The myth of middle class stagnation

Don Boudreaux and his former student Mark J. Perry both write excellent blog articles and short essays on their own. Last week they combined their powers to write one amazing, fact-dense piece on the myth of  a middle class that has seen no developments in decades. Here's a taste to get you hooked:

Despite assertions by progressives who complain about stagnant wages, inequality and the (always) disappearing middle class, middle-class Americans have more buying power than ever before. They live longer lives and have much greater access to the services and consumer products bought by billionaires.

Do read the entire thing. It highlights the error of ignoring non-monetary forms of compensation when comparing workers' compensation, it reminds us of the difference between statistical categories and flesh and blood people,  it reveals how technology has drastically improved our standards of living and it shows the diminishing returns of wealth when middle class teenagers can afford the same iPhone a pop star uses.
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The open borders club is always recruiting

I was happy to learn today that Fox news regular and former judge Andrew Napolitano is a proponent of open borders immigration.

It took me years to get here, but I proud to support making America a nation where anyone who wants to can live here. When I moved from Maine to Massachusetts I didn't have to get permission from the grand temple of residency bureaucrats (I wish I could say the same thing about my car) so why should it be different for someone escaping Venezuelan socialism? The only restrictions should be on dangerous criminals.

People who worry that immigrants will "take our jobs" are simply engaging in protectionism. If a competitor can make a superior product, what difference does it matter what side of an imaginary line the factory is on? Why should it matter if workers must cross that same imaginary line on their way to the factory?

The one difference I have with other immigration supporters is that I do not support making it harder to enforce our immigration laws, as stupid and harmful as they are. These measures include giving driver's licenses to illegal immigrants, in-state college tuition, blocking police officers from checking on the immigration status of suspects or declining to deport criminals.

The answer to bad laws is to change them, not to weasel around and leave them on the books.

Milton Friedman was talking about the positive impact from illegal immigrants when he spoke of the problem  of "bad laws [that] make socially advantageous acts illegal, and therefor leads to an undermining of morality in general."

Not enforcing bad laws opens the door to arbitrarily ignoring laws and finally ignoring good laws. I want free and open immigration for everyone, including people who are poor or have few skills. That's why we need to hurry up and change the laws we have, not ignore them.
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Protectionism and the hierarchy of needs

International trade is one of those subjects that people talk about with confidence when they really don't understand the basics. It seems like common sense. Of course we want to be the ones who produce cheap merchandise. Of course China is doing all of our manufacturing for us, as we can clearly demonstrate by looking at where cheap consumer goods are made. Of course the purpose of free trade is to increase our exports.

All three of those common sense ideas are wrong and they require looking at international trade the same way we look at the cola wars, where America and China compete with each other the way Pepsi and Coke compete for customers. Paul Krugman called this view pop internationalism.

Krugman said we should look at China and Japan as trading partners, not competitors. This is a hard sell to the public, and the ignorance of this perspective is what drives protectionism and pseudo economic fads like the "Buy Local" movement.

They tell us, of course the community benefits if you buy from within instead of afar. Of course we should produce our own food. Of course these methods will lead to a higher quality of life for people in our community.

To get into the proper mindset, let's look at providing for the community through the lens of Maslow's hierarchy of needs.

The community must have its basic needs met first. Your library won't do the public much good if everyone freezes to death, and good luck unraveling the mysteries of philosophy if everyone is dying of starvation. The bottom tier of the hierarchy includes things like food, shelter, water and air to breath.

Localists want to have communities feed themselves first, so they support local agriculture as a way to create jobs and keep the community self-sustained.

But remember, jobs are a cost, not a benefit. If you are tying up all your workers with inefficient food production than you will have fewer workers around to tackle the higher tiers of safety, love and belonging, esteem and self-actualization. Who will research cancer treatments, build cars or reinvent higher education if everyone is too busy feeding themselves? That's why the advancements from civilization has always been possible through trade and technology and protectionism is a source of harm for the local community.

