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Archive for October, 2009

Over at Cato Unbound, Elizabeth Anderson responds to Will Wilkinson’s really solid argument about economic inequality.  Will argues that inequality is not injustice in and of itself, but that it can indeed be a symptom of actual injustice.  If inequality comes about due to variation in skill, effort, performance, and chance, then there is no injustice.  If inequality comes about because some elite class is illegitimately withholding resources from the poor, then it does no good to focus on the inequality.  The injustice is the injustice itself.

Elizabeth Anderson makes an absurd argument, one that I had long suspected leftists who fixate on inequality might endorse:

Economic inequality can also lead to stigmatization. Adam Smith famously observed that, as the general level of consumption increases, so does the level of consumption needed by each individual to be able to appear in public without shame:

A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably, though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty, which, it is presumed, no body can well fall into without extreme bad conduct.

The consumption of the better-off thereby raises the cost of living for the worse off. The demands of respectable appearance can be crushing in regions where spiteful competition inflames a culture of conspicuous consumption. In the 2008 documentary Kids + Money, Lauren Greenfield depicts the competitive consumption among teenagers of all classes in Los Angeles, sometimes to the financial ruin of parents who are less well-off. One single mother, desperate to see her daughter wear socially accepted clothes, couldn’t pay her utility bills because she spent her income on a pricey t-shirt for her daughter.

Anderson is justifying redistribution by the state because people are sometimes stigmatized for not keeping up with fashion?  Am I cold-hearted because I have absolutely no sympathy for a parent who can’t deny an expensive, unnecessary shirt to their own child and teach them how to socialize?  Children are bullied for all sorts of reasons far more intangible and trivial than for the particular clothes that they wear.

This argument is absurd on so many levels.  Will redistribution mean that this kind of stigmatization would simply disappear?  Does Anderson really believe that the key driver of this systematic error she describes is inequality and not ten other social problems with the community, or the parents themselves?  Does Anderson believe this problem is widespread enough to justify redistribution, and all its costs?

Could the state possibly have the knowledge to analyze and act on how people will be stigmatized socially?  Maybe Anderson’s isn’t connecting the dots.  If the state did have the knowledge and the authority to “fix” a problem like this, it would be a totalitarian society.  That’s no exaggeration.

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There’s an interesting post on the Economist blog today about TABOR, and how it has worked in Colorado and how it might, or might not, work in Maine.

Colorado’s TABOR mandated that taxation and state spending could grow no faster than inflation, adjusted for changes in state population, without approval by voter referendum.

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Say One Thing

Do another.  That’ s my biggest problem with politics in general, but I think it’s likely that liberals are more prone to that kind of posturing than ‘conservatives’.  At the very least, statists of all stripes fall prey to that more so than liberty-minded folks.

Case in point: environmentalists and building heights in the district.  Renting in D.C. is insanely expensive, especially for commercial space in the good parts of the city.  The reason is simple: building heights are capped by both the city and the Congress.

The height restriction came into existence in 1899, in response to the construction of the 160-foot-tall Cairo apartment building, which was largely seen as an aesthetic threat to D.C.’s cosmopolitan feel. The restrictions are codified under D.C. law, however to make any major revision to the building code would require revision of the Heights of Building Act of 1910, which was passed by Congress. Lifting building height restrictions would presumably channel the high price of office space and real estate into vertical construction, allowing for the accommodation of increased density in the District.

There also overwhelming evidence that when you concentrate people into a smaller space, their environmental footprint is proportionally decreased.

Numerous studies and intuitive wisdom indicate that densely populated urban areas are, in many ways, more environmentally friendly than those that are less dense, and Environmental Protection Agency and National Association of Realtors guidance to cities lauds the benefits of dense building. Case in point: New York City may have the most skyscrapers of any city in the country, but it also has one of the lowest per-capita carbon footprints in the nation. With more dense growth, people are able to live closer to their places of work and to shopping areas, encouraging more walking and discouraging the use of cars.

Not to mention sharing services, which also reduces impacts.  A city can afford a sophisticated sewage treatment/wastewater plant, while sparsely populated communities can’t.  Economies of scale operate even in an environmental context.

As a resident, though, I’ll admit the height restrictions aren’t all bad.  The city is beautiful and sunny, in a way that New York hasn’t been in probably a hundred years.

But I’ll bet dollars to donuts that environmental groups, especially those that make their home in or around the District, would be opposed to repealing those laws, and would be willing to forgo the environmental benefits that increased development in the district would bring.  At the very least, the development of Northern Virginia would be slowed.

I consider myself an environmentalist.  My father has made his living off the land for most of my life, I’ve worked in pristine natural settings, I care about the negative externalities of my actions, and when thinking about future policy I always consider the impacts on the natural world.

I think those principles are consistent with lifting the height restrictions in the district.  It just so happens that such lifting would also conform to my free-market principles.

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We all know Michigan’s economy is craptastic; it’s become proverbial, like the Pope crapping in the woods.  (Is that a joke anyone makes besides my dad?)

Michigan’s a poisonous mix of high, progressive taxes, union influence, and “investments” in public money-sinks like education, public works, and corporate subsidies. From the WSJ

Meanwhile, the new business taxes didn’t balance the budget. Instead, thanks to business closures and relocations, tax receipts are running nearly $1 billion below projections and the deficit has climbed back to $2.8 billion. As the Detroit News put it, Michigan businesses are continually asked “to pay more in taxes to erase a budget deficit that, despite their contributions, never goes away.” And this is despite the flood of federal stimulus and auto bailout cash over the last year.

