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Today I reprint a slightly edited piece I put together several years ago. Happy Thanksgiving to all.

Four centuries after the celebration of the first Thanksgiving, there is still widespread disagreement about the reason for the Pilgrims’ feast. But whether it was a harvest festival, a strictly religious observance, or a thank you to the local Wampanoag Indians, such a feast would not even have been possible were it not for the abandonment of the utopian ideas the Pilgrims laid out in the original Mayflower Compact.

Imagine a world where the earnings you generate from teaching, or nursing, or tending your orchard, from working the cash register, or mowing some lawns – all of the fruits of your efforts went into a common pool. Imagine further that each of your friends and neighbors, and every stranger in Monroe County was entitled to an equal share of what was placed into the kitty. It didn’t matter whether you mowed 20 lawns per day or one, whether you treated 30 patients per day or none, whether you taught 50 students per day or none – you received the same “income” as everyone else in the community. Imagine further that your home was owned in common by all in your community and that rearing your neighbor’s children was as much your responsibility as anyone else’s.

Such was the intention of the Compact – by eliminating any semblance of private property and personal accountability, which were declared to be the foundation for avarice and selfishness – prosperity and brotherly love would result. How did it work out?

You need only look at the cleanliness of your office fridge or the condition of a public bathroom for a glimpse into the horrors of such collectivism. People suffered, starved and perished. Governor Bradford wrote in his diary, “For this community (so far as it was) was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort. For young men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children without any recompense … that was thought injustice.”

Most shocking perhaps is that this injustice generated penury, jealousy and sloth in a society comprised entirely of (self-professed) holy people, each with a common cause, each from a similar background, and in a community with less than 200 settlers. The lessons for a society comprised of people of varying degrees of “saintliness”, with differing interests and backgrounds, and hundreds of millions in size should be obvious.

Confronting the disaster of collectivism, Plymouth’s elders wisely “resorted” to a system of private property and free exchange. Bradford wrote of the reforms, “… it made all hands very industrious, so as much more corn was planted than otherwise would have been. The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression…By this time harvest was come, and instead of famine, now God gave them plenty, and the faces of things were changed, to the rejoicing of the hearts of many, for which they blessed God.”

I doubt many Pilgrims themselves properly understood the nature of their original problem, nor its solution – which is why I doubt that the first Thanksgiving was a celebration of liberty and private property. While they might have thanked Providence and luck for the bounties that followed the change in property institutions in 1623, it was only their industry, thrift and discipline in response to the formation of private property institutions that such a feast was even possible. For a truly detailed and incredible account not only of the first Thanksgiving, but of the sad and incredible struggle the local Indian tribes had with their new European neighbors, I cannot recommend more highly Nathaniel Philbrick’s bookMayflower in large part because of its telling of the largely forgotten yet historically important King Phillip’s War. 

Fast forward to 2014, where the most productive among us are made to feel like criminals, and the non-productive (those who are able) are portrayed as innocent victims of a tyrannical system of capitalism. That Thanksgiving is a “national” holiday is ironic – for it is was a celebration enabled by an explicit movement away from “nationalistic” ideals – a celebration made possible by the unleashing of the individual productive efforts of all in the Plymouth colony.

I am blessed to have a healthy family, the ability to have completed my formal education, and the discipline to work hard with the lot I was given in life. Providence and luck has been kind to me. I give thanks to that every single day of my life. But on this day, this 393rd renewal of Thanksgiving Day, as many in our nation clamor to gallop anew down a 21st century style collectivist path (health care for everyone, financial bailouts, auto bailouts, fairer taxes, public/government schools, managed trade, green-collar subsidies, farm subsidies, licensing restrictions, “living wages” and more) littered with the tragedies of hundreds of failed experiments before us, let us remember what made the first Thanksgiving possible, and what has made our modern prosperity possible.

The productive efforts of billions of individuals past and present who unknowingly cooperate each and every day in an effort to improve their own lots, have bestowed upon us a gift even greater than the yams, apples, turkeys, wheat, and other resources that we were naturally endowed with. Just how large a gift have they given to each of us? Imagine yourself alone in the New England wilderness on a cold and wet November day 500 years ago. The difference between the “fire roasted” yam you might conjure up with days of immiserating work in 1508 and the majestic spread set out before you today in 2014 is but a glimpse of the bounty that liberty and property have bestowed upon us. Let us hope that the light of liberty remains lit, so that we may see our way through harsh and brutal winters that might lie ahead.

