Thursday, December 5, 2013

Immigration reform doesn't have to be about citizenship

Of all political issues right now, I think relaxing our immigration laws may be the most important. But it seems weird that this is often presented as a question of whether to grant citizenship to current illegal immigrants. IMO the important part of immigration reform is simply allowing more freedom in where people live and work, regardless of whether they can also become U.S. citizens. And the other day the NYT had this article suggesting that illegal immigrants largely view it the same way.

So why does citizenship sometimes seem to be the focal point in Washington? I wonder if it's a sign of pure politics. The GOP claims to be in favor of individual freedom and not "Big Government", but they largely are opposing immigration reform even though that seems to fit perfectly with that philosophy. Could part of it be that, if citizenship is part of the deal, then they are just worried that most newly immigrated citizens would vote Democrat? And for the same reason, is that why Democrats seem so focused on making citizenship be a main part of immigration reform?

Sunday, November 17, 2013

European minimum wage and unemployment facts

This certainly doesn't prove anything, but it's one more data point to add to our opinions on the minimum wage. I still don't understand why progressives don't mostly prefer wage subsidies (i.e. the EITC) over the minimum wage:
Regarding the minimum wage, here is some data for Western Europe: 
There are nine countries with a minimum wage (Belgium, Netherlands, Britain, Ireland, France, Spain, Portugal, Greece, Luxembourg).  Their unemployment rates range from 5.9% in Luxembourg to 27.6% in Greece.  The median country is France with 11.1% unemployment. 
There are nine countries with no minimum wage (Iceland, Norway, Sweden, Finland, Denmark, Austria, Germany, Italy, Switzerland.)  Five of the nine have a lower unemployment rate than Luxembourg, the best of the other group.  The median country is Iceland, with a 5.5% unemployment rate.
-- link

Monday, October 21, 2013

The benefits of outsourcing

Although economists virtually all agree that free trade is good, it is still something people are often very suspicious of. For instance, you hear people all the time saying our economy has suffered due to off-shoring/outsourcing, especially when it's for products that foreign governments are unfairly subsidizing.

I just started reading Free To Choose by Milton Friedman, and it has the clearest explanation I've read for why these things are (counter-intuitively) good for us. This was written decades ago but fits perfectly with the widespread concerns about cheap, subsidized Chinese labor/products and off-shoring of related jobs today:

  Another fallacy seldom contradicted is that exports are good, imports bad. The truth is very different. We cannot eat, wear, or enjoy the goods we send abroad. We eat bananas from Central America, wear Italian shoes, drive German automobiles, and enjoy programs we see on our Japanese TV sets. Our gain from foreign trade is what we import. Exports are the price we pay to get imports...
  It is simply not true that high-wage American workers are, as a group, threatened by "unfair" competition from low-wage foreign workers. Of course, particular workers may be harmed if a new or improved product is developed abroad, or if foreign producers become able to produce such products more cheaply. But that is no different from the effect on a particular group of workers of other American firms' developing new or improved products or discovering how to produce at lower costs. That is simply market competition in practice, the major source of the high standard of life of the American worker. If we want to benefit from a vital, dynamic, innovative economic system, we must accept the need for mobility and adjustment. It may be desirable to ease these adjustments, and we have adopted many arrangements, such as unemployment insurance, to do so... In any event, whatever we do should be evenhanded with respect to foreign and domestic trade...
  Another source of "unfair competition" is said to be subsidies by foreign governments to their producers that enable them to sell in the United States below cost. Suppose a foreign government gives such subsidies, as no doubt some do. Who is hurt and who benefits? To pay for the subsidies the foreign government must tax its citizens. They are the ones who pay for the subsidies. U.S. consumers benefit. They get cheap TV sets or automobiles or whatever it is that is subsidized. Should we complain about such a program of reverse foreign aid? Was it noble of the United States to send goods and services as gifts to other countries in the form of Marshall Plan aid or, later, foreign aid, but ignoble for foreign countries to send us gifts in the indirect form of goods and services sold to us below cost? The citizens of the foreign government might well complain. They must suffer a lower standard of living for the benefit of American consumers and of some of their fellow citizens who own or work in the industries that are subsidized. No doubt, if such subsidies are introduced suddenly or erratically, that will adversely affect owners and workers in U.S. industries producing the same products. However, that is one of the ordinary risks of doing business... As already noted, any measures to ease the adjustment to sudden changes should be applied evenhandedly to domestic and foreign trade.
  In any event, disturbances are likely to be temporary. Suppose that, for whatever reason, Japan decided to subsidize steel very heavily. If no additional tariffs or quotas were imposed, imports of steel into the United States would go up sharply. That would drive down the price of steel in the United States and force steel producers to cut their output, causing unemployment in the steel industry. On the other hand, products made of steel could be purchased more cheaply. Buyers of such products would have extra money to spend on other things. The demand for other items would go up, as would employment in enterprises producing those items. Of course, it would take time to absorb the now unemployed steelworkers. However, to balance that effect, workers in other industries who had been unemployed would find jobs available. There need be no net loss of employment, and there would be a gain in output because workers no longer needed to produce steel would be available to produce something else.

Tuesday, October 8, 2013

How to tell who you should ignore about politics: govt shutdown edition

Politics is important. What our government does (or doesn't) do can have a huge impact on the well-being of its citizens and the world. So ideally, people would think through the issues rationally, try to learn more, consciously work on identifying/eliminating their misunderstandings/biases, and be interested in discussing their differences of opinion with other educated/rational people in hopes that one or more sides can learn something.

But then there's reality. Sure, people have the capacity to think objectively and skeptically, but on some topics people prefer to think tribally. You just pick a side, usually your "home team" (whatever your parents and/or peers think), and then view everything as a simple good-versus-evil struggle where, of course, your team is always right and the others are always wrong. And of course, you'll want to post stuff on Facebook that displays your team/tribe loyalty... whether or not it's factual or logically consistent is not really important.

If you do hope to learn from the opinions/knowledge of others, the time you devote to that is a limited resource, so you have to choose wisely how to spend it. An important rule of thumb would be to ignore those purely tribalistic people. Which leads me to the shutdown...

Democrats passed a law that Republicans don't like. After not being able to stop it through the accepted means of passing/altering/repealing a law, many Republicans in Congress have decided to shut down the government until they get their way. The details of what "shutdown" means can be read here.

It isn't too often that something happens like this where the right answer is so obvious. This is a terrible, dysfunctional way to run a government. Even if you support the goal of the Republican politicians here, this is such an obviously bad way to do it. If this works, won't this tactic be much more likely to get used again? Should the Democrats think they should shut down the government to get their way the next time Republicans regain a majority and pass a law that they don't like? Regardless of what you think about "Obamacare", there can't be any negotiation on these grounds for the same reason we shouldn't negotiate with terrorists or pay ransoms even when the immediate result of that action seems positive. Giving any legitimacy to that tactic would create long-term consequences worse than the perceived benefits of its first use.

I've seen many people post stuff on Facebook about whether certain national parks/monuments should be closed. And I do think there's room for debate there. The National Park Service has a policy of only having things open if they have sufficient security to monitor them, which they now do not. Maybe that policy should be changed or applied in a more case-by-case basis rather than as a blanket policy. But what's amazing is that many people are presenting this as the outrageous story of the government shutdown and don't have anything to say about the shutdown itself. Really???? What justification could there possibly be for that other than looking for any excuse to criticize Obama and trying as hard as possible to ignore obvious flaws within your "tribe"?

It's mind-boggling, but it's also a win-win situation. They and like-minded people on their "team" get to have their warm, fuzzy (apparently mind-numbing) feeling of tribal unity. And for anyone else this serves as a useful advertisement that states "there is no reason to listen to anything I ever have to say about politics".

Saturday, September 28, 2013

Corporations aren't people, so why tax them?

"Corporations are not people" has been a popular rallying cry over the last few years. One of the contexts in which it is often used is to support raising taxes on them. That's what the hecklers in this infamous Romney video seem to be saying. People apparently get upset when a corporation pays less taxes than them.. but really, if they are not people, then why compare them to yourself in this way? Why even tax them at all?

