People are stupid

Stopped by youtube today and this video was on my front page. I posted this comment on his video that I liked and wanted to save here.

Your conclusion that libertarianism doesn't work is based on the premise that people are stupid.  And that premise is true but misleading.  Some people are stupid across the board, but those people are pretty rare.  Generally, most people are smart in areas where it matters to them and ignorant in areas that don't.  In "The Use of Knowledge in Society", Hayak described this as "the particular circumstances of time and place". It's also called, "the local knowledge problem." Which is to say that markets excel where local knowledge can be used efficiently.

An example: imagine a parts assembler who works for a machine manufacturer.  Imagine that the assembler is taught that the optimal placement of the tools he's not using is at some location. Let's call that spot "location X".  But in his part of the shop due to forces that no one could have imagined, location X has a lot of vibrations. And it causes his tools to fall a LOT causing the worker to be less efficient because he's constantly stopping to pick up his tools. So the worker decides to place his tools at some other spot, (location Y) that is much more stable but not as convenient as location X.

Now it's too easy for someone far away evaluating that worker to conclude that he's an idiot because he doesn't put his tools in the optimal spot he was taught. But what's really going on is that the worker is exercising knowledge of the particular circumstances of his work place. And what looks idiotic from afar is actually optimal when local knowledge is accounted for.

IMHO, most of the claims that "people are stupid" are of this type. We look at people far away from us and do not understand why they do what they do and proclaim that they are dumb. But what's really going on is that we are arrogant in presuming to understand all the local knowledge that they take advantage of but that is invisible to us.

I wonder how often we'd conclude that people are stupid if we were a little more humble about what we presume to know about them.

Liberals vs Conservatives vs Libertarians

Liberals:

Any woman who strips for men (or otherwise exploits her sexuality to please men) makes men see all women as non-human objects. We should outlaw this because it’s a moral outrage that men and women might voluntarily behave that way, and it has an external cost on non-involved people.

 

Conservatives:

Any homosexual behavior, and worst of all, homosexual marriage, normalizes homosexuality and makes it more likely that kids will be homosexual. We should outlaw this because it’s a moral outrage that men and women might voluntarily behave that way, and it has an external cost on non-involved people.

 

Libertarians:

Both seem like private matters between the parties involved. The externality is tiny, if not entirely non-existent. No one should have any authority to intervene.

Depression & Suicide

Robin Williams recent death is sad. Especially sad is that it appears to have been a suicide. Matt Walsh wrote a blog on the reaction that people are having to this. I wanted to write this as a comment on his blog, but thought it might be better here.

Matt,

Thank you for your post. I want so badly to agree with you. I want what you are saying to be the end of the discussion on depression. But I can’t get there.

As far as I’m aware, I have never suffered from clinical depression. I have had periods in which I was sad or down. But I’ve never looked at the world the way that the depressed people in my life describe it. Yes life is hard, but the moments of joy are so much better than the moments of agony that it’s not even close. Yes, there are bad people in the world who attempt to impose themselves on me, but I can walk away.  I am very much one of those people who "just doesn’t get it". I don’t get how people who are depressed can’t see that their attitudes are also a choice. I don’t get how they’re capable of forgetting all the wonderful things in their lives and remembering only the pain. That seems to me like a choice too. So I don’t get it.

But I do know what it’s like to be influenced by brain chemistry that completely changes my decision making process. I consume alcohol. And I have, on occasion, been drunk. Reflecting on my decisions afterwards, it is amazing to me how the presence of that chemical completely changes how I see and value events and people in my life. I am not in complete control of my full faculties when that happens and only afterwards, when my entire brain is available to me, does the stupidity of my decisions suddenly become obvious.

But one need not drink to have this experience. I have learned to forgive the decisions that I make while dreaming. In my dreams I have been a womanizer and a murderer.  I’ve even been a woman trying to seduce my husband. Does these dreams mean that I am a womanizer while awake, or a murder, or attracted to men? I don’t think so. I think these are mostly random roles playing out while a significant portion of my mental faculties are not available. So I give myself permission to ignore the decisions I made in the dream.

And then I think of the movie “A Beautiful Mind”. If I were seeing and hearing people who weren’t actually there, how could I tell the difference? If I really believed that some figment of my mind was an actual person chasing me with a knife, would my running and screaming for help be something I “chose”?

Yes, we are both spiritual and physical beings. But when a critical part of our what allows us to make decisions is unavailable, it’s hard to call what happens a decision. At least not a fully informed and reasoned decision.

I look forward to the time when my depressed family members get their new bodies as promised in 2 Cor 5:1-5. I look forward to a time when that body won’t be corrupted by the fragility of this body, and when that fragility won’t create adverse decision making. But until then it’s really hard for me to accept that depressed decisions are the same thing as rational decisions. I’m not sure that depressed people are any more in control than drunk people are. And apart from heaven, my only hope is that humanity figures out (through medicine) how to resolve the brain chemistry imbalance that seems to be at the heart of this awful disease.

Road Trips With Kids

3 years is a long time. It's the difference between 1st grade and 4th grade. It's the difference between the end of your freshman year of high school and graduation. Those spans of 3 years seem like forever. So it's a bit of shock to me that it's been more than 3 years since I posted a blog. But the posts don't lie and I just have to accept that as I get older, time seems to be passing by more quickly.

The truth of the matter is that I probably wouldn't be writing this post at all and my blog would be sitting dormant for an even longer span of time. Except that, unexpectedly, a complete stranger requested that I blog something. So here it is.

A little context, I am an aspiring poker player. And to get better, I listen to The Thinking Poker podcast. And on a lark I happened to read the blog today where I saw this article. And having made an annual trip to Wisconsin for the last ten years (*), I thought I might share some of the things that make the drive much more survivable, and occasionally, pleasant. Here are the fairly quick thoughts that I had:

1) Break up your trip into 3 hour segments, with scheduled stops for at least 10-15 minutes to let the kids get pent up energy out. Regardless of your dietary requirements, McDonald’s playlands are blessings… except in Indiana where they’re apparently outlawed, since none seem to exist. Plan things like lunch and dinner around these stops.

