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I like to read, when I have time, things like Counterpunch Magazine, you know, to share the vibe with my comrades. Today I came across this:

The Khmer Rouge experiment lasted only three years, from 1975 to 1978.

Surprisingly, Cambodians have no bad memories of that period. This is quite an amazing discovery for an infrequent visitor.

A much quoted American professor, RJ Rummel, wrote that “out of a 1970 population of probably near 7,100,000 …almost 3,300,000 men, women, and children were murdered …most of these… were murdered by the communist Khmer Rouge”. Every second person was killed, according to his estimate.

However, Cambodia’s population was not halved but more than doubled since 1970, despite alleged multiple genocides. Apparently, the genocidaires were inept, or their achievements have been greatly exaggerated.

The Pol Pot the Cambodians remember was not a tyrant, but a great patriot and nationalist, a lover of native culture and native way of life.

The Cambodians I spoke to pooh-poohed the dreadful stories of Communist Holocaust as a western invention. 

New Cambodia (or Kampuchea, as it was called) under Pol Pot and his comrades was a nightmare for the privileged, for the wealthy and for their retainers; but poor people had enough food and were taught to read and write. As for the mass killings, these are just horror stories, averred my Cambodian interlocutors.  Surely the victorious peasants shot marauders and spies, but many more died of American-planted mines and during the subsequent Vietnamese takeover, they said.

The people now in charge of the US, Europe and Russia want to present every alternative to their rule as inept or bloody or both. They especially hate incorruptible leaders, be it Robespierre or Lenin, Stalin or Mao – and Pol Pot. They prefer leaders keen on graft, and eventually install them. The Americans have an additional good reason: Pol Pot killings serve to hide their own atrocities, the millions of Indochinese they napalmed and strafed.

Introduction of capitalism in Russia killed more people than introduction of socialism, but who knows that?

But let us remember: if socialism failed, so did capitalism. If communism was accompanied by loss of life, so was and is capitalism. But with capitalism, we have no future worth living, while socialism still offers hope to us and our children.

Amen comrade! Have a nice day.

Our Class Rules

Like many parents, last week I was able to attend the opening meetings at our childrens’ school which included a brief “ra ra” assembly with the Principal and then we go to the classrooms to meet the teachers and listen to their shpiel on how they will educate our kids and how lucky they are to have our kids and so on. I didn’t register much of it – after the first bit of ra ra on how our school fares on standardized tests (I don’t care) and more ra ra on the new goodies bought in each classroom like smart boards (I don’t care), we finally got to something I DO care very much about. The Class Rules. Here is why I send my kids where they go now:

3rd Grade Class Rules

  1. Treat others as you would wish to be treated
  2. Respect others
  3. Be responsible for yourself
  4. Be kind
  5. Be honest
  6. Be fair

In any event, I think it is in 3rd grade that the actual indoctrination of children begins. In their “social studies” unit they are learning all about communities this year, I’ll share tidbits with you as it comes in. And the science done by third graders is a mix of life science and earth science – but with very little actual physical science (a shortcoming of all science education in my view is that this is not done early or often or deeply enough) and a nice big chunky section on climate. I don’t remember having climate taught to me in third grade. Or fourth. Or really much, ever. For fun, I am going to ask my child to write a paper for her science project comparing all of the deaths worldwide due to easily preventable causes like infectious diseases caused by poverty as compared to all of the deaths due to climate, and we will be generous and assume any death caused in anything remotely weather related can be attributed entire to the burning of fossil fuels.

Finally, our school does not do normal grading like when I was in school. I distinctly remember getting letter grades (A, B, C, D, and F) as early as first grade. Now, even in third grade, we get “Beyond Mastery” or “Mastery” or “Developing Mastery” or “Not Meeting Standards.”

At least I admit it.

So I’ve heard people with a professed Keynesian bent argue that we should end the idea of “tax cuts for the rich.” Fine, I suppose. But I’ve even heard this uttered during recessions, including the time from 2007 right up through today. I am not making this up so far, am I? OK, isn’t a primary objective of Keynesian economics that we should conduct countercyclical economic policy to cool down expansions and get the wheels turning again during recessions? So, while Keynesians might prefer additional government borrowing and spending for a variety of reasons (go check the empirical literature on this question by the way, you’ll be fascinated), tax cuts would also serve as stimulus when times are bad and tax increases as ways to cool things down during boom times.

