Good For What Ails Us

On the other hand I tend to agree with the editors of the Economist:

From mid-2009 to the end of 2017, wages and salaries grew by only 2% a year on average. That outpaced inflation, but mainly because petrol prices slumped in 2014. Today, however, paycheques are fattening faster. In the year to the first quarter of 2018, wages and salaries grew by 2.9%—equal to the average growth, though hardly the quickest, seen during the 2000s.

Plenty of outside opportunities give workers negotiating power even without labour unions, which have been in near-terminal decline. In May 2.4% of workers quit their jobs, the highest figure since 2001—good news in an economy that has been plagued by falling dynamism. Job-switchers are banking median pay rises of nearly 4%, according to the Atlanta Fed. In the jobs boom of the late-1990s, overall wage and salary growth reached 4.3%.

At that time, fast productivity growth enabled wages to boom without provoking inflation. Yet the second benefit of economy-wide labour shortages is that they may precipitate faster productivity growth, which has been disappointing in America—and in other rich countries—since the financial crisis. If less profitable firms have to fold because they cannot pay enough to attract workers, their labour and capital can be put to better use. A similar process can take place within firms. Plagued by resignations, Dunkin’ Donuts, a purveyor of starch, sugar and caffeine, recently asked its ex-employees which tasks they disliked most, and then automated the dullest, such as writing labels and checking the quality of coffee grounds. Less prosaically, worker shortages might encourage firms to adopt path-breaking technologies such as artificial intelligence.

A labour shortage is also likely to reduce inequality. As wages stagnated, corporate profits—and stockmarkets—touched record highs. That has contributed to a feeling that the economy has tilted towards capital and away from labour. From 2000 to 2014 labour’s share of national income fell from just over 57% to below 54%. If rising wages reduce profits, labour’s share could yet rebound. Moreover, the biggest wage gains in a tight labour market tend to accrue to the poorest workers. Full-time employees at the 10th percentile of the income distribution are earning almost 4% more than a year ago.

Firms are also reaching into untapped pools of labour. For years policy wonks have worried about rising disability rolls. Today nearly 10% of disabled workers who were outside the labour force a year ago are employed, a figure that has been steadily rising. There have been scattered reports of firms hiring more ex-convicts. Even a 30-year-old jobless man who recently gained notoriety after his parents went to court to evict him was offered work by a pizza chain as a publicity stunt.

Those are the reasons I’ve advocated the policies I have. They are intended to tighten the labor market. In addition we either need to relax the caps on certain jobs or else tie pay raises in those jobs to increases in productivity.

There will be a difficult transition while whole sectors in which we don’t have either competitive or comparative advantages are de-emphasized while areas in which we can be competitive or have a comparative advantage receive more. The end product will be more efficient, wealthier, and more equal. The alternative is remaining on the road we’ve been on which leads to a small aristocracy, a large impoverished peasantry, and a struggling middle class.

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Fairness and Justice

In his op-ed in USA Today chiding the U. S. for President Trump’s tariffs and attributing China’s enormous trade imbalance with the United States to the workings of the market, I wish that Cui Tiankai, the Chinese ambassador, had addressed several questions.

How do enormously subsidized state-owned enterprises fit in his market theory?

How do China’s 25% average tariffs (in comparison with 5% U. S. tariffs) comport with a free market?

How does the dumping (selling below production costs) of steel on world markets, something the World Trade Organization found that China did, facilitate free trade?

How is a non-convertible currency and opaque state-owned banks that lend to favored businesses consistent with a free market?

What is the role of slave labor in a free market?

And those do not even touch the thorny issue of intellectual property.

There is one issue on which I agree whole-heartedly with the ambassador:

With all of this as a backdrop, it is absolutely beyond our understanding that the U.S. government initiated the trade war with such determination. Does the U.S. government genuinely believe that China would possibly yield to such unreasonable policy? Anyone familiar with Chinese history knows that “maximum pressure” doesn’t work for our nation.

The tariffs are unlikely to change China’s behavior. But they might change ours.

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About China

Read this rather length valedictory from an American college professor who’s been teaching in China and, unless you’re an old China hand, you will likely learn an enormous amount about China. What particularly struck a chord with me were his remarks about loving the Chinese people but hating the Chinese government.