2) Travel no more than 9 hours per day... meaning 9 hours on the road with kids belted in their seats. Stops will increase the total trip time. But doing this we can usually make about 500 miles a day.

3) At least once per travel day, give the kids some new thing to explore. Puzzle books and books on tape have worked for us. Self contained toys work also. Movies are an option but we try to limit those.

4) Have an ample supply of snacks. But ration them.

5) When you stop for the night, have options for the kids to do something fun. Looking forward to the evening’s activities is a benefit for both adults and kids. Swimming is (by far) our kids favorite.

6) Pack destination bags and overnight bags. The destination bags can remain in the vehicle not to be taken out until you get there. The overnight bags are the only things you should have to unload when you stop overnight. Eases the unpacking & repacking the vehicle when stopping.

The trip that we take is an 18 hour trip, and takes us 2 days each way. I’m not sure if these ideas can scale to a cross-country trip. But if I were going to make such a trip, I would start with this but then be flexible enough to decide if it’s wearing thin by day 4-5.

(*) Holy crap, we've been doing this for 10 years!?

This picture is amazing to me. It really makes a very strong case for the budget resolution from the House of Representatives.

I recall both President Bush and President Obama arguing that the increased spending was a temporary measure required in a time of economic crisis. This is Keynesian economics. In the time of reduced aggregate demand, the government can temporarily increase its spending to restore aggregate demand until consumer spending comes back to normal. I don’t personally grok this argument. There are a lot of economists who disagree with it. Strongly. They suggest, instead, that increasing spending will simply prolong the problem, and they point to data that shows the great depression didn’t actually end until after WWII, some 15 years (or so) after it started.

But in this case, it matters little. The spending measures were made into law. And we can’t go back and change that.

Here’s the thing, though. If you buy the Keynesian argument that the spending increases were necessary and temporary, then shouldn’t we acknowledge the temporary part? You can argue that they may still be necessary. But if, as the administration proposes, the spending increases stay in place until 2021 (and beyond) on the idea that they’re still necessary that far out, doesn’t that give credence to the original criticism of the spending increases? That they’ve prolonged, and will continue to prolong the problem?

When I look at this chart, I can see no justification at all for continuing spending at these levels. If you believe these spending increases continue to be necessary, then how can you justify that they’ve helped. If they are no longer necessary, then how can you justify keeping them?

What possible reason could we have for not returning (eventually) to the spending levels that we had prior to the crisis?

Government vs Corporate Power

I play poker with a group of guys once a month. Mostly these guys are pretty darn "liberal". Meaning that they tend to share my distrust of corporate power, but they tend, instead to trust government as a counterbalance to that power. E.g. an increase in government power is an effective means to neutralize corporate power.

I tend not to express my opinions in this group. Mainly because I'm grossly outnumbered. Any time I have tried to express my opinion, I get 3-4 people arguing over me, and I never really get to finish my thought. It's basically pointless. I don't think they're interested in listening anyway, so I just bite my tongue. It's not that these are bad guys. In fact, I really enjoy their company. They're smart and funny and (unfortunately) much better than I am at poker. But when it comes to politics, we don't see things similarly. And there doesn't seem to be much willingness on either my part or theirs to see each other's point of view.

Tonight, I managed to accidentally start a rant session when one of the guys suggested that soda should be illegal. I responded saying that I wasn't particularly fond of telling other adults what to do. I was about to say that I was totally in favor of telling kids what to do, but, predictably, I wasn't able to finish my thought while I was being told how that was wrong. I immediately shut up, because all that could happen was that tempers would flare - most likely including my own.

This eventually turned into one of the guys ranting about how bad it was that corporations bought politicians. And on that topic I couldn't have agreed more with him. The purchase of politicians is a huge problem. But it was interesting how differently he and I would approach a solution. His response was that we should demand all campaign finance be opened up completely. And in general I don't have a problem with that. But he seemed to think that it was the root cause of the problem. And there I disagree. I tend to see this as a symptom of a different problem rather than the root problem.

I think the root cause of the problem is politicians with too much power. Corporations attempting to purchase those politicians are just a symptom of that root problem. Because, of course, if you're a corporation, you don't lobby those who don't have power. There's no point. You lobby, and bribe, and attempt to influence those who have the power to make changes in your favor. If you give politicians more power - e.g. the power to regulate campaign finance, or the power to regulate financial markets, or the power to rescue GM - what you'll end up with is *more* attempts by those with money to purchase those with the power. You'll end up stoking the problem that you're trying to solve.

I imagine my friend's response to be that we need to elect the "right" people so that they will stand up to this corporate influence. And maybe that'd work. The problem is that the people who are most likely to win an election are the ones who are the most duplicitous - the ones who can promise everything to everyone, knowing that they can't keep those promises. The winners in politics are very rarely - in fact almost never - the "right" people. Politics rewards people who are best at being two-faced. As a result relying on electing the right people seems unlikely to improve anything.

IMHO, the way to remove the negative influence of corporations purchasing politicians is to reduce the power of the politicians. Reduce their regulatory authority. Make it harder for politicians to create laws and regulations. If the politicians don't have power, corporations will not be interested in influencing them.

There are, of course, two problems with this answer. First, you have to elect politicians who's goal it would be to reduce their own power. What incentive will such politicians have? Once they're elected they will face a set of incentives that pushes them towards increasing their power. Put another way, my solution also requires electing the "right" people. Which I've already mentioned is pretty unlikely. Still my "right" people are fundamentally different than my friend's "right" people. My right people would go in with the goal of reducing government power, while my friend's "right" people would be smart and able to gather more power so that they could put the right solutions in place to curtail corporate influence. I believe the latter to be impossible, even if the former is highly unlikely.

Second, my friend would probably respond that this would allow corporations to run amok over the public with nothing to counterbalance corporate power. At this point, we would be at a standoff. If I were able to get to this point without being shouted down and outnumbered, I suspect that I could get no further. Because I think that individuals making voluntary choices with their money would act as better regulators of corporations than a government. And I suspect that this would be a very difficult - if not impossible - topic to sway my friend's opinion.