Following her 2007 misadventure, Ms. Granholm promised: “I’m not ever going to raise taxes again.” That pledge lasted about 18 months. Now she wants $600 million more. Among the ideas under consideration: an income tax increase with a higher top rate, a sales tax on services, a freeze on the personal income tax exemption (which would be a stealth inflation tax on all Michigan families), a 3% surtax on doctors, and fees on bottled water and cigarettes. To their credit, Republicans who control the Michigan Senate are holding out for a repeal of the 22% business tax surcharge.

As for Ms. Granholm, she and House speaker Andy Dillon continue to bow to public-sector unions. There are now 637,000 public employees in Michigan compared to fewer than 500,000 workers left in manufacturing. Government is the largest employer in the state, but the number of taxpayers to support these government workers is shrinking. The budget deadline is November 1, and Ms. Granholm is holding out for tax increases rather than paring back state government.

The decline in auto sales has hurt Michigan more than other states, but the state’s economy would have been better equipped to cope without Ms. Granholm’s policy mix of higher taxes in order to spend more money on favored political and corporate interests.

Where’s Harold Meyerson on this blow to manufacturing?  Oh that’s right, he thinks only private industry can screw up this badly.

In related links, check out Forgotten Detroit, for an on-going pictorial study detailing the death of a city.  Sadly fascinating.

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One of the joys of growing older (which like the Silversun Pickups say, is getting old) is hearing old songs, once loved and now forgotten.  Like running into an ex without any baggage or judgment.  I recently rediscovered Smashing Pumpkins and they took me back to a great time of overblown emotions and wildly inflated self-image.

(Aside:  Billy Corgan reminds me of Ezra Klein, in the sense that I doubt there’s ever been a time when they both didn’t automatically assume they were the smartest people in any room.  End snark.)

But somewhere in that wild rumpus of pomposity, Billy Corgan has some interesting philosophy.  On “Bullet With Butterfly Wings“, he sings

The world is a vampire, sent to drain

Corgan’s oeuvre is concerned with personal integrity or purity.  He’s a true believer in internal perfection, and everything external saps his protagonists of their unique, superior perfection.  He holds himself/his protagonists (I doubt there’s little substantive difference) naturally aloof from the toiling masses, from the dirty fecundity of reality.  Every major SP song betrays this kind of spiritual or physical difference from ‘reality’; Corgan is very much the romantic in that way.  Even in their catalog of videos, the visual metaphor for the world is always dirty (Bullet) or sterile (1979) or fantastical (Tonight, Tonight), Billy is always the startlingly clean, white, pure artistic dream.

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Peter Suderman does an excellent job of clarifying Ezra Klein’s misconceptions about health care.

This is the house they’ve built: an insurance market where plans are written for the healthy and all legal efforts are made to exclude the sick. That’s meant premiums are somewhat lower than they’d otherwise be, but only because the people who most need health-care insurance aren’t able to afford it, or in some cases, aren’t able to convince anyone to sell it to them. Now that arrangement is ending and they’re scared that they can’t provide an affordable product to the people who need it. They may be right, but it’s evidence of how deeply perverse their business has become, not of what’s wrong with health-care reform.

That’s one way to look at it. But Klein’s conclusion rests on the assumption that the insurance industry exists to provide inexpensive protection and support to those deemed “in need” rather than a service business built to help provide a safety net against genuine catastrophe—you know, insurance—to those who want to pay for it. Essentially, this view entails seeing insurance as a social good rather than as a business, which explains why many reform advocates see a single payer system as their ultimate goal.

Now, that’s par for the course for folks with a preexisting liberal worldview. And none of this is particularly surprising given that a) Americans tend to understand insurance as medical prepayment rather than actual insurance and b) the country has built its medical system around third-party payment.

I’ve never understood the concept of health care as a public good.  It’s not a resource, there’s no fount of endless good-health that we can dip into.  Health care and insurance are services, and in a service economy it’s clear that multiple providers and competitive pricing are the best discovered mechanisms for lowering costs and increasing access.

Consider cell phone service.  When the first bulky cell phones came out they cost an arm and a leg, had terrible reception, were ostentatious and you could only use them if you stood under a tower.

But competition and creative destruction have (and continue) to work their invisible hands in the cell phone industry, and now you can have a slim blackberry set to vibrate, and reasonably expect 3G coverage in the middle of Montana.  Google “cell phone providers” and see how many options you find.  True, most people you meet will have either At&t or Verizon, but that’s because by most standards they’re the best.  But the variety of carriers, and more importantly, the potential for increased variety, is intrinsic to the market.

When it comes to something as important as health care, we should be trying to actively promote that kind of diversity, expansion, and cost-cutting.  Baucus-care and its single-payer ilk won’t do any of these things, but Ezra Klein doesn’t care nearly as much for actually helping people as he does about bashing insurance companies for not operating as he’d like.

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Sometime in the near future, I’ll be blogging at the Mercatus Center’s Neighborhood Effects.  I’m very excited, and humbled, to be invited, and I hope I can add something to their excellent staff of writers.  I’ll be cross-posting here as well, but y’all should check that place out for all your state and local policy needs.

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