Think of a rock band. Let's say they have a singer/guitarist that makes a lot of money, a drummer and bassist who make a decent amount of money, and some techs that make a little bit of money. We already tax all of those people based on the amount they make. Nobody claims that we should additionally tax "the band", because it would still be the people who pay the tax, maybe with some of it being covered through raising the price of their product. Clearly, a "band tax" would just uselessly increase the complexity of our tax code - if we need to raise taxes it would be better to just raise them on the people directly.

Now, how is a corporation any different in this regard?

Saturday, June 29, 2013

Why Children Should Walk To School

Nothing has transformed childhood as much as the risk of kidnapping by strangers, a textbook case in the psychology of fear. Since 1979, when six-year-old Etan Patz disappeared on his way to a school bus stop in lower Manhattan, kidnapped children have riveted the nation's attention, thanks to interest groups that are dedicated to sowing panic among the nation's parents...

Childhood has never been the same. American parents will not let their children out of their sight. Children are chauffeured, chaperoned, and tethered with cell phones, which, far from reducing parents' anxiety, only sends them into a tizzy if a child doesn't answer on first ring. Making friends in the playground has given way to mother-arranged playdates, a phrase that didn't exist before the 1980s. Forty years ago two-thirds of children walked or biked to school; today 10 percent do. A generation ago 70 percent of children played outside; today the rate is down to 30 percent. In 2008 the nine-year-old son of the journalist Lenore Skenazy begged her to let him go home by himself on the New York subway. She agreed, and he made it home without incident. When she wrote about the vignette in a New York Sun column, she found herself at the center of a media frenzy in which she was dubbed "America's Worst Mom." In response she started a movement - Free-Range Children - and proposed National Take Our Children to the Park and Leave Them There Day, intended to get children to learn to play by themselves without constant adult supervision.

Skenazy is not, in fact, America's worst mom. She simply did what no politician, policeman, parent, or producer ever did: she looked up the facts. The overwhelming majority of milk-carton children were not lured into vans by sex perverts, child traffickers, or ransom artists, but were teenagers who ran away from home, or children taken by a divorced parent who was embittered by an unfavorable custody ruling. The annual number of abductions by strangers has ranged from 200 to 300 in the 1990s to about 100 today, around half of whom are murdered. With 50 million children in the United States, that works out to an annual homicide rate of one in a million. That's about a twentieth of the risk of drowning and a fortieth of the risk of a fatal car accident. The writer Warwick Cairns calculated that if you wanted your child to be kidnapped and held overnight by a stranger, you'd have to leave the child outside and unattended for 750,000 years.

...When 300 million people change their lives to reduce a risk to 50 people, they will probably do more harm than good, because of the unforeseen consequences of their adjustments on the vastly more than 50 people who are affected by them. More than twice as many children are hit by cars driven by parents taking their children to school as by other kinds of traffic, so when more parents drive their children to school to prevent them from getting killed by kidnappers, more children get killed.

-- from The Better Angels of Our Nature

Monday, June 10, 2013

Europe: Conservative or Liberal?

Many Americans seem to assume that European countries are all far more liberal than us in every way. When one person claims that another person wants to make us "more like Europe", they are usually accusing them of being an extreme leftist. However...

  • Relative to our QE and stimulus, most of Europe has responded to the recession with tighter money and fiscal austerity.
  • Our taxes are more progressive than of any European country. In fact, most European countries actually have regressive taxation.
  • European countries, on average, have lower corporate tax rates.
  • Immigration laws are stricter in Europe.
  • Germany has no minimum wage.
  • The Netherlands and Switzerland have no capital gains tax.
  • Sweden has partially privatized their public retirement system, along the lines of what Bush tried to do.
  • Sweden also provides school vouchers to fund education.
  • Firefighting and ambulance services in most of Denmark is provided by a private company.
  • Poland is pro-life.
  • In Switzerland, all health insurance is via private insurance companies (like Paul Ryan's plan to turn Medicare into "vouchers").
  • There's not as much of a separation of church and state in many European countries. In fact, the Norwegian constitution states that their Evangelical-Lutheran church is "Norway's people's church, and is supported by the State". The government funds the church and church administrators are part of the government.
My point is not that Europe is actually conservative. It's just that reality is more complicated that we like to pretend.

Sunday, May 26, 2013

Immigration & Crime

On facebook lately, I've frequently seen posted articles about crimes committed by illegal immigrants, with the implication that this is a reason not to pass immigration reform. The line of reasoning isn't spelled out, but I assume it's something like this:
  1. Immigrants (or just illegal immigrants?) are more likely to commit crimes.
  2. Stricter immigration laws would prevent more immigrants from entering America.
  3. Therefore, in the interests of reducing crime, we should have strict immigration laws.

First, is it true that immigrants are more likely to commit crimes? For legal immigrants, we know the answer is no, simply by counting the number of immigrants and their incarceration rate relative to native-born Americans (link). Also, there is a consistent correlation between crime and cities that get the largest waves of immigrants - crime decreases with more immigration compared to cities with less immigration (link).

Most of the examples people use of immigrants whose crime rates are perceived to be extremely high are Mexicans, so what about them? In general, crime rates among Mexican-Americans are similar to those of white Americans, and what I found surprising was that among Mexican-Americans, those who immigrate here are less likely to commit crimes than those who were born here (link).

What about specifically illegal immigrants? We can't really be sure of that simply because we can't be sure how many illegal immigrants are here in the first place. Estimates range from 7-20 million, so even if we knew exactly how many illegal immigrants committed crimes, the crimes rates could vary a whole lot depending on what the real number of illegal immigrants is. For clues, we can simply look at the crime rates for immigrants in general that I mentioned above, since illegal immigrants would count toward those totals. But in some southern states, there is some evidence that crime from illegal immigrants is higher than average, such as this estimate from the Arizona Department Of Corrections. If that's true, why would that be? It can't be due to the culture or "nature" of latino people who come here, or else we would see the exact opposite of the crime trends among different generations of Mexican-American immigrants that I linked earlier. The most likely explanation would be the drug trade, which drives a lot of the illegal crossings on our southern border.

Now, if that is true, does it justify tighter immigration laws? I don't understand how it would. If we have an increase in crime due to our drug policy that suggests we should do something about... our drug policy. We also had an increase in organized crime among Italian-Americans during the Prohibition because of the black market for alcohol. It would be silly to suggest the solution should have been to get rid of Italians.

Also consider that there are other factors that correlate more definitively and strongly with crime rates. Crime rates are higher among impoverished African Americans. They are also higher among southerners, regardless of race and social status, than they are among northerners. Not being married is also correlated with higher crime rates, as is alcohol consumption. But the most relevant indicator of one's likelihood to commit crimes is whether they are a young male. So if we're going to discriminate against a group of people simply because their crime rates are higher than those outside that group, young males takes the cake.

So... should we update our immigration laws to simply not accept young men but accept anyone else? Or should our government discriminate against American-born young males and closely track their activity for a certain age range? Should northern states pass a law preventing/limiting southerners from visiting or moving there? Those hypothetical laws follow the logic against immigration-due-to-crime much better than anti-immigration laws do. Remember that tight immigration laws are a huge Big Government infringement on liberty and the free market. Telling people where they can go/work and employers who they can hire based on something as arbitrary as the location of their birth has a far bigger impact on people's freedom than background checks and other gun regulations that much of the anti-immigration advocates decried as tyranny.

And on top of all of this, the proposed immigration reform bill in Congress puts more money into border patrol, uses things like e-verify to keep businesses from hiring illegal immigrants, and makes it easier to immigrate here legally. Those things would be expected to reduce illegal immigration, right?

Saturday, May 25, 2013

Randomness Is Random

From The Better Angels of Our Nature - this is a bit off topic from the theme of the book, but I always find this type of thing (examples where our intuitions are wrong) really interesting:

Suppose you live in a place that has a constant chance of being struck by lightning at any time throughout the year. Suppose that the strikes are random: every day the chance of a strike is the same, and the rate works out to one strike a month. Your house is hit by lightning today, Monday. What is the most likely day for the next bolt to strike your house?