Given this general idea, how is it plausible that Keynesians argue against “Tax Cuts for the Rich?” I can’t see it. It is argued that we should instead direct tax cuts to the poor. I can see why of course – you can argue that they have a greater propensity to consume newly granted income than the rich. But on economic grounds that’s shaky to begin with – do rich people EAT their tax cuts? If they stick it in the bank, then instead of consumers spending it, it ends up being spent by folks in need of excess loanable funds … in other words it just ends up as I instead of C in the fancy macro equations.

So, while it might reasonably be argued that tax cuts nicely targeted at the poor would be better there is not really a leg to stand on to oppose tax cuts to anyone in times of recession. Or is the primary objective actually NOT to fight recessions, but rather to use recessions to enact policies you otherwise couldn’t get accomplished.

Two final points that I think I’ve made long ago here.

(1) The fact that I’ve never heard a Keynesian vociferously argue, or write a heated OpEd, arguing that “now the economy is ON FIRE!” And it’s high time we slashed the government budget deficit to cool things down a bit, tells me of course they we’re arguing from an identity, not a principled theory.

(2) People smarter than me have correctly pointed out that there is no such actual economic theory called “trickle down economics.” I’ve never seen it in any economics book that was used to teach me, nor did I even see the term “supply side economics” used. It’s a straw man term invoked politically, not by actual real, living, breathing economics people. Nonetheless, it is used as a term of ridicule even to this day. But suppose we accept the ridicule, and accept it proudly. Then what dear reader, exactly, is Keynesian economic stimulus? Give some tax cuts to people or have the government spend a lot of money and they spending will “trickle down” to everyone else. This is particularly the case of stimulus spending, when it is most certainly not targeted well at lower income people.

Here is how much milk that the US Government recommends that you and your children consume every day:

Milk

Aside from the fact that the US Government doesn’t exactly have a great history of getting the recommended daily allowances correct (go check out what was on the 1950s “choosemyplate” plate and compare it to what scientists know), I don’t actually know many people who drink 3 cups of milk per day. That’s 24 ounces – well more than a pint of milk.

  1. These recommendations are out now, but milk consumption in the US has been in a decline over the entire course of my life.
  2. I find charts like this incredibly insensitive, borderline creepy, but totally incoherent. No longer are we to be thought of as individuals, but merely hunks of meat that can be blandly represented by what “group” we are in. Are people of all physical characteristics supposed to drink the same amount of milk? If you are 6′ 8″ and 280 lbs? If you are 5’4″ and 160 lbs? If you are lactose intolerant? So much for celebrating the individual. Now don’t go telling me there is a tiny disclaimer somewhere on the site or on the charts, the chart gets the play, that CYA stuff just doesn’t fly.
  3. I love the “Key Consumer Message” …

    fatfree
    Well, “everyone just knows” fat is bad for you. Ummm, really? That doesn’t exactly seem to be the case.

  4. Here’s the real point of today’s post. Go check out how much sugar is in a single cup of milk. That would be 13g. This means that the Government is recommended you drink 39 grams of sugar in the recommended dose of milk. Guess what folks, that’s far more sugar than is to be found in a glass of soda. I love how the linked calculator defaults people to a small 8oz glass of milk but a 21oz. glass of soda to do the comparison. But a 12 ounce can of regular soda (does anyone drink regular anymore anyway?) contains 33 grams of sugar. So while school cafeterias and government food nannies everywhere make it harder to obtain soda and even ban soda outright, they are not only recommended but in many cases SUBSIDIZING and providing for FREE an amount of milk to people that has 18% more sugar than a can of soda. Now it would be stupid of me to ask, “how the heck do they get away with this?” Or “why would they do this?” The answers should be obvious. Of course there is no reason whatsoever to believe that any of this has to do with concern for the health of people. That gets nominal air-play, but that is meaningless.
  5. If you want to tell me that the milk is recommended because despite the huge amounts of sugar in milk there are other things in there that the know-it-alls find valuable, I can buy that. But why then milk? Orange juice is fortified with calcium. There are easy to make and take multi-vitamins that can replicate everything that a glass of milk gives you, and they can be given to you with water – so you get ALL of the benefits of milk without the sugar, and without the “environmental impact” that cows have and without having to worry about hormones and any such things in your milk. If we are oh so concerned about people’s health and the health of the planet, how on earth could the government be recommending so much milk consumption? Finally, we can make energy drinks that have less sugar than that, we can make sodas (indeed they are VERY popular) that have less sugar than that, that taste better than that, that are better for the planet, and that replicate the nutritional features that folks want in milk … so why are those not provided freely or subsidized? Again, we know the answers to these questions. I’d love to see folks who, knowing this, still insist we ought to subsidize and promote milk consumption. They’d be akin to … modern climate deniers, no?

