Of Course He's Smiling. He's Probably Drunk

I'm agnostic on the current immigration debate.  I am for almost completely unfettered open borders, specifically so far as a source for employees is concerned.  If someone can pass some form of security background check, welcome in.
This would work, of course, so long as we were to get rid entirely of the wealth-transfer schemes dressed up as social welfare.  But that is a fight for another day.
The reason I am agnostic is that if the matter is to be addressed by our legislators, I am reasonably certain that the result will be ineffective and expensive.
But God bless Harry Reid for giving me the best reason of all not to support the legislation currently under consideration:

The First Tea Party was Hosted by a Madman

It hasn't happened for a while, but I have occasionally been asked for my thoughts on the "Tea Party" movement.

At first, I thought there might be something to it.  Without knowing what those that identified themselves as tea-partiers stood for, I only knew that people like Keith Olbermann and Aaron Sorkin hated them and called them racists.  Based on that alone, you could have colored me a supporter.

But upon examination, the movement, such as it is, revealed itself to be entirely lacking in any sort of credibility or coherent political philosophy that demonstrates a scintilla of rigorous thought.  I think contemporary progressivism (modern "liberalism") is intellectually offensive and an insult to human dignity; contemporary conservatism is morally bankrupt and clings to impotent nostrums.  But as Walter  Sobchak says in the Big Lebwoski



The Tea Party is an ephemeral trifle.  Hastening itself to its rightful place in forgotten lore, one of the groups that constitutes the movement, the Tea Party Leadership Fund, is pushing for Sarah Palin to run for Senate.  Well done.

Celebrating Diversity

The gay marriage debate is front and center.  I posted my two cents on the matter here over four years ago and, revisiting it today I'd say certain excessive flourishes aside, I stand by what I wrote.

I am a libertarian and hold dear to the notion that behavior by one's self or between consenting adults that does not harm another person or his property is of no concern whatsoever to the state.  I don't know what's best for you, you don't know what's best for me and together we don't know what's best for the other guy.  And this applies to Michael Bloomberg, too.

To recap, I have no problem with gay marriage.  But I am willing to argue the matter with those who may not agree with me.  And I do not think opponents of gay marriage, whatever reason they may have for their opposition, are arguing in bad faith.  So you see how wonderful I am, right?

I was cruising the internet today and I saw this headline at the Huffington Post (here is the story).

I don't really care about the story, it was the headline that grabbed me.  Because places like the Huffington Post (among many other sources) not too long ago bemoaned the "epistemic closure" on the right (Julian Sanchez, libertarian and Cato research fellow, got the ball rolling here and here).  If you don't feel like wading through the morass, it boils down to the fact that conservatives are closed-minded.  Sanchez was making, to my mind, a legitimate critique on contemporary political philosophy. Contemporary in the sense that he was using examples from the (then) current headlines.  The liberals went nuts and ran with the meme, missing the point that this is an issue of contemporary political philosophy, not merely conservatism.

Anyway, the headline reminded me of all this because if you are a Republican who agrees that gays should be allowed to get married, you are either related to someone who is gay or you are truly open-minded.  But if you are a Democrat who opposes either gay marriage or federal intervention into state matters or what have you, you are an embarrassment.  Open-mindedness has nothing to do with considering opinions that you may not necessarily agree with, it means agreeing with liberals (n.b.- Jonathan Chait makes the point that fans of Rush Limbaugh or Glenn Beck would be well-served to read the Huffington Post or other liberal sources, because the practice of listening to opposing view is essential to good citizenship; he does not provide the same advise to devotees of the New Republic or MSNBC, which is surprising).

Diversity of thinking is a beautiful thing, so long as you agree with me.

Foolish Thinking



I love this crazy lady

 

 

Elizabeth Warren says that minimum wage should be $22/hour.  Well, she doesn't say it, she says someone else says it would be if wages kept pace with productivity.  And apparently she agrees.  And when you are on the Senate Committee on Health, Education, Labor & Pensions, when you agree with something this stupid, the rest of us had better hold on to our wallets.

 

Let's put aside the notion that legislators, most of whom haven't the foggiest idea how to create and/or adhere to a budget much less about crazy things like marginal productivity, have insight into what the minimum amount a worker should be paid regardless of that worker's marginal productivity (i.e., no matter what value is produced by a given worker for that hour of labor, we will pay him $x because... well, because that's what's fair!, until, of course, it isn't fair anymore).  Got it?  Let's just ignore all of that.

 

Let's concentrate on productivity.  Labor is a factor of production, labor does not equal production.  The factors of productivity (Y) are Labor (L), physical capital (K), human capital (H) and natural resources (N).  So the production function would look like this: Y = f(L, K, H, N), because productivity is a function of its factors.

 

But what about technology?  Technology has its own variable, A, and technology is not a factor of production.  It is a variable that increases (or decreases, let's not forget the Dark Ages), the effective productivity of all factors as the variable increases (or decreases).  So the real production function looks like this:

 

Y = A f(L, K, H, N)

 

What this means, simply, is that there is no direct correlation between the increase in productivity and the marginal contribution of any particular employee's labor, and a general increase in Y has no direct correlation to the quantity of L in the macroeconomic sense.  So when they stopped using people to connect phone calls through switchboards and moved over to computers, this increase in productivity (more phone calls being routed quickly, efficiently and correctly all around the country) was not the result of "better labor" or an increase in the marginal production of the labor force.  What the productivity function shows is that productivity can increase even if a particular factor decreases or remains unchanged.