With international trade, we put our trading partners to work satisfying some of those needs on the lower tiers so we can concentrate on the higher ones. When China makes our souvenir baseball caps, that frees up our workers to build airplanes.
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In search of a Silver lining

I keep hearing how the Bush tax cuts and the wars in Iraq and Afghanistan are the reason the national debt is up so much and balancing the budget depends on raising taxes and cutting military spending.

But then someone came out with a well-research blog post about how the spending increases are very clearly about increases in entitlement programs. Just look at this graph.

Huh, must be some far-right Republican.

Oh wait, no, it's Nate Silver of the New York Times.

Don't get me wrong, I've been saying for years and years and years that military spending needs to be cut drastically, but let's not ignore the elephant in the room.
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All hail quinoa, slayer of poverty

It looks like the poor farmers in Bolivia and Peru are seeing some decent profits because of growing demand and exports of the food crop quinoa. This has lead to major improvements in the standard of living for poor people in these countries.

Like clockwork, rich busybodies from Western nations feel they have to put a stop to this. As know-nothing foodist Joanna Blythman writes in The Guardian, this increased demand has lead to an increase in the domestic price of quinoa.

The appetite of countries such as ours for this grain has pushed up prices to such an extent that poorer people in Peru and Bolivia, for whom it was once a nourishing staple food, can no longer afford to eat it. Imported junk food is cheaper. In Lima, quinoa now costs more than chicken. Outside the cities, and fuelled by overseas demand, the pressure is on to turn land that once produced a portfolio of diverse crops into quinoa monoculture.

Note the scare word "monoculture." Blythman, who spends a considerable amount of time railing against genetically modified food and other forms of progress, leaves out that rice is still plentiful and costs a fourth of the price of quinoa. It's true that some people in Peru and Bolivia are now eating things like pizza and pasta, but it's not the poor. It's the middle class, and they are eating it because they prefer it and can finally afford it.

Thus, it's clear her biggest problem with quinoa is that it makes poor people wealthy. She would rather live in a world where impoverished serfs toil in the fields all day and sleep on dirt floors than let Bolivian farmers send their kids to school because they might try to bring a cupcake for a snack. Don't mistake her stance as ethical, it's downright cruel.
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Keep the middle man

This weekend I've been reading The Locavore's Dilemma by Pierre Desrochers and Hiroko Shimizu and several passages about the role of intermediaries reminded me that I have been meaning to write about the importance of middle men.

Intermediaries, they write, complete important tasks like assembling, grading, packaging, processing, storing, transporting, financing, distributing and adverting products. The uninformed public, especially Marxists, have seen these middle men as redundant parasites who stand between the customer and the craftsman or farmer. They insist this makes buying and selling impersonal and the process needs to be changed.

This mentality is just a knee-jerk reaction to the division of labor, something Henry David Thoreau compared to letting another man do his thinking for him. What they gloss over is that when you don't hire a middle man that labor has to be performed by someone else, often the customer.

This is called shadow work, unpaid labor that the customer picks up from an eliminated middle man. When you spend an hour on the Internet searching for cheap airline tickets instead of hiring a travel agent, you are doing shadow work. The money you save is the shadow work payment. For some people, that's worth it. If you are a corporate attorney, it probably isn't and you'd rather have the free time.

In 2011 Craig Lambert wrote a New York Times article on the growing problem of shadow work. That is to say, the problems that have come from eliminating middle men.

To be sure, shadow work has its benefits. Bagging one’s own groceries or pumping one’s own gas can save time. Shadow work can increase autonomy and enlarge our repertoire of skills and knowledge. Research on the “Ikea effect,” named for the Swedish furniture manufacturer whose products often require home assembly, indicates that customers value a product more highly when they play a role in constructing it. 

Still, doctors routinely observe that one of the most common complaints today is fatigue; a 2007 study pegged its prevalence in the American work force at 38 percent. This should not be surprising. Much of this fatigue may result from the steady, surreptitious accumulation of shadow work in modern life. People are simply doing a huge number of tasks that were once done for them by others. 

Doing things for one another is, in fact, an essential characteristic of a human community. Various mundane jobs were once spread around among us, and performing such small services for one another was even an aspect of civility. Those days are over. The robots are in charge now, pushing a thousand routine tasks onto each of our backs.

