In his Washington Post column Michael Gerson lurches uncontrollably towards the point I made several years ago. Republican (small r) government is impossible without moderation:

Civility is not weakness. It is the native tongue of a successful democracy. What Stephen L. Carter calls “civil listening” allows people who are opponents to avoid becoming enemies. Civility prevents dehumanization.

Compromise is not surrender. It is the lubricant of a successful democracy. What Jonathan Rauch calls “a cardinal virtue” allows for incremental progress on difficult issues such as health care. It is a moral principle that elevates progress on the common good above ideological purity.

Moderation is not indecision or centrism (as important as political centrism may be). It is the mode or mood of a successful democracy. What Aurelian Craiutu calls “a difficult virtue for courageous minds” puts an emphasis on reasonableness, prudence and balance. It is a principle rooted in epistemological modesty — a recognition that no one possesses the whole truth.

Moderation takes more than one form. Garbing immoderate actions or policies in moderate language is not moderate.

There are many causes for the breakdown in civility, compromise, and moderation we’re witnessing today. Among them are the vast amount of wealth being concentrated in few hands, the necessities of political fundraising, variations kinds of isolation including physical, occupational, and social, the conviction that those who disagree with you are evil, the pernicious idea that those whom you deem evil should be suppressed, and, let’s face it, basic disagreement not just about ways and means but over goals.

For no particularly good reason, possibly prompted by looking through my dad’s photos as I did on Father’s Day, I began thinking about how my siblings and I have fared compared with my parents.

My parents were the first people in their respective families to graduate from high school. They both went on to attend and graduate from college and both obtained higher degrees. My siblings and I always assumed we would attend college—we never considered anything else. One of my siblings and I went on to a higher degree. A couple of my siblings’ spouses have as well.

Adjusted for inflation my father earned more in his last full year of life than any of us have in a year. My wife and I have a family income higher than my parents’ highest family income (again adjusted for inflation) as does one of my siblings. The rest of my siblings have never managed a family income higher than my parents.

With the exception of one of my siblings my siblings and I have found maintaining a middle class lifestyle a strain from time to time. We’ve been frugal.

Of my siblings, their spouses, and I all are retired except for me and several of my siblings’ spouses. I’ll probably continue working longer than any of them.

My nieces and nephews have all graduated from college. Roughly half have gone on to post-graduate education and I expect that more will. It’s early to say what their incomes will be or whether they’ll remain middle class.

Consider that everyone in my family has an IQ at least two standard deviations above normal (some of us considerably higher), we’re all industrious to a fault, and by and large we’re good-looking and personable. No substance abuse (as far as I know) and no criminal history. And we’re just getting by. You might think that people who are so hardworking and intelligent would prosper. You would be wrong. We just don’t have enough guile.

I can’t imagine how the vast majority of the people who don’t have our gifts and advantages manage. My guess is that many don’t.

I searched Mario Schulz’s post at War on the Rocks for an answer to that question in his post “Germans Should Accept What a Military Is For, or Get Used to Disappointment”. I was the one who was disappointed.

Clausewitz answered that question for us: war is the pursuit of policy by other means. The Germans are accomplishing their policy objectives without war and effectively without a military. Why should they bear the costs in blood and money (to coin a cliche) of a military? They’ll always have the United States to bear those costs for them.

At RealClearMarkets Doug Kass collects a group of very dumb things said by very smart people some of which may surprise you. He concludes with a quote from Janet Yellen:

Would I say there will never, ever be another financial crisis? … You know, probably that would be going too far, but I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will be.

What’s the smart bet here? I think that until and unless we change the incentives that are in place we’ll keep getting the results we’ve gotten. More quickly and more catastrophically with each turn of the crank.

At The Daily Beast Matt Lewis considers the history of the U. S. health care system:

During World War II, government intervention in wage controls had unintended consequences that are still being felt today. Businesses couldn’t woo top talent by offering them more money, so they instead sweetened job offers by adding fringe benefits, including health care. The result was a Catch-22: Because health insurance was paid for by a third party (your employer) instead of the beneficiary (you), there was no incentive to keep costs low. As a result, almost everybody had to be an employee—because health care costs were too high to pay for out-of-pocket.

