RWCG


Welfare Is A ‘Job’
May 5, 2015, 9:33 am
Filed under: Uncategorized

Arnold Kling struggles with the question, what is a job.

A job is a context for performing a particular small set of tasks that can be exchanged for the means to obtain goods and services produced by a far larger set of tasks.

By this definition, the stereotypical welfare-collector ‘has a job’. He/she indeed has a particular small set of tasks to perform:

  • Fill out some paperwork at the local Social Welfare Bureaucratic Place, or forms online, or whatever, to ‘sign up’, or whatever, for the welfare.
  • Vote straight (D)-party candidates in all elections. (The linkage here between performing the task & collecting the goods/services is admittedly stochastic rather than deterministic, but plenty of other jobs are like that too.)
  • Riot/crime/dysfunction/mayhem? (Perhaps only occasionally or fractionally, but at least with some critical-frequency that gives politicians sufficient talking-point fodder to make their demagogic pitches for the welfare, anyway.)

In return for performing these tasks (the latter two – arguably the most important – of which can be summarized as ’empower certain politicians’), the welfare-collector receives the means to obtain goods and services – i.e., money. Or he is given some such services in-kind – health care, for example. Either way, the transaction is there and the linkage fairly strong. (There are exceptions, like when Clinton defaulted on his implicit end of the bargain by ‘ending welfare as we know it’ – just as an employer can go bankrupt and default on employee pay/pensions – but those exceptions, I’d say, prove the rule.)

I mean, empirically, these form-filling, lever-pulling and community-polluting tasks clearly can, usually, ‘be exchanged for the means to obtain goods and services produced by a far larger set of tasks’. This relationship between welfare-collector and the state, then, meets all of Arnold Kling’s criteria for being ‘a job’. We can think one of three things about this observation:

1. Kling’s definition is just bad. I don’t want to say this (not yet). I like and have immense respect for Kling, and would be loathe to dismiss his thought so readily, without giving it more thought myself.

2. Kling’s definition needs some amendments/conditions to exclude this relationship from being termed a ‘job’, since we don’t want to think of it as one. But what exactly? I can think of possible amendments, but they seem to be ad hoc and throw the baby out with the bathwater, by excluding too much. The payer can’t be the government? But surely genuine bona fide government jobs are, whatever else they are, ‘jobs’. The recipient must ‘create value’ in the transaction? How on earth do we measure ‘value’ (other than by what is revealed by what the recipient receives)?

3. Kling’s definition is fine, and so we should just follow it to its conclusion: ‘welfare recipient’ is indeed a job. Hmmm. Maybe!

If we provisionally go with #3, we’re left with a description of the economy in which almost all people have ‘jobs’, it’s just that some of those ‘jobs’ involve being on various forms of welfare, and the fraction of ’employees’ with the welfare ‘job’ fluctuates over time. Well gee now what? Presumably conservative minded folks such as Kling (and myself) would really like to say that it’s bad for people to have the welfare ‘job’, for the ‘welfare work force’ to be large rather than small. But why exactly? We can’t even get there by calling welfare ‘not a job’ anymore.

In fact, here are some other examples of ‘jobs’, per this definition: drug dealer, layabout good-for-nothing trust-fund collector, street beggar, being mentally ill and institutionalized, car thief, prostitute, mortgage fraudster who hasn’t made a mortgage payment in 5+ years but fights foreclosure in court, Kim Kardashian (oh but I already said prostitute), daytime home burglar, ex-President who informally ‘advises’ and greases wheels for (other) rich people trading off his wife’s cabinet position, guy who wheels around a train of stolen shopping-carts skimming aluminimum cans from your recycling bin at 3 a.m., etc. etc. etc.

Those are all ‘jobs’ by Kling’s definition, surely: small number of tasks, receives large number in return – etc. And so almost anyone you can name who draws breath and has a pulse has at least some ‘job’, almost by definition. Which observation gets us nowhere I’m afraid.

To get somewhere, I guess we’d have to start distinguishing among ‘jobs’ by asserting that some ‘jobs’ are actually bad and socially-undesirable, and that what we seek is not to blindly increase the number of ‘jobs’ (or create a Pattern Of Sustainable Whatever in which the number of ‘jobs’ increases, whatever), but rather to shape and alter the types of ‘jobs’ that exist so that (among other things) the number of people with the bad types of ‘jobs’ goes down.

I’m willing to go there and call some jobs bad, of course (although following this path has twisted us into speaking in a way that will be understood by too few to be of any use). But in order to do that we have to start a look-through into how and why the ‘job’ we’re concerned with was created or exists, and critique or praise the process that led to its existence. Merely defining ‘job’ itself, especially in this broad Klingian sense, doesn’t help us do that at all. I’m afraid we may have to start talking about things like rights, externalities, and rule of law.