The answer is "tomorrow," Tuesday. That probability, to be sure, is not very high; let's approximate it at 0.03 (about once a month). Now think about the chance that the next strike will be the day after tomorrow, Wednesday. For that to happen, two things have to take place. First lightning has to strike on Wednesday, a probability of 0.03. Second, lightning can't have struck on Tuesday, or else Tuesday would have been the day of the next strike, not Wednesday. To calculate that probability, you have to multiply the chance that lightning will not strike on Tuesday (0.97, or 1 minus 0.03) by the chance that lightning will strike on Wednesday (0.03), which is 0.0291, a bit lower than Tuesday's chances. What about Thursday? For that to be the day, lightning can't have struck on Tuesday (0.97) or on Wednesday either (0.97 again) but it must strike on Thursday, so the chances are 0.97 x 0.97 x 0.03, which is 0.0282... With each day, the odds go down... because for a given day to be the next day that lightning strikes, all the previous days have to have been strike-free, and the more of these days there are, the lower the chances are that the streak will continue...

... events that occur at random will seem to come in clusters, because it would take a nonrandom process to space them out.

The human mind has great difficulty appreciating this law of probability. When I was a graduate student, I worked in an auditory perception lab. In one experiment listeners had to press a key as quickly as possible every time they heard a beep. The beeps were timed at random... The listeners, graduate students themselves, knew this, but as soon as the experiment began they would run out of the booth and say, "Your random event generator is broken. The beeps are coming in bursts." ... that's what randomness sounds like.

Sunday, May 19, 2013

More On Capital Gains Taxes

A continuation of (and a bit of a counter-weight to) this post from yesterday... Even though capital gains taxes are double taxation (assuming you invest money that was taxed at the income level), there are still reasons to support it. Basically, it can be just another way to make sure our taxes are progressive, since people who make a lot of money from investments will usually be much better off than people who don't.

Also, even though in theory our tax system could just tax wages and that should already be a tax on future capital gains, in reality this would create very high incentives for people to find (and/or create via lobbying) loopholes. This seems to be Paul Krugman's main reason for taxing capital gains. For instance, using the carried interest loophole, some people can currently get their income taxed at the rates of capital gains. If we only taxed "wages", some very rich people would pay zero taxes because their income would qualify as carried interest.

I assume a common objection to taxing capital gains extra would be that it punishes good behavior. Basically, if 2 people make the same income, the person who invests more of it is "doing the right thing" comparatively. I don't happen to believe in just deserts, but even if you do, you can't assume that a person who invests more is more virtuous than one who spends more. For instance, right out of college I was able to invest a good portion of my income compared to most people my age because I had no student debt. The fact that I was lucky enough to have parents that could and would pay my tuition doesn't make me "better" than anyone. I'm better than everyone for other reasons.

The best objection to taxing people extra for investments is its effect on incentives - we should want people to save/invest more, and having extra taxes for people to do so probably discourages more people from doing it. But the evidence is not clear-cut here. For instance, Germany used to have no capital gains tax, but in 2009 they created a capital gains tax rate of 25%. But their average savings rate has hardly budged. Of course, this isn't conclusive; there are many other variables that would be involved in their savings rate and maybe the economic crisis in the EU is temporarily hiding the long-term effect of that tax hike. Or maybe savings rates are mostly decided by culture, and cultural values shift very slowly in response to new circumstances. I'd be interested to see more data on cap-gains-tax-changes compared to average-savings-rates-changes from other places and times.

So putting all this and the previous post together, capital gains taxes aren't something I strongly oppose. But, all in all, I think we should get rid of them in favor of a progressive payroll/consumption tax. It's a shame that almost any politician who wants to get rid of them also wants to make our taxes much more regressive. I would definitely oppose ending capital gains taxes if that just meant shifting much more of our taxes onto the poor. But I would also strongly oppose making our capital gains tax rate as high as the income tax rate.

Saturday, May 18, 2013

Capital Gains Taxes Are Double Taxation

Last post, I mentioned this argument by Scott Sumner against capital gains taxes. I found it hard to follow, but he links to these posts by Steve Landsburg that make basically the same point more simply, IMO. And it made me realize that I've always thought about capital gains taxes incorrectly. This is another case where our intuition isn't very good at math, and we don't realize when we shouldn't trust that intuition. I'll try to sum up their basic point as simply as possible.

We (and most countries) tax income at a higher rate than we tax capital gains. Most people, including myself, will think this means that people who successfully invest a lot of their income will be taxed much less overall. This will lead to cases such as the well-known example where in most years Warren Buffett pays less taxes than his secretary. But our intuition is wrong here; a tax on income is effectively a tax on your future capital gains because it reduces the amount you can invest, and all capital gains are in proportion to how much you invested. Any additional capital gains tax means you will pay a higher tax rate overall. I had to walk myself through the math to prove to myself that this is right:

Largely stealing from Steve Landsburg's example, assume there are two people named Bob and Tom that each make $100. Bob invests that money in a stock that doubles in value, but Tom does not invest any of it. So overall, with no taxation, Bob would make a total of $200, and Tom would make a total of $100.

Now assume a 50% income tax and no capital gains tax. They still make $100, but after tax they have $50. After doubling that money with his investment, Bob increases his money to $100, and Tom just sticks with his $50. Compare that to what they would have made with no taxes: they both have 50% less, even though Bob's capital gains were not directly taxed.

So... if you add a capital gains tax of 10%, Bob now pays $5 on his $50 gain, which leaves him with $95 out of the $200 he would have had with no taxes. That is an effective tax rate of 52.5% in the long-run! And yet, when Bob pays that additional tax, people will look at that single point of taxation and incorrectly think he is paying less taxes than the rest of us. Moral of the story: this isn't a case of people not paying their "fair share".

However, I don't think this means that we must not tax capital gains as Scott Sumner says, assuming one agrees with progressive taxation (as he does). For the sake of simplicity, I'll save that for another post.

Friday, May 17, 2013

Am I A Liberaltarian?

I had this old post from Scott Sumner's blog bookmarked for a long time with the intention to go read it later. It's mainly an argument that we should not tax capital gains, and it's a little information-dense for my short attention span, so I've put off reading it for a long time even though it looked interesting. I finally got around to reading it, but the thing that interested me the most wasn't his argument about capital gains taxes. It was a part at the end where he says this about the Democratic Party (he is a moderate libertarian):
It would only take four things to make me become a card-carrying Democrat:
1. If they dumped Keynesianism and favored using monetary policy to target NGDP
2. If they favored replacing our current tax system with a progressive consumption tax
3. If they favored replacing the public school monopoly with universal vouchers.
4. HSAs through forced saving plus subsidies for the lower incomes

What surprised me is that I would be fine with all of those changes. I already figured that if I lived someplace like California, I'd feel more conservative than I currently do. But this makes me wonder if I have much less in common with the "average" Democrat than I thought. I live in Texas where I don't personally know many Democrats, and I don't watch stuff like MSNBC or Michael Moore documentaries or whatever. When I think of "the Democratic Party" I largely think of the economics blogs I read, which I guess I should expect to not be a representative sample.

I may make my next few posts about each of the 4 items on Scott Sumner's list and why I think those are good ideas.

