The editors of the Washington Post gently chide the Biden Administration for sending “mixed messages” to prospective migrants:

An estimated two-thirds of undocumented immigrants have been in the United States for more than a decade, and many in that cohort arrived at least 15 years ago. It is preposterous to think that deportation agents would target those long-term unauthorized residents, the vast majority of whom pose no threat to public safety or national security.

Yet in announcing new deportation guidelines Thursday, the Biden administration left ambiguous the question of whether its arrest priorities would exclude most noncitizens who have spent years in U.S. communities as neighbors, workers, and, in some cases, owners of businesses and homes. In effect, the guidelines amount to an ill-defined, ongoing negotiation with Immigration and Customs Enforcement, the government’s deportation arm. With good reason, it will leave many unauthorized migrants concerned about their foothold in this country.

The message isn’t that mixed. When you align their words and their actions, the takeaway is that not much will be done to deter illegal migrants so why the heck not give it a try?

The editors rather clearly buy into the hoary “jobs Americans won’t do” trope. Reality is more complex. a reliable stream of new workers allows employers to keep wages lower than would otherwise be the case. A significant number of such workers allows them to substitute unskilled labor for capital investment-requiring automation. Lots and lot of these migrant workers looks okay until you realize that these are people, they have costs associated with them, and there’s no way that the taxes they’re able to pay will pay for the services they use.

Meanwhile in her Wall Street Journal column Mary Anastasia O’Grady advises:

A proactive approach to global migrant flows would address both push and pull factors. On the pull side, a greater supply of U.S. work visas are needed to resolve a labor shortage that acts as a magnet for eager foreign workers.

Pushing the migrants is a dearth of employment, a problem that can be addressed by the resumption of a robust U.S. free-trade agenda. Now is the time to do it because companies want to move away from China in favor of “near shoring” in Central America, the Dominican Republic and Haiti, particularly in textiles. The key is to eliminate trade barriers that make the manufacturing of apparel in these countries uncompetitive.

As a general matter I favor doing a lot more of our trade with our neighbors than we do. I also favor more substantial migrant worker programs but however expanded those need to be vigorously enforced. I see little stomach for doing that in the present administration.

In an op-ed in the Wall Street Journal Jason De Sena Trennert considers an interesting and important question—does the Federal Reserve have the will to fight inflation? Eventually, he gets around to giving his answer:

There is no doubt that the Fed has the tools to fight inflation if it chooses. But the question remains whether it has the political will—given the size of financial assets relative to the economy, the potential effects of tightening on the federal budget, and the Fed’s growing list of social responsibilities. Tapering may start by the end of the year, but real tightening could present risks to the economy and, in turn, the Fed’s independence. Policy makers seem increasingly convinced that there are few long-term costs to spending money we don’t have.

or, shorter, they don’t have the will to fight inflation. I tend to agree. All of their incentives point in the direction of continuing to do what they’re doing now.

At The Hill Jerry Haar jumps heedlessly into a thorny subject—do the rich actually not pay their “fair share” in taxes?

Progressives often assert that wealthy individuals and corporations do not pay their fair share in taxes and therefore that tax rates on these upper-income people and companies should be increased.

But is it true that the rich and big companies do not pay their fair share?

A recent Internal Revenue Service (IRS) survey found that 95 percent of Americans believe it is everyone’s civic duty to pay their fair share of taxes. They also believe the current system is unfair, largely benefitting big business and rich people. But the truth is American business pays 93 percent of the nation’s taxes, and the top 1 percent pay over one-third of income taxes.

Let’s disaggregate the subject a bit, starting with corporations. Whatever you think a corporation’s “fair share” of taxes, however high the rate you impose, it will not fall on the corporation, as Mr. Haar observes:

In actuality, corporate taxes are paid by shareholders, workers and consumers, with a substantial share passed on through retail prices or lower wages. As economist Scott Lincicome points out, this can result in lower investment and economic growth, thus reducing wages and living standards, less innovation and lower productivity. An OECD study of major taxes and their impact on economic growth and real wages found that corporate taxes were the most harmful.