The beauty of middle men is that they perform tasks that would otherwise end up as shadow work. There's nothing redundant or parasitical about that.

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Drive-by blogging

It's been a busy week and I've blessed with too many links to write about them all at length.

Jezebel has taught us that feminists don't always believe that women should have control over their own bodies, as sometimes they will want to do things that they don't like.

I don't know if I should be proud of embarrassed that when I saw the title "How Much Are Mario Coins Really Worth?" for this video I immediately thought to apply the 100 coins extra life rule to the figure federal agencies use as a value estimate for an individual life, which is exactly what this video does about two minutes in.

The next time a Democratic Party apologist tells me that the donkeys are the party of science, reason and well-thought out policies I will think of this post from Matt Welch about the president's use of shallow, ill-informed emotional arguments to push gun control.

Nate, or N8r as he likes to be called, has been pushing the idea that advanced 3-D printers will eventually make gun control obsolete. I think he's right, but I see that as a negative overall while he sees it as a positive. I want to make it marginally harder for convicted felons and people with mental illnesses to acquire guns. While many will find ways around it and get guns anyways, not all of them do.
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Obama doesn't care about evidence

Today President Obama announced his list of 12 legislative recommendations and 23 executive actions for gun control measures to capitalize on the wave of enthusiasm following the Sandy Hook shooting. Some of the measures are ho-hum, such a call to nominate an ATF director and have the Consumer Product Safety Commission review safety standards for gun locks and gun safes.

But, of course, there was a lot of nonsense recommended by the president, such as a federal ammunition magazine cap at 10 rounds, a ban on so-called assault weapons and having the Centers for Disease Control conduct a $10 million study to answer a question we already know.

I'm reminded of a brilliant article David Bier wrote last week that questions the philosophy behind the gun-grabbers demand that we provide a reason why we should be allowed to possess semi-automatic rifles like an AR-15.

Free societies place the responsibility on those who would restrain the freedom of an individual to justify their action, not on the individual to justify his freedom. But the proponents of government action have completely inverted this premise - government power now requires little justification - it is presumed valid - and exercising liberty requires a great deal of justification.  

Russell's Teapot taught us the burden of proof is on the claim maker. If we apply this logic to government power, shouldn't it be up to the President Obama to show us the evidence that his policies will reduce the murders of innocent people?

Where is the evidence that restricting magazine sizes will stop or minimize mass shootings? The claims from the anti-gun folks are quite grand. Lawrence O’Donnell was ahead of the curve on this idea. Back in July MSNBC's he guaranteed that the Aurora movie theater massacre would have ended early if the shooter hadn't used a hundred-round drum magazine:

California has made the sale of hundred-round clips illegal. California restricts those magazines to ten bullets. And so, if you’re an aspiring mass murderer here in California, and you decide tonight to obtain your killing tools legally, as our most recent mass murderers have done, you will be forced to reload after your first ten bullets, and if you try doing that in a packed movie theater, I promise you, you will not finish reloading. You will be taken down by the freedom of the people in that theater to attack you the second you have to stop firing and reload. The ten-bullet clip is about the freedom to stop mass murderers after they’ve fired ten shots, instead of a hundred.

But that shooting never lasted 100 rounds. The shooter's gun jammed on him. No one tackled him. He simply switched to a second weapon, as most of these shooters have had the option to do. Reloading can take one to three seconds. O'Donnell's wild claim, peppered with confident statements like "I promise you" was a swirl of useless conjecture. Where is the hard evidence that this policy will make a difference?

Banning weapons that have certain non-essential features and labeling them "assault weapons" based on the stock or the grip is another useless move lacking evidence. The research ranges from showing the 1994 federal ban on so-called assault weapons failed to make a clear impact on gun violence to inconclusive. There is no reason to believe passing these feel-good laws will prevent violence.

I think the most telling recommendation President Obama made today was his effort to fund another study on video games hoping the conclusion will be different. From Joystiq:

Obama mentioned video games once during the conference, asking Congress to provide $10 million for the Centers for Disease Control and other scientific agencies to research the causes of gun violence. 

