Speaking of cost-benefit analysis that ignores the costs, the editors of the Washington Post lay out their case for increasing immigration:

THE 2020 CENSUS offers a powerful argument for immigration. The United States in the past 10 years saw the slowest population growth rate in eight decades, owing both to plummeting fertility and dwindling immigration. Demographic stagnation, and the resulting possibility of anemic economic growth, threaten American vitality.

The census numbers give the lie, again, to the idea that this country is “full,” as President Donald Trump said, by way of justifying his assault on legal and illegal immigration, or that it has somehow reached the limits of its absorptive capacity. In fact, without robust population growth, and a steady supply of working-age strivers, there is no prospect of repairing the fraying social safety net that supports an aging population of retired Americans.

Simply, lagging births and slowing immigration mean fewer workers, less production and the specter of languid economic growth, or none.

and they point to Japan:

Those skeptical at the proposition that immigration is a bulwark against falling birthrates should mull the counterexample of Japan, where a dwindling population has contributed to a listless average annual gross domestic product growth of 1.3 percent in the decade ending in 2019. (The U.S. average over the same period was nearly 2.3 percent.) Faced with a critical labor shortage, Japan, traditionally resistant to immigrants, finally enacted a measure in 2018 to expand the number of semiskilled workers it admits each year.

which conveniently ignores quite a number of things about Japan. For example, even though Japan’s population is declining its per capita GDP is rising:

Japan does not have income inequality anything like we are seeing in the U. S. and the top 1% are not capturing most of the increases in income. Per capita spending on education and health care in Japan are substantially lower than in the U. S. as well.

Rather than being a cautionary tale Japan is the future to which we should aspire.

Additionally, there is scant evidence that the U. S. is suffering from a “critical labor shortage”. If it were real wages for semi-skilled workers would be rising much faster than they are. Indeed, the problem in the U. S. is, as Jared Bernstein pointed out that every time anybody’s wages start to increase the “immigration spigot is turned on”. Keep in mind Joschke Fischer’s observation from Germany: “We wanted workers; we got people.”

In the U. S. it makes some sense to bring in workers with specialized and in-demand skills whose taxes paid will exceed the cost of educating their children and providing them with all of the services we presently do, e.g. safety, sanitation, transportation, etc. We cannot produce economic growth by importing workers on whom we will spend more than they can conceivably add to the bottom line which, sadly, characterizes most of the migrant workers from Mexico, Guatemala, Honduras, and El Salvador who enter illegally via our southern border.

In her most recent Washington Post column Megan McArdle laments that President Biden’s proposals amount to politics without budgets:

If I have to pay for some new government program, I care a lot about whether it will be worth the money. If someone else is paying, it has to meet only the bare-minimum criteria of “sounds vaguely nice.” Which is perhaps why so much of President Biden’s address to Congress sounded more like a half-baked Democratic wish list than a coherent policy agenda.

The most striking moment was probably this one: “The Defense Department has an agency called DARPA, the Defense Advanced Research Projects Agency . . . to develop breakthroughs that enhance our national security. . . . It’s led to everything from the discovery of the Internet to GPS and so much more. . . . The National Institutes of Health, the NIH, I believe should create a similar Advanced Research Projects Agency for health.” That agency would have one purpose: “to develop breakthroughs to prevent, detect and treat diseases like Alzheimer’s, diabetes and cancer.”

“Let’s end cancer as we know it,” Biden added. “It’s within our power.”

Why was this so striking? For one thing, it has been almost 50 years since President Richard M. Nixon initiated America’s “war on cancer.” Since then, the National Cancer Institute has spent at least $100 billion on research and treatment. Though we’re certainly closer than we were in 1971, cancer remains uncured. And while I’ve spoken to a lot of cancer experts who are hearteningly hopeful, none suggests a cure is a sure thing so long as we spend enough money.

Biden’s assertion that all we need is DARPA for cancer encapsulates his administration’s style — as well as its contrast with the style of our last Democratic administration.

