RWCG


Volcker Rule still stupid, still incoherent, still not enforced
July 16, 2014, 11:39 am
Filed under: Uncategorized

Remember how ‘prop trading’ was banned by the Volcker Rule? That was awesome. ‘Prop trading’, as we all know, is when a bank does a trade ‘for their own account’ rather than on behalf of a client. (It’s evil and bad. It caused all bad things.) We all agree. Smart People agree. Smart People are Smart for agreeing. We’re Smart.

Meanwhile, in unrelated news, a bank just went out and bought like billions of dollars worth of mostly seasoned non-agency subprime mortgage bonds, for 73 cents on the dollar. Bloomberg helpfully explains that them and a buncha other banks were asked to bid on the block of bonds directly, ‘either to hold on their own books or to fill client orders’.

Wait, what? ‘Either’? How on earth could it be that first thing, legally-speaking? Does not compute.

Or do they have literally $3 billion some-odd worth of client orders lined up that they crossed literally all these bonds to yesterday? Did all the other banks line up (different?) $3 billion some-odd worth of client orders yesterday too?

Because whichever bank won the auction would’ve had to take delivery of a bunch of bonds T+3 or whatever, and if those bonds weren’t all immediately crossed to end-clients, the remainder would then, by definition, be sitting – as Bloomberg says – on their own books. Right there in ‘their own account’, so to speak.

Do you see? Is anyone getting this yet?

Oh, why do I bother.

UPDATE 7/17: If this followup is any indication I have a heaping helping of crow to eat. Hard to tell, but it seems to imply that the entire block was sold to clients (or in part to other dealers, who sold to their clients?):

Data on market trades yesterday from the Financial Industry Regulatory Authority signal Credit Suisse placed the bonds with clients, with a similar amount of debt being bought and sold by dealers.

So…nevermind? I guess this particular auction was perhaps Volcker-kosher on its own terms after all. If so I was wrong and my snark, dumb & misplaced for a change (unlike my usual snark, which is intelligent & on point).

Dang, by my count this would mark like the 4th time I’ve been wrong while blogging. See I told you I wasn’t a very good blogger.



Feeling Smart
July 6, 2014, 10:37 am
Filed under: Uncategorized

Elliot Temple replying to the Scott Aaronson post I reacted to here:

This is a common problem where people are more interested in the social role of a rational intellectual than truth-seeking discussion. They’re more interested in feeling smart than being smart. They’re more interested in self-image than action. They care about popular opinion and socialized legitimized status, and only feel much need to address arguments with some kind of (social) authority behind them. They look at the source of ideas and then wonder whether, socially, they can get away with ignoring the ideas (ignoring arguments is something they seem to treat as desirable and try to maximize).

It’s not about, “Have I already written an answer to this argument? Has someone else written an answer to it that I can endorse? If yes, I’ll give a link/cite. If no, maybe I or someone else better write something.” That’d be rational but few people think that way.

Instead it’s about, “If I don’t answer this, will other people think it was a serious argument I should have answered? Am I expected to answer it? Do I have to answer it to protect my social status? Do I have any excuses for not engaging with the argument that most people (weighted by their status/authority) will accept?”

Smart People.



Smart Person humbly suggests using higher math to secretly weigh Smart Peoples’ votes more
June 20, 2014, 8:12 pm
Filed under: Uncategorized

Scott Aaronson has written an interesting post (HT: mathbabe) proposing borrowing concepts from ‘eigenmorality’ and Google page-ranking to improve democracy. I thought I’d go into it a little if you don’t mind.

The core of the idea is this:

A trustworthy source of information is one that’s considered trustworthy by many sources who are themselves trustworthy (on the same topic or on closely related topics). The current scientific consensus, on any given issue, is what the trustworthy sources consider to be the consensus. A good decision-maker is someone who’s considered to be a good decision-maker by many other good decision-makers.

[...]

…once people’s individual decisions did give rise to a giant connected trust component, the recommendations of that component could acquire the force of law.

Essentially, some Google PageRank-like algorithm would be set up (by Smart People) to rank how ‘trustworthy’ people are (according to definitions and metrics presumably defined by Smart People). Starting from how much people ‘trust’ each other, the ‘largest connected trust component’ would be extracted via some basic linear algebra, and that component would be deemed to be Trustworthy, hence would rule. (And then we’d have a carbon tax1.)

In a sense, this is just a description of a hagiocracy – rule by priests, by people who are sufficiently holy. He just defines his ‘priesthood’ implicitly, in a certain way that (he is confident) would include himself and other Smart People who agree with him about stuff (like, a carbon tax). So in particular, the overall idea constitutes a decent outline of a formal, workable mechanism for setting up an Yglesiocracy:

Smart People favor the rule of Smart People.

Oh, but don’t worry, he doesn’t seek dictatorship and he doesn’t like numbers-based amorality that allows one gang to tyrannize another. Just ask him. He says so and everything. He just wants the views of the ‘largest connected trust component’, whatever they are, to ‘acquire the force of law’. Apples and oranges!

Let me start by dialing back his concept a bit and then seeing where it goes off the rails. Because he is right that our current system, (nominally) democracy, does a similar sort of thing: it is The Majority that rules. He just wants to replace The Majority with something else, The Smart People. But there would be advanced math™ behind it, so it’s all good.

In fact, we can cast winner-take-all democracy into his framework quite easily. To simplify matters imagine a country with five people (A,B,C,D and E) who are sharply divided into two Parties: A,B, and C implicitly trust each other about everything and distrust D & E, and vice versa. (This is an admittedly extreme but for our purposes reasonable approximation to how our society already works for certain issues.)