"While year after year, those who oppose even modest gun safety measures have threatened to defund scientific or medical research into the causes of gun violence, I will direct the Centers for Disease Control to go ahead and study the best ways to reduce it," Obama said. "And Congress should fund research into the effects that violent video games have on young minds. We don't benefit from ignorance. We don't benefit from not knowing the science of this epidemic of violence."

Well, we do know the science here. In fact, the Supreme Court took that scientific fact into account back in 2011. We already have the answer to this question.

Imagine if the president said he wanted to fund a new study to determine if vaccines cause autism, or if George W. Bush was behind the 9-11 terrorist attacks. Try ending that request with "We don't benefit from ignorance."

The president does not practice an evidence-based approach to running this government. The list he produced today had some reasonable approaches, but he couldn't help himself from peppering it with dubious measures.

In an authoritarian world, all freedoms are restricted unless the government permits them. In a world of liberty, all freedoms are permitted unless the government restricts them.

I believe freedom should come first. There are times when it is needed for the government to restrict some of our freedoms, but the burden of proving the necessity of those restrictions falls on the government. If they want to take a right away it is up to them to prove to us why they should be allowed to. We shouldn't have to come up with a compelling reason for why we deserve each and every freedom we get to keep.
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Rolling taxes onto the middle class

Today as I was shelling out $450 to have my tires replaced I thought of a pledge President Barack Obama made over and over again not to raise taxes on anyone making less than $250,000 a year.




Notice the detail where he said there will not be an increase in "any" form of a tax increase.

So then how do you explain the 25 percent tariff he put on imported Chinese tires?

Dylan Matthews of the Washington Post reveals the policy was a massive failure:

The best evaluation of the program comes from Gary Clyde Hufbauer and Sean Lowry at the Peterson Institute. Theirstudy found that after Obama imposed the tariffs, employment in the U.S. tire industry grew by 1,200 jobs. Hufbauer and Lowry figure that this is the maximum number of jobs the tariffs could have created or saved, a generous assumption given that tire employment was already trending upward. 

How much did those 1,200 jobs cost? About $1.1 billion, Hufbauer and Lowry found, all borne by consumers who were forced to pay higher American prices for tires, prices which shot up still higher when freed from competition with China.

As Milton Friedman often reminded us, the person who writes the check is not always the one who pays the tax. Consumers like me who make far less than $250,000 annually are the ones that paid that tax. It is likely I personally did not, as the program expired in September and I bought mine today, but that's just because my timing was fortunate. The president's promises to make our overwhelmingly progressive tax system more progressive are flawed as long as he continues to intervene in the economy and impose stealth taxes.
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More living fossil controllers

Back in June I wrote about how the evolution of video game controller designs may have ended like it did for crocodiles with the Xbox 360 controller, as can be seen by the almost duplicate WiiU controller.

I recently saw two Android controllers that went the same route, the Moga Pro and the Project Shield. There is more supporting evidence here.

This two handed, two thumbstick, two trigger, two bumper, four face button and directional pad design may be with us for a long time.
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Local-washing in Kentucky

While I was queuing up some 80's rock music on YouTube this week an advertisement from Goldman Sachs started playing that brags about how they helped create local jobs in Louisville by financing a new NCAA arena. There was a lot of talk about putting local people back to work and revitalizing the downtown area, which were of course red flags that something is very wrong here.

The most obvious criticism is that this is an approach called local-washing where a large national company will try to piggybank onto the silly "Buy Local" fad by presenting itself as a savior of the local economy. Since most companies need workers to perform labor near their home, any company can argue it has a local impact on some community somewhere.

The second one is, what do I care about the local economy in Louisville? The local purchasing preference movement is all about putting your own community above all the others, so as a resident of Massachusetts shouldn't I be hostile to Goldman Sachs for helping one of our many rival communities?

The third is that arenas are a horrible use of taxpayer money. Sports economist Roger Noll said mixed-use arenas like this one will break even at best, as they mow down a lot of property that can no longer be used for other purposes, and that's if the arena sees constant use. This one doesn't.

