There’s something important missing from Paul Krugman’s paean to Denmark in his latest New York Times column. Nowhere in his catalog of social benefits that Danes have chosen to convey on themselves does he mention that every one of those social programs was put in place when Denmark was comprised of 98% ethnic Danes and 98% at least cultural Lutherans. Those are not insignificant. That means that when they were put in place the Danes were less predisposed to avail themselves of the benefits than Americans would have been and there was a general understanding that they were helping themselves rather than being called on to help non-Danes. Us rather than them.

He also fails to mention that Denmark, like the other Scandinavian countries, is backing away from its expansive social programs, has just banned the burqa, and is a country of under 6 million people.

Other than that it’s a fine column.

In her column at the Washington Post Megan McArdle echoes the sentiments I expressed yesterday about the report of sexual abuse of children and teens by Catholic priests in Pennsylvania:

According to news reports, the church hierarchy in Pennsylvania and beyond has already denied Christ’s gospel three times: once when it sheltered predators in silence; once when it failed to remove everyone who was involved in covering up any crime; and again when two of the six dioceses involved tried to shut down the grand jury investigation that produced the report. Now they face the same choice Peter did.

They can offer the full record of faithlessness in abject penitence, witnessing for repentance and redemption even at risk of martyrdom. Or they can deny Him a fourth time by minimizing the past and protecting those who helped maintain that grisly silence. Which is to say, they can choose to be a millstone around the neck of the faithful — or the rock on which the church can be rebuilt.

I wish she were a little more careful in her diction. I do not approve of the actions of these rapists but my influence over them is limited. They are not the Church. They are merely the Church hierarchy. And, as she notes, they are unshriven.

There is nothing like a coordinated editorial against the president to convince the president and his supporters that journalists are not engaged in a conspiracy against him.

At the Sacramento Bee Erwin Chemerinsky does a pretty good job of distinguishing between the two present schools of thought on jurisprudence:

Originalism is the view that a constitutional provision means the same thing today as when it was adopted, and that its meaning can be changed only through a constitutional amendment. This approach to constitutional interpretation is attractive because there is a desire to think of Supreme Court decisions as being more than just a reflection of who is on the bench at a particular time.

But this is neither desirable nor possible. The original understanding of the Constitution is unknowable, and even if it could be known, it should not be binding today.

His argument is essentially that such a strict interpretation of the law impedes the Court’s ability to do justice. The opposite point of view is that it is not the Court’s role to do justice but to interpret the law. Doing justice is the responsibility of the Congress.

That the original understanding of the Constitution is unknowable is either a lie or no more true of the Constitution than of any other law. At what point does the understanding of a law become unknowable? After 200 years? After 100 years? After 50 years? The day after it is enacted? The authors of the Constitution left a substantial body of writing explaining what they meant and much of it is quite readable, unlike the turgid Supreme Court decisions of today.

The Supreme Court and the Congress operate along vastly different lines. The Congress runs for office every two (or six) years; Supreme Court justices serve for life (“in good behavior”). Congress makes its decisions for political reasons; the Supreme Court, presumably, through expertise in the law.

No Supreme Court justice has ever been removed from office via the impeachment process. It was tried once.

To argue that the justices follow their consciences rather than the law, as Mr. Chemerinsky does, is to argue for a much more openly political Supreme Court and, because of their lifetime tenure, a much more tyrannical Supreme Court. If we are to have a Supreme Court that rules by the seats of the justices’ pants, they should run for office like Congressmen.

That the Congress has failed to act time after time is a reasonable complaint. The remedy for Congressional inaction on the issues of the day is to stop re-electing the same do-nothing Congressmen term after term after term.

Yet another scandal involving Catholic priests abusing children and teens has been revealed, this time in Pennsylvania. From U. S. News and World Report:

HARRISBURG, Pa. (AP) — A priest raped a 7-year-old girl while he was visiting her in the hospital after she’d had her tonsils removed. Another priest forced a 9-year-old boy into having oral sex, then rinsed out the boy’s mouth with holy water. One boy was forced to say confession to the priest who sexually abused him.

Those children are among the victims of roughly 300 Roman Catholic priests in Pennsylvania who molested more than 1,000 children — and possibly many more — since the 1940s, according to a sweeping state grand jury report released Tuesday that accused senior church officials, including a man who is now the archbishop of Washington, D.C., of systematically covering up complaints.

