Tag Archives: Economics 101

Win-win: How about creating that libertarian paradise in Barbuda?

Hurricane Irma destroyed Barbuda, forcing evacuation of the island’s 3,000 inhabitants.  Media reports suggest that it will cost around $250M to rebuild the tropical paradise.  The territory is, of course, part of the country of Antigua and Barbuda, which has a relatively high standard of living.

In lieu of focusing on seasteading, how about a bunch of rich libertarians get together and, though a market solution, try to purchase the island, rehabilitate it, and create a new sovereign state?

Maybe offer $500M to the government of Antigua and Barbuda to cover the costs of permanently accommodating former Barbuda residents on Antigua and to compensate them for the lost territory.  Given the country’s fiscal challenges, this could be a nice nest egg, covering about half of the annual government budget [PDF].  Add in the $250M to rebuild Barbuda.  (We have little doubt that enterprising, profit-motivated Americans could manage it cheaper.)

Offer, say, $100,000 to compensate each resident of Barbuda who chooses not to return.  If half of them take you up on it, that’s $150M.  (Better yet, determine the fair value of their private losses and compensate them; we doubt that it would be anything close to an order of magnitude higher than $100K on average.)  Invite those who decline the opportunity to return under the new system.  Budget $50M to build the hardware and software of a new (minimalist) national government.

So, for less than a billion dollars, we could possibly have a new state.  Peter Thiel alone could cover this.  The new owners could begin selling parcels of land, privatizing government-type services, and creating a true libertarian paradise.  It’s easy to envision them recouping their investment while creating a society that would soon become the richest per capita in the world.  Think of the prospects for tourism, retirement homes, and financial services alone.  The geography and weather (minus the occasional hurricane) are a good start.

Advertisements

Leave a comment

Filed under Politics

Debates about guns and Muslim immigration don’t explicitly discuss trade-offs

I am willing to tolerate higher levels of gun violence in America in exchange for having a Second Amendment.  We don’t often hear our fellow rightists state the case so explicitly, but most probably have arrived at this cognitive consonance.

(It is true that more guns means less crime in general.  It is also true that America has the highest rate of mass shootings and other gun violence of any industrialized country, and this is due at least in part to the wide availability of firearms.  America’s unique history, culture, legal environment, and demographics all contribute to these seemingly contradictory realities.  The quote above is the position of this blog, and we also believe that the best way to counter the threat of Islamist terrorist attacks like the Orlando night club shooting is to facilitate more people being armed.)

The alternate universe in which the U.S. never had a Second Amendment, in which there were not hundreds of millions of guns in circulation, in which the police have all the firepower, and in which mass shootings and other instances of gun violence were extremely rare, is easy to envision.  That’s the situation in the United Kingdom, Australia, Japan, and most other industrialized countries (as well as in most police states).  Count ours as one vote in favor of the American status quo.

The left doesn’t really possess the vocabulary to present its own arguments about the trade-offs associated with gun rights (or most other issues).  We rarely hear progressives espousing the values of individual liberty anymore—except in a few specific scenarios that turn the Bill of Rights on its head—and they are even less sympathetic to the concept of individual self-defense.  The left apparently isn’t able to comprehend the main reason why the founders included the Second Amendment to begin with:  protection from government tyranny.  We will have a social contract in which only the benevolent government will have guns, and in exchange the citizenry will trust the government to use them to protect citizens’ liberty and well-being is also not a scenario that liberals articulate very often, even if this is what they believe.

It is a legitimate political stance to try to persuade the American electorate to move our country in that direction, although we don’t see the left doing so very often:  as opposed to openly arguing for repeal of the Second Amendment, they usually use stealthy Federal and local legislative, regulatory, and judicial actions to end-run around it.  Fortunately democratic means couldn’t succeed nationally at this point.

