Archive for the '(modern day) Liberalism' Category

The Logic Of The Left

My good friend Jon, one of the smartest leftists I know, argues that looting isn’t really so bad if you compare it to the legal “theft” done by Mitt Romney types:

Who is harmed when a TV is stolen from Best Buy? Not the person that made the TV. He’s in Mexico making $1 an hour or so and he has already been paid. Not the workers at Best Buy. Their salary doesn’t change. In an economy where corporations have record cash and only hire to meet the demand the people harmed are the investors. The poorest half of people in this country don’t own any stock, so they obviously are not harmed. By and large it’s the richest people in the world that are harmed when a poor person steals a TV from Best Buy.

Mitt Romney made $20 million in 2010 and he didn’t work. He’s the kind of guy that gets the largest share of the money due to the profits generated by workers. So you can kind of see why the right wing would want to shoot a black man for stealing a TV. He’s stealing from Mitt Romney, a super rich guy that won’t actually notice because he already has money coming out of his ears. But so what? Serving the needs of the rich is of prime importance.

Romney doesn’t actually “steal” because “stealing” means illegally taking something. He takes the value created by the Mexican factory worker, but it’s not stealing because it’s legal. Let’s say the Mexican worker is paid $5 to make a TV. Other costs related to delivering that TV to a buyer amount to maybe $300. The TV is actually sold for $1000. So Romney gets $695, even though he may have been asleep through the whole process.

Where to even begin with such a thought process? The economics, the moral arguments, even the assumptions are all wrong. I feel like our worldviews are so far apart that it would be fruitless to even try.  Although I have tried in the past, and indeed, it has proven to be fruitless. Now I have resigned to just pointing it out, chuckling, and just shaking my head. This, my readers, is the logic of the left.

Quote Of The Day

“Take housing, for example. The cheapest form of housing is small, prefabricated homes for zero-lot developments. However, zoning regulations in most cities outlaw them — an act that effectively doubles the price of the cheapest housing. There are also other expensive restrictions on new housing, such as forcing builders to build on bigger lots and mandating specific types of materials and construction methods. Regulations vary widely across the United States. In Houston, a less restrictive city, regulatory costs add about $13,200 to the price of an average home. In San Diego, a multitude of regulations add $240,000. These cost-increasing regulations have essentially priced many low-income residents out of the market for a private home, forcing them to turn to public housing instead.” — John Goodman, arguing that the left’s entire approach to poverty is to segregate the poor into inferior public provision, while the rest of society enjoys the benefits of quasi-private provision.

Quote Of The Day

“As a side note, the Communist Party has also given their endorsement.  While Communists are certainly responsible for more deaths and misery than the Nazis could ever dream of, at least their intentions were good, so I’ll give them a pass.” — Post on the very liberal DailyKos blog

Quote Of The Day

“BTW, progressives like Yglesias often point out that no matter what they say, the GOP is devoted single-mindedly to one goal, and one goal only—lower tax rates for the rich.  And I have to agree that that is an obsession of many GOP economists.  But then why the strange pattern of state income taxes around the country?  Income taxes are often higher in conservative Republican states in the South, than in liberal Massachusetts.  Even more surprisingly, the rich in the South are especially likely to be Republicans (as compared to the rich in Boston, NY and LA.)  Yes, there are some GOP states with no income tax (Texas, Tennessee and South Dakota.)  But there are also swing states (Nevada, New Hampshire and Florida) and even one liberal state (Washington.)  Why don’t the southern and Rocky Mountain GOP states at least cut the top rate down to Massachusetts levels (5.3%)?” –Scott Sumner, Economist

David Leonhardt On Liberal Economists

On Monday, I posted a quote from Paul Krugman stating that it’s usually conservatives who are less aligned with facts than liberals. Well I dug up a post from David Leonhardt (a well respected liberal), implying the opposite.

He writes:

The difference, I think, is that conservative economists’ blind spots overlap more with general conservative blind spots than is the case for liberal economists and liberal blind spots. That’s not a value judgment so much as an observation: liberal economists tend to be more economically conservative than average liberals. (emphasis added)

This is my main point. The commonality is so strong that if you put three of us in a room: a liberal economist, a liberal non-economist and a conservative NON-economist, my hunch is that the conservative non-economist will have more in common with the liberal economist than the liberal does.