The Goldman Sachs video never reveals the name of the arena, which is understandable as it has the unfortunate moniker of the KFC Yum! Center. Like clockwork observations started pouring out about how great the arena is for the city, but the financial figures tell a different story.

The official price tag was $238 million, but critics put it at $348 million by focusing on the municipal bonds the city had to take out to pay for it. The annual profits can't even clear $1 million a year, the city may have to kick in $9.8 million annually to help it makes its mortgages and the arena's managing authority just had its credit rating kicked down the stairs.

Sorry Goldman Sachs, but this Yum! center just made me lose my appetite.
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Let's not play that game

An NPR reporter tonight said that gun control proponents are trying to re brand their position as "gun violence prevention." The New York Times confirms it, giving Nancy Pelosi credit for the new spin.

On gun rights, Ms. Pelosi said Democrats are no longer talking about gun control but refer instead to what she calls gun violence prevention — an effort by Democrats and their allies to find a less politically charged term, one that suggests a broader range of approaches beyond simply gun regulation. She called it challenging to balance the rights of gun ownership with public safety and security but said Congress needed to find a way to reach consensus. “We have to prioritize, get the votes and do something,” said Ms. Pelosi, who identified limits on high-capacity ammunition magazines as one area that Democrats would explore.

If "gun control" was too politically charged a term then it is because gun control advocates gave it a bad reputation.

There's a reason that the Associated Press uses the terms "abortion rights" and "anti-abortion" instead of "pro-choice" and "pro-life." Groups will try to re brand themselves for a marketing spin, or give their opponents a disadvantage if the term becomes mainstream.

George W. Bush's administration swapped "tax cut" out for "tax relief" to make Democrats have to say they oppose "tax relief." It's a cheap trick, and the only solution is to refuse to use those terms.

Do they think for a minute people like me will declare themselves opposed to "gun violence prevention" when that's something we value as well? It's not going to happen. Why don't they put a little more work into making their position something they can wear with pride instead of playing word games with journalists. Shame on any reporter who goes along with this nonsense.
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How did I miss that one?

Each year I chose a story I never blogged about but should have. My selection for 2012 is now ready for public consumption.

I must have been very busy in February with my underwater triathlon training regiment because I somehow missed the opposition to the Welfare Integrity Now for Children and Families Act, which would have prevented ATMs in casinos, strip clubs and liquor stores from dispensing cash from from welfare.

Seems like a no-brainer, right? Well, never underestimate the stories people will spin to protect the reputation of something they have devoted their life to. Enter Elizabeth Lower-Basch:

This is another example of setting policies based on attention-grabbing news stories with little connection to the underlying reality and that are designed to reinforce the 'unworthy poor' stereotype," said Elizabeth Lower-Basch, a senior analyst at the Center for Law and Social Policy, a progressive D.C. think tank. "There's no evidence that this is a widespread problem. And even when funds are withdrawn in those locations, it doesn't mean that people are gambling away their benefits."

Good grief. Is one of her main arguments really that there's no way to tell if welfare money taken out of a strip club ATM is ending up in a stripper's G-string or a grocery store register? Ladies, if you bank history shows your husband withdrew $200 while he was at the Pole Cat Lounge, don't assume he just stopped in to get money to buy apples.

Welfare is sold to the public as a way to help impoverished families with children, but look at how feverishly the hard-core left responded to allow the parents of those families to waste that money. One Californian group said the amount spent at casinos and strip clubs is less than one half of one percent of the state's welfare spending. We are supposed to assume that's not enough money to care about.

So how much money is that, seeing as how the critics avoided naming the figure. Since California spent $6 billion on welfare spending in 2011, that would mean the amount is less than $30 million for that state alone. That ballpark is a lot higher than the $1.8 million reporter for casinos alone in an 8 month period in 2009 and 2010 in the state. Neither of these figures include liquor store purchases.