It’s easy to write down the equivalent of the trust-matrix for this setup:

trust

(I hope this is pretty self-explanatory. Row A has 1s for columns A, B, and C since that’s who he trusts. It has 0s for columns D and E since that’s who he distrusts. Etc.)

The ‘eigenmorality’/Google approach suggests that we convert this trust matrix, which encodes how much people (rightly or wrongly) trust each other, into something we interpret as an absolute, external, objective measure of trustworthiness, using the circular/implicit reasoning I excerpted above:

A trustworthy source of information is one that’s considered trustworthy by many sources who are themselves trustworthy

Or, as I put it in my groundbreaking, award-winning^H^H^H^H^H^H^H -eligible, seminal post on Smart People,

The odd thing about Smart People is that they all seem to know who they are. They recognize each other, instinctively.

It appears the Google/eigenmorality idea is that (due to some hand-waving) the most-likely-to-be-the trustworthy bloc would be represented by whoever’s in the primary eigenvector of the trust matrix, since if we ran this game a bunch of times, [a. give people some Trust Points, b. let them distribute them to those they Trust], that would characterize the long-term equilibrium.

In our above ABCDE case that primary-eigenvector happens to be (a multiple of) this vector:

eigen

What those 1s mean is that the people in party ABC are part of the largest eigenvector; the 0s mean that those in party DE are not. Which is just to say, for our simplified all-or-nothing party-system trust model, the largest eigenvector = largest connected component = the party with the most votes. So winner-take-all majority-rule democracy is the same thing as Aaronson’s ‘eigenmorality’ if ‘trust’/’morality’ is assumed to be binary and to correspond to simple-agreement on the issue in question.

And we even already have a mechanism for discovering this largest-connected-component too. It uses no advanced linear algebra. It’s called ‘voting’.

Aaronson is clearly unhappy with this mechanism though, since it doesn’t produce the outcomes he wants (e.g. a carbon tax). The policy he wants hasn’t gotten enough of this ‘voting’ thing and so there must be something wrong with that process, says he. What other process might his idea lead to, exactly?

Let’s modify our model a little. After all, it was admittedly an oversimplification. Let’s look for areas to improve and generalize. The first one is pairwise trust. I can buy that A trusts himself 1 trust-unit, but all other people? Just because they’re in his party? People aren’t so groupthink-minded right? So make things slightly more realistic: let’s say that instead of trusting each other 1, party members trust each other p<1:

trustp

But it doesn’t matter what p is (as long as it’s not 0): this still has the same leading eigenvector, the majority party ABC, as before. So this is still just a model of majority-rule democracy.

What to change next? One more thing oughta do it: Maybe the members of party DE trust each other a different amount, say q, than do the members of party ABC:

trustq

Does this change things? It turns out that it could: if q>2p then Party DE, not ABC, actually becomes the first-eigenvector.

smart

Despite being a minority, the PageRank Democracy Machine would do its linear algebra and declare – ultimately, simply because they ‘trust’ each other more, or whatever q is measuring exactly – that Party DE is the Most-Trustworthy-Connected-Component and therefore that their preference – not that of the majority, ABC – should carry force of law.

Another way to get the same exact outcome, clearly, is just to give the votes of Party DE, the Smart People, extra weight.

So don’t be fooled; that is what he is saying he wants. If Smart People can convince Linear Algebra that they’ve arranged themselves into an impressive-enough Mutual-Trust-Admiration-Society (and is that not, if nothing else, exactly what Smart People are good at doing?), then they get to rule, regardless of such parochial concepts as actual voter preferences.

Thus we see that this ‘eigenmorality’/PageRank-based reform of democracy is really just a roundabout way of overweighting the votes of Smart People (more generally, of whoever can figure out how best to game the math and control the spigots of who is given ‘trust’ – but we’re all pretty convinced that would be Smart People, right?), in the guise of Google-like hi tech and advanced math™.

Now sure. A straightforward, overt appeal to give Smart People double-votes, to count non-Smart People as 3/5 of a vote, or whatever it takes, probably wouldn’t have been so appealing or palatable. But perhaps this idea of ‘using linear algebra to discover the Most-Trustworthy-Connected-Component’ could sneak through?

I’m just here to tell you that, despite the hifalutin language and math, for all intents and purposes they’re the same exact thing. Do not be fooled; Aaronson wants the votes of himself and people-who-agree-with-him-about-stuff to count more than they currently do. That is what he is saying. That is all he is saying.

In fairness, it’s a pretty common wish.


1It’s pretty amusing just how important something like a carbon tax is to Smart People, even those who don’t know the first thing about either climate modelling or economics and thus have no idea whatsoever what if anything a carbon tax would accomplish.



Anniversary
May 17, 2014, 8:29 am
Filed under: Uncategorized

Congratulations on an improtant millstone.



Question time – open borders
May 16, 2014, 9:43 pm
Filed under: Uncategorized

This time it was Bryan Caplan’s turn to play Smart Person by asking Mark Krikorian some Questions. Do you want to know my answers to those questions? Well regardless (and despite the redundancy, since my answers are broadly similar to Krikorian’s) here they are:

How much would open borders have to raise living standards before you’d reconsider? Doubling GDP clearly doesn’t impress you. What about tripling? A ten-fold increase?

No one can prove, even in principle, a proposition such as ‘open borders will raise living standards by X’ as a sort of Law Of Physics, so let’s take that off the table right now; if that’s the premise of the question I reject it outright. Also, merely ‘raising living standards’ is too aggregate and vague for my taste; whose living standards? I reserve the right to care about micro details of what happens, not merely macro or on average. Finally, ‘living standards’ isn’t even the only relevant metric.