We’re still living with the consequences today. As Sen. Rand Paul recently observed, “The reason capitalism doesn’t work in health care is the consumer is disconnected from the product… When you connect with the consumer, and the consumer cares about the price, guess what? The consumer will shop. And when the consumer shops, competition works. But we’re not really doing that in health care.”

And as Jeff Jacoby noted years ago, “Why is it that in every other field where enormous technological strides have been made, total costs have fallen over time, but in health care they have increased? The answer is simple: Health care costs so much because most of us pay so little for it. And we pay so little—out-of-pocket expenses amount to just 14 cents of every health dollar spent in this country—because a third party nearly always picks up the tab. For most working Americans, that third party is an insurance company paid by their employers.”

I think he’s overlooking something. If weavers had the kind of control over how weaving would be done in the 18th and 19th century that physicians have over how medical services are provided, none of us could afford to buy underwear. Employers are only part of the problem. A much larger component of the problem is that who should provide medical services, what services should be provided, when they should be provided, and at what cost is determined by those getting paid for the services.

I do agree with his conclusion. When the United Kingdom was adopting its National Health Service we were consigning the health care of American workers to their employers. Now health care is shared among employers, the federal government, and state governments. There are so many interests at stake it will be impossible to untangle them.

There’s an old joke about traveling in Maine. After wandering for hours along rural roads, some travelers stopped at a general store and asked those sitting on the porch for directions. After thinking for a while the Mainesters replied “You cahn’t get they-ah from he-ah.” That’s how it is with affordable, effective health care in the United States. We can’t get there from here.

The questions that should be asked are

1. Does the proposed reform move us in the direction of a more affordable, more effective, and more just system?
2. Does the proposal stand on its own? Or will it require frequent adjustment? Our history tells us we don’t have the appetite for that.
3. Over what time frame do you anticipate the process of change to take place?

Those are the questions that should have been asked but weren’t in the mad dash to enact the Affordable Care Act in the first place and those are the questions that should be asked about the attempt to “repeal and replace” it.

In his Washington Post column, greatly impeded by a lack of knowledge or intuition into China (or the United States, for that matter), David Ignatius engages in a “thought experiment” to look at the idea that war between an established power and a rising power is inevitable AKA “the Thucydides trap” from the Chinese perspective:

1. Economic and cultural power is no substitute for military power. China was a dominant economic and intellectual force when it first encountered European power, but it lacked technologically backed military muscle. Mistake.
2. Weakness breeds contempt. Western powers made a show of pledging loyalty and tribute to China’s rulers and warlords, but this masked hostile intent. The Chinese were wooed and corrupted by the West’s influence. Mistake. Allison quotes Thucydides’ precept: The weak (and by extension, the corrupt) suffer what they must. Rooting out (or at least controlling) corruption is a central Chinese task.
3. The West preached openness as the way for China and other Asian nations to absorb advanced technology and Western know-how. But the West exploited that openness to create dependence. Even Japan, which built an astonishing manufacturing base, remained dependent on Western raw materials and energy supplies. Mistake. The result was a catastrophic war.
4. Networks of aid and assistance are good covers for expanding influence and military power. The Marshall Plan was a sublime scheme for spreading U.S. influence and blunting the Soviet Union, in the name of relieving humanitarian suffering. China is devising similar outreach through the Asian Infrastructure Investment Bank and the cooperative development project known as “One Belt One Road.” The United States has done everything it can to prevent other nations from signing up to China’s initiatives. Mistake. Asian development is the handmaiden of Chinese power.
5. The United States argues that transparency and an international rules-based order are the best guarantee of security for all sides. But what this really means, through modern history, is that the United States makes the rules and others obey the orders. Adherence to the “rules” would have checked China’s expansion into the South China Sea (allowing perpetual U.S. domination). And if last year’s Philippine arbitration ruling had been enforced, it would have rolled back China’s projection of power through reclaimed islands and military bases. Mistake. History teaches that China should proclaim that its intentions are limited, benign and non-military — even as its power expands and it creates the military bases that will allow it to challenge U.S. naval power in the South China Sea.