The “real number” of abused children and abusive priests might be higher since some secret church records were lost and some victims never came forward, the grand jury said.

While the grand jury said dioceses have established internal processes and seem to refer complaints to law enforcement more promptly, it suggested that important changes are lacking.

There are actually three grave scandals involved. The first and most serious is the child and teen sexual abuse. The second is the coverups by other priests and bishops. The third is that the man under whose papacy many of the abuses took place was canonized. That he created a climate in which the Church hierarchy were predisposed to cover up these abuses and shield the abusers can now hardly be denied.

I will not utter a word in defense of the abusers or their co-conspirators in the clergy. I am proud to be acquainted with the man who formulated the Chicago Archdiocese’s policy 35 years ago which amounts to “Call the Cops”. Don’t try to hush it up. Don’t shield the abusers. Don’t try to handle it internally as a disciplinary matter. Turn the abusers over to law enforcement. They are criminals.

I will not dwell on the anti-Catholic tone of many of the reports in the media. Neither the clergy nor the Church hierarchy are the Church, however much the clergy and the hierarchy think that is the case. IMO they barely qualify as Christians let alone as the Church.

In the Catholic tradition forgiveness has three prerequisites: confession of one’s sins, a sincere intention to change one’s actions, and penance. Paying the penalty for one’s actions is not penance. Neither is foisting the costs of your misdeeds on the laity. Confession, reform, and penance by the Catholic clergy and hierarchy are still wanting and long overdue.

In his Wall Street Journal column Holman Jenkins suggests some interesting analogs to Elon Musk. Howard Hughes:

It is not a bad time to remember that Elon Musk created two amazing companies—not counting his role in founding PayPal —in the form of his car company, Tesla, and his rocket company, SpaceX.

He likely would not have achieved these successes if he weren’t a little crazy. One reader emails to compare him, both flatteringly and unflatteringly, to Howard Hughes.

and Enron:

Not to elicit howls, but Enron was a company that found itself trying to sustain a stock price its underlying business couldn’t support. Here was an overlooked progenitor of what became the signature corporate scandal of its era. A gas-pipeline company that was selling for $20 suddenly was boosted to $90 based on internet-era hype about the commodification of everything. Notice any similarity to today’s belief among a certain public that Tesla is solving the climate problem and government policy will guarantee Elon’s success? What followed, at Enron, was management’s resort to funky, illegal and then frankly piratical measures to support a valuation received from investors intoxicated with new-age thinking.

Are those really reasonable comparisons to Elon Musk? I don’t recall either one of them basing so much of their business on rent-seeking. Maybe a better comparison for Elon Musk is John D. Rockefeller. After all the basis of his fortune was war-profiteering during the Civil War.

Companies whose stock prices far exceed what its underlying business can support are hardly uncommon these days. Indeed, the biggest names in stocks, i.e. Facebook, Apple, Amazon, Netflix, and Google, all fall into that category.

Maybe we should stop thinking that there is any relationship between stock valuation and earnings. Maybe there is just too much money looking for a presumedly safe landing spot.

I found Mary Anastasia O’Grady’s Wall Street Journal column on changes in Canadian economic policy interesting:

Canada’s ability to attract capital suffered a setback when oil prices fell hard in 2015. Under Mr. Trudeau, who took office in November of that year, it hasn’t caught up. In an April 13 blog post, Jason Clemens and Niels Veldhuis of the Vancouver-based Fraser Institute noted that Canadian foreign direct investment amounted to C$31.5 billion in 2017, down 56% from C$71.5 billion in 2013. The authors added: “Since peaking in the fourth quarter of 2014, total business investment adjusted for inflation—excluding residential housing—is down almost 17.0 percent. Private-sector investment in factories and other structures is down 23.3 percent. And investment in intellectual property is down 13.3 percent.”

The causes of this capital strike seem to be taxes and regulation, as more than one business leader has noted. Suncor Energy CEO Steve Williams said in February that his company is “having to look at Canada quite hard. The cumulative impact of regulation and higher taxation than other jurisdictions is making Canada a more difficult jurisdiction to allocate capital in.”