While the bill passed the House 395 to 27, it never came to a vote in the Senate. Too bad. It wouldn't have fixed a broken system, but it would have cleanly targeted abuse. It's so simple why wouldn't you do it?
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Didn't expect Sam Harris to pack a pistol

As someone who gets annoyed by the popular assumption that having a secular world view means one has to hold generic left-wing views as well, I thoroughly enjoyed Sam Harris's recent piece on the gun control fervor and why he is a gun owner.

As an outspoken atheist author and critic of religion, Harris receives a considerable number of death threats, and some of them need to be taken seriously. That's why he spends an entire day training with a qualified instructor about once a month. This is news to me, but when other critics of radical Islam like Theo van Gogh are murdered in the street it seems like a reasonable precaution.

What is comforting is that Harris makes the same points people like me have been making - mass shootings are rare, assault "weapons" bans are useless symbolism and concealed weapons allow people to fight back. Dysfunctional views tend to be all over the place, but informed views converge.

This is my favorite part, where he makes the same point as the gun is civilization essay.

Like most gun owners, I understand the ethical importance of guns and cannot honestly wish for a world without them. I suspect that sentiment will shock many readers. Wouldn’t any decent person wish for a world without guns? In my view, only someone who doesn’t understand violence could wish for such a world. A world without guns is one in which the most aggressive men can do more or less anything they want. It is a world in which a man with a knife can rape and murder a woman in the presence of a dozen witnesses, and none will find the courage to intervene. There have been cases of prison guards (who generally do not carry guns) helplessly standing by as one of their own was stabbed to death by a lone prisoner armed with an improvised blade. The hesitation of bystanders in these situations makes perfect sense—and “diffusion of responsibility” has little to do with it. The fantasies of many martial artists aside, to go unarmed against a person with a knife is to put oneself in very real peril, regardless of one’s training. The same can be said of attacks involving multiple assailants. A world without guns is a world in which no man, not even a member of Seal Team Six, can reasonably expect to prevail over more than one determined attacker at a time. A world without guns, therefore, is one in which the advantages of youth, size, strength, aggression, and sheer numbers are almost always decisive. Who could be nostalgic for such a world?

Harris also says that limiting magazines to 10 rounds causes more frequent reloads and provide a slight help in mass shootings. I don't agree this would change much and he readily admits that this would require multiple people who happen to be in the right place to make a daring attack, but Harris is coming at this from his own perspective and I'm glad to see he really does think for himself.
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I wouldn't mind if they didn't call themselves journalists

I thought I was done with this subject, but they keep pulling me back in.

The self-important "Maine Center for Public Interest Reporting" released a report yesterday that was reprinted by Maine newspapers. The headline was States have subsidized makers of assault rifles to tune of $19 million.

However, I read it and found no subsidies or assault rifles. The sloppiness of this editorial masquerading as a news story is apparent just two paragraphs in.

Taxpayers across the country are subsidizing the manufacturers of assault rifles used in multiple mass killings, including the massacre of 20 children and six adults at an elementary school in Newtown, Conn. last month.

A Maine Center for Public Interest Reporting examination of tax records shows that five companies that make semi-automatic rifles have received more than $19 million in tax breaks, most within with the past five years.

Semi-automatic rifles, by definition, are not assault rifles. Tax breaks are not subsidies, just as deciding not to punch someone in the face doesn't mean you healed them. The article repeatedly uses those terms interchangeably. As a journalist I know how crucial getting details right is for a story. This is something an intern would be embarrassed to turn in, and they're treating it like an opus.

The article finds every anti-gun source it can and makes a layer cake with them. This is what activists do, and that's acceptable for activists, but the Maine Center for Public Interest Reporting insists on labeling itself "A nonprofit, nonpartisan news service that writes and distributes stories that uncover and explain the actions of state, local and federal government."

If you want to call yourselves journalists, expect to be judged like ones. Either the reporters and editors are so sloppy that they don't know the difference between a tax break and a subsidy or they just assume all wealth belongs to the government and anything not confiscated is a gift.

Well, if that's the case, I am going to continue to not steal money from the Maine Center for Public Interest Reporting and call myself a donor.
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