Quick Thought

I follow several very popular people on Twitter... well popular in my world. I like economists. I was quite thrilled recently when I got to have a conversation with @asymmetricinfo. I've also previously got to chat (via Twitter) with @EconTalker, @willwilkinson, @russnelson and @tylercowen.

But I'm also a Packer fan. So getting to tweet with @jasonjwilde, @mitchnelles, @TomSilverstein, and @TomOatesWSJ was pretty thrilling, too. At the same time, I follow @AaronRodgers12, @GregJennings, @ClayMatthews52 and @NickBarnett - Packers players. It's really quite cool to be able to read what they're thinking and occasionally get to chat with them.

Prior to about 2005 or so, the ability of popular, or powerful, people to communicate with almost everyone was limited by expensive resources. Specifically, newspapers, radio & television. A couple of things came about because those resources were scarce:

1. Someone behind the scenes had to ensure that the best, most clear possible message got out. Hence editors.
2. It was too difficult to have a conversation. Responses and clarifications were expensive. Hence you spent a lot of time avoiding conversation with the media unless and until you were certain you knew what you were going to say.
   

With the advent of twitter, it's become dramatically cheaper for those same people to communicate with everyone. And moreover to engage in conversation, despite the 140 character restriction. And I suspect that no matter who you are, those conversations are enjoyable. Those conversations make both parties better off. They fulfill a basic human need to connect with other humans. But until twitter, that connection was limited for stars in the world by the technology we had available.

It will likely take a while for all of us in society to get used to how to understand tweets. If you're popular you're likely to end up crossing what was a line using previous technology. Take photogate for example. But this line is less useful given today's technology. If you want more context of what was meant, just keep reading the twitter stream. More will come. And if you don't see it, you can ask. You don't have to rely on a reporter to ask the question on your behalf. You can ask yourself. You won't always get an answer, but you can still ask. And if enough people ask, you'll probably get that answer.

My quick thought is this: twitter really changes communication between the popular and the not. We have less need for 3rd party intermediaries like TV, radio & newspapers.

But this is only a guess.

Ten Bucks

Have you ever wondered what $10 can buy? It’s fairly likely that you’re going to spend much more than $10 just today. Here’s a few things that I found that you could buy for $10:

A bag of coffee

A Case of Giant Smarties

10 things from McDonald’s Dollar Menu

A Large Pizza from Pizza Hut

2 footlongs from Subway

Now, of course, in the US, we have a pretty high standard of living. Most Americans will spend $10 on trivial stuff.

Every.

Single.

Day.

At the same time, that same $10 can make a huge difference in another person’s life outside the US. Which is why I’m writing this. I’d like to give you the opportunity to use $10 to help rewrite the stories that some kids are living.

I am going on a missions trip the Philippines as part of a team from my church. Some of the details of this trip can be seen here

http://www.mecklenburg.org/philippines

I’m going for a couple of reasons.

First, my mom is from the Philippines, and I’ve been there twice: once when I was 12 and again about 7-8 years ago. These trips have changed my perspective on things. I was exposed to poverty on a level that I’d never seen before. It made me appreciate how incredibly wealthy we are in the US.

Second, I read a book called A Million Miles in a Thousand Years by Donald Miller. I’ve mentioned this before on my blog, but I’ve become convinced that living a good life means doing things that are hard that serve a good purpose. The International Justice Mission is working with My Refuge House to build a facility in Cebu, Philippines that will act as a safe place for women and children to escape from sex trafficking.

Initially, I just assumed that I would fund this entire trip myself. It was something that I thought I’d do as a way to share with kids who are in a situation that I can barely imagine. And up to this point, I have funded all of it. But then it struck me that if one of my friends were doing something like this, that I would love to get involved. In fact, I’ve done this exact thing before. I couldn't participate by going, but I could participate by helping fund them. So maybe, I should let my friends know that I’m doing this. Maybe this is something you’d react to like I did. Not like you’re obligated to help, but that you’d be disappointed if you didn’t get the chance to help.

So that’s what I’m doing. This is your opportunity to join with me on this trip. To help by using a tiny bit of our wealth to change these kids’ stories.

And let me make this perfectly clear: I will fund this entire trip on my own. But if you feel moved to help, I won’t turn you away. Just click on the paypal link below. I’m recommending a $10 donation. Of course, if you wish to donate more, you’re welcome to do so.

https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=3L3LTNTNH9UVC

Now, no matter what happens, I am funding the majority of this trip out of my own pocket. If, by some miracle, I find myself with donations in excess of $1000, the excess will go to other members of the team to help them fund their trips. Additionally, I will be creating a facebook group that people who donate will get access to see. I will (apparently) have internet access while in the Philippines, so I can post pictures and video pretty quickly.

For those of you that are moved to help, thank you!

Why I'm Not Voting

I had a discussion with a friend today who is preparing himself to vote in the November midterm elections. I applaud his vote. He’s a smart guy and will inform himself of the candidates and make a vote that makes sense. Even if I might disagree with who he picked. He’s the kind of guy I want voting.

But I won’t vote. Here are my reasons:

1. I think that being an informed voter is important. I think that being an ignorant voter is destructive. If you're not going to be informed, you can either vote randomly, which seems silly, or you end up voting your biases. Bryan Caplan has written a book called, “The Myth of the Rational Voter”. In it he documents how destructive it is to vote on bias alone.
   
   
2. The benefits of voting are really quite minimal
1. A sense of having performed a civic duty
   
2. An infinitesimally small chance of influencing the results – put another way, odds are *incredibly* high that my vote won’t impact what happens in the election.
   
   
3. The effort to become an informed voter is high. I really don’t know who the candidates are. I *am* an ignorant voter. I could become informed, but at what cost? Studying candidates requires time. Time that I’d rather use for:
   
   1. Being a better husband & father
      
   2. Being a better employee
      
   3. Studying economics – something that sharpens my mind
      
   4. Time contemplating God and his will for me
      
   5. Watching my favorite sports teams – something that may be of less social value than voting, but of much more personal value to me.
      