In the end we all form a view regarding what the likely effects of open borders – or any other nontrivial policy – would be, based on knowledge and data but also based on our economic and other intuition, our priors, our experience, and so forth. We then measure that against our preferences. Viewed in this light Caplan is essentially asking ‘if you thought open borders would be beneficial would you think open borders beneficial?’ Sure! But in the event, evidently, taking everything into account, I don’t find open borders to be desirable. If I did, then I would, but I don’t, so I don’t. Sorry, what is Caplan even asking?

Suppose the U.S. had a lot more patriotic solidarity. In what specific ways would it be better to live here?

There would, I have to think, be more good fellow-feeling amongst the people one encounters day to day. There would be less insularity and distrust. That’d be pleasant, I think.

I also venture that there would be less of the cheating, angling, trickery, corruption, rent-seeking, etc etc that IMHO is pervasive in modern life. I mean, if there really is a lot more solidarity. Right? We hear a lot about ‘high-trust societies’ (and they are usually quite homogeneous). Although it isn’t mentioned as much, this presumably goes hand in hand with high-trustworthiness societies. It is not the dumbest thing in the world to think that ‘patriotic solidarity’ would nudge things in that direction, and that that would be nice.

Aren’t there any practical ways you could unilaterally adopt to realize their benefits? Are you using them?

Krikorian didn’t understand this question but I do; Caplan links to his ‘bubble’ post. So I interpret him to be asking this: whatever good effects I think might stem from ‘patriotic solidarity’, can’t I just ‘unilaterally’ create them on my own?

I think the answer is a resounding no. I can’t ‘unilaterally’ make other people act more pleasantly. I can’t ‘unilaterally’ get others to stop trying to rip me off. I could metaphorically (or literally) build a moat and fortress around myself and mine in various ways – and people do – but that’s very expensive (so I perceive it as a cost/tax), and doesn’t really achieve the state of ‘patriotic solidarity’ anyway.

These are weird questions. Suffice to say that ‘patriotic solidarity’ as such isn’t my main reason for being an immigration-trimmer, but I guess there was a context for Caplan raising these points. In any event, they aren’t good ones.


Do you really think low-immigration parts of the U.S. are nicer places to live? If so, why aren’t more natives going there? Why don’t you?

Some are some aren’t. It’s not a single-dimensional issue. It’s also not a simple matter of evaluating or going to ‘places’ that are ‘low-immigration’ in some aggregate sense.

In fact, I would say that generally natives do try to go where immigrants aren’t, whether or not they live in a place that is ‘low-immigration’ overall. Ever hear of ‘white flight’? I presume Caplan is thinking of places with a lot of immigrants somewhere kinda nearby – you know, so that they can commute in to be ‘workers’ to aid him and his in his daily life – but that’s not quite the same thing.

New York for example may have a lot of immigrants but fancy rich people will pay up to live cloistered away from them – even if that only means a couple dozen blocks away. Or look at a racial map of the DC metro area sometime; it’s a pie chart. Both of those places are ‘high immigration’ but the natives are expressing clear revealed-preferences regarding proximity to immigrants (among other groups), and no, Bryan, that revealed preference is clearly not indifference.

Doesn’t patriotic solidarity often lead people to unify around bad ideas? Think about the Vietnam War or Iraq War II. If so, why are you so confident that we need more patriotic solidarity rather than less?

I guess a thing can lead to unifying around bad ideas sure. I have quibbles with the examples he gives but it’s not worth going into. Again, I am not a non-open-borderser primarily because of a desire to engineer an increase in ‘patriotic solidarity’ so the question doesn’t really apply to me.

I’m sincerely puzzled. How exactly is discriminating against blacks worse than discriminating against foreigners?

Krikorian’s answer is fine.

Suppose you were debating a white nationalist who said, “I agree completely with [you], except I value racial solidarity rather than patriotic solidarity.” What would you say to change his mind? Would you consider him evil if he didn’t?

I’m not sure why I’d be ‘debating’ with him. I don’t really care what he thinks. Why do I have to ‘change his mind’? Maybe I’d just walk away. Or if I stayed, maybe I’d be listening to his thoughts out of sheer curiosity without feeling any sort of obligation or pressure to ‘debate’ them.

If I were really heart-set on changing his mind, I guess I’d make the argument to him that pitching (white, Caplan presumably means) ‘racial solidarity’ is a loser’s game and a lost cause and not really even likely to achieve whatever goals he has. What does this have to do with anything? The idea is that non-open borders is equivalent to white supremacy? Sorry, it’s just that it can be hard to follow when an open-borderers goes Full Lefty like this.

Suppose you can either save one American or x foreigners. How big does x have to be before you save the foreigners?

There’s no mathematical critical-threshold x that I could define and state here and it would be stupid if someone did state such a thing. Like a human, I’d take this sort of thing on a case by case basis.

In what sense is letting an American employer hire a foreigner is an act of charity?

It’s not. As I’ve stated many times,

(a) I’d ‘let’ American employers hire foreigners or anyone else, I don’t care; and
(b) doing that by itself does not ‘open the borders’ so it’s silly to include it in an open-borders pitch.

I know I keep saying that over and over, which is a little silly in its own right and accomplishes little besides scaring readers away, but I promise it’s only because Bryan Caplan doesn’t understand it yet. He literally doesn’t understand the substantive difference in what is taking place between letting an employer hire someone and letting a guy cross the border. I’ve pointed it out to him. He’s read the words where I pointed it out to him. And they didn’t register, because he’s ‘not a lawyer’.


Suppose the U.S. decided to increase patriotic solidarity by refusing to admit Americans’ foreign spouses: “Americans should marry other Americans.” Would that be wrong?