Tuesday, May 14, 2013

World Military Spending

We spend almost 40% of the world's total spending. From here:

Saturday, May 11, 2013

Difference between Northerners and Southerners

Students were recruited for a psychology experiment ... In the hallway on their way to the lab, the students had to pass by an accomplice of the experimenter who was filing papers in a cabinet. In half of the cases, when the student brushed past the accomplice, he slammed the drawer shut and muttered, "Asshole." Then the experimenter (who was kept in the dark as to whether the student had been insulted) welcomed the student into the lab, observed his demeanor, gave him a questionnaire, and drew a blood sample. The students from the northern states, they found, laughed off the insult and behaved no differently from the control group who had entered without incident. But the insulted students from the southern states walked in fuming. They reported lower self-esteem in a questionnaire, and their blood samples showed elevated levels of testosterone and of cortisol, a stress hormone. They behaved more dominantly toward the experimenter and shook his hand more firmly, and when approaching another accomplice in the narrow hallway on their way out, they refused to step aside to let him pass.
Yeehaw! Also...
In one study, they sent fake letters inquiring about jobs to companies all over the country. Half of them contained ...(a confession about accidentally killing someone in a fight over his fiancee in the past and now regretting it)... The other half contained a similar paragraph in which the applicant confessed to a felony conviction for grand theft auto, which, he said, he had foolishly committed to help support his wife and young children... northern companies were more forgiving of the auto theft than the honor killing; the southern and western companies were more forgiving of the honor killing
Both from The Better Angels of Our Nature: Why Violence Has Declined. Very interesting so far.

Tuesday, May 7, 2013

When Should We Give To Charity?

To help think through our moral obligations around charitable giving, you can step through the somewhat-famous "drowning child" thought experiment here. It starts with a simple scenario: you pass by a pond where you see a child is drowning - do you have a moral obligation to try to save the child? And then it expands from there to the conclusion that we should give more to charity. I just have one issue... The final part of the thought experiment (on that site, at least) implies that we have an obligation not just to give but to do so "within the next few days". Why? Suppose I make $1 every day that I can give to charity. Why would it be better to give $1 every day than to give $365 once a year?

The timing is different than in the drowning child scenario because saving a drowning child today does not in any way prevent me from saving a different child tomorrow. But with donating money, a dollar I donate today is a dollar I cannot donate tomorrow. And since not all charitable opportunities are equal, we should be picky about where we donate our money. So IMO the thought experiment should encourage people to at least take the time needed to choose the right charity.

But even if you have figured out which charities to support (shout out), what is the best frequency for giving? I don't know. I'm torn between a few options:

Once a year. AFAIK, this is most common. The main benefit is that you can give in larger amounts at a time, and this page by Against Malaria Foundation (rated #1 most effective charity by GiveWell, Giving What We Can, and The Life You Can Save) helps explain why that matters. Basically, you can minimize transaction/overhead costs and therefore can do more good per dollar given.

Once a month. For the same overall amount, this may not be as efficient as annual giving. However, if you just plan on giving annually, there's a good chance you will find an excuse to spend some of that before the year is up or keep more of it for yourself when the time comes to write that check. So, when considering the human element rather than just financial efficiency, you may end up giving much more overall if you give more frequently.

Right before you die. Yep. Just save/invest everything you can and only give to charity at the end of your life. This suggestion shocked me at first, but there's a pretty good case for it. Robin Hanson makes this argument, and you can read a summary here. Basically, if you invest X dollars throughout your life and then donate it just before you die, you will have given much more overall than if you gave it sooner. And the only reason he suggests giving it before you die is because giving after you die is "legally complicated".

That idea hurts my brain; I can't decide what my opinion should be. By the same logic, if it weren't for the "legal complications", should nobody currently give anything to charity as long as "the real rate of return on investment (is) higher than the growth rate"? That seems absurd, but yet is it really that different from the reason why giving annually is better than giving daily? AGH! I think this also points to one of the most difficult problems with utilitarianism in general: how to value the long-run versus the short-run.

The most convincing argument I've seen against Robin Hanson's viewpoint is this post by GiveWell. Basically, there are good reasons to think that world poverty is currently shrinking at an incredibly fast pace. So although we may be able to give more money overall by investing everything now, the current charitable opportunities actually provide much more bang-per-buck than will likely exist at the end of our life. You can find Robin Hanson's take on that here.

I'm beginning to wonder if I should just accept the uncertainty of all this and split my approach equally between the three giving-intervals I listed above. I'm interested in anyone else's thoughts.

Sunday, May 5, 2013

I Don't Understand Liquor Laws

In Plano (my city), next weekend you can vote to allow liquor stores. I will probably go in to vote yes. I'm not fundamentally opposed to laws aimed at discouraging/reducing the consumption of alcohol; I believe that, overall, the world would be a better place if alcohol did not exist. But the current liquor laws seem really stupid...

Like many cities around here, in Plano we currently cannot have liquor stores. But a nearby city does, so if I really want to buy some liquor to have at home, I just have to drive further to buy it. Hopefully a desperate alcoholic doesn't decide that longer drive is too long to wait before getting home to start drinking. But what's much dumber IMO is this law combined with the fact that restaurants can serve liquor. At a liquor store you have to buy your liquor, go home, and then drink. The difference with restaurants is just that you have to drink before you go home. Great! How is this not, in effect, increasing drunk driving? Is there something I'm missing here?

Saturday, April 27, 2013

Redefining Marriage

Perhaps the most common "secular" argument against gay marriage is this:
  1. The definition of marriage has always implied man-and-woman.
  2. Therefore, if the government recognizes gay marriage, the government is redefining a word.
  3. If we let the government change the definition of words, anything can happen!
  4. Therefore, no gay marriage.
For one thing, if you have a problem with words being redefined, maybe you can accept "gay" marriage by pretending it just means "happy" marriage? Anyway, a little-known interesting fact is that gay marriage existed in Native American tribes. The reason there's not gay marriage throughout America now is because... our government changed the definition of marriage.

Does anyone expect this to cause people, who claimed that argument as their reason for opposing gay marriage, to now change their mind? Of course not... nobody really thinks that argument ever made sense.

Tuesday, March 26, 2013

Why Christians Should Support Legal Gay Marriage

This post will ignore the question of the moral status of homosexuality, whether there is a "right to marriage", etc. Maybe I'll look at those things in another post, but they aren't necessary for the specific thought I'm writing about here...

Just looking at marriage as a religious institution, why is the government involved at all? Baptism is another religious institution that has some controversies around its definition/restrictions. A Catholic believes that sprinkling water on an infant is baptism. A Baptist believes it's only valid if performed by immersion on a believing adult. Should the government get involved in declaring which baptism is valid? I know of no American that believes it should do so. Similarly, even within Christianity, there are differing opinions on marriage. The Presbyterian church down the street may have a heterosexual marriage ceremony, while the Episcopal church right next to it performs a homosexual marriage ceremony on the same day. Why should the government be involved in that religious debate? Why should this be different from baptism?

Well, the government is involved in the recognition of marriage simply because it has practical legal implications. It helps with how taxes are filed/collected. If you have an accident and go into a coma, it has implications on who is allowed to visit you since you are unable to approve people at the time. If you adopt a child, it has implications on what happens to that child if you die. It has practical implications on sharing a health insurance plan. The DOMA case the Supreme Court will hear tomorrow started with the issue of the estate tax and marriage: two women were married in Canada, moved to America, then when one of them died the other was taxed on "the inheritance" since we didn't recognize their marriage and therefore their joint finances. Here's a list of some more legal implications of marriage.

Notice that all the above legal implications of marriage are useful (and important for the well-being of those involved), and that they are just as useful when applied to a life-long committed gay couple as to a life-long committed straight couple. And this usefulness is the reason the government recognizes marriage but not other religious institutions like baptism. If you think marriage is recognized by the government so that it can enforce the will of God, why not also have it declare which type of baptism is valid? The government should recognize a gay marriage performed at an Episcopal church for the same reason it recognizes a straight marriage from a Presbyterian church. Not because it's declaring which one is right in a religious sense, but because it has practical legal implications.