For prospective investors, the business climate in Canada is naturally compared with that of the U.S. Recent U.S. tax cuts, including accelerated depreciation, and President Trump’s deregulation push, are increasing the pressure on Canada to step up. In an April interview with the Canadian Press, Royal Bank of Canada president and CEO Dave McKay described the competitiveness problem behind what he called “significant” capital flight and called on the government to address it. “If we don’t keep the capital here, we can’t keep the people here—and these changes are important to bring human capital and financial capital together in one place,” he said.

The new carbon tax is only one of the green policies hurting Canada’s competitiveness. Ontario has long been the nation’s manufacturing hub. But in 2005 the province began phasing out the use of coal for electricity generation, and in 2009 it passed the Green Energy Act, designed to force industry and consumers into renewable energy. The net effect has been skyrocketing electricity prices in the province and declining manufacturing output.

The reaction by the Ottawa government has been to retrench on their environmental policies a bit by restraining the carbon tax. I’m sure they’ll have more flexibility to return to the prior policies after the election.

I’m skeptical about carbon taxes. Can anyone give me an example where they’ve actually worked? Other than as a means of producing revenue, I mean. The basic problem I see is that they’re regressive while carbon emissions are not distributed evenly through the population but increase geometrically with income. In other words the rich can just pay the tax.

Don’t cite European countries as an example. Most of their reductions in emissions over the last 30 years have been realized by exporting heavy industry to China. Not only is that not a solution, it exacerbates the problem.

I found Jared Bernstein’s Washington Post column on the relationship between productivity and wages excellent:

When economists tick off the reasons for our current wage problems, we usually include “slow productivity growth” on the list. Well, somebody asked me the reasonable question: Why should that matter?

Productivity, or output per hour, is growing slowly, but it’s still up, so why should it explain stagnant real wages? And at a more intuitive level, suppose a business figures out how to produce more efficiently and its productivity goes up. Where is it written that it must share that extra income with its workforce? Isn’t a big chunk of the inequality problem precisely that it doesn’t?

because it made me think. Pay particular attention to the two graphs (gap between productivity growth and median compensation and labor share of total income). The second graph tells us something about which we might not be aware: that labor’s share of income is about what it was 60 years ago but lower than it was 40 years ago.

I have been trained to try to explain changes by first considering changes in other factors. What are the most significant changes in public policy over the period under consideration, 1958 to present? I would say that they were Medicare and greatly increased immigration. Just a thought.

The first graph made me want to know the standard deviation. Is it possible that the entirety of the gap between productivity increases and median wages can be explained by a loss in bargaining power among the least productive workers?

Whatever the factors that underpin the increasing gap between productivity and median wages, the very fact of the relationship between productivity wages means that we should want more domestic capital investment. The most important factors in productivity growth are capital investment and the nature of the work being performed. In other words merely preferring areas in which increased capital investment does not produce much more output, e.g. education, would produce the gap illustrated in Dr. Bernstein’s first chart.

While I think that increased scrutiny of medical education in the United States, one example of which is this op-ed in the Washington Post from medical resident Akhilesh Pathipati:

U.S. physicians average 14 years of higher education (four years of college, four years of medical school and three to eight years to specialize in a residency or fellowship). That’s much longer than in other developed countries, where students typically study for 10 years. It also translates to millions of dollars and hours spent by U.S. medical students listening to lectures on topics they already know, doing clinical electives in fields they will not pursue and publishing papers no one will read.

Decreasing the length of training would immediately add thousands of physicians to the workforce. At the same time, it would save money that could be reinvested in creating more positions in medical schools and residencies. It would also allow more students to go into lower-paying fields such as primary care, where the need is greatest.

is not only completely warranted but long overdue, I find it sad that a physician is so ignorant of public policy related to medicine, economics, and human behavior in general, let alone an MD-MBA as Dr. Paripathi is. I strongly doubt that lowering the cost of medical education will have much effect on the number of graduate physicians who pursue primary care. IMO the greater factors in choice of specialty are revenue expectations and lifestyle reasons not costs.

But the biggest thing missing from his analysis is that the gating factor in the number of physicians isn’t the number of qualified applicants or the length of classroom medical education, or any factor other than the number of medical residents that the Medicare system will pay for. Most Americans aren’t aware of it but each and every medical resident in the United States is subsidized to the tune of $80,000+ per year.

Post-high school medical education in the United Kingdom, from classroom to specialization is around nine years. It’s the same in Germany and slightly longer in France. We, as in so much are the outlier.