That’s not controversial. It is common knowledge among economists. If you want the corporate income tax to fall on the corporation itself, you will need to change more than the marginal tax rate. IMO such a notion is unworkable not to mention politically impossible.

Onwards to the personal income tax. I think there’s a reasonable conversation to be had about actual effective tax rates for individuals when all federal taxes are considered. In terms of effective tax rates everyone who is paid wages, whether a salary or by the hour, and earns less than $142,000 pays about 20% in federal taxes. That’s Social Security tax (FICA) plus Medicare tax combined. $142,000 is the present FICA max, the level above which FICA is not levied. Personal income taxes are on top of that. In the U. S. the average single worker without children pays about 28% in federal taxes (the average married worker with one income and two children pays 14%) compared with OECD average of 35% (24%). Even that is not really an apples-to-apples comparison for a variety of reasons include that just about every other OECD country has a VAT and most don’t have state taxes on top of federal taxes.

The key point is that the U. S. federal tax system is slightly (repeat slightly) regressive because of Social Security and Medicare taxes. Most European tax systems are much more regressive than ours because of VAT.

Our system is even more regressive when you recognize that workers who earn more than $142,000 don’t have FICA taken on it. That lowers their effective tax rates quite a bit. Translation: workers in the top 1% of income earners pay considerably lower than 14% and genuinely rich taxpayers even lower.

Now we get to the question of what is “fair”?

I’ve expressed my own view on taxes many times in the past. I think FICA, the Medicare tax, and personal and corporate income taxes should be abolished and replaced by a prebated VAT. Progressivity could be ensured by the size and incidence of the prebates. To my eye the second best alternative would be 1) levying FICA on all wage income and 2) a prebated flat rate tax on income with progressivity ensured by the size and incidence of the prebates.

Neither of my preferred approaches have the slightest chance of being enacted into law because either one would take Congress out of the equation, removing its main power which is to give tax breaks to the individuals and organizations it favors while imposing taxes on the disfavored.

So we’re left to squabble over what’s a “fair share”? Nobody really gives a damn. They just know that you can’t get blood out of a stone.

It’s always nice to be recognized even if it is, as is the case in this editorial in the Las Vegas Review-Journal as an object lesson:

Illinois provides a case study for why Nevada’s elected officials should pursue pension reform sooner rather than later.

The Illinois Policy Institute published some shocking research last month on the state’s education system. For every dollar the state government spends on education, 39 cents goes toward pensions. In 2000, just 12 percent went to pensions. In 2000, spending on teacher pensions was $640 million. Today, it’s $5.8 billion. That’s a ninefold increase.

Non-pension spending increased too but at a much slower rate. It didn’t even double.

Every dollar that goes toward pensions is a dollar that doesn’t go toward hiring teachers or lowering taxes. Most teachers, presumably, would prefer to see that money in their regular paycheck, too. Further compounding the problem is that significant portions of these payments are paying off previously incurred debts. The current students have less because previous generations didn’t set aside enough money to pay for their promises.

Nevada’s pension situation isn’t as bad as Illinois, which is perhaps the country’s leading fiscal basketcase and is the poster child for what happens when public employee unions have the key to the public fisc. But that doesn’t mean everything is rosy in the Silver State.

Over the last 20 years the number of students enrolled in Illinois has declined from 1% to 4% per year even as spending per student enrolled has increased sharply. The state’s teacher pension obligation has increased more than tenfold over the same period.

The math is pretty simple. Fewer people in the state, rising obligations, failure of elected officials to fund pensions fully, sharply increasing spending per taxpayer. It will require an amendment to the state’s constitution to correct the situation and politicians understand they won’t keep their jobs if they do what’s necessary.