   6. Hanging out with friends. Ironically, some of whom will discuss politics.
      

In short, I’m an ignorant voter because I have better uses for my time than to study candidates and wait in line to cast a vote that will have almost no influence on the outcome and give me an “I voted” sticker. Moreover, I believe strongly that voting ignorantly is socially destructive and I won’t do it.

So enjoy your votes everyone… but please only vote if you’re informed.

A Magical Machine

Imagine that there was a gigantic machine that sat in Iowa. This machine is somewhat amazing. Magical, in fact. Into it you place things like corn and steel and beef and all the things that we produce in the United States. This machine churns for a little bit and then spits out things like cars and computers and champagne and rice – all kinds of things that are not produced in the US. The machine is really quite useful, because we put into it stuff that we do produce and we get back stuff that we don’t produce. W00t!

Now imagine that the input to that machine or the output from that machine changes. If the input decreases, but the output stays the same, we should be pretty happy. We have to work less to get the same level of stuff from the machine. Perhaps the input stays the same and the output increases. Again, we’re happy. We don’t have to work any harder, but we get more back from this wonderful machine.

On the other hand, maybe the input stays the same, but the output decreases. That’s sad news for us. We have to produce the same amount but we’re getting back less. Maybe the output stays the same, but now to get that output, we have to put more of our stuff in. Again, this is sad news for us. We have to work harder to get the same amount of stuff back from the magical machine.

So for us good news is when the machine is producing more than we are. Bad news is when we are forced to produce more than the machine does.

Now the magic in the machine doesn’t really have anything to do with it being placed in Iowa. The machine continues to work just fine if it’s in San Francisco. It’s a little less convenient for people from the east coast because they have to travel farther to get to it. But it turns out that we can easily put another one of these machines on the east coast, too. And another one in Texas.

And again what we want from these machines is for them to produce more than we do. If the machines produce more and we produce less, we’re better off. We’re richer because we expend less energy & resources while getting back more.

Now, of course these machines don’t exist. They’re fanciful chunks of my imagination. And (hopefully) now yours. But it turns out that I’m lying to you. Because the machines do exist. They’re called ports, and the mechanism by which they operate is trade.  The port in San Francisco deals primarily with trade to and from the far east – primarily China. And the machine is no less magical once it’s called a port. It does exactly what it did when we were calling it a machine. We put stuff into it that we produce and, as if by magic, other stuff that we don’t produce comes out.

But here’s the key: the rules of the port the same as the machine. If we import more than we export, we’re better off. We’re richer. We don’t have to work as hard and we get back the same or more.

Remember this when you hear people bemoan the trade deficit. The trade deficit measures how much work we have to do in order to get back work and products from other people. We are better off when we work less and get more.

The criticism to this view is that “working less” masks what’s really happening – people are losing their jobs. And that’s true. Working less means people losing jobs. But while this is a problem, it’s less of a problem than you might think.

First, people who are unemployed today are dramatically better off than if they were unemployed 100 years ago. Part of this is a result of government unemployment benefits. But those benefits exist only because our society is so wealthy that we can afford to grab some money from the employed and give it to the unemployed. If we were not wealthy enough to afford this, no amount of government imposed rules could make it happen. You simply aren’t going to be able to make the desperately poor better off by taking money from the slightly less poor. To help the unemployed, you need wealth. The point is this: even the unemployed are reaping huge benefits from the trade deficit. Unemployment today is a ton better than it was even just 30 years ago.

Second, while unemployment does cause pain, necessity is the mother of invention. The unemployed are incented to find some niche of production that hasn’t been brought to market yet. So they go searching for something to do. Most will just go looking for another job. But the jobs available to them will have changed. There’s a likelihood that they’ll work in a different industry than they previously had. That different industry is almost certainly newer than the one that they left. It is this mechanism by which entirely new wealth comes into existence. New industry emerges from a new idea that had never existed before. And that new idea, if it’s a good one, makes us all better off.

Don’t be confused: I’m not trying to minimize the difficulty of people losing their jobs. I’ve lost mine before and it sucks. There’s no way around it. But it’s part of a process. And that process is the society of humans re-inventing itself over and over again. Each time slightly better than the last time. And those slight improvements accrue into big changes over time. So much so that, just like today’s unemployed are better off than (probably) everyone from 100 years ago, I would expect that 50 or 100 years from now, the unemployed will likely be better off than most (if not all) of the employed today.

And the key thing at the heart of all this: trade. The more free it is, the more we do, the better off we are. Trying to level the trade deficit will kill the goose that laying the golden eggs.

N.B. I can’t take credit for coming up with the idea of equating a machine with trade. I first read this idea from David Friedman, and more recently read about it from Matt Ridley in “The Rational Optimist”. The purpose of my post here is to solidify the lesson in my head. I’ve discovered that there are a lot of things that I may think I understand conceptually, but that I don’t until I’ve actually written it down. Feel free to point out any errors you find.

My Moral Defense of Wal-Mart

A friend of mine recently worried on facebook whether or not she could shop at Wal-Mart with a clean conscience. She sees Wal-Mart as evil. This point of view frequently surprises me. It strikes me that those who claim it aren’t looking deeply enough into the total effects of Wal-Mart on the community. Generally, they see that Wal-Mart comes into a community, and then long standing local businesses shut down. Putting people out of jobs. This is, of course, bad news. And they think they can make things better by just preventing Wal-Mart from being there.

But there’s another side to the story. The analysis that Wal-Mart is evil really misses a huge benefit that they bring with them. Specifically lower costs for consumers.

The simple question is this: should local consumers be forced to spend millions more on products in order to save the jobs of local businesses? When Wal-Mart is not allowed into a community, members of that community lose the cost savings that typically accompanies Wal-Mart. And instead are forced to spend more money at existing local business. By what principle should this redistribution of money from consumers to local business be forced on consumers?

Suppose Wal-Mart saves $1000 annually for people who shop there. This is not that difficult a number to imagine. If a person makes a trip to the store weekly, and saves a $20 each week, that adds up more than $1000 annually. Is it worth $1000 per year in extra costs to you to save the jobs of local business? That $1000 is money taken from your pocket and put into the pocket of the local business simply because they’re not as good at getting product to you as Wal-Mart is. If the local business came up to you directly and asked for $1000 every year, do you think you’d just hand them that cash? Well that’s what’s happening when local business demands that you protect their jobs from competition from Wal-Mart.