If that were the policy beforehand and it were known by all then there really wouldn’t be a lot of situations involving someone getting married (elsewhere, it would have to be, logically speaking) and then trying to bring their spouse to America only to have America ‘refuse to admit’ them. Instead the status quo legal situation would be that marrying someone in a foreign country wouldn’t confer on that person the automatic right to immigrate to America. Everyone would know that. And thus they probably wouldn’t court or get married to foreigners, or if they did, they’d do so with no expectation of being able to return to America with their spouse, rather, they’d do so with the intent to stay in the country in question.

That may or may not be a wise or desirable outcome but I have a hard time seeing such a counterfactual as some kind of grave ‘wrong’ to get all worked up over. It seems like a highly relevant question only because, as I promise you I am fully aware, Americans marrying foreign spouses happens a not-insignificant amount of time, but if the legal landscape were as Caplan posits then I guess it wouldn’t be so much, so it kinda wouldn’t come up. *shrug*

This is a good example though because it illustrates that whether to allow this or that person to immigrate is nothing but a practical question on which there can be reasonable disagreement, discussion, etc. ‘Rights’ do not belong in the discussion and you will search for them in vain in my above answer to his question. That’s because it would be ridiculous to insist that a foreign person upon saying ‘I do’ to an American suddenly and magically gained the natural inalienable human ‘right’ to resettle within the United States. That’s not how it works and it’s not on the table. It’s a thing we decide, just as with all immigration allowances.

This has been another…QUESTION TIME



Question time – climate change
May 16, 2014, 1:15 pm
Filed under: Uncategorized

When a Smart Person is talking to a non-Smart Person, he loves to line up an enumerated list of ‘Questions’ for that person. Devastating questions. In answering them the non-Smart Person will inevitably reveal how much of a neanderthal he is somewhere.

Let me demonstrate by tackling some Questions recently asked of Bryan Caplan by (some guy who wrote a cartoon book) regarding Climate Change.

Are you comfortable saying that carbon dioxide is a greenhouse gas?

Um, sure? ‘Greenhouse gas’ is a category of thing with a definition. Carbon dioxide meets that definition. Duh. This is like asking am I comfortable saying that 2 is an even number. There is not real debate about this.

That human emissions of carbon dioxide are raising atmospheric CO2 concentrations?

I guess; if humans emit X CO2′s then at least in short-term there are X CO2′s that weren’t there before. Though there could ultimately be feedback effects, which I don’t trust anyone to have modeled well. (For example more CO2 -> more trees -> less CO2, so it’s a wash? I dunno. Nor do you.)

Perhaps the real implied question is, if one goes back to (say) 1850 and spawns a parallel universe in which one instantly and without pollution kills all the humans, then runs the clock forward to today, is there more CO2 in our universe than in that parallel universe’s 2014? In that case, my even-money bet would be ‘yes’. But I don’t feel hugely strongly about that. I also don’t care or think it is germane to much of anything.

That global temperatures have been increasing over the past century?

So they say. I haven’t been measuring. I have seen measurements that seem fine and show warming from the late 1800s to ~2000. It seems to have paused in the last decade or two though.

Climates change. Did you know there have been “Ice Ages”?

That humans are partly responsible for those increasing global temperatures?

I doubt it, unless ‘partly’ is defined so expansively as to mean ‘causing an epsilon temperature increase, with probability epsilon, for some epsilon>0′.

Again it would be convenient to check that parallel universe, but absent that, all we have are computer models to inform our answer to this question. I don’t trust the output of those computer models to have the resolution or accuracy enabling them to establish a hypothesized Human Responsibility Factor as being measurably, statistically-significantly different from 0. Does the cartoonist? If so, why, exactly?

That “it is extremely likely that human influence has been the dominant cause of the observed warming since the mid-20th century”?

‘The’ dominant? No, I do not think this extremely likely. I think it is one of the possibilities, sure.

By the way, none of the above questions matter one iota regarding what forward-looking climate change policy ought, or ought not, to be.

Thanks everyone, this has been: QUESTION TIME



Amnesia
May 14, 2014, 7:37 pm
Filed under: Uncategorized

Mortgages Should Be Easier to Get

Right. Of course. Pointing government policy toward making mortgages easier to get has always worked out pretty well for us before.



The duty to coordinate
May 13, 2014, 9:14 pm
Filed under: Uncategorized

Florida Couple Fined $746 For Crime Of Feeding Homeless People

The police chief helpfully explains:

“If you want to feed people, and you want to do a good, Christian act, we encourage you to coordinate with the social service agencies.”

Makes sense. How/why could someone do a good, Christian act without ‘coordinating with ‘the social service agencies’? Why would this even be allowed?

In any fascism, there can be no religion outside of the state.



I, too, am an immigration ‘trimmer’
May 13, 2014, 7:19 am
Filed under: Uncategorized

Immigration, Yes — and No

Good, balanced piece by Gene Callahan. (h/t Danny Kenny)



Not just hands
May 12, 2014, 8:10 pm
Filed under: Uncategorized

David Henderson, probably my favorite EconLog blogger, comments on a recent open-borders debate in which Mark Krikorian apparently made this important point:

The second [point Krikorian makes], which goes from about 19:00 to 20:30, is that immigrants aren’t just hands, that is, not just workers, but are also people.

Bingo.

Unfortunately, the full meaning and import of this comment seems to have been lost even on Henderson, who misses the point by only replying:

Krikorian seems to be making this as a criticism of immigration and I don’t get it. I find the fact that they’re people a positive on net, not a negative.

Let me just say that I’m right there with Henderson in this sense: ‘the fact that they’re people’ isn’t helpful as a uniform criticism of all immigration. (Who was criticizing ‘immmigration’?) It’s just part of a criticism of open borders. That is because, however much one may think ‘people are a positive on net’ (and I suppose even I do, misanthrophic hater that I supposedly am!), there are still – undeniably – a nonzero number of people who would not be. Hence, I reserve the right to think some people more ‘net-positive’ than others – as indeed we all do, in any number of the daily associations that we form, or don’t, as the case may be.