The National Cancer Institute is doing great work on innovative treatments, notably the immunotherapies that are already revolutionizing cancer care. If the administration thinks there are gaps in the institute’s research program, by all means identify and fund them. But what in tarnation does DARPA for cancer add that NCI won’t?

concluding:

The less constrained Biden administration, by contrast, seems willing to float anything that promises any benefit to anyone, running as far down the Democratic wish list as bond markets or voters will tolerate. We’re barely having an argument about whether this spending is worth what it costs (and, if it is, why can’t we just ask taxpayers to pay for it?).

Because in the end they’ll have to, even if we put it off for a while by borrowing money or printing it. And when that bill comes due, it would be nice if we could look back and think that, in the main, what we got in exchange was worth it.

If you only reckon hypothetical benefits and ignore the likelihood of those benefits materializing, their cost, or their return on investment, it’s pretty easy to pass cost-benefit analysis. That’s why, in my post on mission statements, I enumerated several criteria for limiting wish lists like those to which we were treated on Wednesday evening:

• It has to be achievable.
• It has to be achievable by the means proposed.
• It has to be achievable by the means proposed within a stated timeframe.

There are a couple of criteria I didn’t mention:

• It should be paid for.
• The cost of the secondary effects should not outweigh the net benefits of what is being proposed.
• There should be consequences for failure to meet the proposed objective other than not being re-elected.

We genuinely need to recognize that we are setting the stage for a future in which interest payments crowd out other spending and we will be impelled to fully monetize the debt or default.

In an op-ed in the New York Times linguistics scholar John McWhorter provides a history of the “N-word”, its usage, and its transition from ordinary discourse to slur to taboo. It’s accompanied by an editorial disclaimer.

It was not a word to be said by members of my family. That was made very clear to me what, at about 5 years of age, I used it (I had heard it from other neighborhood kids) and was punished fairly severely by my parents standards and told in no uncertain terms that we did not use that word. For my parents and in my family racism was a mortal sin.

It reminds me a bit of Lincoln’s wellknown wisecrack about the man who was tarred and feathered and ridden out of town on a rail, somebody asked him how he liked it, and his reply was if it was not for the honor of the thing, he would much rather walk. I see that Illinois’s public pension system has made RealClearPolicy’s “Waste of the Day” to the tune of more than $15 billion per year:

While businesses struggled under the lockdowns put in place by Illinois Gov. J.B. Pritzker and Chicago Mayor Lori Lightfoot in 2020, the high-earning employees of state and local government had a record year.

Our auditors at OpenTheBooks.com discovered that more than 122,000 public employees and retirees earned over $100,000 last year, as compared to 109,000 employees in 2019 who collected that much.

I do wonder about how robust that finding is. They record that there are 16 school superintendents receiving $300,000 or more in pensions. I agree that’s excessive. But they don’t tell me, for example, how many of those present employees and retirees are drawing more than $150,000 per year. I agree that Illinois public pensions are exceedingly generous but I’m less concerned about those receiving $100,000 a year in pensions than I am about those receiving $130,000 or more in pensions. In statistics-speak what’s the mode on that finding?

To the extent that it exemplifies thinking in the New Right, I found this article by Cole Simmons at The American Mind interesting:

Before the Spirit of ‘76 there were two generations of theorizing and political change. From John Wise’s naughty little book to Patrick Henry’s noble speech in the Virginia House of Burgesses, nearly 60 years of theorizing and acting prepared for the emergence of the American. A new work is underway. We probably won’t be sticking to the name “American Whig” and I doubt there will be a republican solution. The republican was a great type of man in American history, but we cannot will him back into existence. The township cannot be artificially constructed. Property cannot be artificially made equal enough, and a relative equality in property would be necessary. We cannot make the populations small enough. The militia will never again be the backbone of our military. These hurdles and many others lead me to believe the republican character of the citizens is through.

