinion on why Ford can’t find mechanics:

Corporate CEOs are keeping their heads down these days, lest they get chopped off by the Trump Administration. So last week’s remarks by Ford Motor CEO Jim Farley deserve credit for candor, as well as for the public service of telling politicians a hard truth about the American labor force.

Mr. Farley told a podcast last week that he can’t find enough skilled mechanics to run his auto plants. Specifically, Ford can’t fill 5,000 mechanic jobs that pay $120,000 a year.

“We are in trouble in our country. We are not talking about this enough,” Mr. Farley said. “We have over a million openings in critical jobs, emergency services, trucking, factory workers, plumbers, electricians and tradesmen.” He said Ford is struggling to hire mechanics at salaries that Ivy League grads might envy.

“A bay with a lift and tools and no one to work in it—are you kidding me? Nope,” Mr. Farley lamented. “We do not have trade schools” in this country. He’s right to a large degree. Few high schools teach trades these days. Community colleges are mostly remedial high school education, and government worker-training programs have poor results.

Government subsidies for college and graduate education have encouraged the young to go to college even though they might be better off learning a trade. This has created a skills mismatch in the labor market. Unemployment among young college grads is increasing, while employers struggle to hire skilled manufacturing workers, technicians and contractors.

I wish there were more in the way of details being offered. $120,000/year is twice the median wage and three times the median wage for automotive service technicians/mechanics. That sounds like a pretty good wage to me. Why is Ford having problems?

I also wonder whether the editors are making a pitch for vocational training, importing more workers with the required skills, or both? Or something else?

All I can add is that we’ve been propagandizing people for 30 years that they need to go to college and the public subsidies for doing that have been massive. Maybe it’s time to alter course. Like turning an ocean liner it’s not something you can do on a dime.

In his most recent column Washington Post foreign policy columnist Fareed Zakaria turns to domestic policy and, perhaps not coincidentally, makes a point I have made for years. The surest way for Democrats to prove the superiority of their plans to what Republicans are doing is for them to govern well in the places they already hold the reins of government:

It’s hard to see how the government shutdown and reopening is anything other than a defeat for the Democrats — a high-stakes confrontation that ended with their own goals unmet and their message muddled. If they didn’t have the leverage or were not willing to use it to prolong the shutdown, then why did they stage it at all?

The shutdown reinforced the image of the Democrats as feckless. They promise wonderful-sounding new programs — free child care, for example — but in fact preside over bloated bureaucracies and inept execution. If America has an affordability crisis, it tends to be in places Democrats govern, like New York, Illinois and California, which all feature high taxes, soaring housing costs and stagnant outcomes in basic areas like education and infrastructure.

concluding:

The truth is that local government in the U.S. is already living on borrowed time. For decades, states and cities have traded short-term political harmony for long-term fiscal ruin. To keep the peace with powerful public sector unions, they promise ever-more-lavish pensions and benefits, then quietly defer the bill to future taxpayers. Across America, these obligations act like slow-motion fiscal time bombs — invisible for now, but guaranteed to explode.

These problems have been brewing for decades. Our savings rate has been too low for 70 years. Our spending has been too high for most of that period. Business investment has been too low for the last 25 years. We don’t produce enough of what we consume (for a good rundown on this see the San Francisco Federal Reserve).

The most likely strategy for dealing with debt at the federal level will be to monetize it—that’s what we’ve done for the last 25 years at least. That is diametrically opposed to the buzzword of the day: “affordability”.

Unless the federal government bails out local governments (something I oppose) that alternative is not open to state and local governments. What is to be done? I have been seeking answers to that question from Democrats for some time to no avail.

Nobody wants higher taxes. That is particularly true of Republicans. Every Republican president of recent memory has cut taxes. Everybody wants to spend more; they may differ on how they want to spend the money but everybody wants to spend more.

As I write this post the Chicago City Council is debating the mayor’s latest budget proposal. The mayor wants to balance the budget via higher taxes on businesses. The City Council realizes that is unlikely to attract businesses to Chicago. Chicago has its lowest population in a century and large businesses have been leaving not only the city but the state.

