Monthly Archive for October, 2009

Is Racism Still Important?

A continued theme on Matthew Yglesias blog is that conservatives in general are more concerned with anti-racism than racism, this is how he explains it:

“…most conservatives, think that the preeminent racial problem in the United States is that white people are too put upon by political correctness. Conservatives are very very very concerned about this alleged problem of anti-racism run amok. And they’re very concerned about the alleged problem of reverse discrimination. But they don’t seem concerned at all about racism or discrimination and certainly not nearly as concerned as they about helping out the poor, put-upon white man.

This is actually true and though Yglesias views it as a flaw, I see it as a virtue. In fact, its one of the reasons why I find the conservative side more appealing than the progressive side. Just to be clear though, Yglesias is not saying that conservatives view racism as historically unimportant, or that racism is completely unimportant, cuz then I would agree with Yglesias that that is a flaw; no, Yglesias is chiding conservatives for not seeing todays racism as a bigger problem than todays “anti-racism”.

Of course racism is important, very important,  to those who are suffering under racism. If I was denied a job solely because of my race, I would be really pissed off and want some justice. However, as a policy issue I think racism is very low on the totem poll of problems (though not zero).

I like the way economist Walter Williams explained it:

Like the March of Dimes’ victory against polio in the U.S., civil rights organizations can claim victory as well. At one time, black Americans did not enjoy the same constitutional guarantees as other Americans. Now we do. Because the civil rights struggle is over and won doesn’t mean that all problems have vanished within the black community. A 70 percent illegitimacy rate, 65 percent of black children raised in female-headed households, high crime rates and fraudulent education are devastating problems, but they’re not civil rights problems. Furthermore, their solutions do not lie in civil rights strategies.

Civil rights organizations’ expenditure of resources and continued focus on racial discrimination is just as intelligent as it would be for the March of Dimes to continue to expend resources fighting polio in the U.S. Like the March of Dimes, civil rights organizations should revise their agenda and take on the big, non-civil rights problems that make socioeconomic progress impossible for a large segment of the black community.

In other words, racism as a source of minority failure is not all that important anymore.  Most real impediments to minority success – issues like illegitimacy rates, crime, failing public schools – are only loosely, very loosely I would argue, tied to race. But because race is such a hot button issue, these issues are difficult to talk about openly – ultimately harming the search for the cure. Bring up your concerns with crime in the ghetto, illegitimacy rates, the widening educational gap, or affirmative action and unless you walk a very tight line, you can be easily accused of racism. This censorship, namely, this “anti-racism”, hampers progress on such important issues (even some progressives agree, see here).

This is much more a problem on the left than it is on the right. The left tends to see the world through the prism of “racism” (and”class warfare”), making honest dialog on race issues extremely difficult – trust me, I’ve tried. The right, on the other hand, has a more balanced view on these issues and because of it you are able to go further in finding a cure.

Not only does overemphasis on racism result in unintended censorship on important topics,  but it also leads to a blinding force when searching for solutions. When dealing with the issues of illegitimacy rates, crime and failing public schools, for example,  the progressive tries hard to find its racist connection – however strained that connection may be. This is a serious stumbling block and is one of the main reasons why real educational reforms, whether it’s charter schools, vouchers, or even NCLB have all come from the right.

So I would argue that as far as real effective policy goes, emphasis on racism has now ran into significant diminishing returns, whereas the overemphasis on racism is a real roadblock to discussing important minority problems.

And it seems like Matthew Yglesias, ultimately, is not too far off. For example, in a separate post, he lists what he considers the real problems of racism today:

At any rate, I’ve made this point a million times, but it’s fascinating to me the kind of double standard conservatives apply to these issues. You never hear Rush Limbaugh decrying everyday racism against non-whites in the United States. You never hear him recounting an anecdote about an African-American man having trouble hailing a cab or being followed by a shopkeeper. He doesn’t do stories about how people with stereotypically “black” names suffer job discrimination. He doesn’t bemoan the fact that the United States has an aircraft carrier named after a fanatical segregationist.

What is interesting about this list is what type of “racism” it is: specifically, statistical racism (more here and here), or what economists call statistical discrimination. This type of “racism” is very different than the invidious racism that comes to mind when we think of racism: issues like being forced to sit in the back of the bus, forced segregation, laws against interracial marriages, poll taxes and so forth. Statistical discrimination, while still offensive, is based on statistics, not bigotry.