I wouldn’t be bold enough to put words in the mouths of the Chinese leadership but do they really put all laowai into one big bundle? That’s what Mr. Ignatius is doing in those paragraphs. He’s jumbling the United States, the United Kingdom, and Germany, the United States and Europe, into one heap. I suspect that the Chinese leadership is intelligent enough and well-educated enough to recognize that’s an over-simplification to say the least.

The idea of “the West” has been propaganda for the last 2,500 years. Originally, it was used by Plato to distinguish between the Greeks and the Persians or the Egyptians. Its modern incarnation is about 80 years old and was proposed by the Germans to distinguish between themselves and Western Europe and the rest of the world. That alone should give us pause.

For most of the 19th century Americans were conflicted about their relationship with Europe in general and Britain in particular. We contrasted ourselves with the Europeans as frequently as we aligned ourselves with them but you’ll frequently find reference to a shared heritage.

In the late 1930s the Brits and their American admirers promoted the idea to attract the U. S. into the war on their side and it meant “Western Europe plus the United States” excluding Germany. After the war “the West” was used to distinguish between Britain, France, the United States, etc. and the communist east. Its present incarnation, which includes Poland but not Russia, is about 30 years old.

Said another way this “The West preached openness as the way for China and other Asian nations…” is hooey at best and circular propaganda at worst.

As to the “Thucydides trap” itself that, too, is hooey at best and propaganda at worst. If there were something inevitable about war between established powers and rising ones, why didn’t we go to war with Britain after 1812 which decidedly does not fit the model? In 1914 who was the “established power” and who the “rising power”? Germany a rising power? It is to laugh. Wannabes.

Whether Sam Clemens said it or not, that history doesn’t repeat itself but it does rhyme has it right. Human events across the ages have resonance with each other because they are human actions. Historical inevitability is a beard used to justify actions decided on for other reasons. If the Chinese think that war with the United States is inevitable, they’ll find a reason.

When I took economics classes lo! those many years ago, the Phillips Curve, the relationship between inflation and unemployment proposed by New Zealand economist A. W. Phillips based on his study of about 90 years of British history, was taught as gospel. It was considered a force of nature, as sure as gravity.

Like all economic laws, it was a rule of thumb and like all rules of thumb it holds true until it doesn’t. The Phillips Curve began to break down somewhat after I left school and for the last 25 years it’s been on life support. As Michael Owyang notes at the St. Louis Fed:

Over the years, economists have discovered that the Phillips curve appears to shift. These shifts are typically attributed to changes in inflation expectations and were thought to have contributed to the period of high inflation and high unemployment in the late 1970s.

Recently, economists have questioned whether the Phillips curve relationship has broken down. As the unemployment rate has fallen during the recovery from the Great Recession, the inflation rate has stayed low, below even the Federal Reserve’s target.

He goes on to propose some explanations for why the Phillips Curve just isn’t particularly predictive.

Comes Robert Samuelson to put in his two cents about the Phillips Curve in his column at the Washington Post:

Economists from the Bank for International Settlements (BIS) in Basel, Switzerland — a bank for government central banks — find that the pass-through from wage increases to price increases has weakened. If this is confirmed and continues, it implies that inflation will remain tame for some time even if the economy continues to grow.

Just what caused the breakdown of the old Phillips Curve relationship isn’t clear. Nor is it clear whether the shift is permanent. Arguably, it might just reflect an ongoing hangover from the Great Recession. Firms raise prices reluctantly, because they fear losing sales.

In a public presentation, Claudio Borio, head of the BIS’s Monetary and Economic Department, offered another explanation. It’s globalization: the expansion of so-called global value chains — supply chains that manufacture components for a final product in many countries.

