As much as I used to admire National Review, since WFB stepped down, it’s basically become a rag that occasionally publishes someone worth reading. And, as far as I can tell, none of those people write on the Corner.

Case in point: this little gem on immigration from Andy McCarthy:

Mind you, I am not resolutely opposed to the granting at some point of a humanitarian amnesty, if the illegal population were reduced by 90 - 95 percent. After all, we already have asylum laws — a form of humanitarian relief by which we permit people who would not otherwise qualify to reside here.

Let me get this straight: Here McCarthy is–I suppose–attempting to show he’s not a cold-blooded bastard by saying, “Well, we don’t have to deport ALL of those people.”

If we work with the figures most generally tossed around, there are an estimated 12 million illegal immigrants in this country. Most of those immigrants work. They may or may not pay income taxes, (mind you, if they were allowed to stay here legally, they would) but their labor undeniably contributes to the economy and they pay sales tax on anything they buy in the country. Yet, if McCarthy had his druthers, he’d get rid cut that 12 million down 10.8-11.4 million.

But, who’s going to take all their jobs once they are deported? Even if we assume the patently absurd–that all of the able-bodied unemployed would magically get off their asses and work these (shitty) jobs and there would be ZERO job growth–with the current figures estimating U.S. unemployment at 8.5 million, you’re looking at a job deficit of 2.3-2.9 million!

How in the hell is that good for the economy?

Can we hire one of these illegals to teach McCarthy subtraction?

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Filed under: Politics is Personal, The Dismal Science, Daily Rant

Riding the Metro into the Swamp this morning, before I leaned my head against the glass to catch my last few minutes of sleep for the day, I noticed that there were stories in the freebie news rags about the dramatically increased Metro ridership due to gasoline prices. Even the conductor even commented on the number of people saying that “We all know why.”

So, it is with a great deal of chutzpah that the left-leaning codgers in the Senate tried to…get this…increase gas prices to punish the evil corporations:

The legislation at issue called for repealing some $17 billion in tax breaks for oil companies and for imposing a 25 percent windfall profits tax. Companies could avoid the windfall profits tax if they invested the money in renewable energy development or in new refineries.

…

“The Bush administration has failed to address these concerns,” said Senate Majority Leader Harry Reid, a Nevada Democrat. “Sadly, the Republican members of Congress have stood by his side, cheering him on, cheering on the oil companies as they make more money.”

reason’s Ronald Bailey had this to say:

In any case, [the U.S.] has had a previous bad experience with “windfall profits taxes” on oil companies. In 1980, as a parting gift, President Jimmy Carter and Congressional Democrats imposed just such a tax. How did it work out? Not so well. In 2005, the Tax Foundation looked at the issue and pointed out that the Congressional Research Service…

…found the windfall profits tax had the effect of decreasing domestic production by 3 percent to 6 percent, thereby increasing American dependence on foreign oil sources by 8 percent to 16 percent. A side effect was declining, not increasing, tax collections.

Great idea, huh? But it gets even worse. In 2005 Congressional testimony, ConocoPhillips CEO James Mulva cited the same CRS study as finding…

…the windfall profits tax that was signed into law in 1980 and repealed in 1988 drained $79 billion in industry revenues during the 1980s that could have been used to invest in new oil production-leading to 1.6 billion fewer barrels of oil being produced in the U.S. from 1980-1988.

So not only does a “windfall profits tax” boost prices now, it reduces investment in oil exploration helping to keep prices high in the future. Let’s call that a “lose-lose” for American motorists.

And by the way, just how much in taxes has Big Oil paid? Back in 2005, the Tax Foundation reported…

…over the past 25 years, oil companies directly paid or remitted more than $2.2 trillion in taxes, after adjusting for inflation, to federal and state governments-including excise taxes, royalty payments and state and federal corporate income taxes. That amounts to more than three times what they earned in profits during the same period, according to the latest numbers from the Bureau of Economic Analysis and U.S. Department of Energy.

You don’t need a Ph.D. in Economics to understand that if you raise the cost of providing a service, the cost will be passed on to the consumer. Hell, you should be able to figure this out with an 8th grade education…or a memory that goes back further than the previous election cycle.

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Filed under: The Dismal Science, Profiles in Governance

Imagine that you, like Austin Powers, were cryogenically frozen in 1967, only to be thawed out today. Now, imagine how little you would even begin to comprehend a news item like the following:

Scientists in Finland said they had replaced a 65-year-old patient’s upper jaw with a bone transplant cultivated from stem cells isolated from his own fatty tissue and grown inside his abdomen.