‘People are a positive on net’ then is just not helpful as an argument for open borders, not unless whether/to what extent to allow immigration is somehow an all-or-nothing proposition. But says who? Why do we have to do this calculation only ‘on net’? The excluded middle being assumed away, allowing only some immigrants – i.e., having a restrictionist immigration policy – is precisely the proposition under discussion and which Henderson purports to be arguing against. This means that taken as a counter to restrictionist arguments, his comment begs the question.

In fact, I can perfectly well agree with David Henderson that immigrants are a net-positive but still favor restrictionist policies; in part that would be because not all of them are (as Henderson himself would presumably agree). Going back to the ‘hands’ vs. ‘people’ point, I think a problem I have with Caplanite ‘immigrants=workers’ type constructions is that they, seemingly intentionally, either paper over or declare out-of-bounds the very dimensions along which increased immigration would fail cost-benefit analysis. And I suppose that was Krikorian’s point, though of course I can’t be sure, given that as usual I’m blogging this off-the-cuff without actual reference to the source material I’m supposedly commenting on.



Gillespie gives us THE DEFINITIVE ARGUMENT for open borders
May 10, 2014, 8:48 am
Filed under: Uncategorized

From Nick Gillespie at Reason:


Immigration Helps American Workers: The Definitive Argument (And Why It Won’t Matter)

You ready, folks? This is going to be ‘the definitive’ argument! The argument is going to be just so good that there can be no possible disputing it afterwards! I can’t wait.

A recent Washington Post article reports on new studies about the employment effects of immigration.

‘New studies’. I’m excited already. Is there any case of a social-science ‘study’ that didn’t become the ‘definitive argument’ for something? No! Social-science ‘studies’ are always unequivocal and totally convincing. I’m not even sure there’s any reason to read further.

The basic conclusion? Immigrants don’t displace native-born workers.

They ‘don’t displace’ native-born workers. Ever. Not any of them. This isn’t an aggregate conclusion, mind you; this is an absolute conclusion. Immigrants ‘don’t displace’ native-born workers. As a sort of law of physics, I reckon.

That must be some ‘study’! Because where I come from, no conceivable ‘study’ could possibly prove this claim, even in principle (let alone definitively). But Reason said so so it must be so.

Maybe the devil is in the details:

immigrants fill labor gaps;

What’s a ‘labor gap’? Would that be a ‘job where employers would have to pay higher salaries in order to attract workers if they weren’t able to tap the immigrant gray-market’, by any chance? Why is it a good thing to ‘fill’ this ‘labor gap’ with a gray-market, why not let it be ‘filled’ the way markets adjust to other such ‘gaps’, by letting the price go up?

immigrants don’t have access to the same jobs as natives;

Right, especially when/where a large portion of them are illegals and thus exist in a legal no-man’s-land, hence employers can take more advantage of them. This…is an argument for such a situation not only persisting but being encouraged and nurtured?

immigrants complement (rather than replace) existing capital, tech, and workers;

‘rather than replace’? Another absolutist claim where it would be more honest to state this as an aggregate/’on average’/’for the most part’ type of claim.

labor markets adapt;

Well, they kinda have to, right? But the question is what shocks/forces we do or don’t wish to throw at the labor market that it will (inevitably) be forced to adapt to, and do we like the result of that adaptation. Since this is a ‘definitive argument’ surely that question is addressed and answered somewhere…

complementarity increases productivity, which in turn increases wages.

Sensible, where such complementarity exists.

Gillespie points us to two highly-lightweight-looking ‘papers’ (PDFs put up on some think-tank web site; it’s not clear to me if/where they are published) that are supposed to form the basis for all of these absolutist conclusions. The ‘papers’ are short, mostly verbal, and contain graphs like this:

Which, I claim, demonstrate approximately 0% of what Gillespie suggests. Just off the top of my head:

‘Foreign population’ is measured differently in different places. ‘Unemployment’ is measured differently in different places. There are undoubtedly local idiosyncratic reasons and situations affecting these numbers meaning that these aren’t at all apples-apples comparisons. Fitting a quadratic function through these data is a hilarious thing to do.

And more to the point, I had thought the question was not whether ‘foreign population’ in aggregate increases ‘unemployment’ (however measured) in aggregate, but whether immigration ‘displaces native-born workers’, because I was promised that it didn’t. Moreover, this chart doesn’t show that and couldn’t show that even in principle, because ‘unemployment’ is an aggregate number that can mask what is going on under the hood. You can have workers X, Y, Z get laid off Because Of Immigrants but if workers A, B, C (for example, immigrants!) get new jobs at the same time, the ‘unemployment rate’ will stay about the same. In such a case it is just not true that no one got displaced.

There is a weaker claim to be made perhaps, that immigration doesn’t hurt ‘overall’, but that is cold comfort to X, Y, and Z, and doesn’t address their actual concerns, now does it? So there is no support whatsoever for Gillespie’s ‘don’t displace’ assertion in the papers he points to. (This loose, careless, absolutist way of pushing various empirical claims is, I have noticed, a very common feature of pro-open-borders rhetoric.)

Second, Gillespie shows us a chart from the other paper, a ‘meta-analysis’. Oooh, meta-analysis! I love those! Read a bunch of other papers and histogram their results. SCIENCE

This is junk. I don’t even know what to say about it.

THE DEFINITIVE ARGUMENT, though. I keep forgetting. Gillespie is pretty blown away by this stuff (if he even really read it):

I don’t expect this latest foray into empirical reality to change most people’s minds on immigration.