Sadly, I find the thinking of the New Right just about as concerning as that of Bernie Sanders-style democratic socialists or Black Lives Matter activists. It is far too elitist, too rejectionist, and, frankly, not conservative at all.

I agree with the conclusions expressed in Steve Sacks’s post at The Diplomat on the strengths and weaknesses of the Chinese People’s Liberation Army:

Xi Jinping and the Central Military Commission recognize that the introduction of advanced weaponry to a military force that is ill-trained and ill-managed will not result in a PLA that can achieve the party’s strategic objectives. However, new hardware enables Beijing to perpetuate its projected images of military strength while concealing continued shortfalls related to military reform.

U.S. defense analysts and policymakers should watch for indications of improvements across Xi’s identified critical PLA shortfall areas to generate clear and comprehensive assessments of progress within both PLA modernization and reform campaigns. Indications of continued progress can provide critical insight into party leaders’ confidence in the PLA’s ability to compete, fight, and win wars, while also highlighting areas of continued shortfall throughout the force. If military analysts and policymakers focus solely on the procurement of new hardware, longer range missiles, more capable ships, and stealthier aircraft, they risk only seeing half the picture and risk making the PLA out to be 10 feet tall.

Although the more aggressive stance that China has taken lately towards its neighbors does concern me, I’m not as concerned about the threat posed by the CPLA as many people in the U. S. for two reasons. First, I think much of the CPLA is focused internally. Second, I think that military doctrine is a vital force multiplier and China has several handicaps in that regard that they cannot address either with new hardware or training.

I want to draw your attention to a fantastic post at Morningstar by John Rekenthaler on the relationship between the performance of individual stocks and the performance of the stock market indices. Here’s a snippet:

The larger companies were far more reliable than their smaller rivals. Whereas 42% of the overall stock universe persisted for the full decade and posted a positive total return, 77% of the biggest 1,000 companies did so. Conversely, once the larger fish had been removed from the list, the success ratio of the next 4,000 stocks dropped to just 33%. Even though the decade contained a prolonged bull market, most smaller stocks recorded a loss, not a gain.

It’s full of interesting graphs. Although I recommend reading the whole thing, if you’re not willing to do that I’ll summarize his findings:

• The majority of stocks either decline or cease to exist over time.
• The stocks that go up over time tend to be those of large companies.
• Almost all of the stock indices performance is produced by a very small number of stocks.
  

  Bessembinder’s boldest claim was that 4% of the U.S. stock market’s companies accounted for its entire gains. Such math does not hold during bull markets. (If an index appreciated by 1% for the year, a single stock could well be said to have accounted for all its gains. If the index appreciated by 30%, then many, many stocks will be required for the task.) However, as shown by the following table, which measures the performance con

I look forward eagerly to his next post on the implications of it all. I would add that the small companies tend to employ more people relative to their total earnings than large ones do and that large companies are more likely to be subsidized in one fashion or another. Since so much of the increase in income and wealth inequality is derived from stock market performance, that means that government policy is actually subsidizing reduced unemployment and inequality.

In an op-ed in the Wall Street Journal Elliot Abrams seeks to craft a new foreign policy consensus based on six principles:

First, American security depends on leadership. The U.S. must remain the most powerful and influential nation in the world. Tempting though it may be, threats won’t simply go away if America retreats into isolationism. On the contrary, these challenges are likely to get worse.

Second, a strong America is a safe America. The U.S. must have a well-funded, effective military and security infrastructure to protect its people and deter aggression.

Third, strategic cooperation serves U.S. interests. Robust alliances among sovereign nations and the strategic use of multilateral institutions advance American security. The U.S. alliance system is a huge asset that must be strengthened.

Fourth, free and fair trade advances the prosperity and security of the American people. The U.S. must sustain its defense industrial base, lead efforts against predatory economic practices such as intellectual-property theft experienced in recent decades at the hands of China, and promote respect for the rules of international trade and commerce.