Sure, we will disagree on the importance of income inequality, what side of the phillips curve we should be on, and redistribution among other things – and these are not minor issues to say the least, but our fundamentals will also be drastically more similar. We are predisposed to support free-trade. We understand the trade-offs to the minimum-wage, vacation pay, the benefits of the market economy, the view that regulation should not be the default view, the power of the price system, rent-control is bad, the benefit of Wal-Mart, the limitation of lobbying, the limitation of unions etc Now of course, we may still come down on opposite sides on each of these issues – but the reasons for doing so will be drastically different than what the liberal non-economist gives. It’s much harder to argue against Wal-Mart, or globalization, or to argue for a raise in the minimum wage, within the context of economics than it is outside of it. Also, the arguments for such a case would have to be far more nuanced.

I’m not saying who is right or wrong on any of these issues – my only point is that conservatives tend to be less removed from basic economic principles than liberals are.

Quote Of The Day

“I find it maddening how many upper middle class parents energetically “support public education” against the depredations of vouchers and other reforms, while moving their own children into better school districts or better programs.  Especially parents in Manhattan and a few areas of Brooklyn who proudly note that their experience shows how great public education is, while failing to note that their schools work because these comparatively affluent parents with a great deal of social and political capital fight like hell to divert as many resources as possible–including the best teachers–into a handful of schools in affluent areas.” — Megan McArdle

Quote Of The Day

“Here we see the fundamental differences between the parties: One believes in spending more and allocating that spending via central planning.  The other believes in spending less and harnessing individual choice and competition to ensure that the money is spent wisely.” — Greg Mankiw, professor of economics at Harvard on the difference between the Ryan plan and ObamaCare

Quote Of The Day

“That’s right, and George Will isn’t Michael Moore; and a liberal blog, almost by definition, is a blog written by someone who chooses not to notice that asymmetry.  No need to read Marginal Revolution, Becker/Posner, Econlog, John Taylor, Greg Mankiw, Robin Hanson, Steven Landsburg, etc, etc.  Nothing of interest, just move right along folks.  I’m always amazed when someone so brilliant can be so clueless about life.  How someone can reach middle age and still live in a kindergartener’s world of good guys and bad guys….I find that reading good liberal blogs like Krugman, DeLong, Thoma, Yglesias, etc, sharpens my arguments.  It forces me to reconsider things I took for granted.  I’d guess that when Krugman tells people at cocktail parties that the post-1980 trend of lower tax rates, deregulation, and privatization was a plot devised by racist Republicans, they all nod their heads in agreement.  If he occasionally read a conservative blog he might learn that all those trends occurred in almost every country throughout the world after 1980, usually much more so than in the US.” — Scott Sumner, professor of economics at Bentley University commenting on Krugman’s admission that he doesn’t read any blogs that disagree with him politically

In Defense Of For-Profit Colleges

One of the biggest blind spots of policymakers and pundits is the inability to take target market into account. For example, you can’t just compare the wages of employees at Hilton Hotels vs Motel 6’s and conclude that Hilton Hotels are superior because the employees are paid more. You have to take the companies vastly different target market into account. Motel 6’s target a much poorer and cost sensitive segment of the economy, and so it’s understandable that they pay their employees less. In addition, Motel 6’s also hire from a lower socioeconomic level than does Hilton Hotels, so again you’d expect their pay to be lower (in exchange for lower productivity, ie education, ability to speak English, etc). What seemed like a bad wrap for the poor without taking target market into account, turns out to be an overall net gain when it’s included (who doubts that from the poor’s perspective, Motel 6’s are better than Hilton hotels?).

The same blind spot is apparent in the Wal-Mart vs union run grocery stores debate. Wal-Mart caters to a lower socioeconomic class, by hiring and providing cheaper products to those at the lower end of the income distribution. So it makes sense that their employees are paid less than their union run grocery stores counterparts, who cater to a higher socioeconomic class. Seen in that aspect, Wal-Mart is no different than the Motel 6. And since it’s our ghettos and poor areas that are plagued by unemployment, empty lots and general lack of opportunities, the Wal-Mart model is a superior model for the ghettos and poor areas.