 

So the question is, is the marginal product of the burger-flipper $22/hour?  Of course it isn't.  How can I say that so easily?  Because the market doesn't pay $22/hour to uneducated, unskilled people to flip burgers.  Because that would be an inefficient allocation of resources.  Resources that must be taken from elsewhere to make up the difference to the person not contributing $22 worth of goods or services per hour of labor to the market.

 

So even if $7.25 seems unfair please note that fairness is a matter for philosophers and priests and seek counsel from them.  Because $7.25 is also a distortion, just not to the degree, that $22/hour or $100/hour minimum wage would be.

 

See here, here and here for further readings.  And call you congresscritter and ask humbly that the minimum wage be abolished.

Our Archaic, Idiosyncratic, Evil Constitution

"As the nation teeters at the edge of fiscal chaos, observers are reaching the conclusion that the American system of government is broken. But almost no one blames the culprit: our insistence on obedience to the Constitution, with all its archaic, idiosyncratic and downright evil provisions."

The ravings of some fringe anarchist?  The rantings of a social pariah, angry at being marginalized by "the system?"

Nope, this is the introductory paragraph published in the New York Times and written by Louis Michael Seidman.  The same Louis Michael Seidman that is the Carmack Waterhouse Professor of Constitutional Law at Georgetown University.

It is remarkable in its Herculean efforts of straw-man construction.  As one who is partial to the textualist approach to constitutional interpretation I'm impressed with Professor Seidman's tango with arguments that nobody has ever made.  It is easy to build up a body of half-truths and nonsensical extrapolations and then tear the whole thing down.  When you present people with whom you disagree as idiots not meant to be taken seriously, to an audience all to eager to accept this presentation, you are freed from the obligation to make an actual argument that can withstand scrutiny.

But then the good professor saves anyone from the obligation of taking his argument seriously by basically saying "never mind."  You see, he doesn't think the entire constitution is evil and should be ignored.  Just the parts he doesn't like.  "This is not to say that we should disobey all constitutional commands. Freedom of speech and religion, equal protection of the laws and protections against governmental deprivation of life, liberty or property are important, whether or not they are in the Constitution. We should continue to follow those requirements out of respect, not obligation."

Why Economists Shouldn't be Listened To

It's not that Paul Krugman has taken time off, it's just that I tried, I really did, to get off that ship.  But here he goes again.

Please read this.  And don't get thrown.  It is not "wonkish" unless wonkish means deliberately obfuscating some pretty simple concepts.

Krugman presents the following graph:

He writes the following: "Now, in a perfectly competitive economy (don’t worry, we’ll talk about what happens "if not"* in a minute), we would expect the labor force to achieve full employment by accepting whatever real wage is consistent with said full employment. And what is that real wage? It’s the marginal product of labor at that point — which, graphically, is the slope of the aggregate production function where it crosses the vertical blue line." (* quotes added for clarity and emphasis added by me)

This is, so far as any economic theory can be, correct.  Krugman then goes on to make the point that under certain circumstances, technological improvements can lead to lower real wages.  This, too, is correct.  The workers may not share fully in the productivity gains.  So the next logical question is "so what?"  So long as the wage matches the marginal product of one's labor, then we're good.  Unless some people think it better to pay people for work they are not doing so long as those wages for unproductive labor are being paid by someone else, but who would be so damn fool as to think that's a good idea?

But before I come across as callous about people being paid less money for less work (yes, I understand fully the problems and pressure a family can face if, through no fault of one's own, if wages are lower in real terms in succeeding years), let me address what Professor Krugman skips over with an all-too-casual afterthought.  He writes: 

Start with the notion of an aggregate production function, which relates economy-wide output to economy-wide inputs of capital and labor. Yes, that sort of aggregation does violence to the complexity of reality. So?

Furthermore, for current purposes, hold the quantity of capital fixed and show how output varies with the quantity of labor.

In the first part he explicitly acknowledges that the aggregate models has no real bearing in reality.  Will that stop him?  Of course not.

In the second part, he “hold[s] the quantity of capital fixed” in order to show how his spurious function using a bogus model will affect real wages.  The problem is that in any real economy, the quantity of capital is not fixed.  And in a thriving free-market system (which ours isn’t, but if he can live in a fantasy world, why can’t I) far more capital is created than destroyed and everyone is better off.  Further, technological improvements affect positively all of the factors of production, if not there would be no increase in efficiency and thus it would not be considered a “technological improvement.”  Does a technological improvement increase all factors of production evenly?  No, of course not.  But productivity is increased.  And this benefits the economy as a whole, however marginally.  And that is reality.

Politics is What Politicians Do

In response to this piece, a short memo to the president, who happens to be a politician:

1) Whatever a politician does as far as his job is concerned is politics.  Not just when you disagree with what the politician does.  Politics may be a dirty word, but it is the likes of the president and our legislators that have helped make it a dirty word.

2) The legislation proposed would not "take away" anyone's rights.  It would give an employee the right to choose not to be represented by a union.  And if union membership os so wonderful why is membership and dues paying mandatory?