Which brings to mind…..markets in organ surrogates, anyone?

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Filed under: The Dismal Science, Freedom Meets Darwin, Pop! Goes the Culture

The money-changers in Wall Street’s temple apparently think it slightly less likely today than they did yesterday that the Fed will call for a 50 basis point cut in the federal funds rate target when they wrap up their meeting this afternoon (trading in futures contracts on the Chicago Board of Trade show about a 75% likelihood of a half-point cut, compared to the 86% just a day earlier) but a cut of at least 25 basis points is still generally taken as a given.

This is on top of the surprise 75 basis point cut the Fed announced Jan. 22, the first inter-meeting action since September 2001 (you might remember a bit of commotion right around then) and the largest single cut since October 1984.

And that was on top of the 25 basis point cut they announced Dec. 11. And the 25 basis point cut they announced Oct. 31. And the 50 basis point cut they announced Sept. 18.

So what all this means is, depending on whose forecast you believe, the funds rate will stand by the end of the day at either 3.25% or 3.0%. That’s in comparison to the European Central Bank’s key rate of 4.0%, and despite the fact that the dollar already stood at historic lows against the euro even before the rate-cutting binge.

It also means the benchmark rate could stand a full point below the 4.1% rate of consumer inflation reported in 2007, the highest rate in 17 years.

So when the cuts come, and when you’ll undoubtedly see a rally on Wall Street, and when Jim Cramer and his ilk complain that they didn’t come fast enough or didn’t come deep enough, just keep one thing in mind, folks:

We’ve watched this movie before. And it sucked.

It was called the 1970s, the era of “stagflation.” Yes, it was a groovy time for sea monkeys, puka shells, Hostess fruit pies, X-ray specs, and other goods hawked in the back pages of every issue of Howard the Duck. But economically? Yeah, the Seventies totally blew, dude.

It especially sucked if you happened to be a Keynesian economist, and had to rethink your entire economic model when you saw rampant unemployment (that’s the “stag” part, as in stagnation) alongside rapidly rising prices (there’s your “flation,”) something the General Theory told us wasn’t supposed to be possible. For a whole decade, our nation’s leaders were hamstrung trying to fix the problem. Nixon rammed through price controls and took us off the gold standard. Ford distributed some nifty buttons. Jimmy Carter opted for the “group hug” approach to solving our economic woes.

None of it much worked until Paul Volcker came in and jacked the shit out of interest rates, dragging us through a fairly prolonged recession that didn’t much ease until the friendly visage of Michael J. Fox started appearing on Americans’ television screens and convincing them it was ok to be consumers again.

Whether “Stagflation Part Deuex: Stag Harder” will have as pleasant a resolution is anyone’s guess, at this point. But in the meantime, as the Fed continues to turn our dollars into monopoly money, it might not be a bad idea to invest in a wheelbarrow.

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Filed under: The Dismal Science, Pop! Goes the Culture

We’ve had a lot of race relevant posts here at F & S here recently, which has inspired me to explore the meaning of one of our (infrequently used) tags. The phrase is “The Dismal Science,” which, as we all know, refers to the really exciting academic discipline known as economics.

In modern times, the phrase has been used by economists to refer, in a mood of self-deprecating good humor, to themselves. The joke is that sitting around a faculty office and spending all of one’s time working on regressions and supply curves is considered nerdy and boring, so some of those scienticians have ruefully characterized their careers as “dismal,” according to the old phrase. The truth, as always, is much more interesting.

The phrase, long known among academics, actually comes from English historian and semi-pro racist Thomas Carlyle. It turns out that Carlyle was such a bastard that even some of his fellow Victorian Brits thought he was an immoral shitbag. Trust me, you had to be a real hard core dick to earn that reputation in the 1890s.

So anyway, one of the points of Carlyle’s phrase was that modern economics treats all human beings, in analysis, as equal. When we calculate supply and demand, the racial or ethnic background of the people doing the supplying and demanding makes no difference. One can rightly say that ‘I am a human being with certain abilities and resources, and that is the only thing that matters.’ He considered that dismal. In other words, sad and disappointing. A white man is equal to the dusky heathens of the uncivilized world? Dismal!

Among other things, Carlyle argued that slavery was superior to free trade in labor. Even worse, he argued that that was true not just for the slave owners, but worse even for the human beings who found themselves enslaved by force. He put Orwell to shame, really. Slavery = freedom? His theory was that, (for some people, anyway) slavery > freedom. What a fucking cock.