The same blind spot resurfaces when talking about for-profit colleges. When comparing for-profit colleges to non-profits, critics will primarily focus on graduation rates and default rates, taking nothing else into account. But what happens when you take target market into account?

For-profit colleges tend to cater primarily to the marginalized segments of society: working mothers, high school drop outs, older people trying to change careers, and people who are in a rush to graduate. In other words, the riskier segment of society. The very same people that the non-profit education system often ignores.

Seen from this perspective, it’s expected that for-profit schools will be worse than non-profits when it comes to student debt. It’s expected because they cater to riskier students, so they are going to have a larger variance of outcome – whether that is graduation rates, or student loan repayment. But catering to a riskier segment of the population is not something that should be punished, it should be encouraged. Lets remember, for-profits are actually doing what we berate businesses to do – serve those at the bottom, often forgotten by others. They are a lot better at helping students who may have messed up through high school and want to change their lives around.

And this is without even mentioning all of the other benefits that come from for-profit colleges vs traditional colleges. For example, a significantly shorter time to graduation (averaging 3 years, when non-profits are getting closer to 6 years – a huge gain in opportunity cost), more income oriented majors (even the worst of the for-profit colleges will never have such time wasted majors like Chicano Studies, for example) and a clear path towards graduation. All benefits that primarily help the marginalized segments of society.

In the interest of full disclosure, I should mention that I graduated from a for-profit institution. I got my BS in 3 years. Before that I was a high school drop out (in 10th grade) with about a 2.0 GPA. I had only a GED and no community college credits. I was also the child of a poor single mother, living in Compton, Ca. The group of friends I currently run with all have similar stories – all of us grew up poor, are minorities and graduated from the same for-profit college. None of us received any grants (my mom refused to fill out the FAFSA – she always hated anybody knowing how much she made and was convinced I would find out). More importantly, in the for-profit college I went to there were others – not a majority, but certainly a strong minority – in the same situation I grew up in. It’s the privileged kids that were the exception at the for-profit college, not the the poor minorities.

All of us, also, are currently successful engineers. We all make around 6 figures a year or more. All of us with just the bachelors degree from the for-profit college (I have some undergraduate and graduate work at UCSD, but never completed a full degree there). Without a doubt, graduating from that for-profit college was the single best thing I could have done for my life. Without it, my life would have been very different.

Update: Matt Rognlie makes a similar point here.

Quote Of The Day

“When historians look back on this period, they will see it as another progressive era. It is not a liberal era — when government intervenes to seize wealth and power and distribute it to the have-nots. It’s not a conservative era, when the governing class concedes that the world is too complicated to be managed from the center. It’s a progressive era, based on the faith in government experts and their ability to use social science analysis to manage complex systems.” — David Brooks

Quote Of The Day

“Liberals sometimes argue that their preferred approach to family life reduces the need for abortion. In reality, it may depend on abortion to succeed. The teen pregnancy rate in blue Connecticut, for instance, is roughly identical to the teen pregnancy rate in red Montana. But in Connecticut, those pregnancies are half as likely to be carried to term. Over all, the abortion rate is twice as high in New York as in Texas and three times as high in Massachusetts as in Utah.” –Ross Douthat, writing in the New York Times, more here.

Unions Kill Voucher Bill In Chicago

The Chicago Tribune gives the details:

The legislation got through the Senate in March after being championed by Sen. James Meeks, D-Chicago, and suburban Republicans. But by Wednesday, teachers unions had regrouped and its supporters found themselves pleading with opponents to overcome a furious lobbying effort to stop the bill.

“Think back to why you ran for office,” said sponsoring Rep. Kevin Joyce, D-Chicago. “Was it for a pension? I doubt it. Was it to protect the leadership of a union? I doubt that. Actually in all cases, I believe each and every one of us here got involved to try and make a difference in the lives of our fellow man.”

Joyce could muster only 48 of the 60 votes needed to pass a bill that would have allowed students to get vouchers worth about $3,700 to switch to private or parochial schools beginning in fall 2011.

Joyce said the bill would have passed if it had not faced the union opposition. The bill got support from 26 Republicans and 22 Democrats, fewer votes than Joyce had expected from his fellow Democrats.