That is not to say that it is any less offensive to the person being statistically discriminated against but it makes a huge difference when looked at from a policy perspective. Take the claim “about an African-American man having trouble hailing a cab”, as an example. The reason that Blacks have trouble hailing a cab, specifically in New York City, is because Blacks have a higher crime rate than many other groups. A cab driver, being in an especially vulnerable position, has a strong incentive to ensure his safety but at the same time he also wants to make the most money he can. So every approaching customer gets put through some sort of subconscious statistical analysis: is this person more likely to rob me? Given that the cab driver has a limited amount of information to go on, race plays an important factor. This is not unique to white cab drivers either, cab drivers of every race, including Black cab drivers, show the same tendency of picking up Black passengers less than non-Black ones. While this may be offensive, from a policy perspective there is no practical way to prevent it – as long as the cab driver has an incentive to reduce the likelihood of robbery, and as long as being Black signals a higher probability for robbery, there is always going to be the desire to resist providing a cab when the cab driver deduces the risk is too high. The same general principle applies about stereotypically “black” names, see here.

The real gains in reducing statistical discrimination come not from government fiat but from the inside, as economist Bryan Caplan states,”If you really want to improve your group’s image, telling other groups to stop stereotyping won’t work. The stereotype is based on the underlying distribution of fact. It is far more realistic to turn your complaining inward, and pressure the bad apples in your group to stop pulling down the average.” Which is, btw, more likely when you don’t see racism behind every corner.

Besides, hasn’t Yglesias noticed that we have a Black President? How much of an impediment can racism really be in a country that elected its first Black president? John McWhorter has more here.

The Public Option Or A Public Option

Arnold Kling asks a good question:

Just once, I would like to see someone making this argument collect data on how where insurance company overhead comes from. I suspect that very little of it comes from designing means for selecting customers in the individual market. Instead, I suspect that a lot of overhead is associated with designing and administering plans for employer-provided health insurance, where adverse selection is not an issue. In the individual market, a lot of the overhead relates to regulatory compliance, because health insurance is regulated differently in every state, and it is illegal to sell health insurance across state lines (except in the case of an employer-sponsored plan).

Which leads me to a question I have had all along about the public option. Will it have to comply with state regulations? If so, then it will be misleading to talk about the public option, because it is unlikely that the same plan will work in all fifty states. If not, then it is misleading to talk about the public option being on a level playing field with private health insurance.

The full post can be found here.

Quote Of The Day

“According to a new study, Amtrak lost $462 per passenger on its route from New Orleans to Los Angeles and $193 per passenger on its route from Chicago to San Francisco in 2008. In each case I found a variety of airline flights for just over $100 on these routes. Therefore, it would have been cheaper for Amtrak to buy its passengers free airplane tickets than transport them. I don’t know what Amtrak charges because, as is often the case, its web site is down.” — Bruce Bartlett

Quote Of The Day

“The newly reinvigorated advocates of a “public option” in health care argue that government, with its limitless deep pockets, with its ability to sustain an economically unviable operation indefinitely through its taxing and borrowing power, provides fair and meaningful “competition” to private health care providers and insurers.  Well, then, why not have private providers compete with government across the entire range of government services?  Maybe the supporters of actual market-based competition in health care could offer the following deal:  We’ll give you your health care public option, now open garbage collection, road-building, transit operations, mail delivery, parks maintenance, education, sewage treatment, prison management, inter alia, to private sector competition, and let the most efficient player win. ” — Heather Mac Donald, blogging at Secular Right

The Number 1 Mistake

Juan Williams on the #1 mistake liberals and conservatives make:

On the No. 1 mistake liberals make: “The world is changing fast. There’s a need for innovation,” and “liberals are slow to react. For example, the biggest challenge of our time is education, and the poor quality of education for minorities. How can we have a discussion about equality when there’s such an achievement gap? How are we not talking about the breakdown of the family–70% in the black community? Yet the left is absent on those issues. That pocket of issues requires innovative thinking. You don’t see the left changing with the times.”

On the No. 1 mistake conservatives make: “Republicans feel embattled, and I think it’s been a mistake by some Republicans not to be more engaged in the health care debate. There’s also a changing demographic: more people of color, younger people, and there has to be a Republican approach [to them]. There has to be a clear message sent, and a willingness for the party to engage. That’s crucial if it’s to grow.”

Alot more on Fox News and other topics here.