Consider some other ways the traditional Christian understanding of marriage differs from how the government treats it today:
  • Not requiring a religious ceremony. A couple can get married (in the eyes of the law) by just signing a document at a courthouse. Many Christians believe, particularly if that couple is also Christian, that they must have their religious wedding ceremony before they are really married. But I don't know of anyone that believes the government should add that restriction... because the religious ceremony is not necessary for the practical legal uses of marriage recognition.
  • Divorce. The Bible clearly states that divorce (with a few exceptions) is wrong. For that reason, there actually used to be (maybe still are in some places?) laws to try to enforce that. Not allowing "no-fault divorces" was used to have the government prohibit a couple from divorcing unless they could prove there were circumstances that would make it morally acceptable. Nowadays, I don't know any Christians that believe we should use the government to try to force people to not get divorced.
  • Re-marriage. Some churches have restrictions on what remarriages they will accept. In the Catholic Church, their previous marriage must first get an official "declaration of invalidity". In the Orthodox Church, a person can only have up to 3 marriages - any more after that will not be recognized. But I don't know of any Catholics or Orthodox Christians who believe the government should also use those restrictions.
  • Inter-faith marriage. The Bible says Christians should not marry non-Christians. Therefore, many churches will not perform or recognize inter-faith marriages. But I don't know of anyone who thinks that restriction should be part of how the government chooses which marriages to recognize.

So no matter your personal/religious views on homosexuality, I still know of no reason to oppose legal recognition of gay marriage. The question of which marriages the government should recognize and which marriages your personal church should recognize are two different issues that exist for different reasons.

Friday, March 15, 2013

Top Income Tax Rates Over Time

Interesting graph (source); it's shocking to remember how high the top rates used to be.

That is all.

Thursday, March 7, 2013

Best (Free) Way To Be Politically Informed

Most agree that, as citizens with the right and privilege to vote, we have an obligation to do so. But if we're going to vote, we also have an obligation to make an educated decision - who gets elected and what laws are passed really does have a big impact on the world. For most important decisions, it's clear that we should have an open mind and try to learn something from a variety of people who know a lot about the relevant subject. But unfortunately, when that important decision is "politics", way too many people just operate purely from early instincts to pledge emotional loyalty to one "tribe". Voting for a candidate or law should be less like following your favorite football team and more like buying a house or car.

But it's no secret that most news sucks. You have the cable news and talk radio pundits who are really just performing pep rallies to make their tribe feel superior to rival tribes - details, accuracy, and logic are just obstacles to that goal. And then you have the non-opinion news that is often just focusing on sensationalism (gaffes! celebrities! anything-gate/anything-geddon!), or they just provide equal helpings of BS from political operatives on both sides of the aisle. That doesn't help; the ramblings of someone whose job is to convince people to vote for their political party is not going to help gain a real understanding of an issue. However, I actually think opinion news can be great. It can give you facts plus a look at how to interpret them, but we need opinion that is honest, rational, and well informed. And we need variety so we don't live in an information bubble.

IMO, the best source of fact/evidence/expertise-based viewpoints on politics is the blogs of economists. Many leading economists have blogs, and since most political issues deal with economics, this is a really great educational resource. As Matt Yglesias said: "Of all the academic disciplines (economics is) the one that's online at the greatest volume and in the most accessible way". Blogs are free, and you can scan through entries very quickly to find the pieces that interest you - this is a much quicker way to get the kinds of information you're looking for than sitting through a whole TV show.

So seriously, if you want a free and much better way to be politically informed, get an RSS reader and subscribe to economics blogs run by people who know what they are talking about. RSS readers (or news aggregators) let you subscribe to different blogs and collect them all in one place. I use Google Reader, which I usually read on my phone.

The following are the most popular (AFAIK) economics blogs and are a good starting place with a range of views:
  • Marginal Revolution: This is run by 2 moderate-libertarian economics professors from GMU. It covers a wide range of things that I think anyone can find interesting, not just the political or technical side of economics. They have also started free online economics courses at Marginal Revolution University.
  • The Conscience Of A Liberal: This is Paul Krugman's blog and is really the main economics blog for understanding the liberal and Keynesian perspective. He also writes for the NYTimes, is an economics professor at Princeton, and won an economics Nobel prize. I think, of the economists who blog, he does the best job of taking complex ideas and writing them in a simple way for ignorant people like me to understand. But he can also be pretty harsh toward people who disagree with him and paint them with broad strokes.
  • Greg Mankiw's Blog: Greg Mankiw is a Republican who is the chairman of economics at Harvard and was an economic adviser for Bush and Romney. In a previous survey of other economists' favorite blogs, his ranked #1.

Those blogs will also sometimes debate and reference each other, as well as other books and blogs to consider. You can check out the other blogs they reference over time to add to your RSS subscription list. Every now and then I try adding a new blog and/or removing an old one. Some other blogs I would recommend on the more liberal side are: Wonkblog, Matt Yglesias, and Brad DeLong. And on the more conservative side: Scott Sumner, Steve Landsburg, and John Taylor.

A lot of posts you'll read will be confusing, especially at first. But you can skip those, and over time you'll understand more of them. And it won't be long until you look back at cable news and wonder why you ever spent time on that crap.

Wednesday, February 27, 2013

TV News Sucks: Reason #4827

One of the things I said here was that the news can be a crappy place to actually learn something educational about a topic from the relevant experts. Here's one example I had in mind - a graph of guests on TV news shows from one month:

So often on those shows, they are talking about economic topics. And they always have political people offer their side's spin on the issue. But that doesn't help us become better informed/educated on the topic. We just become experts on political BS. I also saw this today:
In Four Years, Sunday Shows Have Not Quoted A Single Scientist On Climate Change. Of those who were asked about climate change on the Sunday shows, 54 percent were media figures, 31 percent were politicians and not one was a scientist or climate expert.

Tuesday, February 26, 2013

Is Another Recession Coming?

From here: "The federal deficit has never fallen as fast as it's falling now without a coincident recession."

Why would that be? Take the case of a bunch of government employees losing their job (which would be the main effect of the sequester). In the short run, that increases the unemployment rate, and the sudden decreased spending of those people who were laid off will also mean less income for the businesses where they would otherwise have spent their income. The economy will adjust, but not immediately, so a big enough shock of this type can cause a recession during that adjustment - especially when our economy is already suffering on the demand-side.

We also have the current example of Europe. The countries that have been trying to rapidly reduce their deficit are the ones that have suffered the worst from the recession. Britain, for example, is very close to entering a triple dip recession.

However, the European countries that have done so poorly have also had tighter monetary policy. So it may be that QE3 prevents our sudden belt-tightening from causing another recession. Or maybe our labor market is more flexible such that it can absorb this type of thing better. I don't know. But isn't this all so exciting? :/

Saturday, February 23, 2013

How To Be An Expert On Everything

It's not really possible anymore (unless you're a genius) to be a polymath, someone who is an expert on a wide variety of topics. There's just too much out there to learn. But it's useful to know the truth about things, and people are often strangely confident in their opinions on issues they don't know much about.

So try this instead: just agree with whatever the experts of a given topic agree on. And on issues where there's a lot of disagreement among the experts, don't have a strong opinion. This doesn't guarantee you will be right, but on average it will certainly be more accurate than an uninformed opinion. And if you do have the time to become an expert on a topic, wait until you gain some of that expertise before getting the confidence to believe something outside the mainstream of expert opinion. Also, for any given topic, the weight we should give to experts should really depend on the mechanisms that exist to verify their beliefs. For instance, we should really just agree with physicists on statements that can be, and are, repeatedly tested. But it's not as important to go with the experts on esoteric philosophical topics where there's no way to demonstrate what is wrong or right. Most issues fall somewhere between the two.

Unfortunately, the news can often be a crappy place to know the issues that have widespread consensus among the experts. For instance, if there's an issue where 99% of scientists agree with one side, when a cable news show covers the topic, they will simply have someone from each side on to argue their case which will leave the impression that there's a split on the topic. If many people (but not the scientists) still believed the earth may be flat, unfortunately much of the news would probably present the topic largely as "opinions differ". Also, when it comes to getting news from pundits, they are "experts" at being successful TV personalities, not at being "right" about whatever they are talking about. So it does take some looking around to find out if and when there is a consensus among the experts on the topic, but that takes far less effort than becoming an expert yourself.

Take a few examples of topics where people widely disagree, but the scientists of the relevant subject are much more in agreement. Virtually all biologists believe in evolution. Virtually all climate scientists believe in climate change. There are a ton of things I (and most people) don't understand about those topics, so why disagree with the people who do understand them?