Riddle Me This

Reducing costs to a business in this case is going to attract it to your state and induce it to change its behavior.

Yet increasing its costs due to various labor market intrusions is at the same time NOT supposed to induce a response?

Did we legalize it in all 50?

When I first started writing here at TUW in earnest nearly a decade ago, I actually used to spend time writing up the very simple economic arguments, rooted in price theory and the empirical literature, regarding the minimum wage and many other proposed policies. There was once a time that I persuaded myself that a good dose of pure logic was enough to “win” an argument. Certainly a lot has changed. I don’t try to “win” arguments anymore – I probably spend a lot of energy just evading them now. But even if I were in the business of winning arguments, I’ve come to learn that it’s not logic most people care about. And since that’s the case, much of what I end up writing is ultimately a waste of time. To convince myself that it is worth putting pen to paper, at least on TUW, I tend to reflect upon logical considerations that seem to me to be unappreciated. So the following thoughts are in no way to be construed as home run arguments for or against the minimum wage, or even the most important ones, but ones that I find interesting ipso facto.

(1) Suppose you know someone that, rather than working for the man, works for themselves. There is little difference – in each case you work to produce a product or service, you sell it, and you earn income. Suppose this someone puts in about 20 hours per week doing such work, but when you look at the end of the year performance of this someone’s consulting activities, the total gross earnings are less than $6,000 (in fact MUCH lower). Putting these together would indicate an effective hourly wage of less than $6.00 per hour of work. Now, don’t go telling me what the minimum wage legislation says … I want to know if proponents of the minimum wage being raised think that this poor sap is entitled to earn a living that is dignified and that can support himself and perhaps a small family on? Is this person entitled to earn $7,150 for his 1,000 hours of running his own organization? And when the wage law is enacted and mandated wages go to $15.00 per hour or $10.10 or whatever the number is, is this person required to pay himself $10,100 or $15,000 for the year? Why not? And if so, then how is he supposed to do it? Why WOULDN’T proponents of the minimum wage argue that these poor entrepreneurs are entitled to earn a decent and dignified and respectable living without having to be at the mercy of impersonal competitive forces that force his annual earnings below a “living” level? We here at TUW are really wanting to know if ever any serious thought has been given to this and if so if there is a legitimate argument to be made to NOT make this man the object of the feel good sympathy of the minimum wage proponents? And who, of course, is to be deemed to have to raise this man’s pay.

(2) Let’s be generous and assume that the answer to (1) is, “yeah, sure, he deserves some cash.” Consider, hypothetically of course, that this “entrepreneur” happens to also have another full-time salaried job. And this salaried job is quite well paying (by objective standards, not by the standards applied to the 1%). It turns out that this “consulting” business is a side business on top of the “real” job, but perhaps is something the man wishes to turn into something more permanent. Again, all hypotheticals here. How many folks would NOW argue that this man is entitled to the minimum wage? I am almost sure that 100% of the people I would pose this scenario to would say that this person is in no way “deserving” of the minimum wage. And I wouldn’t disagree, but merely wish to ask the question of, “why do you say that?” Is it because there are circumstances beyond the actual wage one gets paid that suggest whether one ought to receive additional support? Now of course, I don’t think proponents of minimum wages better find themselves arguing this? Why is that? Because regardless of the empirical results on the minimum wage’s impacts on employment, unemployment, nonwage compensation, long-term business continuity and so on, what we DO certainly know is that a large number of minimum wage earners would fall closer into the 2nd category here than the “37 year old father, married, with 3 children, trying to raise a family on $56 per day. And once we admit that we can’t just look at the money earned by our fellow in scenario 1, I tend to believe that most “reasonable” arguments in favor of the minimum wage as an across the board law simply have to disappear. But of course, you knew I would say that.

(3) Suppose you knew someone who was actually salaried, say, as an investment banker at the entry level. I wouldn’t happen to have any firsthand knowledge of this, like everything else in economics, I make this stuff up too. Suppose their annual pay was something like $35,000. If this person worked a normal work-week, their hourly pay would amount to $17.50 or so. But what if this person ended up pulling 110 hour work weeks? Now he;s making $6.36 per hour. Do minimum wage supporters also support a maximum hours worked law? Or do they mandate that there be an increase in investment banker pay? 

(4) And while I am pondering the coming $10.10 minimum wage, can someone refer to the economic literature and economic theory that says this is the correct amount? Why not $10.02? Why not $11.15? Who came up with this number? I can assure you that at best it is pegged to some “ideal wage that existed in the past” but this is nothing more than arguing that football players today be mandated to wear leather helmets. Why? Because .. we think … they look cool.