The debate about Muslim immigration, or immigration in general, similarly seems devoid of a discussion about trade-offs.  We would like to hear Donald Trump state, Of course in principle I don’t like the idea of banning an entire group [Muslims] from visiting or immigrating to the U.S.  Such a ban would certainly affect some innocent people who don’t intend to harm the country.  However, we are in a time of war, so we need to accept this trade-off in order to reduce the number of Muslim terrorists we admit.  We presume that Trump feels this way—and he has implied an understanding of the trade-off in his call to pause Muslim immigration until we “can figure out what’s going on”—but it would be nice for him to make it explicit.

Similarly, it would be nice if President Obama, Hillary Clinton, or other liberals made explicit their own views of a trade-off.  The U.S. is the most multicultural, open country in the world.  I want to accept more Muslim immigrants, and in fact all types of immigrants, because they make America better.  I acknowledge that, in so doing, we might inadvertently admit some people who will go on to commit terrorist attacks, but a few hundred or a few thousand dead Americans is a reasonable price to pay for the vibrancy that immigrants contribute to our society.  We have little doubt that Obama, Clinton, and most of the cosmopolitan left, including the mainstream media, feel this way.  (Though even this may be a charitable portrayal of their views:  the hard left, like President Obama, has demonstrated that it thinks that traditional American culture is an anachronism that should be replaced by a culture that is more collectivist, authoritarian, and brown.)

A sympathetic article, “What Obama Actually Thinks about Radical Islam,” by Jeffrey Goldberg (h/t James Taranto) seems to serve as a rare reveal of Obama’s view:

Obama believes that the clash is taking place within a single civilization, and that Americans are sometimes collateral damage in this fight between Muslim modernizers and Muslim fundamentalists.

Taranto rightly expresses puzzlement at the phrase “collateral damage” as it relates to Americans being killed in a “fight between Muslim modernizers and Muslim fundamentalists.”  One way to reconcile this apparent misreading of the current state of the world—there doesn’t seem to be much of a “fight” pitting Muslim modernizers against Muslim fundamentalists, especially on American soil—is to speculate that Goldberg misinterpreted Obama’s statement.

Obama possibly seems himself as the “Muslim modernizer”; inasmuch as he is not actually a Muslim, he could be fairly called a “‘Muslimist‘ modernizer,” to use Steve Sailer’s term.  Obama may not identify precisely as a Muslim, but he was raised in a Muslim environment and considers himself an enlightened exponent of the Muslim faith (as does Hillary Clinton).

Goldberg posits that “Obama sees the problems affecting parts of the Muslim world as largely outside American control,” though he cites the president asserting that the way we address Muslims around the world talking about the problem of radical Islam—including his infamous refusal to label the motivations of terrorism as such—plays an important role in addressing it.  And Obama has strongly condemned Trump’s call for a moratorium on Muslim immigration to the U.S. while increasing admission of people who claim to be Syrian refugees.  Obama probably sees himself as playing a righteous, central role as a “Muslim modernizer,” by importing more Muslims to the U.S., by his imposition of political correctness on all government discussions of terrorism, and by the virtue-signaling language he insists on using to assert solidarity with Islam.  If these accommodations carry some costs, then it’s worth it.

So, if Goldberg is accurately portraying What Obama Actually Thinks about Radical Islam, then it appears that what Obama is really saying is, The United States can play a role in the clash between Muslim modernizers and Muslim fundamentalists, by, among other things, welcoming Muslim immigrants to the U.S.  A few dead Americans as collateral damage is a price that I am willing to pay to promote Muslim modernization.   Such a viewpoint would fall within the bounds of legitimate debate within our political system—as taking sides in any war involves the conscious sacrifice of American lives—though we assume that vast majority of Americans would vehemently disagree with it and would redeem their disagreement through all democratic mechanisms available.  Let’s have the debate.

 

 

 

 

 

 

1 Comment

Filed under Politics

Liberals don’t acknowledge trade-offs

The left almost never acknowledges the trade-offs associated with the policies it advocates.  Its ongoing attempt to raise minimum wage is the latest example.

It would be nice if liberal politicians or pundits said, We understand that raising the minimum wage always reduces employment, but we are willing to make that trade-off in favor of a higher standard of living for those who keep their jobs.  Instead, the left usually denies the existence of any trade-off (a New York Times editorial in favor of California’s recent law gradually raising the statewide minimum wage to $15 per hour sort of acknowledged some associated costs, but tried to explain them away via economic bunk) or resorts to demagogic attacks against the more productive.