On political issues, when deciding how we should vote, often the relevant field of expertise is economics. Economics is not as precise a science as say, physics, but we do learn more about it over time through looking at the actual results of policies across a variety of places. And there are views commonly held by the politicians and voters of all parties that almost all economists disagree with. So shouldn't we all strongly reconsider our opinions in those cases? For example:
- Corporate income taxes are bad (sorry Democrats).
- The stimulus did lower the unemployment rate (sorry Republicans).
- The gold standard is a bad idea (sorry Libertarians).

Wednesday, February 20, 2013

Torture vs. Dust Specks

I really like hypothetical moral dilemmas. One of my favorites is the "torture vs. dust specks" scenario from here. I'll try to give a simpler explanation:

We can agree that suffering is bad, and less suffering is preferable to more suffering. So think of the worst possible amount of suffering: torture. And think of the smallest possible amount of suffering: in this scenario it's a single dust speck getting into your eye. And then answer this question: should you prefer for one person to be tortured for 50 years, or a bazillion people get a single dust speck in their eye? If "bazillion" is not high enough, then just keep increasing the number. Should there be a point where one person's torture becomes preferable?

Almost everyone, myself included, intuitively prefer dust specks; most people in the comments of the blog I linked above did. But the author thinks it should be obvious that torture is better, and that anyone who disagrees just isn't being rational. After all, if we compare less extreme differences in pain, we usually would say there's a point where a smaller amount of pain on an extremely high number of people would be worse than higher pain on one person. So why would there be an arbitrary pain difference where that arithmetic no longer applies?

Because people are so uncomfortable with accepting this, I've seen this used as an argument against utilitarianism, but I think there's a utilitarian case to be made for choosing dust specks. If you are a hedonistic utilitarian, then there must be a point where torture is preferable because you simply "add up" the pain and choose the lesser value. But you can justify dust specks as a preference utilitarian, where what's best is what maximizes people's preferences. In that case, you don't have to assign a single value to all amounts of pain and add them up. You could think of it instead in terms of what one person would prefer: to be tortured for 50 years or have dust specks in your eye for a bazillion-or-more years. Human preferences are not necessarily "rational" or "mathematical". So if people would prefer a bazillion dust specks to 50 years of torture, then the dust specks are the right answer.

Tuesday, February 19, 2013

The GOP and Federalism

Remember how Republicans always say they believe we should trust states to govern better than the federal government because they are closer to the people they represent? Remember how that was one of the repeated attacks against Obamacare - that the states should be in charge of those sorts of things?

Well one of the main pieces of "Obamacare" is the health insurance exchanges, which each state can set up for themselves. But a state can also choose to let the federal government do it. Surely all those Republican states would prefer to have those run by their state instead of the federal government, right?

Wrong. Here's the breakdown of which states decided to run these themselves, and which ones decided to let the federal government do it, by party lines (found this here):

Is there a reason why Republicans would mostly prefer the federal government to run their state exchanges, other than putting politics over their own supposed principles?

Monday, February 18, 2013

Science vs. Religion

I don't understand why people assume that natural laws must "exist", and this seems to be a philosophical mistake made by both atheists and theists. Think of how many atheists argue against theism by pointing out how well we can explain everything as a result of natural laws. And think of all the theists who believe they need to deny things like evolution. Even Christians who accept evolution usually find it important to believe only in "theistic evolution", where the laws of nature may be responsible for some of the development of life, but God must have intervened in the natural process. They believe there are 2 separate categories: the things God does directly, and the things that are a direct result of natural laws. So those theists argue for the existence of God based on the things they believe we cannot explain by natural laws. So underlying all this, both atheists and theists generally agree that natural laws explain why things happen rather than just how they happen. But why?

Here's a hypothetical situation to make it more clear what I mean. Suppose we have monkeys living in a walled area with a red button in it. Whenever the button is pressed, a human throws a banana over the wall. However, the monkeys never observe the humans; they just notice the correlation between pressing a button and receiving a banana. If one of the monkeys decided to use the scientific method, they would come up with the natural law of banana-button: pressing a button causes a banana to appear. Suppose then that the monkeys begin to debate whether or not humans exist outside their walls, and what effect those humans have on their life. Would it make sense for any of them, regardless of their belief about humans, to say "well clearly the humans couldn't be directly causing the bananas to appear, because the law of banana-button explains that"? No, because the "law of banana-button" is just a description of things that happen, not the actual cause of things that happen.

So how is this different from the natural laws that we have determined via science? Maybe our natural laws are actually the explanation for why things happen the way they do. Or maybe they are just a useful description of things that reliably occur. This is not a question that can be answered by science. The law of gravity is a reliable way to predict the interaction between two physical objects. But is the law of gravity the cause of what we are observing? Who knows? Why would a theist think that natural laws must operate "on their own", rather than just being our observation of the reliable direct actions of supernatural beings (God, angels, demons, etc.)? And with that in mind, why should the big bang, abiogenesis, or evolution be viewed as threats to the idea that God is the direct cause of the development of the universe and life?

I think this is just not a possibility people usually think of; we are for some reason conditioned to think of natural laws as literal things, like the code of a computer program. But regardless of your religious beliefs, it would be beneficial for people to drop this assumption. For scientifically-minded atheists who are concerned with religious attempts to oppose science, it would remove the underlying motivation for some theists to do that. And for theists, the benefits are that, regardless of how well we are able to explain things through scientific laws, it will not be a threat to theism at all. The current idea of a "God of the gaps", where God is just the explanation of what we cannot explain with science, has led to a concept of God that has consistently been shrinking as we scientifically advance. So why not just accept science as descriptively and usefully true, but not necessarily ultimately true?

Philosophies of Political Parties

I don't think people's political opinions can be completely reduced to a basic philosophical principle - our minds are far more complicated than that (in good ways and bad ways). But I do think it's helpful to have a simple-and-fairly-accurate way to categorize how people think differently. Instead of the usual two-sided "big govt vs. small govt" scale, I prefer to think of 4 basic groups, where each group is focused on a different value that they want the government to maximize.
Liberal DemocratsEquality
Moderate DemocratsWell-being

Libertarians believe freedom is the ultimate "good", and therefore the government should do whatever maximizes freedom, even if that means letting otherwise bad things happen. This is often how people describe the Republican party, but overall I don't think that "fits".

For a long time I've had a hard time understanding how to simplify the Republican party into a single idea, but I recently read someone say they are concerned mostly with "justice", which I think works very well. A sense that virtues should be rewarded and vices should be punished is a good way to understand what makes Republicans different from Libertarians. A large military budget will help us bring justice against evil in the world. The war on drugs, even though it limits freedom and well-being, is perceived as punishing a sin. Same with the opposition to illegal immigrants, gay marriage, etc. It can explain why they oppose redistribution in some cases and support it in others: capitalism is viewed as the way to distribute money according to who deserves it, but with Medicare, seniors are viewed as "deserving" of public help because they are assumed to have already devoted their life to their country.

The more liberal Democrats are focused mostly on maximizing equality (or fairness) over everything else. This is often how people portray all Democrats, but I don't believe that's right. An example of this thinking that I've seen many people cite is this bit from Obama during a Democratic primary debate in 2008, where at first he seems to support raising the capital gains tax even if it decreases revenue out of concern for "fairness" (in his elaboration though, he doesn't end up supporting that idea).

I think most progressives, including myself, want the government to maximize well-being. This is my understanding of what Obama meant when he said the role of government is to "do for people only what they cannot do better by themselves, and no more." Maximizing well-being justifies redistribution, because transferring a dollar from a rich person to a poor person benefits the poor person more than it harms the rich person. But it doesn't justify too much redistribution, because that harms economic growth. But diminishing marginal utility explains why those who value maximizing well-being and those who mainly value equality are natural allies in many cases.