In the event that you didn’t see the commentary I’ve embedded from CBS Sunday Morning this morning I wanted to share it with you. It evoked a flood of thoughts in me.

First, I am very proud of what this young man has accomplished.

Second, although thought, cognitive development, language, reason, and literacy are not all the same thing, they are interrelated things. Language and literacy foster cognitive development. Not all languages do so in the same way and the sort of cognitive development any given language fosters depends somewhat on the language. That is not to say that some languages are “better” than others. It is possible to express any concept in any human language. But languages are different. It’s harder to express some concepts in some languages. The cost involved does not categorically prevent speakers of any given language from comprehending certain concepts but it may disincline them from thinking such thoughts. For those keeping score at home that is the “weak Sapir-Whorf hypothesis” with which I tend to agree as opposed to the “strong Sapir-Whorf hypothesis” with which I strongly disagree.

And there’s an intimate relationship between literacy and reason. By “literacy” I do not mean the ability to puzzle out words on a page. I mean deriving information from the words written on a page. I am concerned about literacy declining in our culture in favor of more visual methods of deriving and exchanging information. That may have some advantages but improving the level of reasoned discourse is not one of them.

Finally, don’t judge a book by its cover.

I was prepared to agree with David Shribman’s take on contemporary developments in the Pittsburgh Post-Gazette but I couldn’t get past my disagreement with him about the relative importance of COVID-19 in the scheme of things:

In the past century, the United States has lived through several hinges of history.

World War II changed the role of women in American life, transformed the nation into a global superpower, created a baby boom and a mass consumer culture and — no one says everything changes — failed to redeem the “Double V” victory that the Pittsburgh Courier, the indispensable Black newspaper, yearned for: broad victory for freedom overseas and broad freedom at home.

The combination of the Vietnam era, the youth rebellion and the Watergate scandal produced a national skepticism of authority and institutions that we live with today. Though the Trump rebellion might be ascribed by historians to the age of disruption begun in the high-tech age, do not forget that the 45th president was born in the first year of the baby boom, and that he ingested that sense of rebellion in his youth.

The implications of the COVID-19 virus cannot be overstated. By month’s end, the American death toll may reach 700,000, about 12% more than in the Civil War, the deadliest conflict in our history.

The Civil War split the country, shattered families, altered economic relationships and created a new kind of politics that arguably dominated American politics for a century. (It was only in the late 1960s that there were cracks in the Democratic Solid South, an immutable force in politics that assisted military mobilization in the years leading to World War II but resisted racial integration in the years following World War II.)

That is what is called in the trade an “invidious comparison”. Not to diminish the hurt and harm of COVID-19 but the difference between 750,000 deaths in a population of 35 million people and the same number of deaths in a population nearly ten times that is simply enormous. That’s especially true since those who died in the American Civil War were disproportionately men, men were very needed by their families for economic support, and there was little or no social safety net. There’s simply no comparison between the misery caused by the Civil War and that caused by COVID-19.

The question we should ask is how cardinal a moment was the Spanish flu epidemic in U. S. history? That is widely thought (with some controversy) to have brought 650,000 deaths in a population of 110 million, a much more comparable situation. I would submit that it was almost completely unimportant.

At this point I think it’s just too early to tell how persistent or pervasive the undermining of confidence in American institutions. I think that regardless of ideology or political affiliation we should be able to agree that a broad swathe of American institutions have not exactly covered themselves in glory during the pandemic. But for goodness sake the pandemic is no Civil War. I don’t even think it’s a World War II.

Truly there is nothing new under the sun. In a piece at Persuasion Jonathan Haidt attributes the “democracy recession” to “monomania”, an irrational focus on a single aspect of things rather than on the whole. After a parable of the nature of these competing “monomanias” he asserts the following:

1. Monomania makes groups illiberal.

   In theory, one could be a liberal monomaniac—obsessed with a celebrity or an intellectual paradigm but perfectly willing to let everyone else have their own obsessions, or no obsessions. But moral and political monomaniacs generally travel in self-policing groups, and these groups are rarely liberal according to either of the two Oxford definitions. If you and your friends believe that everything is about power, and that the world is divided into the powerful people (who oppress others) and the powerless (who are oppressed), then you have a moral obligation to do something about it—all the time.