But maybe you do think that $1000 is worth it. You could be wealthy enough to afford it. Maybe you have friends who work in those local businesses and you can see the harm more directly and the $1000 seems pretty small to you. You’re wealthy enough to afford $1000 per year to help those people keep their jobs. OK, but by what logic do you impose that cost on the poor, who spend even more of their money at Wal-Mart than do the affluent? What makes you think it’s moral to force the poor to buy more expensive products for the benefit of local business?

If you really want to make this into a moral argument, you’d better understand that just about every decision has a tradeoff. When you weigh the decision, it isn’t that there local jobs lost on one side and nothing on the other. Instead you have losing local jobs on one side and higher prices for the poor on the other side.

If you think Wal-Mart is evil for the costs that it imposes on local business, consider what the costs are to the poor when you force Wal-Mart out. Because those are the choices. Choosing in favor of local business is also choosing to further impoverish the poor.

Now maybe your moral compass allows this. But mine does not. I find it incredibly distasteful to force the poor to subsidize local business by removing Wal-Mart as an option for them. So I shop at Wal-Mart with a clean conscience. I’m glad that they help not only me be a little less poor, but also those who are poorer than I am. I want that choice available to all. I am distrustful of local businesses when they demand that it not be allowed.

Perhaps the objection to Wal-Mart is that they hire sweatshop labor in third world countries. It's certainly true that sweatshop labor is horrible and difficult labor. But only compared to the standard of working that we have in the US. For many in the developing world, the alternative to working in a sweatshop isn't working in an office. It's working in a field. It's subsistence living. It's 16 hours of back breaking labor per day earning just enough to get food to survive the day. Compared to that, sweatshops are a step up. Which is why, when a factory in China opens up, the Chinese beg for the work.

There does not appear to be any known way to transition the desperately poor into an industrialized nation capable of producing wealth for its people without going through a phase in which sweatshops exist. The US went through that phase and it appears that others have to go through it, too. But this is only surprising and shocking to us looking back on it. For the desperately poor, stuck in subsistence living, sweatshops are a significant step up.  So, of course you have to go through that phase. In exactly the same way that if someone wants to get to the penthouse, they must first get past the second floor.

For a much better description of how sweatshops are beneficial to third world countries, read this: http://www.econlib.org/library/Columns/y2008/Powellsweatshops.html

Suffice it to say, I'm not convinced that Wal-Mart is evil.

Postscript: I should note that frequently Wal-Mart will come into a community and demand tax incentives from the local government in order to build. No such incentives should ever be granted to just Wal-Mart. If the taxes are too high to get Wal-Mart in, then special exemptions for them are wrong. Lower the taxes for everyone. It’s pretty likely that if lower taxes attract Wal-Mart, they’ll also attract other businesses. And you’ll likely generate at least as much (if not more) tax revenue post tax cut than before. See Laffer Curve.

Publicize my location & location history and somehow I win. Huh?

In late 2008, I opened my facebook account. I had heard friends talking about it and I didn’t understand it. So I cautiously created an account. After almost no time, I had figured out why people were so excited about facebook. It’s a revolution in keeping in contact with people. It makes distant friendships much easier to keep up with than email. Email focuses too much on the immediate message. Everytime you want to update via email, you have to refigure out who should get it. Facebook reverses that. You figure out your connections, and then focus on what you want to say.

Not too long after facebook, I figured that if I don’t understand something, it’s worth trying it and then maybe the experience will help me understand. So I tried twitter because that made no sense to me. I’m kind of wordy. Restricting myself to only 140 characters seemed the equivalent of trying to fit into my children’s clothes. But now I get it. Twitter is my news source. I search for things that interest me, then find the people who seem to have the best news, and follow them. From that point, I can just go to my twitter feed and get news about things that are interesting to me. Also, twitter provides a way for me to contribute to trends. I get to say the tiniest thing that is on my mind, and twitter aggregates it through search for those who are also interested in it. It helps me feel less alone in my thoughts.

Long and short: I now understand the appeal of both twitter and facebook. And a bunch of other things that I didn’t understand until I tried them. Blogs, Podcasts & RSS feeds come to mind.

But I’ve come to a service that I really don’t understand and am hesitant to try: location based check-ins. These services provide a mechanism for telling the internet where you are. Presumably the value in this is that you can figure out where your friends are and meet up with them w/out having to do the coordination thing. You know what I mean. You want to go to lunch with your friends. So you invite a bunch of them. One wants Thai food. Another wants Indian. Someone else wants Japanese. So you hem and haw for 30 minutes trying to figure out where to go. And all you really care about is going somewhere with friends.

Location based services (like Gowalla, Foursquare and Google’s Latitude) allow you to look up where your friends are and just show up, avoiding the whole coordination issue. The location service provider gets to gather interesting information about where people congregate, and then use that information for marketing. Locations want to participate so as to encourage people to congregate at their location, and buy services from them.

So, in one sense I understand location services. The problem that I have with them, and why I haven’t yet tried them, is that I’m not really sure that I want to tell the internet where I am and where I’ve been. I don’t like the idea of telling the world that, for example, I’m not at home at the moment. If I were someone interested in burglary, that’d be useful information. Especially, if (as seems common) people frequently check-in at home.

Location services just seem to provide too much information about me to the wide internet. With twitter and this blog, I am very careful not to post any personally identifying information. So far as I’m aware I have never revealed the name of my employer. Nor the names of my children or family. And I don’t think I’ve ever mentioned where I live. With facebook, it’s a little different. I reveal a lot more information, but I make thorough use of the privacy features of the site, which allows me pretty good control of who gets to see what I post.

But I can’t imagine a way to use gowalla, foursquare or latitude which doesn’t reveal too much. In particular my location.

So my question, dear Internet, is this? Do you use those services? If so, what benefit do you see from using them? Are you at all concerned with revealing your location to the world? What do you think of my concerns?

I Was Wrong About Immigration

John Maynard Keynes once was getting berated for having changed his mind on a topic. To which he famously responded, "When the facts change, I change my mind. What do you do, sir?"