(5) Dear minimum wage supporters, can you tell me why, if employers are required by law to pay people no less than $7.15, anyone is paid more than $7.15?

(6) Dear minimum wage supporters, can you tell me why a person who is earning $14.00 per hour actually obtains that wage? And please, when you answer, do make reference to what is different about someone who earns $7.15.

Thank you

Dear social contractarians, suppose I agree with you that by being born “into society” that I am bound by an unwritten social contract, and therefore am bound to allegiance to my fellow citizens and the representatives they choose. Great, I agree.

What, then, do you say to me when both my fellow citizens and especially the elected officials and the people that administer the legislation constructed by these officials do not meet the terms of the social contract? After all, if you suggest that there is a contract, there MUST be terms, no? And just what those terms are indeed are never made clear. Both fellow citizens and rulers who break the terms of the “deal” are no longer legitimate. So, when are these terms deemed broken? What is an individual’s recourse, especially when fellow citizens break the terms of the deal – can you seriously argue that they should be permitted to “choose better leaders”?

I’m pretty sure Hume had something interesting to say about this. But I really don’t know, because it’s not like I was encouraged or asked to study it at a great liberal arts college, and it’s certainly not like kids are asked to think about it here.

Friday Quiz

Name a government program or effort that has not worked well – particularly a huge one.

Can you do it? If not, is it because you aren’t thinking hard enough, or is it because you can’t fathom that something done by government is a failure? Surely it can’t be the case that EVERY program has been a good one, is it?

I would venture to argue that almost everyone could argue and demonstrate private programs and businesses that have been abject failures, regardless of political disposition. Why is the same not true of government? After all, the existence of failure is part of our humanity, it is insane to demand and expect that all programs work all of the time and for all people.

The real distinction ought NOT be whether some entity has failed at something, but rather what the responses to those failures have been over time. Nor do we require that failed programs necessarily go away, but surely the failure should induce some changes in behavior and resource allocation, no? So the right way, in my view, to be arguing “pro-” or “anti-” some program probably includes SOME measure of how successful it may or may not be, but rather what happens if and when it fails. And this is the point to emphasize about private versus government programs – name for me a major government program that has disappeared after its failure?

I can think of elements but not entire programs. For example, NASA closed down its Space Shuttle program. Why? Is this just one of many examples, or an exception that sort of proves the rule.

Finally, the distinction really ought not be about governments versus the private sector … it really should be broadened to any collective institution – a look at any “private” college campus is good enough evidence that this question need not only apply to governments versus markets.

One of the great ones, a former student of mine, gets a hearty shout out from Marginal Revolution today.I’ll leave it for readers to evaluate the ideas Dan summarizes there. Per usual, as much as I think I agree with the general gist of the argument, I think there are also reasons to be worried about how much we really understand what is going on in technology and why. Note, too, that this topic can easily go off the rails and devolve into a game of picking political sides as explanations for what is potentially going on. You can imagine the left arguing that we’ve starved the basic research funding beast (in many ways I agree with that). You can see the right arguing that the brutal regulatory and tax environment is responsible, and I’d find reason to agree with that. But it’s complicated, as is most stuff.

Well worth considering.

Surely you have followed with interest the debate over the past decade on what the true history of Easter Island was. Was it, as Jared Diamond makes the case for in Collapse, a case of a people stupidly overconsuming the limited resources on a fragile island ecosystem, or was it perhaps a more nuanced story, or eve na success story that people could have flourished in such a place for so long before the island depopulated? I’ll leave it to readers to track down the various ideas and arguments. Our point today is a bit different. Suppose the Collapse version of the story is correct, which I am sympathetic to, particularly since being neither an historian nor anthropologist I really have no basis to judge which version of stories is more correct. However, there are huge lessons to be drawn from the story, particularly if correct. And one of those lessons? Over the course of human history well over 10 billion people have inhabited all different parts of the planet. And in this entire human history despite seemingly stupid and rapacious behavior in many places and despite living in some of the most inhospitable places one could ever imagine, one of the “best” illustrations of how we are doomed to destroy ourselves and our planet is from a tiny little island that is for all intents and purposes pretty insignificant? So, when I pick up stories like this, aware of course that we are all prone to confirmation bias, I take it not at all as a cautionary tale, but rather quite the opposite – a sign of the incredible ability of people of all cultures and all time periods in all places to survive, a story of resilience, a story of our bright future, a story, in fact, of our inherent ability to live quite sustainably in practice. Sharing such a view does not garner much sympathy or invitations to fancy faculty dinners of course. No matter – this wintercow prefers a laid back fish-fry among his fellow cows out here in the pasture.

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