What ‘empirical reality’? The empirical reality of how many papers (that some authors decided to read) had regression coefficients in which bin?

The thing is, I don’t even care that much about the immigrants-steal-our-jobs factor. That is not why I am an immigration ‘restrictionist’ (i.e. non-open-borderser). I’m just saying that people who are and who do have such concerns should not feel bullied or even threatened in any way by this sort of junk ‘study’.

Yet the simple reality is something like this: Immigrants, who are barred from receiving most forms of welfare in America,

Wait what? ‘Barred from receiving’? And ‘immigrants’ (not merely illegal immigrants)? What is he talking about? Unless by ‘most forms of’ he excludes things like using the hospital for free medical care… More loose, sloppy language. If the case for immigration is so strong why does everything need to be exaggerated, why do subtleties need to be ignored? Why write this way when one is clearly capable of better thinking and better writing?

Or restrictionists fixate on the willingness of cantalope-calved “criminals” to cross a fucking desert in order to

‘Fixate’. ‘Fucking’. Wow now I’m really blown away by this ‘definitive argument’. HE SAID FUCKING. I am devastated by the sheer power of this logic

Or they enlist SCIENCE in the cause of closing borders: Don’t you know that evolution means we are designed by nature to hate Mexicans who don’t look anything like us second-generation Italians, third-generation Jews, and seventh-generation Tennesseans?

Huh? I don’t even know where he got this straw-man

But that sort of atavism and emotionalism is simply no basis for public policy or living an examined life.

Yeah, we sure wouldn’t want to let ‘emotionalism’ get in the way of our clear-headed examined life, would we, Nick Fucking Gillespie?

I’ll say this again: it’s the issue of immigration itself. It’s not the writer. Something about this issue just takes intelligent folks’ brains and temporarily destroys their reasoning ability. I probably like, enjoy, and respect in excess of 95% of the writing of Nick Gillespie (and Bryan Caplan for that matter). But when they get to the subject of immigration they just turn into naive first-week college-freshman ranting and raving in the student union. Reason goes out the window. Tempering and hedging one’s claims goes out the window. Blow smoke, change the subject, muddy the waters. Propagandistic language and straw-men, mischaracterizing and demonizing one’s opponents’ views and motives, become the order of the moment.

It’s striking: Why is unlimited immigration, alone among public-policy issues, so important that it turns the Nick Gillespies of the world into Michael Moore?



I’m making progress with Caplan on open borders
May 8, 2014, 11:15 am
Filed under: Uncategorized

Caplan:

Why should we grant foreigners the rights to travel, live, and work where they want? [...] I’m not proposing that we give foreigners homes or jobs. I’m proposing that we allow foreigners to earn these worldly goods from willing native landlords and employers.

(emphasis mine)

I’d like to note that, compared to most of his rhetoric, Caplan has apparently added ‘travel’ to his list of asks. That is a good thing. He’s getting there.

His prior constructions have been things like ‘let anyone take a job anywhere’. He also mentions ‘renting’ from ‘willing landlords’ a lot. As I have pointed out repeatedly, immigration isn’t merely getting a job and it isn’t merely renting an apartment. There’s something more to it than all that. And so as I have pointed out repeatedly, ‘letting’ anyone take a job/rent an apartment from a willing whatever – which I’m all for – doesn’t amount to open borders. You still have to, like, open the borders themselves.

I engaged him on Twitter about this but he eventually waved me away with (weird, coming from Bryan Caplan) accusations that I was being pedantic for him, because he’s not a lawyer. Yeah, Bryan Caplan is more about emotion and fast & loose reasoning (sure).

Anyway, in spite of that feigned inability/unwillingness/lack of temperament to grasp the logical distinctions I was drawing, I’m pleased to note here that Caplan’s recent subtle insertion of ‘travel’ into his pro-open borders litany is presumably a (welcome!) recognition of my point. Because it indicates that he finally recognizes that merely allowing ‘working’ and ‘renting’ doesn’t get him open borders.

But then look at the last sentence quoted above. For some reason, after asserting the right to ‘live [reside], work, and travel’, he only mentions willing landlords and employers. That is a fine construction for convincing a libertarian that letting people ‘live’ and ‘work’ where they want should be allowed.

But what about the travelling part? What about the – you know – actual immigration component of immigrating?

There is a glaring obvious hole in his rhetoric. There were three claimed ‘rights’ not two, so clearly he needs to mention – in addition to ‘landlords’ and ‘employers’ – a third ‘willing’ counterparty who, if they are ‘willing’, would be the one allowing the travelling?

Who is that counterparty, I wonder?

Why, it’s us! The People of the United States! More specifically, it’s us via our representatives in our government that we charge with defending and enforcing our national border.

But that’s just it, Professor Caplan. We aren’t willing. You can’t beg the question by assuming that we are. If we were, we wouldn’t be talking about this. So sure, anyone anywhere should be able to

a) live,
b) work, and/or
c) travel (i.e. immigrate)

anywhere they want, in any situation where they have found willing

A) landlords,
B) employers, and/or
C) nations.

The only problem then is that Caplan left out (C). Once he goes all the way and realizes that, we’ll be in total agreement!



Somewhere, in a saner, more grown-up society
May 6, 2014, 7:41 am
Filed under: Uncategorized

A: I guess we all look alike to you then, huh? I see how it is!

B: Well, you do have strong similarities in skin-hues and facial features, almost by definition, else we wouldn’t be talking about this. But perhaps more interestingly, and what compounds this, comes from the fact that we learn to distinguish faces and types starting when very young. Now, as you might guess, my upbringing is simply such that I was raised and grew up with far more daily exposure to people of my grouping – starting, of course, and unavoidably, with my immediate and extended family members – than to people of your grouping. This is normal and natural and everyone has some upbringing of some kind in which the people to which they’re exposed constitute a non-representative rather than perfectly-cross-sectional-on-all-metrics subset of humanity. We don’t hold this fact against people or hold them to blame for such things, that wouldn’t make any sense.