The state is raising the sales tax Chicagoans will pay. Chicago already has the highest sales tax of any major city and the highest property taxes of any major city. Illinoisans have refused to allow the state to create a graduated state income tax. We recognize that although the tax may be levied on those making the highest income at first in due course everyone with a job will be paying higher state income taxes. Neither the city nor the state appear to be capable of economization.

It’s not the Republicans’ fault. There are no Republicans on the Chicago City Council and the State of Illinois has supermajorities in both houses of the legislature. That has been true for decades.

Today is my mom’s birthday. How old would she have been (you might ask)? The answer is we don’t know. Just look at her birth certificate (you might say). Which birth certificate (I would respond)? We have three. All have the same day of the year, November 15. Each has a different birth year.

I’ve written a lot about my mom over the years, shown a lot of pictures of her. She was my dad’s favorite photographic model after all, we have tons of them, and he was an outstanding amateur photographer. He preferred “candids” which in my dad’s eye were picture taken in the most awkward possible circumstances.

I can’t tell you how much I miss my mom. Not only was she my mother, she was one of my best friends and I hope she would have said the same. I frequently sought her advice and vice versa. I have enormous respect for her and the challenges she overcame. In a very real sense it is to the challenges my parents overcame that I became the person I am today, for good or ill.

The other evening my wife and I were watching Wheel of Fortune and, when the winner failed to figure out the phrase in the final prize round, I turned to my wife and said, “Well, obviously he did not have a mother who was a remedial reading teacher.” I learned to read based on the shape of the words. In school I learned phonics; from my mom I learned whole word recognition. It has been a good combination. I still think of her at least daily.

At any rate, Happy Birthday, Mama! I love you.

Yesterday President Trump announced a cut in tariffs on beef, coffee, and other foods. I wanted to make an observation and a prediction.

My observation is that not imposing the tariffs in the first place would have been better.

Here’s the prediction. To use economic jargon food prices will turn out to be downwards inelastic. In other words although prices rise quickly when a tariff, for example, is imposed, removing the tariffs won’t cause prices to return to the status quo ante. At least not nearly as quickly. Competition among retailers won’t bring them down quickly.

One of the reasons that’s the case is how concentrated the grocery business has become. There used to be dozens of major chains and thousands of mom-and-pop grocery stores.. Now there are just a few chains and they don’t actually compete with each other. And then there’s the effect of regional concentration.

I don’t think that national grocery chains should be allowed to exist but I’m a dinosaur.

The short version of this is that prices went up fast. Don’t expect them to come down fast whatever happens.

I wanted to take note of an excellent primer on what an immigration judge does, written by a well-informed source. Here’s a snippet;

Before repatriating aliens with deportation orders, the Department of Homeland Security must obtain removal orders from a tiny pool of approved immigration judges. This lack of decision makers has caused adjudications to slow to a crawl in recent years.

In the meantime, aliens establish what are known as “equities,” meaning jobs, homes, and families, that make deportations more difficult. President Trump’s return to office, however, has allowed our nation’s immigration judges to do something they haven’t accomplished since 2008: decrease the backlog by closing cases faster than new ones are added.

This is a subject I know well, having served as an immigration judge between 2006 and 2015. Here’s how it happened, and what it means going forward.

If this is a subject that interests you, I recommend it.

It does point out a number of defects in present immigration law. The Immigration and Naturalization Act was written before the Department of Homeland Security existed and long before the Digital Revolution had really taken hold. As I’ve pointed out in the past the federal government is mired in the 1950s and has so many moving parts any major structural change (like creating the DHS) is bound to produce overlapping and conflicting roles and processes.

I’ve been waiting for a “hook” before expressing my opinions about the bombing of boats setting off from Venezuela, allegedly smuggling narcotics to the United States. Since so little opinion has been expressed on the subject by major outlets and no real news “hook”, just the occasional announcement of the boat’s destruction or speculation about President Trump’s intentions, I’ve decided just to go ahead and give my opinion.

Yes, boats from Venezuela have been ferrying illegal drugs to the United States. Have the boats that have been destroyed been doing so? We’ll probably never know. Occasionally, the families of men killed in the boats’ destruction have admitted that, yes, the boat was smuggling drugs, also asserting that they weren’t “narco-terrorists”, they were just poor guys trying to make a buck smuggling drugs. The two aren’t mutually exclusive.