But that’s an entirely different kind of discussion, altogether.



Chris Rock on the missing black player
April 27, 2015, 10:06 pm
Filed under: Uncategorized

Chris Rock takes up the noble cause of the missing black player:

“Last year, the San Francisco Giants won it all without any black guys on the team.”

Just for the record, their 25-man 2014 World Series roster included the following lilywhite WASPs.

Santiago Casilla

Jean Machi

Yusmeiro Petit

Joaquin Arias

Pablo Sandoval

Ack! It’s like a 1950s Tupperware party in here! Someone break out the Jell-o dessert!

And I have editorially excluded some of the other players who are probably more Latino-ish than “black”: Sergio Romo, Gregor Blanco, Juan Perez, Javier Lopez…to say nothing of Travis Ishikawa…

Why does this stupid-ass meme persist?

Here’s a theory: black people feel self-conscious because black Americans have (evidently) been losing roster spots to black Central- and South-Americans. This (stupid-ass) meme that this is a failure of baseball is more palatable than the reality, which is that it’s a failure of black Americans.

‘Oh, but we just don’t want those roster spots.’ Sure you don’t. Baseball players earn basically the most you can earn in pro sports this side of pro golfers. I still remember when Dave Winfield was the highest-paid contract at $1 million per year; then Kirby Puckett broke the $2mm/year barrier. But now, even some mediocre middle reliever or second baseman with modest home-run potential can get an 8-digit contact. ‘We just don’t like the sport anymore, it’s too uncool.’ Uh huh, keep telling yourself that. Hey, it’s okay that you suck at baseball, don’t feel bad.

Meanwhile, fat guy Pablo Sandoval (a whopping 14 home runs last year): being paid $100 million over 5 years from the Red Sox.

But basketball is ‘cooler’. Ok then, enjoy.



‘Americans’ are held to an inhuman standard and fall short of it
April 27, 2015, 8:48 pm
Filed under: Uncategorized

Here‘s a (completely-random and not at all important) example of the type of rhetoric that really gets on my nerves:

As a result, the majority of olive oil Americans buy isn’t from Italy or extra virgin as advertised.

Americans are addicted to cheap products,” Neuman said. “But people should know the risks of consuming subpar olive oil.”

(Emphasis mine.)

Let’s look at that throwaway line. ‘Americans are addicted to cheap products.’ Sounds smart! I mean, that guy, he sure sounds like he’s talking about Economic Stuff and doing some deep Social Analysis.

But can I just ask: As opposed to…who?

All those other people in all those societies that (unlike Americans) eschew cheap products and prefer to pay higher prices for things rather than lower prices for things?

Who pray tell is that? Give me a break.

You hear this sort of faux-knowing throwaway line all the time. ‘Americans are addicted to cheap oil’, for example, is a big one. First of all, that ‘addicted to’ part: what in the hell does that mean? Nothing, as far as I can tell. It just seems to mean ‘would like, all else equal’. So again, if you parse it carefully, you’re left with ‘Americans would, all else equal, like cheap oil.’

Oil being the primary component of gasoline, which powers automobiles that enable humans to get to/fro their jobs and appointments and errands and social activities, and brings the goods/products/services they use in normal daily life to market. You know, a raw material that contains stored energy. That oil.

Okay, so let’s parse it further: ‘Americans would, all else equal, like their baseline cost of living to be low.’ MONSTERS.

A similar example is to critique the lack of planning or foresight of ‘Americans’. ‘Americans’ in California won’t deal with the drought until they are forced to or feel the effects. ‘Americans’ won’t pay for infrastructure until it becomes intolerable. Etc etc etc. Those horrible ‘Americans’!

AGAIN. Can I just ask: As opposed to who? Please tell me who this other mythical nation is that likes to pay high prices for things, wants their cost of living to be high, pays for things before feeling the effects of their lack, and so forth. I’m all ears!

Sorry I hate to break it to you but the real answer is Literally No One. People in other nation-states aren’t expected to do any of this stuff in the first place. And so the fact that they don’t (i.e., the fact that they are normal humans) goes uncommented-upon.

But Americans are held to an impossibly-high, saintly, weirdly idealistic and inhuman standard that is applied to literally no other society on earth, present-day or historical. And Americans clearly fall short of that standard. Observing this (inevitable) shortfall is for some reason considered to be wisdom.



Aziz on ‘Rentiers’
April 16, 2015, 10:45 am
Filed under: Uncategorized

John Aziz sure picked a strange time to advocate the ‘euthanasia of the rentier’.