Similarly, you almost never hear liberals make arguments like these:

  • We understand that raising income taxes reduces economic growth, but we are willing to make that trade-off to redistribute resources to government services that benefit some subset of the population in the short-term.
  • We understand that Obamacare will result in healthy people, and taxpayers, paying more for inferior health insurance, but we are willing to make that trade-off so that everyone will have some minimal level of health care coverage.
  • We understand that tariffs and other protectionist measures hurt consumers and overall economic growth, but we are willing to make that trade-off to protect certain workers who have good jobs.  (This stance has become more bipartisan lately.)
  • We understand that carbon taxes, regulations that shutter businesses, and other mechanisms that we propose to reduce the effects of “climate change” will seriously harm the economy and jobs, but we are willing to make that trade-off to prevent more catastrophic consequences–which would result in much lower levels of economic activity and human welfare—in the future.

These are legitimate philosophical positions to take and defend in a democracy, and they might win the day in today’s America.  But it is a striking feature of our culture in the last half-century or so that debate is rarely cast on these terms.

Why don’t liberals mention trade-offs?  One factor is that they think that such arguments are too sophisticated and would make it more difficult to sell their policies; it’s much easier to promise everyone a free lunch.  In some cases, they probably don’t understand that a trade-off exists in the first place (most liberals lack appreciation of basic free-market principles).  In others, they don’t see the trade-off as a cost at all:  when it comes to “climate change,” the massive reduction of industry, redistribution of resources from innovative capitalist societies to retrograde third-world countries, and the creation of supranational bureaucracies to centrally plan the economy are features, not bugs.

The essential problem is that the left has universalized its ideology that government is the solution to all problems.  Whenever there is any unintended consequence—and the consequences are almost always unintended, because the left’s first principles simply don’t understand that their good intentions have costs—they can simply enact another government program to solve the problem.

 

 

1 Comment

Filed under Big Government

Conservatives shouldn’t refer to “rationing” health care

Much commentary from the right on health care uses the term “rationing,” such as a recent piece by Wesley Smith in National Review Online.  Please indulge our minor quibble with the term “rationing,” because rationing supply and demand of goods for which we would like all an unlimited amount, such as health care, is exactly what markets are for.

Health care will be rationed by one mechanism or another.  Conservatives should cast the debate as rationing via market mechanisms versus rationing by government bureaucrats (sorry, “experts”), who, as Smith points out, are subject to all sorts of perverse incentives.  People who understand markets comprehend that, even were bureaucrats completely benevolent and possessing as much information as humanly possible, they could not ration health care (or any other good) to maximize welfare as well as the market could.

Perhaps when conservatives use the term, they merely are applying short-hand for the concept of “rationing by bureaucratic fiat” or rationing by non-market mechanisms in general.  But this does a disservice to the audience’s understanding of the free market:  we should make it clear that we are talking not about rationing as what markets do by definition, but rather by something akin to central planning.

I propose the use of more descriptive terms, such as “politicization of health care provision” or “death panels.”

Leave a comment

Filed under Big Government

Liberals may finally get their wish to eradicate car ownership, but miss the point as usual

Liberals hate cars.  The automobile, made a mass consumption item by American ingenuity, capitalism, and prosperity, is the ultimate symbol of personal freedom.  The car owner can drive wherever he wants, whenever he wants, accompanied by whomever he wants.  The milestone of owning one’s own car is a symbol of success to which many Americans aspire.  They open economic opportunity for commuters.  Cars are, for many enthusiasts, an expression of their individual style.  For many an individual living in a crowded home with a bickering wife and screaming kids, schlepping to a workplace comprised of people he doesn’t like, having to stand in line at the grocery store to pick up ingredients for dinner, those minutes in his car are a welcome respite of solitude in one’s own personal space.