So the next time you find yourself mired in an endless conversation with some boring nerd who can’t stop talking about his dissertation on post-mercantilist theory, just sigh and remember that free market economics gave one of the most repellent intellectuals of the 19th century perpetual headaches.

P.S. - Suck it, Carlyle. We won.

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Filed under: The Dismal Science

Protestants ♥ freedom and shit…or at least capitalism, which is facilitated by freedom and shit.

I was reading this post over at Tech Liberation Front, which quotes a passage from a 1975 book about telephony that mentions the relationship between the Calvinist work ethic and entrepreneurship, which was particularly pronounced in 19th century America:

[T]he economic rewards of invention under the U.S. patent system were great and well advertised; Bell and others like him knew well enough that the inventor and original backer of the telegraph had become millionaires, and his passion for secrecy about his experiments, along wit his early and intimate association with the Patent Office through Hubbard, suggest how well he realized he might be onto something commercially big. And he was urged on by both his philosophical background and the current social climate in America. The Scottish Calvinism of the nineteenth century made a primary virtue of material success achieved through hard work, and as an example Bell had his countryman Andrew Carnegie, twelve years his senior, who had come to the United States from Scotland in 1848 and by 1875 was already a millionaire in the process of consolidating the largest steel company in the world. As to the social climate, 1875 was the heyday in America of laissez-faire venture capitalism, when men had a kind of savage fury for fame and fortune that the more jaded twentieth century can scarcely conceive of.

Tim Lee, the post’s author, finds the last sentence of that passage out of step with today’s reality, but I disagree. The spirit of innovation and invention that swept America in the 19th century far surpasses the isolated pockets of innovation that exist in today’s America, and I think there are two reasons.

First is that innovation today is somewhat more difficult to detect: packing more information on a microchip or creating a cell phone that can take pictures is hardly an improvement in quality of life on par with the improvements afforded by electricity, light bulbs, telephones, elevators, steam engines, and yes, the dishwasher, which was invented by an Illinois socialite. Change is less dramatic today, and thus, there’s less opportunity for fame and fortune of the kind that 19th century inventors enjoyed. Who knows the name of the dude who invented the cell phone camera or the halogen light bulb? No one. But we all know Alexander Graham Bell and Thomas Edison. Of course there are occasional exceptions and notable inventors and innovators–like Bill Gates, Steve Jobs, the Google dudes, etc.–but mostly people tend to think of them as the figureheads of multinational corporations, not rugged individualist inventors in the mold of their predecessors.

Second gets more at the mention of Calvinism in the passage. In addition to there being less of a sense of urgency about the physical need to invent things to make life better, the decline in religiosity is likely a significant contributor to the decline in the spirit of invention. I, for one, would work far harder in my secular vocation if a.) I believed in god and b.) I believed that god would prefer it if I worked harder. That’s sort of why I dig Calvinism, except for the whole austerity thing. No matter what you do in life, God has already chosen the elect, those who will be saved and get to chill in heaven. But to be a good Calvinist, you have to put a lot of zeal into proving to others that you’re part of the elect, by working as hard as you can in the name of God in this life. Now as a non-believer, keeping up appearances for the sake of others and showing that I’m part of the modern-day elect (read: the cool kids) is most of why I do the basic minimum to hold down a job. But hells yeah, if I thought god cared and wanted me to do better (and more importantly, if I thought I’d go to hell if I didn’t do better), maybe I’d put some effort into it.

Anyway, the relationship between protestantism and the roots of modern capitalism is pretty interesting: you should work hard, but not live lavishly–so what to do with your hard-earned pennies? Invest them in the means of more production! Jebus lubs investment in productive capital. If you’re interested and haven’t read it, Max Weber’s The Protestant Ethic and the Spirit of Capitalism is a pretty quick read, and it’s available for free online. Ironically. Religiosity declines and all of a sudden books are free! World gone mad.

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Filed under: The Dismal Science, Consumerism Rulez, Jesus is Magic, Pop! Goes the Culture

…is the coercive power of the government. From this morning’s Post Express:

Tickets for expired car registrations usually don’t result in jail time. Unless, of course, that thicket is a driver’s 76th. Valerie Ortiz Sanchez, 31, was arrested on Monday during a routine traffic stop in Harlingen, Texas, when officers discovered she had 76 outstanding traffic warrants and nearly $19,000 in unpaid fines and court fees dating back nine years. Sanchez was arrested on charges of having an expired car registration, no insurance and driving with an expired license, police said. She remained in the Harlingen jail Wednesday, and it was unclear whether she had a lawyer.