An example of people thinking about political issues in different ways and not understanding each other is this question I've seen conservatives bring up many times: "If you want to help the poor, instead of taxing others to do it, why don't you just give your own money?". Well, take the example of social security. Before social security was passed, poverty rates were very high among the elderly. After social security was passed, poverty rates among the elderly shrunk to "normal" levels. That increased the well-being of many seniors. But if instead of passing social security, a much smaller fraction of our population just decided to "give their own money", that would not have led to nearly the same increase in well-being of the elderly that needed help once they couldn't work anymore. Therefore, as someone who judges government programs primarily by their effect on people's well-being, I just don't understand why conservatives even ask that question. But maybe the question makes sense if you're thinking primarily in terms of freedom or rewarding virtue and punishing vices; you don't get "credit" for a good deed if it's just done involuntarily via taxation.

Saturday, February 16, 2013

Minimum Wage vs. EITC: Revisited

A while ago I posted this saying that the minimum wage and the EITC seem to be trying to solve the same problem, so we should end the less effective one (minimum wage) in favor of increasing the more effective one (EITC). But now I've come across a convincing reason to use a mix of the two here:
"The EITC partially subsidizes employers, and as such the minimum wage is an excellent way to combat this. So it complements, rather than substitutes, for an EITC."
Basically, if someone is willing to do a job for X dollars per hour, and then we start giving them a tax credit of Y dollars per hour, then they will now be willing to do that job for lower pay because of the benefit of the tax credit. So now the employer can pay the employee less (won't happen immediately, but that's how the market will adapt over time). In the most extreme case, their wages could be reduced to X-Y, which would lead to that tax credit, in effect, going entirely to the employer. So a minimum wage (by limiting how much wages can be reduced) lessens the amount that the EITC (intended to increase a worker's income) can get shifted to the employer.

This also has me wondering about how much the EITC can explain the rise in income inequality since the 70's. The EITC was started in 1975 and has been increased since then. Meanwhile, the minimum wage has mostly trended downward, adjusting for inflation, since 1970. Hmm...

Wednesday, February 13, 2013

Securing Our Border

With the talks of immigration reform, one of the pieces that appears will be part of the deal (if one happens) is increasing the number of border patrol agents. So how do those numbers look over the last few decades?

That's a pretty big increase. Meanwhile, the number of illegal immigrants in America is estimated to have risen from 3.5 million in 1990 to around 11 million now (link). So has increasing the number of agents really stopped illegal immigration at all? Border control agents cost money, and we have a Congress that is supposedly looking for ways to shrink our deficit. So yea... let's not spend more money on this.

Thursday, February 7, 2013

They Took Our Jobs!

People shouldn't have children, because if we keep adding more people to our economy, there won't be enough jobs for everyone! -- says no one, ever.

It was so tough on our economy when women started entering the workforce. There weren't enough jobs for the men anymore! -- says no one, ever.

Lots of people have been moving to Texas from other states. This is a problem because they'll take all the jobs from the real Texans! -- says no one, ever.

We should have strict immigration laws to keep people out of our country, because they'll take our jobs! -- says many people.


Saturday, February 2, 2013


People often act funny when you mix morality and food. I'm sure almost everyone knows people who have become vegans or vegetarians for a while and then given up on it. And I'm sure almost everyone has noticed how people can get weird when discussing the ethics of it (I've noticed many carnivorous folks seem to get mad just when thinking about it). My own views lead me to be a flexitarian (to varying degrees), which basically just means to go somewhere in between vegetarianism and the typical American diet of eating as much meat as we want.

I think almost anyone will agree that, to some extent, the suffering of animals matters. Most don't think the life of an ant is of any moral significance, but we do agree that it's horrible for someone to torture a dog. This is easy to justify: we believe suffering is bad, and we also believe that, when a dog is suffering, that sensation is similar to our sensation of suffering, so we can empathize with a dog. But we don't believe an ant really experiences "suffering" as we know it. However, people rarely come to a completely consistent moral view of animal suffering. I can't think of any good reason why we should care to reduce the suffering of a dog but not care at all about the suffering animals in factory farms.

But there are reasons to be skeptical of veganism/vegetarianism as a moral necessity:
  • In many times and places, people have no other choice but to eat animals.
  • There are potential health concerns with eating no animal products.
  • Nature is more cruel than people often realize, and death is inevitable. If we kill an animal quickly, that is likely better than their inevitable natural death (disease, starvation, eaten by a predator that won't care about ending their life quickly, etc.). That's why people euthanize their pets.
  • Even if you're a vegan, the very act of farming vegetables leads to a lot of animal suffering and deaths.
However, with the rise of factory farming, where animals sometimes live their whole life unable to even walk around, have to be pumped full of antibiotics everyday to stay alive, and are made so heavy that their legs can snap, there's plenty of reason to be concerned with the impact of our food choices even if you don't think there's anything intrinsically wrong with eating meat.

But I think people have a strange tendency to take an all-or-none approach to moralizing our consumption of animal products. When they seriously think about what it must be like to be a pig in a factory farm, they feel bad for the pig. But they also have reasons to think not eating any animal products isn't necessary or practical, so they just give up on the entire idea of ethical eating. And some people just instantly reject the idea, and I think that's usually for reasons along the lines of something that 80000hours recently posted: "we mostly have a strong desire, arguably a need, to believe that we are good, moral people. This means that if you present someone with a piece of information which seems to contradict that belief, they’re not going to like it very much."

But defensiveness, and our strange tendency to think in an all-or-none way, are not good ways to base our decisions. Even if we don't think vegetarianism is necessary, people should at least be able to agree that we should make some effort to eat less animal products for one or more of the following reasons:
  • If animal suffering matters at all, then an act that leads to less suffering is morally preferable to an act that leads to more suffering.
  • Most medical institutions that study healthy eating recommend a plant-based diet along the lines of a flexitarian/Mediterranean diet.
  • Eating plants is a more efficient use of the world's resources than eating animals. We can use land/water/resources to grow plants and eat directly. But for eating animals, we do that plus more land/water/resources to raise the animals, feed them those plants, then eat the animals. The fact that we don't see this reflected more in the price of meat is largely due to weird policies and subsidies from our government.
  • Eating meat leads to more pollution than eating plants (largely for the reasons above). Ruminants in particular (like cows and goats) are basically methane factories.
So, combining everything above, maybe it'd be most helpful to think of our consumption of animals more along the lines that we think about giving to charity. Most agree that, if you are well-off, you should give some of your money to charity. We admire, not criticize for not doing more, someone who gives 10% of their money to charity. But that doesn't mean it wouldn't be more admirable to give 20%. Similarly, we should admit that our choices of what to eat have a variety of effects on the well-being of others. We should try to make choices to reduce suffering rather than increase it, whether by just eating less animal products, choosing chicken over beef more often out of environmental concerns, or choosing to buy free-range meat more often than factory-farmed meat. And like varying degrees of giving to charity, we can view eating no meat as more admirable than eating some meat without implying that people who eat some meat are evil. We are instinctive meat eaters, and it's admirable to resist our impulses to any degree out of concern for the consequences of our actions.

However, also similar to charity, if I'm being honest I have to say the main reason I'm a flexitarian rather than a vegetarian is selfishness. Eating good food is my favorite thing ever, and I really like many types of meat and dairy products. But the fact is that all of our actions are a result of an awkward compromise between the extent of our concern for others and the extent of our selfishness. I'm too selfish to only make eating decisions based off concern for others, but it's not hard to usually order tofu instead of meat if I want Thai food, paneer if I want Indian, falafel if I want Greek, or black beans & guacamole when I go to Chipotle. When buying food to make at home, it's not hard to usually have PB&J over turkey sandwiches, or marinara sauce over meat sauce, or eggs from free-range chickens over factory-farmed chickens. And I think everyone can, and should, take those things into consideration.

Tuesday, January 29, 2013

Economics In 1 Sentence

How to summarize the most valuable insight of Macroeconomics in one sentence?

John Lanchester: "governments are not households"

Tyler Cowen: “Today is a long run from some time back.”

Scott Sumner: "The money (MOA) market drives cycles in employment, as well as long run growth in nominal aggregates, whereas government policies and cultural practices encouraging wealth creation drive long term real growth." or "Money is really important, but no one understands it."

Thursday, January 24, 2013

Stagnating Median Income: Not That Bad?