In post number one, he reasons that ‘the’ (which?) real risk-free interest rate amounts to pure profit to ‘rentiers’ from capital-scarcity, and thus should be made to go away via monetary policy. Okay I mean I guess. But the weird thing is that however you reckon this rate (he appears to use the 10y CMT nominal rate minus CPI; not sure why he didn’t use the 10y Treasury real yield calculated from TIPS; minor point), it’s pretty much been falling for years and as close to consistently-zero as it’s ever been. So: yay?

Yet Aziz describes this situation thusly:

The general trend is that real interest rates on U.S. government borrowing are overwhelmingly positive, with a few periodical exceptions where real rates on borrowing went a bit negative.

Um, huh? Actually, if you take a longer view using a pre-TIPS calculation that looks similar to Aziz’s, it’d be more accurate to say that real yields have pretty much been falling almost nonstop since the early 1980s. In this view, the ‘best’ time for ‘rentiers’ would have been the post-Carter, Volcker-fueled interest rates of the early Reagan years, the Bush I/Clinton years improved on that and were effectively the same, Bush II then ‘improved’ on Clinton, and now – ever since the The Financial Crisis™ – we’ve had practically the ideal monetary policy. So now Aziz rings the alarm bells about unfair profits to ‘rentiers’?

In fact, based on TIPS yields (which presumably overstate things because they have an illiquidity component in them!), the 5y real yield has pretty much been zero or negative since around 2010. By Aziz’s logic, doesn’t this indicate the ‘rentiers’ have now been ‘euthanized’ too much, and are now due some relief? Don’t we need to bear-flatten the real yield curve to help out the poor, poor ‘rentiers’ and undo the too-much-redistribution that has taken place? If you prefer the 10y real yield it dipped negative in 2011, spent some time in slight positive territory, and is now effectively zero-ish again. Let’s just call that “zero” too.

To even begin to get this capital-scarcity ‘rentier’ profit Aziz speaks of you have to go out and grab the 30-year TIPS at a whopping real yield of sixty-something bps (i.e. 0.60%) – which, historically speaking, is basically…well, zero.

There is a more immediate, practical matter here: even if we go along with Aziz in thinking the monetary authority ought to target real yields and make them all go to zero, can they? Do they know how to do that? The Fed is awfully proud of its QE and how it (supposedly) manipulated the term premium in nominal rates in order to achieve their (ostensible) goals. (Which of course leaves aside the fact that term premia have also come down since QE stopped and Bernanke has no idea why – it’s a “puzzle”.)

But did their oh so deliberate and informed policy actions make real rates go in the direction they wanted? Fed professes to want something like 2% inflation, and after like five years of ‘unconventional’ monetary policy and inventing new tools in their toolkit – hasn’t quite gotten there yet. If “real rates = nominal rates – inflation” then surely manipulating real rates requires manipulating inflation (or at least inflation expectations), and it’s far from obvious the Fed is able to do that to the degree/precision – or even the direction! – that would be required to make this 60bps vanish. In other words, “60bps at the 30y point” lies well within any plausible margin of error and of policy-precision. So what are we even talking about here?

To his credit, Aziz has been made to realize this, writing a followup post in which he abandons the idea of targeting real rates and guiding them to zero with monetary policy. Ok, nevermind.

But his new idea is even more puzzling:

So here’s a different proposal: a new capital gains tax at a variable rate equal to the real risk-free interest rate, with the proceeds going toward business grants for poor people to start new businesses.

What does this mean? The 5y real rate as of yesterday (4/15/15) was published as negative 26bps. Don’t we then have to hand out a capital-gains tax credit? If we prefer 10y then we’re talking about 7bps (0.07%). The current capital-gains tax rate maxes out at 15%, I believe; so after all this talk of ‘rentiers’ unfair profits and the need to ‘euthanize’ them, is Aziz’s grand proposal to increase that rate from 15.00% to 15.07%?

That’s it? That can’t be it.

Now admittedly there’s something that at first glance seems like it could be counter-cyclical about this proposal. Maybe Aziz is taking the long view: sure, there’s no ‘real yield’ to speak of taxing now, but if/when the economy heats up, the real yields would increase, and so the capital-gains tax rate would step up. This would occur at a time when the economy is more healthy, and so the ‘rentiers’ would feel less pain from it. So far, so good.

Except that’s only one side of the equation. The other side is that the proceeds are supposed to go to “business grants for poor people to start new businesses”. But when the economy is bad – and real yields low, presumably – there are no such proceeds. When the economy is good, and the proceeds are flowing in, capital to start new businesses is presumably far easier to get for the aforementioned poor people. So this ‘redistribution’ would only occur precisely at those times it’s least needed. Oops.