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What I Think and What I Believe

I did not vote for Trump; I do not like Trump; I wish he weren’t president; I can’t imagine voting for him in 2020. I also believe it’s morally wrong for me to mock, belittle, or demean anyone and I do my level best to treat all human beings that way. I am a human and imperfect; sometimes I succeed at that better than others.

That belief of mine is rooted in Catholic moral values. Merely by virtue of being a human being every human being is worthy of dignity, respect, and consideration. That doesn’t prevent me from characterizing, doing analyses of actions, or making judgments but it does prevent me from mocking. Consequently, I’d make a lousy comic since so much of comedy is mockery. I like the Marx Brothers because most of their mockery is turned on themselves.

I don’t support presidents. I support or oppose policies and, again, I do my level best to do so on an empirical basis. I am a human and imperfect, etc.

I agreed that we needed a lower corporate income tax. I disagreed that we needed a lower personal income tax. The results aren’t fully in yet and it will be difficult to disaggregate the consequences of the reforms to the corporate income tax from those to the personal income tax.

I agree that we need to control immigration better than we do. I have written at length on this subject and believe it is best facilitated by employment enforcement. Further, I think that failing to do so has had terrible effects on blacks and recent immigrants. I think that Trump’s wall would be an error. I think that President Obama’s policy was the inevitable consequence of a substantial influx of families with children and the Flores decision while Trump’s “zero tolerance” policy which split up families was wrong and a mistake. President Obama’s policy ran afoul of moral hazard; President Trump’s policy was just wrong.

I don’t think the Russians are our friends. I do think that our policy WRT to Russia has been stupid and counter-productive over the last 25 years. It’s probably too late to do anything to remedy that other than heeding the First Rule of Holes.

I think it would be far more effective to get on our high horse about Russian cyber-attacks and information operations if we had a high horse from which to preach. That’s not a moral equivalence. It’s a statement of fact. We’ve been engaging in our own meddling and cyber-attacks for decades at a scale undreamed of by any other country. We are the grand champion and, sadly, our motives are not always pure. At the very least it confuses other countries with regard to what we’re outraged about.

I think that trade should be used as a tool to help the greater part of the American people rather than to promote the interests of a narrow sliver of the American people. Sadly, that has not been the case for many years.

I agree that China has not played fair in international trade. I disagree that tariffs will change their behavior. It will change our behavior and that may be enough.

I think that our State Department and intelligence apparatus has been playing lone hands for many years. They are, reasonably enough, resisting a change. Change is necessary but I’m skeptical that Mr. Trump will be able to effect it.

I don’t think of myself as a Trump supporter. I think of myself as a policy and political analyst, amateur class. Am I wrong?

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Checking the Checkers

or quis custodiet ipsos custodes. Recently, RealClearPolitics has begun an initiative to monitor the various fact-checking sites. In a recent piece they singled out Snopes.com for praise:

Snopes deserves praise because of the six sites we are examining — which are the same ones helping Facebook determine what you see on your feed — we have found that it is the least likely to “fact-check” matters of opinion. It is impossible to verify a subjective matter, so “fact-checking” opinions is a fool’s errand. It is also a surefire way to introduce bias into the fact-checking process, as the natural counter to an opinion is often another opinion.

We have found that since we started our project, Snopes has fact-checked opinions only 2 percent of the time. In other words, 98 percent of the time it sticks to matters of verifiable fact. Such as achievement is even more remarkable given that during this period, Snopes has produced the second-most articles of the six fact-checking outfits. The Weekly Standard comes in next most reliably at 95 percent, but it published only 44 fact checks to Snopes’ 400. Only PolitiFact released more fact checks than Snopes since we started Fact Check Review — 434 — and it comes in fourth place at 85 percent.

While Snopes deserves credit for its “just the facts, ma’am” approach to selecting its subjects, we have observed anecdotally that Snopes writers are in the habit of injecting editorial language or opinions into their fact checks. For instance, they called an unproven claim on knife crimes in London “heavy on Islam-blaming but light on evidence.” They labeled a questionable article on supposed “animal brothels” in Germany a “transparent attempt to spark fear and hatred.”