The old Wonkbloggers are at it again. We are scolded that “It is not OK to have a second refrigerator.”

I happen to have 2 fridges and 3 freezers in my house. Both his premise and conclusion are wrong and that’s entirely excepting the smug and offensive attitude.

Without a lecture:

1. It very clearly was not regulation that drove energy efficiency. Maybe I’ll post my lecture notes when I’m back.

2. Regulating appliance efficiency, celebrated by Mr. Mooney, basically ensures that people like me end up with two or more refrigerators. Why? They’ve imposed policies that make the cost of using electricity LOWER. But leave it to the pointy hats to ignore this and instead resort to berating us heathens for using more than one fridge.

3. If using electricity is a problem, raise the price of electricity. This has many virtues. First it does not require pointy hats to figure out what technologies are and are not appropriate. Second of course it raised the cost of the behavior you want less of. The nice part of this policy is that it still allows all of us to reduce electricity consumption in ways that are best and less costly FOR US and not to satisfy the wet dreams if our techno-overlords. Third of course is that the tax is far less probe to cronyism and corruption than a tech standard. Go look at the political economy of the lightbulb bans emanating from the 2007 Energy Act and you’ll get an appalling illustration.

4. While we’re playing in the sandbox, it’s not OK to put forward such offensive morality and economics.

I hope his Thanksgiving Turkey is dry. Of course, I’m fully expecting to see an article to tell me why a saturnalia of thankfulness tomorrow is not OK.

By the way one reason I have three freezers is that I converted one to a keezer that holds and serves 20 gallons of beer – WAAAY more than the pointy-hat’s recommended 6-pack.

Two completely underappreciated developments. As optimistic as I am about the world, EVEN I was taken aback by the rapidity and breadth of these developments: malaria and species extinction.

Species Extinction

You may by now know that a horrible blight wiped out up to 3 billion American chestnut trees last century. It was one of the most common trees in America and made up an estimated 1/4 of all trees in the Appalachian forests. There are basically NONE left.

Two observations:

(1) Yes, lots of food and furniture depended on the tree. And this supremely important species both ecologically and economically was virtually extinct. What kind of an impact did its loss really have when you understand that there are very good substitutes for it?

(2) In an amazing collaberation of scientists, we believe we can bring the tree back. With a GMO technique to make it blight resistant, this once great tree may soon be a part of the American landscape. You can be a part of this historic restoration here: https://fundly.com/10-000-chestnut-challenge. I think points (1) and (2) are closely related.

 

 

Malaria

PMI’s Bernard Nahlen brought it home to me when he talked about the sea change he’s seen in the tools available. When Bill Gates announced a commitment to elimination on the part of the Gate Foundation in 2007, it was roundly understood as an aspirational but unrealistic goal. No one thinks that any more – it’s an inevitability. The only question is how quickly can we do it – and every bit of speed we can muster is another child that doesn’t have to die.

To think of how incredible this is, check here and here.

I’ll remind you that nothing will guarantee that such incredible innovations will continue, but it is my deepest conviction that this should nonetheless be our default view of the world, and should be the baseline upon which we think about the challenges that climate change will bring us.

Not in the mood to be charitable again. Screw the FDA and the crop of enfeebled nannies who demand crap like this:

The Food and Drug Administration is announcing long-delayed calorie labeling rules on Tuesday, requiring establishments that sell prepared foods and have 20 or more locations to post the calorie content of food “clearly and conspicuously” on their menus. Companies will have until November 2015 to comply.

Read the whole thing so you can see that the rule does not of course apply to everyone:

As in the proposed rules, the final version still exempts airplanes, trains, food trucks and other food served on forms of transportation.

Of course, we “needed” this mandatory labeling because you know, consumers are just so inept and producers are just so inept that they could not survive without it, or that no one would have the bright idea to offer this information if indeed it was valuable. Of course, my local supermarket already has been posting calorie counts on a huge host of food preparations for years, and the “big food” companies have regularly experimented with things like “100 calorie packs” of snacks in order to help consumers better make choices. The imagination must run wild at what doors this ruling opens. It’s probably near impossible, by the way, for any food company to post calorie counts on the quite literally billions of combinations of things they might prepare for you. So either we cripple them, or we can just expect a hell of a lot less prepared foods being made for us, an outcome I’d find far more regrettable than eating more calories than I wanted.