A: Oh. Right. Ok cool. Want a beer?



Immigration Is Not Employment And It Is Not Renting An Apartment, Professor
May 3, 2014, 11:26 am
Filed under: Uncategorized

Caplan

Under current U.S. law, it is illegal for a foreigner to work for a willing American employer or rent from a willing American landlord without government permission. For most foreigners, this permission is impossible to obtain. As a result, hundreds of millions who want to move here are stuck in their birth countries.

No, they’re ‘stuck’ in their birth countries primarily because they can’t get permission to cross the US border (or other borders, apparently; why does it have to be the US?). If we made it legal tomorrow for all foreigners, or whoever else, to work for a willing American employer or rent from a willing American landlord without government permission (which I’m all in favor of!) that wouldn’t magically render all foreigners legally able to cross the border. You’d still need to go the extra step of opening the borders (removing visa requirements, not stopping anyone, whatever it takes). Right? Can anyone dispute me on this? Anyone at all?

But Caplan doesn’t acknowledge this because he can’t acknowledge it without breaking the immigration = employment illusion he rests virtually all of his ‘moral’ argument on. For example:

The moral claim: Immigration restrictions are unjust. Letting people work for willing employers and rent from willing landlords is not charity. It’s basic decency. And even though foreigners wickedly chose the wrong parents, they’re clearly people.

Note: again: I agree! Let’s let people work for willing employers and rent from willing landlords. Whatever!

But that doesn’t get you to an argument that immigration restrictions are unjust. Immigration is not employment. Immigration is not renting an apartment. He just keeps on pretending that it is. Again and again and again. He needs to knock it off. I won’t until he does.

The empirical claim: Being just to foreigners would cost us less than nothing. When people immigrate here to work, they simultaneously enrich themselves and us.

Even if I agreed in the aggregate (it’s hard to say – would require a Large Calculation, which Caplan is not capable of), there are distributional effects. Who is ‘us’? Some of us are different than others of us. In any event, this is where open bordersers ought to focus their energies. Go for it. Roll up your sleeves, do the economics and convince enough of ‘us’ that the cost of more immigration is ‘less than nothing’.

That hasn’t happened yet, evidently. So here we are.



Are we witnessing the world’s first ‘open-borders’ invasion?
May 1, 2014, 12:02 pm
Filed under: Uncategorized

First, Cato on open borders:

The main effect of our immigration laws is to keep out willing foreign workers from selling their labor to willing American purchasers.

Immigrants = ‘foreign workers’. The two sets coincide and are identical. Every single immigrant or would-be immigrant has a ‘willing American purchaser’ [of their labor].

It’s just always helpful to cite this fallacy wherever I see it, lest the reader get the impression that it’s only Bryan Caplan.

Also here note the rank materialism of the sentiment! Immigration is entirely a market transaction. In this myopic view, literally all of human life – where a person puts roots and lives and breathes and raises a family and who he goes to school with and goes to church with and has holiday events with, let alone which nation he is in and feels a part of and feels or (we presume?) will develop patriotism and loyalty towards – is reduced to ‘selling’ one’s ‘labor’ to someone who thereby ‘purchases’ it. That is all that is important about immigrating: where one works afterwards.

If you take this talking-point at face value you can’t help but conclude that the person spouting it has a ridiculously, and sadly, one-dimensional view of what life (and thus, in particular, nationality) is about. (That I don’t conclude that is only because I don’t believe people employing this rhetorical device sincerely believe what they’re saying, I think they just think it’s an easy debate trump-card that is Just Too Good to fully think through or leaven with any nuance or hedging.)

Anyway, I don’t even know what to say about this:

Second, if any peaceful and healthy person could come to the United States lawfully then anybody attempting to enter unlawfully would raise red flags…

If anyone can enter lawfully then what on earth does it mean to ‘enter unlawfully’? He appears to be describing an empty-set. Yes, it will become trivially easy to arrest the by-definition zero people who enter unlawfully.

Or is ‘peaceful and healthy’ supposed to be what does the brunt of the work there? But then how are people checked for whether they are ‘peaceful and healthy’? And where? At the border, which we are not enforcing? When applying for a…visa? What visa? I thought we wanted free immigration, like in the glorious 1850s?

My head hurts now.

A more interesting point I think is raised by many of the sentiments in that piece, such as this one,

If the United States would return to its 1790-1875 immigration policy, foreign militaries crossing U.S. borders would be countered by the U.S. military.

is that open-bordersers have yet to fully come to terms with the implications of what is now taking place in the Ukraine.

Ukraine is being invaded and taken over. Its ‘sovereignty’ is not only being violated but is being supplanted by a foreign power. But this foreign power has not, for the most part, sent (identifiable) ‘foreign militaries’. Instead they have sent young uniformless hotheads with their faces covered to ‘invisibly’ instigate and take over, in a way that provides (silly and believed by literally no one, but effective nevertheless) deniability that this is what is occurring.

The above libertarian conception of why open-borders would be fine and dandy to repel ‘invasion’ might be appropriate for a 1940s- (or 1910s-) era invasion in which a Foreign Army is visibly and ostentatiously Marching across the border to Seize Territory. It is toothless and impotent however in the face of anything not so in keeping with the official rules of the game of Risk.

As far as I can tell, most of what Russia has done so far vis-a-vis Ukraine (save perhaps in Crimea) is perfectly open-borders compatible. Some guys have come across the Ukraine border, so what? That’s an inalienable human right, don’t you know. Just ask open borders dot org, they wrote a blog post asserting as much and everything.