Facing higher costs, companies can relocate production to countries with cheap labor or superior production technology, a.k.a. “automation.” In the past quarter-century, there has been a vast expansion of global labor markets, Borio noted. Businesses that are mobile have undermined workers’ bargaining power.

A solution better than trying to “calculate a new Phillips Curve” might be to realize that moving a single country’s economy in one direction or another, rather as a sailor changes the direction of his boat by tacking, is impossible in a global economy. The U. S. isn’t just importing goods from China; it’s importing deflation which the Chinese exchange for inflation. Now repeat that 200 times with 200 different actors moving in 200 different directions for 200 different reasons.

In his latest Washington Post column Charles Lane makes a proposal I can support wholeheartedly:

We need a more intellectually honest minimum wage debate, one that acknowledges both the intuitive moral appeal of preventing exploitation of the least-skilled, lowest-paid workers — and the countervailing risk of a wage so high that it harms the very people it’s supposed to help.

and then proceeds to surround it with a barrel of claptrap, starting here:

The goal: a relatively objective process, as opposed to just picking a number that sounds good to Bernie Sanders or, for that matter, the restaurant lobby.

Undemocratic, you say? The author of the federal minimum wage, President Franklin D. Roosevelt, believed that this was an issue best left to technocrats. His first proposal for a minimum wage called on the Labor Department to fine-tune it, industry by industry.

Congress rejected that idea, sparing the country a bureaucratic nightmare while creating a political one: a federal minimum wage that can be changed only if lawmakers act.

FDR’s methods were clumsy, but his instinct was sound: If government is going to make a rule for the labor market, the least it can do is base it on facts about the labor market.

Congress should benchmark the minimum-wage level to historical data, then connect it to an independent adjustment factor, so that when it rises, it does so consistently and in response to shifts in the economy — not the political winds.

A basic fact about the “labor market” is that it doesn’t exist. What exist instead are multiple labor markets. Just as housing costs, health care costs, energy costs, and the price of an avocado vary from state to state and from county to county within states, so do labor costs.

Another basic fact about the price of labor: it varies based both on supply and demand.

Sadly, there is no practical, objective, non-political way to determine a just minimum wage for the entire country and simply trying to do so is simultaneously fatuous and itself an exercise in politics and posturing.

Let me propose a radical alternative: allow cities and counties to set their own minimum wages. That, too, will be agenda-driven fraught with bias, politics, and preconceived notions. That’s how it is when such things are set by human beings rather than archangels. The best you can hope for is that when there are multiple minimum wages, set based on local conditions, on average they will be just based on local conditions.

Scientific American reports on another example of the sort of technology I’ve promoted in the past as a strategy for removing carbon dioxide from the atmosphere:

Recently, one group has demonstrated that it is possible to combine water splitting and CO2 conversion into fuels in one system with high efficiency. In a June 2016 issue of Science, Daniel G. Nocera and Pamela A. Silver, both at Harvard University, and their colleagues reported on an approach to making liquid fuel (specifically fusel alcohols) that far exceeds a natural leaf’s conversion of carbon dioxide to carbohydrates. A plant uses just 1 percent of the energy it receives from the sun to make glucose, whereas the artificial system achieved roughly 10 percent efficiency in converting carbon dioxide to fuel, the equivalent of pulling 180 grams of carbon dioxide from the air per kilowatt-hour of electricity generated.

The investigators paired inorganic, solar water-splitting technology (designed to use only biocompatible materials and to avoid creating toxic compounds) with microbes specially engineered to produce fuel, all in a single container. Remarkably, these metabolically engineered bacteria generated a wide variety of fuels and other chemical products even at low CO2 concentrations. The approach is ready for scaling up to the extent that the catalysts already contain cheap, readily obtainable metals. But investigators still need to greatly increase fuel production. Nocera says the team is working on prototyping the technology and is in partnership discussions with several companies.

I wish these project were closer to practical deployment. The key to these technologies is more often making them practical rather than making them work.