I do look forward to the followup post in this series where John Aziz realizes the problem(s) with his second post. Let’s keep this going…it’s interesting, at least.



Jordan Weissman, austerian
April 16, 2015, 7:30 am
Filed under: Uncategorized

Jordan Weissman wants to “ask” [sic] millionaires to pay more taxes. He bemoans that, instead, politicians propose eliminating tax breaks (i.e., stimulus).

In other words, he wants austerity and hates stimulus. Why does Jordan Weissman want austerity when it is bad for the economy and hate stimulus when it is good for the economy? Why does he hate America?

What exactly would this austerity even accomplish? According to Weissman,

At some point, the federal government is going to need more revenue in order to support the social welfare programs that the vast majority of Americans know and love.

But this is simply not true. If these social welfare programs that the vast majority of Americans know and love need funding, and there isn’t enough tax revenue to cover them, the funding can and will just be obtained via debt issuance. As a lefty isn’t Weissman supposed to be just fine with that? What’s the problem? Where’s the giant need to (try to) increase tax revenues? I genuinely don’t understand.

And it’s not at all clear that steeping the wealthy, so to speak, would significantly slow down the economy. I mean, it could. Maybe. Researchers generally do think that a major tax hike would be a sap on growth.

Ok, so it’s not clear that austerity would slow growth, except, that’s what researchers generally think. And Weissman…doesn’t care and just waves that away with a ‘not clear’?

See? Why does he hate America?

Why are people who, tribally, think austerity is awful so attracted to (this particular type of) austerianism that they toss their usual preference out the window?



So this is how The Giver started
March 30, 2015, 9:01 am
Filed under: Uncategorized

Ok my views on abortion and related matters are often wishy-washy, but I do know I have nothing in common with the sort of monstrous ‘experts’ who could decide this:

Killing babies no different from abortion, experts say

The article is a veritable fount of Orwellian, Nazi-esque Newspeak:

The article, published in the Journal of Medical Ethics, says newborn babies are not “actual persons”

Oh. Well in that case.

He said those who made abusive and threatening posts about the study were “fanatics opposed to the very values of a liberal society”.

Interesting right? Don’t want to murder babies, you’re a ‘fanatic’ and opposed to ‘the very values of a liberal society’. What then are those ‘values’, one wonders? And what is this ‘liberal’ thing? Count me out of your version of ‘liberal’.

The moral status of an infant is equivalent to that of a fetus in the sense that both lack those properties that justify the attribution of a right to life to an individual.”

“attribution of a right to life”. Not an inherent, inalienable right to life, but something we ‘attribute’.

Rather than being “actual persons”, newborns were “potential persons”. They explained: “Both a fetus and a newborn certainly are human beings and potential persons, but neither is a ‘person’ in the sense of ‘subject of a moral right to life’.

Proof by semantics. I know I’m convinced

“We take ‘person’ to mean an individual who is capable of

“We take ‘person’ to mean”

Well isn’t that special.

As such they argued it was “not possible to damage a newborn by preventing her from developing the potentiality to become a person in the morally relevant sense”.

Where’s the cutoff, one wonders. Eight months? Eighteen? I suppose ultimately the Supreme Court will tell us.

“what we call ‘after-birth abortion’ (killing a newborn) should be permissible in all the cases where abortion is, including cases where the newborn is not disabled”.

There’s actually a different way to read this – one that undermines the case for abortion itself. Maybe this all just proves that abortion should not be permissible in any cases.

Is this a tongue-in-cheek ‘modest proposal’ designed to show the slippery-slope?

They preferred to use the phrase “after-birth abortion” rather than “infanticide”

I’m sure they did. Who wouldn’t prefer the former phrase to the latter?

“This “debate” has been an example of “witch ethics” – a group of people know who the witch is and seek to burn her. It is one of the most dangerous human tendencies we have. It leads to lynching and genocide.

Wait. Would that be bad? Why?

Rather than argue and engage, there is a drive is to silence and, in the extreme, kill, based on their own moral certainty. That is not the sort of society we should live in.”

Dude there’s only one side arguing for any killing under the imprimateur of their PhD’s and Fancy Journals here.



They have to cast Idris Elba as James Bond now
March 30, 2015, 7:20 am
Filed under: Uncategorized

It’s getting to the point where they’re going to have to cast Idris Elba as James Bond simply because now if you express any uncertainty about let alone disagreement with doing so you’re a racist. Only one solution remains then: cast Idris Elba as James Bond.




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