Two Whales are bigger than one
May 1, 2014, 7:24 am
Filed under: Uncategorized

So the US government lost $11 billion of your dollars on a $50 billion investment of your dollars that they made in General Motors – a loss which amounts to almost two London Whales. The differences being that

(a) the London Whale didn’t lose a single dime of taxpayer money, he implicitly lost JP Morgan equity holders’ money, and

(b) the people who were always fretting about the London Whale losing $6 billion non-taxpayers’ money, so much they insisted that it justified a thousand-page law and an army of overseers regulating bank behavior and endless public discussion and Congressional hearings, don’t appear to give a rat’s ass that the US Government up and lost $11 billion of actual taxpayer money doing whatever-the-hell.

What were they doing with it, you ask?

“The goal of Treasury’s investment in GM was never to make a profit, but to help save the American auto industry, and by any measure that effort was successful,” Adam Hodge, a Treasury spokesman, said in an e-mail yesterday.

Oh. My bad. See, I thought they didn’t have any objective justification of or accounting for what was purchased with that $11 billion loss. But they totes did: ‘help save the American auto industry’. Which they did. So we got our moneys’ worth, I guess. I mean, how can I dispute such a tangible and quantitative claim as that?

The Bloomberg article goes on to state, as fact, that the U.S. auto industry is “revitalized”. So revitalized that “However, the stock had fallen 16 percent this year through yesterday as the automaker struggles with reputational issues following its slowness to recall 2.59 million cars with potentially faulty ignition switches linked to at least 13 deaths” and “GM told investors to temper their expectations for the rest of the year.”

Yeah, that was worth it.

Anyhow, I write this not to evaluate the state of the U.S. auto industry, which for some reason is interpreted to equal GM, but rather to note the discrepancy and inconsistency here. If you were paying attention on the Internet for, say, 2012, you saw a ton of self-anointed Econo Commentato Bloggers spewing forth tons of electrons on the issue, apparently super important to them, of what banks should and shouldn’t be allowed to do and how hyper-regulated they should be. The premise driving these Smart thoughts is that banks represent an implicit taxpayer liability because they might lose a lot of money, in which event Congress might bail them out. Well, fine. But here’s a case of an industry that ACTUALLY got bailed out and ACTUALLY lost a lot of taxpayer money, and what do we get from those same Smart People? Silence. “Oh whatever, it was worth it. Stimulus, or something.”

$11 billion is much more than $6 billion you know. Yet there is a large disproportionate response, going in the other direction, between Smart Peoples’ reaction to the ‘London Whale’ and their (non-)reaction to this event. If that alone doesn’t make you wonder about the sincerity and consistency of the stances Smart, Volcker Rule-spouting People have been taking then I wonder what would.



The ‘liberal’ equivalent of ‘climate denial’
April 29, 2014, 3:35 pm
Filed under: Uncategorized

Although this is good, it fails to get at the core of what is going wrong in the ‘climate change’ vs. ‘climate denial’ debate.

One way to parse Ezra Klein’s question, What’s the liberal equivalent of climate denial?, is to interpret him to be asking this:

What’s an issue where The Science says X but The Liberals [sic; leftists] say Y?

I’m sure that’s what Ezra Klein thinks a ‘liberal [sic] equivalent of climate denial [sic]‘ would be. But to fight him on those grounds is to concede too much.

This is how you get at what a true ‘liberal’ (leftist) equivalent of climate change would be. Imagine this scenario:

1. First, conservatives have a prior basket of policy wants. For concreteness, let’s say it’s ‘eliminate welfare programs’.

2. Some scientists from a previously-marginal, niche field come along and say something like this: “According to our calculations, there’s an outside chance a lot of bad stuff could happen.”

3. Conservatives generally don’t know what the fuck the scientists are talking about because they don’t have the first clue about the details of the field.

4. Nevertheless, conservatives proceed to – inappropriately and without justification (because they don’t know fuck-all about the field or how the calculation was performed) finish the thought: “…if we don’t eliminate welfare programs! Yes, we understand the urgent need to get rid of welfare! Thanks, Scientists!”

5. Conservatives proceed to insist on eliminating all welfare programs Because Science (and call anyone who disagrees, stupid). There are a few – a tiny handful – of activists from that field who are all too happy to lead this effort.

6. Lefties say naw, let’s not.

That’s what would have to happen in a true ‘liberal’ (i.e., leftist) equivalent of ‘climate denial’ (i.e., the non-urgency to impose centralized government restriction and taxation of all emission of molecules containing the element carbon). In other words, a ‘liberal equivalent of climate denial’ would have to require conservatives to act like ignorant intellectual bullies like Ezra Klein and Paul Krugman who don’t know what the fuck they’re talking about but nevertheless try to smuggle in all their prior policy goals under the banner of Science. This doesn’t tend to happen as often and so that’s why Klein & Krugman & co. can’t think of ready examples of ‘liberal equivalents of climate denial’.

It’s not completely unheard-of however. One that does come to mind is the ‘more guns less crime’ research of John Lott (which did make the list at the link above), so that’s a good example.



RIP Seth Roberts
April 28, 2014, 9:56 am
Filed under: Uncategorized

Another one of my favorite bloggers.



My thoughts on Piketty
April 27, 2014, 8:33 am
Filed under: Uncategorized

Shut the hell up about ‘Piketty’ that’s my thoughts on Piketty

Seriously



My life in pennies
April 26, 2014, 9:56 am
Filed under: Uncategorized

Life is a quest to get rid of pennies. Here’s how I’ve been doing; it would appear that everything has come full-circle.

penny




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