I think there’s a “camel in the tent” dynamics to the fact-checking sites. While they probably all begin with benign intentions since human beings have opinions and prejudices and the present “point of view” school of journalistic writing encourages the writer to air his or her prejudices, veering into opinion, as RealClearPolitics notes, is inevitable. From there it’s just a short hop to fact-checking opinions and an erstwhile fact-checking site is now another editorial page.

I wish the folks at RealClearPolitics luck. We could use an empirical measure of the bias or lack of it by presume fact-checking sites but I don’t have my hopes up.

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Riddle Me This

In recent days, weeks, and months at Outside the Beltway Steven L. Taylor has had a series of fine posts on the flaws in our electoral system including:

“The US’ Flawed Democracy”
“The ‘A Republic, not a Democracy’ Library”
“‘A Republic, not a Democracy’ Redux”

I do have one question which I don’t think Dr. Taylor addresses directly. According to Gallup, 27% of the people identify as Republicans, 29% of the people identify as Democrats, and 43% identify themselves as independents. In a fairer, more democratic system, why shouldn’t the composition of the Congress be 27% regular Republicans, 29% regular Democrats, and 43% something other than regular Republicans or Democrats? In other words in a fairer more democratic system why should the unrepresentative regular parties dominate the Congress?

I would also hasten to point out that the unrepresentative quality of the House and Senate can both be mitigated without amending the Constitution if districts were made smaller and the House were made larger and if states were routinely divvied up into smaller units, each with its very own pair of senators. California presently has a population an order of magnitude larger than the entire United States of 1790. In 1790 the House had 67 seats. California presently has 53. The notion that the present House is remotely representative is absurd on its face.

All that would require would be convincing representatives and senators to relinquish some of their enormous power which, as we should all know, is impossible.

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You Are Here

At L’Ombre de l’Olivier Francis Turner has what strikes me as a very fair summary of l’affaire de DNC email hack, Russian cyber-ops, and Trump collusion. Go over there and read his six bullet points. Maybe it’s just my own prejudices but that seems fair to me.

He summarizes the “narratives”, the different explanations various groups are putting forward to it, with this:

The lefty narrative is that Trump colluded with the Russians to get elected and has done so ever since, hence he is guilty of TREASON and should be impeached etc. Also he’s the second incarnation of Adolf Hitler, is Racist, Sexist, Homophobic, Islamophobic and everything else ending it -phobic or -ist except communist. According to that narrative what he said in the Helsinki press conference was evidence of the above. In particular TREASON!!!!1111!!!!. For more detail just scan your favorite social media

The MAGA narrative is that Trump is heroically fighting the Deep State and MSM and heroically trolling them. Also he’s deliberately buttering up Putin in much the same was as he did Kim so as to do a deal with him that achieves the ends of MAGA. I’d say this post is more or less representaive.

The non MAGA righty narrative is pretty much this Victory Girls blog post and this Powerline one. Basically Trump should STFU sometimes and not deny that the Russians almost certainly were involved in electoral-related tricks.

The key thing to note is that the facts permit multiple things to be true. It seems to me quite likely that the Russians either wanted a Trump victory or a damaged Clinton and didn’t really care which because in their judgment either was likely to go easy on additional sanctions etc. However, they didn’t have to collude with the Trump campaign to help him. In fact their likely end goal was pretty much what we see today – a US electorate that is split down the middle and unwilling to talk to each other and a Presidency that is embattled.

Other than his perseveration on the -phobic bit, i.e. if you omit the balance of the first paragraph after its first sentence, is that accurate or not accurate? Fair or not fair?

He goes on to quote an anonymous Facebook post:

So let’s have a little thought exercise here, for the fun of it.

Assume [all the facts above regarding the Russians, add in additional ones as desired]

Go ahead and assume that the Russians did everything they possibly could, up to BUT NOT including actually hacking the voting hardware and software employed by the American people to cast their ballots.

With that all assumed…

Who cares?

No, seriously, who cares?

which continues at some length and considerable profanity in explaining why none of it really makes much difference. You should read that, too.

I also suggest you read Lawfare’s many, very fair-minded posts on this subject.

I’ll conclude this post with some questions and answers.