Well it turns out that I got a pretty important fact wrong in my previous post on Immigration. I wrote this:

“…that illegal immigrants consume taxpayer services without themselves paying taxes is true. But this is an indictment of fiscal policy more than of immigration policy.”

My assumption here was that illegal immigrants were a drain on the welfare system, but that this fact did not justify removing them. My argument was that it justified reducing the benefits of the welfare system in order to not make it so attractive to immigrants.

But it turns out that I was wrong. Illegal immigrants are, in fact, *NOT* a drain on the welfare system, as Reason’s Shikha Dalmia pointed out over 4 years ago:

“…immigrants aren't flocking to the United States to mooch off the government. According to a study by the Urban Institute, the 1996 welfare reform effort dramatically reduced the use of welfare by undocumented immigrant households, exactly as intended. And another vital thing happened in 1996: the Internal Revenue Service began issuing identification numbers to enable illegal immigrants who don't have Social Security numbers to file taxes.… Close to 8 million of the 12 million or so illegal aliens in the country today file personal income taxes using these numbers, contributing billions to federal coffers.

…What's more, aliens who are not self-employed have Social Security and Medicare taxes automatically withheld from their paychecks. Since undocumented workers have only fake numbers, they'll never be able to collect the benefits these taxes are meant to pay for. Last year, the revenues from these fake numbers — that the Social Security administration stashes in the "earnings suspense file" — added up to 10 percent of the Social Security surplus. The file is growing, on average, by more than $50 billion a year.”

Raising taxes, either through income tax or a VAT or any way is a solution to a non-problem, becuase illegal immigrants are not, in fact, a net drain on US taxes.I was mistaken that I thought this was actually a problem that needed to be solved. What I should have said was “*if* illegal immigrants consumed taxpayer services without themselves paying taxes, it *would* be an indictment of fiscal policy more than of immigration policy.”
I regret the error. Hence the correction.

National Day of Prayer

On my way to work yesterday morning, I heard this story on NPR about a federal judge in Wisconsin who struck down the statute that called for the national day of prayer. The Freedom From Religion Foundation is pretty happy about that. The National Day of Prayer Task Force isn’t.

As a Christian I am, of course, in favor of prayer. But I find that both sides have a very poor understanding of history when it comes to freedom of religion. And I’m appalled at the religious side’s argument.

Sweden has a state church. They are also amongst the most atheist of countries on the planet. Henry VIII created the state church in England. The land from which the Pilgrims fled. He did this in part because he was not enamored of the power that Roman Catholicism had in the world.  And that’s to say nothing of national Islam and the problems that causes in the world. Even the Bible documents what state religion was like for the early Christians in Rome.

The marriage of religion and state is a terrible thing. And the founding fathers knew this despite their being, by in large, Christians. They recalled the reasons that the Pilgrims fled England and settled in the colonies, and knew that the separation of state and church was the best way to allow for religious freedom. And that this was the best way to preserve the Christian church (and all faiths). Separation of church and state prevented politicians from using the power of their office to persecute faiths they disagreed with. Imagine a Catholic got elected to President and made an executive order making Protestant churches illegal! Imagine a Muslim were to get elected and declared Islam the state religion – something that many Muslims believe is the call of all Muslims – to create an Islamic nation.

The separation of church and state is no small thing. And when Christians call for the state to execute its power and call for a national day of prayer, they do a great injustice to the thing that preserves their right to worship as they feel fit. They make it easier for the next guy to come in and take another step towards their own persecution.

Ironically, if I were an atheist, and were interested in converting others to atheism, I’d want to find some religion and install it as the state religion. My goal would be to generate the level of apathy about spiritual issues that exists in Sweden. Of course, I couldn’t go as far as the marriage of state religions like in Iran or Afghanistan. But something timid and boring and irrelevant as the state religion is what I’d install. Then I’d fund it just enough to crowd out private alternatives. And viola, a Swedish style atheist state.

So I find it incredibly ironic that the atheist in the story – the member of the group called Freedom *From* Religion Foundation is doing protecting freedom *of* religion, by insisting that the state have no power to promote any religion. And that it is the person in favor of the national day of prayer who does not see the threat that it imposes on religious freedom.

As a human being and as a Christian, there is very little that I fear more than the power that we’ve given to the government. I do not want them holding power to dictate religious practices, even if that means there’s no national day of prayer.

Michael Calhoun, the spokesman for the National Day of Prayer Task Force, said, “No longer will an atheist in Wisconsin undermine a tradition for millions of Americans who simply want to pray for their nation.” To which I say that those same Americans are free to pray for their nation. But that freedom is eroded, if only a little bit, by having a national day of prayer.

How should this be handled? Church leaders should call on their congregations to pray. Individuals should call on their friends to pray. We do not need or want the state executing this power.

Partiality

I was listening to This American Life and their episode on Urban Legends. There were a lot of things in this episode that really irritated me. Mainly because the reporting presented conclusions, but did so by missing pretty important alternative explanations. Explanations that left their conclusions on less solid footing than they presented.  I’m only going to talk about one of them.

If you’re familiar with TAL, you know that they break their show into “Acts”. An act is a single story that revolves around the central theme that they’ve chosen for that week. The theme for this particular week was urban legends that turn out to be true. Act 3 was called “Sleeper Cell”.  And it was about the urban legend that cell phones are dangerous.

At one point, the person being interviewed, Christopher Ketcham, notes that there are lots of studies on each side of this debate. But he notices that if you draw a line around the source of funding of the studies, you discover that of those studies that are funded by industry, 75% show no harm. But those studies that are not funded by industry have 75% of them showing harm.  The implication is that industry is buying the results that they want.

And let me say right now: maybe that’s true. But the big question that came to my mind was this: who’s funding the studies that aren’t funded by industry? There are really only two possibilities: these studies were funded by individuals (extremely rare) or they were funded by the government. And here’s where Ketcham makes an assumption that I think is false: that government is independent, working for our better interests, with no ulterior motives involved, and that their funding of studies is for pure scientific results only, and is not in any way influenced by an agenda.