2. Monomania makes groups stupid.

   In a 2009 TEDx talk titled “Be suspicious of simple stories” the economist Tyler Cowen warned that stories impose a structure on events that distorts them and blinds us to the distortion. He was particularly concerned about moralistic stories that divide the world into good and evil. He proposed that “as a simple rule of thumb, just imagine that every time you’re telling a good versus evil story, you’re basically lowering your IQ by ten points or more.”

Begin radicalized with respect to something, as was pointed out sixty years ago, means you are predisposed to interpret every experience in light of whatever it is you have been radicalized on, e.g. sex, race, power, inequality, the right to bear arms, etc.

Or, said another way, monomania, radicalism, what’s the difference?

I was completely ignorant of the notion of “water markets” for allocating the water of the Colorado River or the Walton family’s role in that promotion until I read this article by Scott Patterson in the Wall Street Journal on the subject:

The first-ever official shortage on the Colorado River has intensified a debate over how to provide water for 40 million people across the Southwest and irrigate fields of thirsty crops like wheat, cotton and alfalfa.

Few voices outside government are more influential than that of the Walton family, billionaire heirs to the Walmart Inc. fortune, who have long advocated water markets as a key part to solving the region’s woes. But some environmental groups say the Waltons drown out other, nonmarket approaches.

A Wall Street Journal analysis shows that a charitable foundation controlled by the Waltons, the Walton Family Foundation, has given about $200 million over the past decade to a variety of advocacy groups, universities and media outlets involved in the river. No other donor comes close. Two federal officials once affiliated with the foundation have been named to key Biden administration posts overseeing the river.

Putting a monetary value on water has raised concerns among those who benefit from guaranteed access to water and those who believe markets benefit investors while hurting farmers and the poor. Water markets in Australia have been blamed for helping dry up waterways due to overuse by a handful of wealthy farmers and investors.

“Any time that the water starts becoming more valuable than the land, you end up with the possibility of outside speculators,” said Andrew Mueller, general manager of the Colorado River District, a public planning and policy agency that oversees water use in western Colorado. Mr. Mueller said his state has been seeing continued interest in agricultural water and lands by outside investment groups.

While it may be an efficient method of allocating a scarce resource, I can’t help but wonder if it would actually comprise an efficient way of misallocating the resource.

I also wonder about the mechanics of such a market: who would set the price (auction?) and regulate the distribution. Would the inefficiency from the administration of these markets, especially graft, overwhelm their benefits? I don’t have any fixed ideas on these subject and I’m willing to learn.

As I’ve said before I think that the underlying problem is too many people for the available water and states that are far too dependent on real estate development. Unless the costs of water that is being more efficiently allocated make their way into the pockets of developers and politicians I’m skeptical that a water market will actually address the underlying problem.

In a post at RealClearEnergy Jane Marsh reminds us that one of the most attractive alternatives to natural gas, renewable natural gas (RNG) also known as “bio-gas”, does not actually reduce carbon emissions, pointing to some of the same factors I have mentioned here:

Transitioning away from fossil fuel uses toward biogas also requires mass construction projects. The building industry accounts for nearly 38% of all greenhouse gas emissions. Increasing air pollution by adopting RNG decreases its sustainability.

Biogas also promotes waste production. When companies produce renewable energy from disposed organic matter, individuals will continue creating food waste and other ecologically degrading materials. America can support the clean electric grid using emissionless energy sources instead of biogas.

There aren’t many emissionless energy sources suitable for baseline power generation. Illinois has one of the lowest reliances on fossil fuels for power generation of any state, largely because of our historic reliance on nuclear power.