  1. Did the Russians hack into the DNC email? I’m convinced they did.
  2. Did Donald Trump or his campaign knowingly collude or collaborate with the Russian government in doing that? I don’t know. Isn’t that what the Mueller investigation is supposed to determine?
  3. Did the subsequent Russian information operation result in the 2016 presidential election being thrown to Donald Trump? It might have been one among several factors but I doubt it was dispositive.
  4. Did the Russians probe U. S. election systems? I’m convinced they did.
  5. Did they add Trump votes, remove Clinton votes, or change Clinton votes to Trump votes? I have seen no evidence that happened.

And the most important question: what should we do? IMO we should do three things:

  1. Let the Mueller investigation continue to go about its business.
  2. We should stop interfering in other countries’ elections and encourage the Russians and the Chinese in particular to do the same in no uncertain terms.
  3. We should stop using Internet- or wireless-connected voting machines and systems.
  4. Government agencies should take cyber-security more seriously than they apparently do.
  5. Keep calm and carry on.

Complete or incomplete? Fair or not fair?

Update

I also want to commend to your attention this post by Jay Michaelson at The Daily Beast. For me this is the key passage:

Now is not the time for Trump’s critics, liberal and conservative alike, to play fast and loose with the truth.

but you may find some of the rest of it edifying.

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Asked But Not Answered

Apparently, among the things that Lisa Page said in her testimony before Congress was that Hillary Clinton’s email server was hacked by the Chinese.
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I’ll repeat the question I asked this morning: does it make a difference whether her bootleg email server was hacked by the Russians or by the Chinese?

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Distinctly Vulnerable

I want to recommend Jack Goldsmith’s excellent post at Lawfare, “Uncomfortable Questions”. Whether you’re vehemently anti-Trump, ardently pro-Trump, or something in between, it should make you squirm a bit. Here’s just one of its core insights: our extremely free press renders the United States distinctly vulnerable to phishing attacks of the sort that cracked the Democratic National Committee:

In this light, consider the standard phishing attacks described in Mueller’s indictment, which resulted in the theft and release of Democratic Party information that, in the unregulated U.S. speech environment, went viral and had an enormous impact that still reverberates. (President Obama once described the operation as “not particularly sophisticated.”) There has been a lot of talk and a bit of action about hardening voting systems, cleaning up fake accounts on social media, and cracking down more on propaganda efforts on social media of the type Mueller outlined in his February indictment. But when I read Friday’s indictment I thought: We have done nothing as a nation to redress the tactic of phishing, and once information is stolen and released, there is no possibility of regulating its use in the American free speech environment. Expect much more phishing and related tactics in November and in the 2020 presidential campaign.

To it I’ll add my own observation: if you think that obscurity makes you invulnerable, you probably shouldn’t have your own email server.

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Right Problem, Wrong Solutions

In his op-ed at RealClearPolicy, I think that Todd Hitt is drawing attention to a genuine problem. Although in many cases complaints about a labor shortage are just a stalking horse for trying to keep wages low, population mobility is a real issue:

In 2017, fewer Americans moved than in any year in the last 50 years. The U.S. mover rate is now 11 percent, half of what it was just 30 years ago. Instead of moving for a new job, today’s out of work Americans are more likely to simply drop out of the workforce. The University of California at Berkeley’s Enrico Moretti has even connected the decline in labor mobility to increased income inequality.

The result? Fewer Americans are able to access the American Dream. Indeed, fewer Americans believe in the American Dream.

Newspapers are filled with stories about employers searching for workers. NatureFresh, a Canadian company that was planning to expand to Ohio, put those plans on hold because it couldn’t find enough workers. That’s a multinational company that wanted to expand in the United States, but couldn’t because we don’t have the labor. Those jobs will go elsewhere. The company’s president, Peter Quiring noted, “It’s not a NatureFresh problem … [It’s] a coast-to-coast, border-to-border problem.”

Unfortunately, his identification of the problem is a lot better than the solutions he proposes, at least in part because I don’t think he understands the problem. I think there are at least two.

First, we don’t have the same labor force we did seventy years ago. People won’t leave their present social support systems to go to a place where they’re uncertain of what may meet them. That, among other reasons, is why blacks move to Atlanta to find work rather than North Dakota.

But possibly even more importantly inducing a worker is not enough. In two job or even two career families, moving has to make financial sense for the whole household and that can be a tall order.

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