These are all mindsets that liberals despise.  They decry the “suburban sprawl,” “gas-guzzling,” “road rage,” conspicuous consumption, luxury,  pollution, and overall selfishness that cars enable.  Liberals would prefer that you took the train or bus—quintessential symbols of collectivism—to travel from where they want you to be to where they want you to go, with the added benefit of being forced to mingle literally toe-to-toe with the rest of humanity.  It’s no coincidence that, unlike Europeans, Americans have not bought into large-scale rail travel.

Liberals have designed entire utopian frameworks, under banners like “smart cities” and “transit-oriented development” to centrally plan the organization of society in the manner that they find morally virtuous.  (Not to mention that liberal politicians love all manner of rail proliferation because it presents copious opportunities for graft, what with the land acquisition along future rail lines, to bloated construction and maintenance contracts and overstuffed union sinecures, to boards and commissions, tax increases, and ribbon cuttings.)

This is apparently the perspective of Dan Neil, writing in Wall Street Journal, whose ideology curtails his ability to analyze the economic implications of self-driving cars in an article entitled “Private car ownership is on the road to becoming a rarity.”

We agree that self-driving cars combined with car sharing have the potential to yield tremendous benefits for society:  reducing costs, allowing people to make better use of their time, allowing more people to be mobile, improving safety, reducing congestion, and, ultimately, allowing people to expand the radii in which they can readily travel, making for great economic benefit.

That’s all well and good, but Mr. Neil can’t help but ooze disdain for the very concept of private car ownership.  He lectures that it makes us “forget the joys of selflessness” in an era of “reckless glut.”

“In 25 years, the only people owning cars will be hobbyists, hot rodders and Flat Earthers,” he gushes, failing to acknowledge any of the benefits of private car ownership other than in these supposed fringes, and barely accepting the existence of a free-market outcome that means that people have the right to express their own preference.  Referring to China, he dismisses cars as nothing more than “status item, as luxury, as totem of personal mastery in a fragile postcolonial mind-set.”  Only a coddled liberal would so glibly dismiss the ability of a Chinese subject to unshackle state control of all aspects of his life in at least one dimension.

He concludes, “The notion that we as consumers will forgo the awesome pleasures of the automobile—the privilege, the mobility, the identity—to share vehicles is, I grant, unfamiliar.”  Mr. Neal, I would respectfully recommend that you familiarize yourself with it before breezily dismissing the benefits of freedom and autonomy that cars bring to so many people.

 

Leave a comment

Filed under Culture

We’re going to see a lot of this. . . but usually with at least some attempt at logic

Eugene Robinson’s apparently phoned-in column in the Washington Post yesterday raises what will be a common trope leading up to the 2016 presidential primaries and then the general election:  Is [insert issue here] good for [insert presidential candidate here]?  The answer, of course, no matter the issue, will be “yes” in the case of Hillary Clinton or whoever the Democratic nominee is and “no” in the case of the Republican nominee, with an extra vociferous “no” in the case of Donald Trump.  Media bias is always more prevalent when it comes to which issues even appear in  the first place than in how pieces are written.

Still, Robinson’s column is especially spurious and lazy, even by the standards of the Post editorial page.  His question is, “What could stumbling stocks mean for presidential politics?” and somehow his answer is that they would help Hillary Clinton.

If he presented a theory to explain why he thought this was the case, then we could just roll our eyes and conclude that it was a typical column.  (And then await a column next month, titled, “What could skyrocketing stocks mean for presidential politics?” which has the same conclusion.)  However, he doesn’t even offer any reason, other than the fact that Hillary Clinton has a resume that includes elected office and Donald Trump does not.

Robinson uses an anecdote to poke fun at the reactions of both John McCain and President Obama to financial turmoil in fall 2008, reporting the accounts of others that McCain “had nothing of substance to say” and Obama “gave an academic lecture on finance to a room littered with MBAs.”  Although his summary of Obama’s performance is not a compliment, Robinson concludes, “In the end, voters decided that sang-froid, perhaps with a touch of arrogance, was better than cluelessness.”

If we find ourselves in similar straits leading up to the 2016 election, Robinson avers, “I’m guessing it could make voters pay more attention to the candidates’ records on economic and financial management—and might give a boost to those with experience, as opposed to promise.”