I don’t believe this assumption. Maybe my friends on the left do. To which I would say to remember that republicans are part of the government, too. It’s pretty easy to see how they’ve got ulterior motives, isn’t it? Sure, you might say, they’re funded by industry. Ok. But some of them lose to democrats. Who funds the democrats campaigns? By people ardently opposed to industry? If you believe that republicans are beholden to the sources of their funding, why do you then not believe the same thing about democrats?

My point is this: if you assume that the source of funding for a study invalidates the results, then don’t you have to call into question the studies that are funded by the government? Aren’t politicians at least as politically motivated to lie and get the results they want as is industry? Why do we automatically assume ill gotten results when industry funds a study, but automatically assume validity when government funds a study?

And none of this even goes to the heart of the problem: it is patently false to say that the source of funding is sufficient as the *only* means to invalidate a study. If you want to correctly invalidate a study, you have to find fault with one of the following:

• The methodology used to gather the data in the study
• The data
• The conclusions drawn from the data

A critique of the funding source is only valid *AFTER* you’ve found some flaw inside the study. At that point, and only at that point, can you claim that the funders bought the results that they wanted. If your only critique of a study is the funding source, what you’re demonstrating is that you were either too lazy to read the study or too ignorant to be able to critique it on its merits.

Watch me now feign surprise that Ketcham, the guy who found the connection between the funding and the results, was a journalist and not a scientist.

And one more thing. Ketcham’s article on this topic says the following: “Interphone researchers reported in 2008 that after a decade of cell-phone use, the chance of getting a brain tumor—specifically on the side of the head where you use the phone—goes up as much as 40 percent for adults.” Two things: first notice the use of weasel words “as much as”, second it provides no context for what 40% means. That looks like a really big number so it must be a really big risk, right?

Let me show you a completely hypothetical example of how numbers can be used to mislead.  Suppose that in any given year, you have a 1 in 1,000,000 chance of dying prematurely. That’s a 0.0001% chance. If you introduce something else and the risk of dying now is 2 in 1,000,000 the percentage is now 0.0002% chance. However since the number of people who died has doubled, you can say that the risk of the thing you introduced increases your chances of death by 100%. And this is not false. But the risk of death is still only 0.0002% after introducing the change. In absolute terms, the new risk is still incredibly small, only slightly larger than the old risk.

Journalists are prone to this type of reporting.  Numbers like this are really big and create a reason for people to read their story. Note that by this logic, a risk that goes from 0.0001% to 0.001% is a 1000% increased risk. But a 0.001% risk is still an incredibly small risk.  So when you read that the risk of some bad thing increases by some percentage, the thing to ask is this: what was the risk before, and what is the risk after? If they’re both really small numbers then you probably shouldn’t worry about it.

Ungoverned

I've been re-watching one of my favorite TV series of all time, Firefly. It's unfortunate that this series was canceled before even one season could complete. It was absolutely brilliant and Fox did it a great disservice in the way they aired it.

Anyway, I like it mostly because the cast of characters in this 14 episode series are incredibly complex and rich and well thought out. My favorite character is Malcolm Reynolds, the captain. He would be - if he lived here - a libertarian. This quote from him is really quite insightful:

A government is just a group of people, usually notably ungoverned.

And it reminds me of those who put a great deal of trust in government. The government isn't magic. It's just people. People who are given a lot of power. And with almost no accountability. Sure, there are elections... every 4 years!  But in between those elections we have very little power to contain the hubris of those we've elected.

And I'm reminded of this as I contemplate a piece of news that came out today:

Today, both The New York Times and The Washington Post confirm that the Obama White House has now expressly authorized the CIA to kill al-Alwaki no matter where he is found, no matter his distance from a battlefield.

The person in question, Anwar al-Awlaki, is an American-born Islamic cleric. In other words, he's an American citizen. Now one could argue that this doesn't change anything. And I have before. I believe that the rights described by our constitution are rights that all people have - not just US citizens. So it makes no difference that he's an American or not. I believe that his right to due process is a constraint on the behavior of our government regardless of his citizenship. Of course, not everyone agrees with this.

But there is little disagreement that the constitution requires due process as a protection for American citizens, and he is one. And the president has just authorized his execution without due process! This is crossing a line beyond which is a short step to totalitarianism. I was angry when the Bush Administration held what it called "enemy combatants" for years in Guantanamo. That was, in my opinion, an egregious violation of those people's civil rights. But so far as I'm aware, no one was summarily executed. If the people in power can kill this man without due process demanded by the constitution, what else are they willing to do? Is there no line they're unwilling to cross?

My hope for this is that somewhere, something was grossly mis-reported. That there's some fact here not yet known that changes this whole story. The alternative - that it's accurate - is horrifying. It means that we don't just have a government that's fiscally out of control, we have people in power who do not respect the rule of law. And they have the keys to the weapons.

This Bears Repeating

The United States Code -- containing federal statutory law -- is more than 50,000 pages long and comprises 40 volumes. The Code of Federal Regulations, which indexes administrative rules, is 161,117pages long and composes 226 volumes.
 
No one on Earth understands them all, and the potential interaction among all the different rules would choke a supercomputer. This means, of course, that when Congress changes the law, it not only can't be aware of all the real-world complications it's producing, it can't even understand the legal and regulatory implications of what it's doing.

Glenn Harlan Reynolds

No Tax Refunds

Megan McArdle has a great post on why it’s important to *NOT* get a tax refund. Long and short: you’re giving the government an interest free loan. Don’t do it. If you really like the forced savings, you can do that on your own AND earn interest. Adjust your withholding on your W4 form so that you don’t give them the interest free loan. Unfortunately, she doesn’t address how to adjust your withholding so that you can control how much you pay in taxes. So I’m stepping in to tell you what I do.

I should mention that I am *NOT* a tax attorney, nor an accountant. I’m simply telling you what I do and what works for me. If you decide to use this, and it doesn’t work out, don’t come looking to me for answers. You’ve been warned.