Yes, Maduro is a bad guy and is bad for Venezuela. He’s a crook and an authoritarian just like his mentor, Hugo Chavez.

No, destroying the boats isn’t legal. It’s not an emergency by the normal non-federal government standard. The smuggling has been going on for years. Yes, destroying the boats is an act of war and the president is not empowered to make war on other countries except in an emergency or when authorized by Congress. To its discredit, Congress has been abrogating that responsibility for the last 65 years. This would be a splendid opportunity for Congress to reassert its prerogatives but I don’t expect that to happen with this president and this Congress.

Furthermore, destroying smuggling boats in the international waters of the Caribbean without specific Congressional authorization is worse than a crime, it is a mistake. Monitoring boats setting off from, say, Venezuela would be a splendid opportunity to use drone aircraft to monitor the boats until they’ve entered the U .S. EEZ at which point the Coast Guard could be deployed to apprehend the craft once they’d entered U. S. territorial waters. Or the drones themselves could destroy the boats at that point—the act of war would be Venezuela’s at that point. That’s the way of war that’s emerging since Russia’s invasion of Ukraine in 2022.

Some of the reports I’ve read have claimed that the boats are being destroyed using MQ-9 Reaper drones armed with Hellfire missiles. As I understand it those missiles cost from $150,000-$200,000. A back-of-the-envelope estimation of the cost of each boat strike is about $1 million. While it would be using drone technology, using Hellfire missiles is a pretty expensive way to sink a smuggling boat. It also raises the question of why the attacks are being carried out in international or even Venezuelan waters. And why we’ve deployed the flotilla pictured above to the Caribbean.

We absolutely, positively should not be preparing to overthrow the Maduro government in Venezuela. We are unpopular enough with our Central and South American neighbors for such unilateral interventions as it is. Hardly the material for a Nobel Peace Prize.

I should add that I do not think most of those fleeing Venezuela are political refugees so there’s no emergency there, either. There’s hardly a better example in the world today of self-inflicted harm than Venezuela. Why we should provide a haven for people who’ve harmed themselves through their own fecklessness eludes me. “One man, one vote, one time” is a completely foreseeable consequence of electing a figure like Chavez. It reminds me of that scene in Blazing Saddles when Cleavon Little has a gun pointed at this own head.

Yet another Substack to which I’d subscribe if I had the money is Noah Smith’s “Noahpinion”. I was recently somewhat shocked in his observations about one of five things he found interesting. As it works out the average income of black Americans is rising, largely due to “selective immigration”:

As you can see from that chart, Black immigrants earn about as much as native-born Black Americans. But 2nd-generation Black Americans earn about as much as White Americans.

There are several important implications of this finding.

First, selective immigration is very important. The kids of Black immigrants to America move up in the world because they’re highly educated. Selecting for immigrants that value education is therefore a way of reducing racial gaps in America — in addition, of course, to the substantial contributions they make to America’s economy.

Second, fears of segmented assimilation — the idea that the kids and grandkids of Black immigrants will end up with economic trajectories similar to those of native-born Black Americans — seem overblown.

Third, America is a land of opportunity for Black immigrants, but not nearly as much so for Black people whose families have been here a long time. This means that the “ADOS” concept — meaning Black Americans whose ancestors were slaves — is probably a useful one. It defines the group of people who most need help from the government. For example, affirmative action programs targeted at Black people in general are likely to award college spots to the kids of elite African immigrants. Instead, in the interest of maximum efficiency and fairness, they should probably be targeted at ADOS specifically.

That is a point I have made for more than 20 years but Mr. Smith doesn’t appreciate the degree of what is actually happening. Black immigrants are benefiting disproportionately from racial set-asides, quotas, preferential hiring or college admissions, and programs intended to promote “equity”. That has been true for 50 years. I think the reason for that is culture (see above). But it bodes very poorly for what he refers to as “ADOS” and which the late sociologist Charles Moskas called “Afro-Americans”.

What Mr. Smith doesn’t address is how do you accomplish what he wants to do? I presume he opposes nativism. Isn’t he supporting it explicitly in this post?