The Express titled the article “Libertarian Protests Oppressive DMV,” because, well, the people who write headlines over there seem to revel in being too cute by a half.

I won’t argue with the validity of (some of) the laws she broke–requiring a minimum of insurance for drivers makes a lot of sense economically, as there’s unarguably a bit of a knowledge problem when it comes to judging the safety of other drivers on the road. Indeed insurance, rather than a capricious drivers’ licensing regime, makes a lot more sense from a market standpoint: require that everyone be insured, and then let the insurance industry work out who gets to drive and who doesn’t, which cars are safe enough, etc. I, for one, would be much more comfortable knowing that my fellow drivers have insurance than knowing that they had the endurance to stand in line at the DMV for 2 hours. Point is, I’m not arguing over of the laws in question.

But think about it: behind every law, no matter how trivial, is the threat of incarceration, and behind the government’s ability to incarcerate you is a gun. It’s that simple. The laws Ms. Sanchez broke may very well be laws that deserve to be backed up with coercive force–I don’t want to argue these particular laws. But it sure would be nice if lawmakers thought about things in those terms when they passed the laws, if, when deliberating they said, “Is this a law, that if flouted enough, should result in someone going to jail? And if they resist going to jail, is this a law that is worth physical coercion?”

I suspect we’d have a lot fewer laws if elected officials were encouraged to step back and realize that what’s backing up their smoking bans, fishing licensure regimes, and jaywalking penalties is a Man with a gun.

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Filed under: Behind Every Law..., The Dismal Science, Profiles in Governance

Well done, Arizona. With your new employer-sanctions law, which threatens to suspend–or revoke–the business licenses of employers who knowing hire illegal immigrants, you’ve made Mexico a pleasanter alternative to America. Right on.

From CNN:

State Rep. Russell Pearce of Mesa, the author of the employer sanctions law, said his intent was to drive illegal immigrants out of Arizona.

“I’m hoping they will self-deport,” Pearce said. “They broke the law. They’re criminals.”

[…]

When immigrants don’t have jobs, they don’t stick around, said Dawn McLaren, a research economist at Arizona State University who specializes in illegal immigration. She said the flagging economy, particularly in the construction industry, also is contributing to an immigrant exodus.

“As the jobs dwindle and the environment becomes more unpleasant in more ways than one, you then decide what to do, and perhaps leaving looks like a good idea,” she said. “And certainly that creates a problem, because as people leave, they take the jobs they created with them.”

One such immigrant in the story is Martin Herrera, a masonry worker who lives in Camp Verde, AZ:

“I don’t want to live here because of the new law and the oppressive environment,” he said. “I’ll be better in my country.”

He called the employer-sanctions law “absurd.”

“Everybody here, legally or illegally, we are part of a motor that makes this country run,” Herrera said. “Once we leave, the motor is going to start to slow down.”

Now for the jaw-dropper:

[Rep.] Pearce disagreed that the Arizona economy will suffer after illegal immigrants leave, saying there will be less crime, lower taxes, less congestion, smaller classroom sizes and shorter lines in emergency rooms.

“We have a free market. It’ll adjust,” he said. “Americans will be much better off.”

Yes, of course, a free market! Where the state can revoke your business license, where labor supply and labor demand never meet, and where, come spring, some rich folk are gonna be mighty peeved at the cost of landscaping. Frrrreeedom!

Um, I’d sort of rather have Martin Herrara as my state representative. He seems to have a much better grasp of the fundamentals of economics; but I find that people who actually work for a living often do.

Hat tip (or thumbed nose, I guess) to RedState, where my favorite comment so far is this one:

The millions of Americans who fought the McCain-Kennedy amnesty were right as well.

We were called racist’s, nativist’s etc. but we didn’t care we fought hard and stopped the Congress and the President.

The beauty of that win was that the state’s could than do what was right and not be usurped by the government.

Freedom of Religion not Freedom from Religion

[sic] all over. Racist’s what? Nativist’s what? State’s what? Racist’s handbags? Nativist’s Trapper Keepers? State’s ice cream cones?

I’m dying to know what all the unidentified possessed nouns in that sentence are.

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Filed under: The Dismal Science, Profiles in Governance, The Homeland