So here’s the deal. You want to withhold enough to cover what you’ll likely owe in taxes, but not too much so that you don’t give too big of a loan to the government. My personal goal is a $100 refund. My real goal would be a $0 refund. But the problem is that if I estimate wrong, I underpay. And our lovely government, who doesn’t pay interest if you overpay, will charge you a penalty if you underpay. !@#$%*^ hypocrites!

But it turns out that it’s pretty easy to adjust my withholding to be pretty darn close to what I want. Here’s what I do:

1. On last year’s tax return, I look for the amount I owed in total tax. For 2009 (the one I just filed) it this was line 44 on form 1040. I don't know if it's always line 44, but that's what it was this year.
2. I will use that number as a guess as to how much I will owe next year. Let’s pretend that the number was $2000 and that I get 24 paychecks per year.
3. Now, if I want to get a $100 refund, I need to pay $2000 (what I estimate I'll owe) + $100 (my intended refund). And I need to divide that into 24 paychecks. Which means that I need to pay $87.50 per paycheck.

Now I know that I want $87.50 withheld from my paycheck to reach my goal of a $100 refund. To set that up, I get a W4 form from my HR department. It’s got a whole bunch of instructions on it. I ignore them & go straight to the form part:

1. Line 5 on the W4 asks how many allowances I am claiming. Using the instructions, most people get fewer than 10. With 4 kids, I end up with about 10 allowances. But I declare 30. Yes, really. By declaring that large of a number, it effectively puts my federal withholding to $0 per paycheck.
2. Now, of course, I don’t want to underpay, so on Line 6 it asks me how much additional I’d like withheld. Since I’m already at $0, and I know from above that I want exactly $87.50 withheld, I put $88.00 on Line 6 (the feds like to round to the nearest dollar, and I don't want to guess if they'll round up or down). And that’s the exact amount that my HR department will withhold for Federal taxes each paycheck.

I then do the same thing for the state withholding form, using last year’s state tax paid. It works well.

My point: I give the government a teeny tiny interest fee loan. Sure, I don't get that big refund every year, but I get a bigger paycheck each pay period.

Public Prayer

As a Christian, one of the things that happens frequently is that in a group of people, one of them will, sooner or later, offer to pray for something. If it’s a meal, we’re asking to bless the food and the conversation. If it’s a small group, we might pray for just about anything that is on the minds of the people in the group. If it’s a church service, typically, the pastor will close the service in prayer, asking for help related to the topic of the message that was just delivered.

We pray publically. A lot.

But I’ve always been fairly uncomfortable doing it. I never know what to say. I often feel like what I’m saying is not meant for God, but rather for the people I’m with. Perhaps to share my needs, fears, etc with them so that they know. Perhaps to reinforce something that we’d talked about. But when I pray publically like that, I constantly fumble around what I mean to say – and it almost never comes out quite right. Which isn’t a problem for God, but is if I’m trying to share that information with the people in the room. And, by convention, there’s no chance for those people to stop me and say, “I’m sorry, I don’t understand what you’re saying.”

This weekend, as I attended a men’s small group that I’ve just recently joined, something odd struck me while we were praying. Every man in that room was a Christian. Which means that every man in that room has the holy spirit with them, guiding them, as a still, small voice. Including me. The problem is that I am very skilled at ignoring that still, small voice. Or I’ve built up habits in my life that serve to muffle the voice. And it struck me that the entire meeting is a public prayer – not just the 5 minutes or so at the end where we close our eyes, bow our heads and start talking. When I meet with those men, what I’m doing is hoping that the issues that I bring, and the questions that I have, that those other men – in aggregate – will listen to the Holy Spirit and help me to un-muffle the voice that is speaking to me.

And as a mechanism for communicating with God, this is LOT more effective than just talking with my eyes closed. Someone talks back. If they don’t understand what I’m saying, they ask for clarity. If they do understand and have a suggestion, they give it. If that suggestion doesn’t match with Biblical teaching, the odds that someone in the group will know that is higher because there are more people listening to the Holy Spirit and thinking about the Word.

I’m think that there is a value in traditional “prayer time” for me privately. When I stop myself, close myself off from distractions, lay the issues in my life in front of God, and still myself to try and hear his response through the Holy Spirit. But I’m beginning to think that my public “prayer time” is quite a bit less useful, especially in comparison to just the conversation that happens with other Christians. That public prayer time allows me to share my stuff with the people I’m with, but in an extremely ineffective way, precluding others from asking questions and giving feedback. Instead, I’m beginning to think of the entire time as an interactive prayer among people each trying to un-muffle the voice of the Holy Spirit. And together being better able to get at His voice than we can alone.

Still, I often find myself listening to someone else who does pray publically very well, and I’m often emotionally moved by the power of what they’re saying. Maybe it’s the humility that they’re expressing. Maybe it’s their awe at God and his world. I think that there is great value in public prayer. I’m just terrible at it, so I tend to avoid it.

My point: traditional public prayer is, I think, more about the people in the room than about communication with God. Deep conversation with a group of Christians seems to me to have a better chance at 2-way communication with God via the Holy Spirit than does group prayer.

But I could be wrong.

Obama vs McCain, The Rematch

President Obama put a smack down on Senatar McCain today during the health care summit. Here’s what happened:

"Both of us during the campaign promised change in Washington," McCain said. "In fact, eight times [as a candidate] you said that negotiations on health care reform would be broadcast on C-SPAN cameras," he said. "I'm glad that more than a year later they are, here. Unfortunately, this product was not produced in that fashion, it was produced behind closed doors."

"Special deals for the special interests and favored few" should be removed from the health care legislation, McCain said.

Obama said in response, "Let me just make this point, John, because we're not campaigning anymore. The election's over."

Wow! Just, wow! McCain holds the President’s feet to the fire for not fulfilling a campaign promise and the President tries to make it look like sour grapes for having lost. Here’s what I wish McCain would have said in response:

Excuse me, Mr. President, perhaps you’ve misunderstood what I was talking about. I was not complaining about having lost an election. You won that election on the strength of your promises. Promises that have been broken. I am not just exercising my duty as a US Senator, but more importantly as a citizen of the United States. You got elected on promises that you’ve since broken. I think the American people are interested in a reconciliation of that discord, much more than using reconciliation to bypass dissent.