Fighting back tears during the lengthy debate, Rep. Suzanne Bassi, R-Palatine, called on fellow lawmakers to “search your souls” to support the measure because “we have failed these kids in the inner-city schools.”

“I’m pleading with you,” said Rep. Ken Dunkin, D-Chicago, who represents an area with four public schools where students would have been eligible for vouchers. “I’m begging you. Help me help kids in my district.”

Jay P. Greene has more here.

Quote Of The Day

A recent survey by Pew revealed that 86 percent of conservatives agree that “not reporting all income on your taxes is morally wrong” compared to only 68 percent of liberals. Conservatives want lower taxes but feel they should pay what they owe. Liberals want you to pay more but don’t stress about paying their own.” — Ron Guhname

Quote Of The Day

“For several decades the most dynamic part of the US economy has been Texas.  Rich people, middle-class people, and working class people are voting with their feet and moving to Houston and Dallas and Austin.  Whites, blacks and Hispanics are moving to Texas.  Not because of oil wealth (Louisiana has even more oil per capita), and not because of climate (California and Florida are more pleasant), but rather because it best epitomizes the US economic model.   And they are leaving states with fiscal policies more to the liking of progressives like Yglesias and Krugman. ” — Scott Sumner, professor of economics at Bentley University, discussing a post by Mankiw that Yglesias responded to

The Path To Single-Payer

How does ObamaCare lead to Single-Payer? The steps are explained in a conversation overheard between Dennis Kucinich and Obama:

Obama: Dennis, I know you want single-payer and so do I. I’ve made that clear on numerous occasions. We both see the public option as a step to single-payer, but that’s a step too far. I can’t get it in this bill and still win.
Kucinich: Now you see why I won’t vote for it.
Obama: But, Dennis, have you actually read the bill? Don’t you see how it will lead to single payer but will just take a little longer?
Kucinich: Er, what do you mean Mr. President?
Obama: Have you heard of adverse selection?
Kucinich: Yeah, but I don’t really know what it is.
Obama: Well, here’s what Larry Summers explained to me. When insurance companies can’t distinguish between healthy and sick people, they have to price to some average of the two. But those high prices discourage the healthy from buying so and the insurance companies know this and so they have to price even higher than otherwise. That’s called adverse selection.
Kucinich: And?
Obama: Don’t you see, Dennis? The way the insurance companies handle this problem is to get information on people’s health and price accordingly. That reduces adverse selection.
Kucinich: And this is supposed to make me feel good about your bill that keeps private health insurance?
Obama: Yes, because our bill doesn’t allow the insurance companies to price higher for pre-existing conditions. So lots of people who are relatively healthy will actually game the system–not buy insurance and pay our piddling fines–and then, when they’re sick, get insurance then. The insurance companies will know this and will have to price high to account for it. Lots of people’s health insurance premiums will rise. I know I said that 32 million more people will get health insurance but I can’t know that. No one can. My bill might even cause fewer people to get health insurance as they game the system.
Kucinich: Still waiting for the good news.
Obama: What happens when insurance companies start to raise premiums through the roof? Do you really think people will blame us? Some will, but many will blame insurance companies. How many people blamed Nixon’s price controls on gasoline when they had to line up at the pump? Most of them blamed the oil companies. Then I, or my successor, will say, “Much as we’ve tried to reform health insurance, these titans of industry are unreformable. We must get costs under control. So we need a public option priced at reasonable rates.”
Kucinich: Yes, Mr. President.(bold added)

[/sarcasm] The full link can be found here. More can be found here, here and here.

Quote Of The Day

“But there is one thing of which I am nearly perfectly certain:  If we pass this thing, no American politician, left or right, is going to cut any of these programs, or raise the broad-based taxes necessary to pay for them, without any compensating goodies to offer the public . . .  until the crisis is almost upon us. I can think of no situation, other than impending crisis, in which such a thing has been done–and usually, as with Social Security, they have done just little enough to punt the problem down the road.  The idea that you pass a program of dubious sustainability because you can always make it sustainable later, seems borderline insane.  I can’t think of a single major entitlement that has become more sustainable over time.  Why is this one supposed to be different?” — Megan McArdle, on the impending ObamaCare