Quote Of The Day

“Nor, as Dan notes, are we particularly likely to lose our status as the world’s reserve currency, because the Euro isn’t very good at being a reserve currency for a number of reasons, and most of the other currencies have too small an economic base to sustain those kinds of capital flows.  To which I’d add that the joys of being the reserve currency are somewhat overmagnified in peoples’ minds–it’s valuable, to be sure, but if the day comes when we lost that status, the sun will continue to shine, the US will continue to be the world’s biggest superpower, and consumer electronics will still be available at attractive prices from developing world manufacturers.” — Megan McArdle

Quote Of The Day

“I’m exhausted and can’t stop crying.  What have I gotten myself into?  I suck at this.  There’s always so much to do, and I don’t feel like I’ve ever done enough.  The majority of my students are failing and not just cause they don’t turn things in, but because they are straight up failing their exams and quizzes.  How do you spend four days talking about natural selection to only have a hand full of students actually pass your quiz on natural selection?  How much can you reteach?  And are they really gonna get it the next time?  What purpose do I have here really?  I’m just so tired…and I barely have time to myself…I mean how much more can I give up?  I just don’t know what to do?  I miss my family and my friends.  I hate this city.  I just want to go home.” — A first-year Teach for America teacher

Quote Of The Day

“Earlier in the day, I’d been talking to MIT economist Jon Gruber about this issue. “There are a few things economists believe in our souls so strongly that we have a hard time actually explaining them,” he said. “One is that free trade is good and another is that health-care costs come out of wages.” To put it another way: Economists are pretty united on this point. A firm’s compensation for its workers is pretty static, and if relatively more goes to health-care costs, relatively less will go to wages, and vice-versa. But this isn’t just a matter of theory. The following graph charts the percent growth in the median household income versus the percent growth in health-care costs since 1990. The correlation is striking” — Ezra Klein, arguing (correctly!) that the less money that an employer has to pay for your healthcare, the more money he will give you in wages

Quote Of The Day

“There’s often a kind of conventional idea on the left that the United States is an unusually racist society. And I think there’s also often a kind of image of Europe as a place where more of the progressive agenda has been achieved than in the USA. But I think that you’ll find if you look at Europe through the eyes of the liberal agenda that while the German left has certainly been more successful than the American left at securing universal health care, it’s been much less successful at promoting a tolerant, integrated, multicultural society. And allowing for the errors implicit in making any kind of sweeping generalization, I’d say that’s pretty generally the case across Europe.” — Matthew Yglesias

The Part Of ObamaCare You Wont Hear Obama Talking About

Kevin Hassett of AEI reports:

The report projected that the excise tax would raise about $52 billion in 2019. Of that, about $8.9 billion would come from taxpayers with incomes of less than $50,000; about $19.4 billion from taxpayers with incomes between $50,000 and $100,000; and about $17.4 billion from taxpayers with incomes between $100,000 and $200,000.

Add those up, and you see that about 87 percent of the revenue in the original Baucus proposal to finance Obamacare would come from individuals with incomes of less than $200,000.

Baucus and the Senate committee have since upped the proposed tax to 40 percent, and the trigger thresholds to $9,850 and $26,000, tweaks that shouldn’t change the basic thrust of the story. The Democrats’ plan is a moving target–and given who will pay the tab, that is probably on purpose.

The remarkable thing is that this revenue comes from low- and middle-income people who already have insurance. Many members of organized labor have these “gold-plated” plans. And they would be worse off, not better, because of Obamacare.

The full article can be found here.

Quote Of The Day

“It seems to me that there are two ways of thinking about how monetary policy would react to fiscal stimulus.  One approach would be to ask:  “What is the optimal Fed response to fiscal stimulus?”  And the answer to that question is rather obvious; the Fed should act in such a way as to completely neutralize the impact of fiscal stimulus, i.e. make sure the multiplier is precisely zero.   This is because the Fed has some optimal level of expected AD growth in mind, and that level should not change just because fiscal policy changed.  So if the Fed is doing its job, which means if it is always targeting expected AD growth at what it sees as the optimal rate, then it will try to completely offset fiscal stimulus and the expected fiscal multiplier will be precisely zero.  That’s why fiscal stimulus almost disappeared from graduate textbooks in recent years.” — Scott Sumner, professor of economics at Bentley University, and monetary expert blogging on “The Silly Multiplier “debate”

Quote Of The Day

“Cash for Clunkers moved a bunch of auto sales forward, causing people who thought they might replace their car in the next year or two to rush into the showrooms.  Now, in the aftermath, sales are plummeting:  47% at GM, 44% at Chrysler, 8.9% at Ford, 16% at Toyota, 23% at Honda, 11% at Nissan.  I hope those car companies used the cash infusion now, because they’ll be on lean rations for months, even years.” — Megan McArdle