Many, including myself, have been really bothered by this:

This trend is often the primary concern among progressives. We've had a lot of economic growth over the last few decades, but since the 70's the median income has hardly budged. When people complain about income inequality in the U.S., the idea that worries them the most is usually that all the economic growth is unfairly going to the top, while the average worker gains nothing. In fact, I got the above graph from the wikipedia page on income inequality in the U.S., and the subtitle of that image is "The benefits of increased productivity over the last 35 years have not gone to the middle class".

However, I recently saw something that really confused me about this:

Even though the median income only increased 3% from 1980-2005, the median income for all demographics actually increased much more than that. How is that possible? It turns out this is just a case where we don't intuitively understand mathematics very well. Steve Landsburg explains a hypothetical situation that makes this more clear:
Imagine a farmer with a few 100-pound goats and a bunch of 1000-pound cows. His median animal weighs 1000 pounds. A few years later, he’s acquired a whole lot more goats, all of which have grown to 200 pounds, while his cows have all grown to 2000. Now his median animal weighs 200 pounds.

A very silly person could point out to this farmer that his median animal seems to be a lot scrawnier these days.The farmer might well reply that both his goats and his cows seem to be doing just fine, at least relative to where they were.

That’s exactly what’s happened with median incomes. Each demographic group has progressed, but at the same time, there’s been a great influx of lower income groups — women and nonwhites — into the workforce. This creates the illusion that nobody’s progressing when in fact everybody’s progressing.

This makes sense. Median incomes started stagnating - and income inequality started rising - around 1970. That was around the time it started becoming culturally accepted for women to have careers. And it was soon after the Immigration and Nationality Act of 1965 which allowed much more immigration into our country.

Surely there are other factors as well; reality is complicated. But unless this data is just wrong, there's far less reason to be concerned with the issue of our median wages and income inequality than most progressives realize. When I first started spending time trying to really understand politics around 4 years ago, this issue quickly shot to the top of my priorities. But now, when you combine the data above with this and this, it has really fallen toward the bottom of my list.

Wednesday, January 23, 2013

We are gaining, not losing, freedom

It gets annoying to constantly see the complaints from some people that, nowadays, our "liberties" are being "infringed upon" compared to "the good old days" of America. That's most clearly not true for anyone who is not a WASP straight male. But even beyond that, David Frum wrote something a couple of months ago that surprised me:

In 1962, the government regulated the price and route of every airplane, every freight train, every truck and every merchant ship in the United States. The government regulated the price of natural gas. It regulated the interest on every checking account and the commission on every purchase or sale of stock. Owning a gold bar was a serious crime that could be prosecuted under the Trading with the Enemy Act. The top rate of income tax was 91%.
It was illegal to own a telephone. Phones had to be rented from the giant government-regulated monopoly that controlled all telecommunications in the United States. All young men were subject to the military draft and could escape only if they entered a government-approved graduate course of study. The great concern of students of American society -- of liberals such as David Riesman, of conservatives such as Russell Kirk and of radicals such as Dwight Macdonald -- was the country's stultifying, crushing conformity.
Even if you look only at the experiences of white heterosexual men, the United States of 2012 is a freer country in almost every way than the United States of 1962.

Monday, January 21, 2013

Income Inequality vs. Economic Growth

This is largely just to keep track of this post from Krugman if I want to find it again.

One common viewpoint on the economy is that the rich spend less than the non-rich, so the more income inequality we have, the weaker our aggregate demand will be. This would help explain why our 2 depressions of the last century have occurred when inequality was high. And it was one of the first thoughts I had around explaining why our economy does noticeably better under democratic presidents than republican ones.

But as Krugman points out in the link above, that idea is hard to square with the correlation of private savings rates and inequality in the past. Here's a graph of our private savings rates over the past few decades:

Income inequality began rising some time in the 70s, with a temporary halt in that trend in part of the 90s. But the savings rate trend is basically the opposite; when inequality was increasing, savings has mostly gone down (therefore private spending went up). I think this pretty much discredits the theory that income inequality leads to lower demand and higher unemployment. There could be some explanation of how it can still be true, but I think it's best to go with the simplest thing that the evidence suggests unless we have a REALLY good reason to suspect otherwise.

Thursday, January 17, 2013

Working vs. Volunteering

I think, as tools for altruism, work (compared to volunteering) is very underrated. Our main criteria for judging the "goodness" of a deed should be its impact; if you can choose between saving 1 life or 2 lives, generally saving 2 lives is better. But we have preconceived notions that cloud that judgment when comparing "work" and "volunteering". We generally look down on "workaholics", but it may be that, if you decide to devote a couple of hours of your free time per week toward a good cause, it would be best to just spend that time at your job.

That may seem counter-intuitive at first, but consider the hypothetical person "Bob". At Bob's job, he makes pills that cure cancer. It takes him an hour to make a single pill. He has decided he wants to be a better person, so he considers spending an hour a week volunteering for a good cause. In his area, he could clean dishes at a soup kitchen or organize donated canned foods. Clearly, he would do the most good by spending that hour making another pill that will cure someone's cancer. He shouldn't believe there's something special about "volunteering" in and of itself that would make it more virtuous than curing someone's cancer.

Nobody's job is quite as good for the world as "Bob's" (I don't think?). But in general, people tend to forget that your job does good for society. The fact that someone is willing to pay you for what you do shows that it's valuable. And most of your necessities, entertainment, and luxuries come through the time someone else puts in at their job. It's good to volunteer at a place that gives canned food to hungry families. But it's also good to be the farmer or manufacturer that are just as (if not more) essential in making that happen. It would be sad for them to feel like what they are doing isn't important just because we don't value the impact of working the way we value the impact of volunteering.

Another overlooked aspect is, in addition to judging the impact of what you are doing, you have to consider how effectively you would do it. And we are usually relatively good at what we do for a living. Plus, the fact that we already spend a lot of time at our job can make it such that it's more clear how to spend an extra hour in an efficient way. I imagine many charities have a hard time figuring out how to put people who only volunteer for an hour every now and then to good use. I know my first hour of work after a vacation is not very productive.

A common objection to the idea of "altruistic over-working" is probably that you can benefit financially from working an extra hour. First, for many on a salary, that's not necessarily the case, though it may lead to better raises/bonuses in the future. But making money does not cancel whatever impact is done by the work itself (think of hypothetical Bob making cancer-curing pills). Additionally, having more money gives you even more opportunities for altruism by putting that money toward a good cause. And even if you just spend the money on something for yourself, one person's spending is another person's income. Self-sacrificing deeds are definitely admirable, but that doesn't mean we should look down on win-win situations.

I'm not suggesting volunteering is not good, and there are definitely many cases where a person does more good from volunteering than working. It just depends on your job, your talents, and your volunteering opportunities. But... if you want to spend some of your free time doing some good for the world, deciding which activity to choose should largely be based on what you expect to have the most positive impact. For some people that will be their job, and hopefully that doesn't get missed when thinking about the options just because it doesn't "sound" as good at first glance.

Monday, January 14, 2013

Don't limit the charitable tax deduction

When the debate was still going on about which deficit reduction deal we should pass in place of the fiscal cliff, one of the common ideas was capping tax deductions, where tax deductions across the board are blocked at a certain dollar amount. This was something that had support of both some Republicans and some Democrats.

The fiscal cliff deal we ended up getting did something like that - it reinstated "PEP and Pease" on high income earners. And for the next deficit deal around the coming sequestration and debt ceiling fiasco, a hard cap on deductions is likely to come up again as an option.

But supporting this, when charitable deductions are not excluded, seems like a blatant example of what I talked about in my post on "the biggest flaw in the Democratic party". Democrats are concerned about poverty and inequality, and want the government to help with it. But the worst cases of poverty, by far, are in third world countries, not America. That is what many charities are addressing. And limiting the tax deduction for charitable giving reduces charitable giving, both by reducing incentives and by leaving those who give with less to give.

I understand raising taxes on the wealthy so we don't have to cut programs for the poor as much. But taxing charitable donations seems like a really self-defeating means towards that end.