If you were to think that this is an endorsement of Donald Trump, who has navigated all types of business environments very successfully, compared to career figurehead and politician Hillary Clinton (who does, in fairness, have a good track record in cattle futures), you would be wrong.  See, “Polls consistently say that voters see her as the most experienced candidate in either party.”  As a commentary on how one particular change in circumstances—a falling stock market—might impact different candidates, all else equal, this seems like a non sequitur.  He then spouts the brief talking-point attacks on most of the Republican candidates, including Trump, all of which are either irrelevant to his question or contrary to his conclusion:  he gives no credit to the “records on economic and financial management” of Govs. Walker or Christie, and doesn’t mention the other governors in the race.

His next non sequitur is the conclusion, which again does not follow from anything stated in the column:  “Logically, it seems to me that market craziness ought to be bad for Trump. But while his candidacy is about many things, logic isn’t one of them.”  So, if Trump’s candidacy is not about logic, then can we infer the converse of the first of these sentences—i.e., that “market craziness” is good for Trump?  We’re scratching our heads.

Leave a comment

Filed under Media Bias

Only 6.8% of those released from Guantanamo during the Obama administration have returned to terrorism to far. Progress!

Cliff Sloan, the bureaucrat responsible for winding down the terrorist detention center at Guantanamo for the past 18 months, takes to the pages of the New York Times to laud progress during his tenure and downplay the perceived challenges in finishing the job.

One of his main arguments suffers from some fatuous logic.  He cites former Vice President Dick Cheney’s report that 30% of those released are “confirmed” or “suspected” to have returned to Islamic terrorism after their release as a “deeply flawed” exaggeration because only half of those fall into the “confirmed” category.  Great, so only 15% of the released detainees certainly returned to terrorism!  (Thankfully, some of these have been killed or recaptured, and others have bounties on their heads, which should certainly give us pause in praising the wisdom of releasing anyone.)

He claims as some sort of success that fewer still of those more recently released have returned to the battlefield:

Of the detainees transferred during this administration, more than 90 percent have not been suspected, much less confirmed, of committing any hostile activities after their release.  The percentage of detainees who were transferred after the Obama-era review and then found to have engaged in terrorist or insurgent activities is 6.8 percent.

By definition, the more recent the sample size we are examining at any point in time, the lower the percentage of recidivism will be.  This obvious logic seems lost on Sloan.  Among terrorists who were released yesterday, the recidivism rate is zero!  Complete success!  Naturally it takes time for released terrorists to escape Uruguay, Kazakhstan, Qatar, or wherever they are sent from Guantanamo, be debriefed, reintegrate into the terrorist network to resume their calling to jihad, and come to the attention of our intelligence agencies.

Reasonable people can disagree about our Guantanamo policy.  There are legitimate arguments to be made about efficacy, cost, and even due process.  (Though Sloan’s quote from an anonymous “high-ranking security official from one of our staunchest allies on counterterrorism” that “The greatest single action the United States can take to fight terrorism is to close Guantanamo” seems like a non sequitur.)

Most Americans probably agree with the maxim that it is “better for 100 guilty men to go free than for one to be wrongly convicted.”  But this applies to American criminal defendants subject to U.S. constitutional protections.  It is easy to make the opposite argument—or at least to prescribe the presumption of guilt—when it comes to foreign terrorists captured on the battlefield taking up arms against the U.S. and its interests.

In any event, the citation of 6.8% of those released having definitively returned to terrorism in a relatively short time should be a red flag, not a celebration of success.  Not only does all evidence and logic inform us that that number will necessarily increase as time goes on, but there is no doubt that a principle of diminishing returns applies.  Presumably the 127 Muslim terrorists still detained at Guantanamo are the most risky cases, which is why they haven’t been released so far.

Let’s not throw around small-sounding (and artificially deflated) numbers as a means to take credit for the perhaps relatively lower-hanging fruit in an effort to obscure the grave risks of releasing terrorists back into the war against our civilization.

1 Comment

Filed under Foreign Affairs