Fifth, we support a proud U.S. foreign policy that champions American values without apology.

Sixth, foreign policy should be responsive to all Americans—not only those in Washington or with the clout to hire lobbyists. The effect of trade deals on employment, for example, should weigh at least as much on policy makers as their effect on the corporate bottom line.

I would propose just four:

1. American hard and soft power is based on its economic strength. Its economic strength depends on a diverse economy in which primary production and secondary production play prominent roles. We cannot base our economy primarily on retail and health care.
2. An American military that depends on imported goods cannot be a strong military.
3. An over-extended American military cannot be a strong military.
4. We do not go abroad in search of monsters to destroy. We are the well-wishers to the freedom and independence of all. We are the champion and vindicator only of our own.

I don’t think they’ll catch on because there is more money to be made from the way we’ve been doing things for the last 30 years.

The editors’ of the Washington Post’s snap reaction to President Biden’s spending proposals resembles mine above:

Democrats worked to slash child poverty in their last coronavirus aid bill by expanding the child tax credit. Mr. Biden proposed keeping the expanded credit only until 2025, probably because making it permanent would be very expensive. Fighting child poverty should take precedence over free community college, and if Democrats expect to continue the expanded credit beyond 2025, they should budget for it now.

Even after limiting child tax-credit spending, the taxes the president proposed would not cover the whole cost of his plan over 10 years. In theory, tax hikes from his previously proposed infrastructure plan could fill the gap in later years, but only if Congress allows the programs with expiration dates to end and new tax increases to remain in place permanently. Moreover, it is unclear whether the amount Mr. Biden proposed spending on Wednesday would be enough to guarantee quality child care, paid leave and other promised benefits.

Mr. Biden pledged not to raise taxes on anyone making less than $400,000 per year. Meantime, the federal government is running huge deficits, even as new census numbers show that the United States is aging and population growth is slowing, which will strain already expensive federal old-age programs. Climate change, future recessions and other issues may require emergency spending on a scale policymakers cannot anticipate. Though many in Washington have set aside concerns about the debt, the nation is still entering uncharted fiscal territory.

Mr. Biden can keep his tax pledge or create a strong, sustainable federal safety net. He probably cannot do both.

while the reaction of the editors of the Wall Street Journal is even more pointed:

One question to ask is: Haven’t we tried this before? What is Head Start if not government pre-school education and child care? Weren’t school lunches and the Women, Infants and Children program supposed to prevent child hunger? Food stamps, welfare checks, child-care subsidies and a supplement to earned-income, plus public housing. Weren’t all of these programs and more from previous decades supposed to end poverty?

Why did the trillions of dollars spent on those programs fail? And if they didn’t work, why do we need more?

For the candid answer, listen to Rahm Emanuel, the Chicago Democrat who explained the political calculation this week to the Washington Post: “Once everyone’s in, all the parents want in. Then it’s not a poor person’s program or a poverty program. It’s an education program. . . . That to me, that is essential. It changes the center of gravity once it’s for everybody.”

So much for the “safety net” to prevent poverty. This is now about mainlining benefits to middle-class families so they become addicted to government—and to the Democratic Party that has become the promoting agent of government.

Democrats are enamored of this principle of “universality” because it has worked to sustain the popularity of Social Security and Medicare, despite their failing finances. But those programs promise benefits in return for work across a lifetime. The Biden New Deal isn’t a deal at all. Most of its programs are free handouts on the model of the 1960s Great Society.

A limitation unmentioned by either is that the federal government does not have the authority to mandate two years of universal pre-school. It can make funds available contingent on such a mandate from the states but it cannot impose one itself.

As I said before I don’t object to education, health care, child care, or elder care but I do think that one year’s worth of spending on those things should be paid for with one year’s worth of taxes and if you don’t have the courage to do the latter, doing the former is not particularly virtuous. Both ends and means are important not just the benignity of your intentions.