Finally, of course there are no such requirements that I post food calorie counts in my home preparations and the incredible fact is that I am probably more clueless about the calories in my own food production than in anything that is prepared for me by supermarkets or other vendors. Yet my friends and family members have not had unwanted bursts of obesity.

Here is a former episode in the series. Screw the FDA, which obviously can’t be bothered to get drug and device innovation policy right. You guys wonder why people become extremely partisan and suspicious of “others” … this is surely an illustration.

Finally, I have to post on innocuous things like calorie labeling because as a white male who has only been helped by the centuries’ old legacy of racism in America, I am not legitimately able to talk about the goings’ on in Ferguson and beyond.

Since 2006, as my real income has fallen by 25%:

  • I have paid about $45,000 in property taxes to our local communities and school districts
  • I have paid over $50,000 in state income taxes
  • I have paid over $110,000 in federal income taxes
  • I have paid over (via not just my share, but the real incidence) $200,000 in payroll taxes
  • I estimate that I’ve paid over $35,000 in sales taxes (likely higher)
  • I’ve driven myself about 150,000 miles. My cars have averaged about 25 miles per gallon. This means I’ve burned 6,000 gallons of gasoline in my car (ignore my snow blowers and lawn mowers and chain saws). At about 43 cents per gallon on average excise taxes at state and local level, I’ve paid over $2,500 in gasoline taxes.

This says nothing about how much higher my costs are due to regulations. Environmental regulations are though to cost 3% of GDP per year, or about $1,400 per person per year, so one can only wonder what the real costs of regulation are, and what the embedded excise taxes are that I pay on things over and above sales taxes. For example, I drink something like 200 pints of beer per year. at about a nickel per beer, this is another $10 in taxes per year. And so it goes.

So, a lower bound estimate for what I’ve paid in taxes, during a time when my real income has “stagnated” and actually fallen by 25% is $465,000. I would note that I am nowhere near the top 1% of income nor do I have any legitimate prospects of reaching that airy ground. I would note that we have two children who do not go to “free” government schools. We probably claim as little a share of government “benefits” as does any family in our situation, which is to say, none – just whatever our share of “public goods” we are getting from our government such as use of some roads, shares of national defense, drug safety, food safety, and so on. Given my affinity for competition protecting me and providing almost any of the things that I could ever imagine wanting, despite you wanting to claim that I get SOME benefits from the FDA, USDA and so on, I do not believe I would voluntarily pay anything near what I pay them to have the services they deliver me delivered to me – I am pretty confident Wegmans and Tylenol and everyone in between would have a strong incentive not to kill me.

Note, my wife resumed working three years ago and these figures do not include any of her obligations.

  1. Does anyone believe that I have received anything close to $465,000 of real, actual, benefits for this $465,000? Even assuming that as part of civil society half of this should be transferred to others, how much of my $465,000 do you really believe ended up helping people who need it? Compare that to what you think I personally do to help people that need it (it may be nothing, by the way).
  2. Think about ANY amazingly awesome government program that has happened in the last 9 years or that may end up coming down the pipe in the next 9 years. Do you think that any of those programs have delivered even a tiny miniscule fraction of $465,000 of value? For example, take ObamaCare. Its proponents believe that my premiums will fall by $2,5000 per year or some such nonsense. Of course my premiums are higher today than they were when the ACA was passed, but maybe they would have been $2,500 higher. Who knows? In any case, compare that $2,500 per year in “savings” with the annual taxes I am paying … it’s nowhere close. How many of you would pay $50,000 per year to save $2,500?
  3. Think about ANY of the awesome government programs that have been passed or will be passed in the future. Compare how much ANY of them could possibly change the life of me and my family as compared to even a ONE TIME reduction in my taxes. Imagine I’d been given a one-year reprieve in taxes – something in the $50,000 range. What would I be able to do with $50,000? We could save it and pay for both of our kids to go to a government university 12 years from now. We could replace every single window in our house, insulate every wall in our house, replace the old heating system in our house, and purchase some serious exercise equipment for our house. How life changing would that money be for our family as compared to anything our overlords do for us?
  4. Imagine I had not been taxed at all during the last 9 years. And imagine that I had the cash today and put it in the stock market. What would it be worth by the time I am 70 years old? If the market returns on average what it has since 2006, then I’d end up with just about $8 million from the tax savings alone. About half of that would be from the foregone social security taxes – do you think $4 million would be enough to provide for my retirement and elderly health care? How do you think that compares to what the overlords will have waiting for me when I am 70? Remember, this is assuming that I’ll pick up and keep paying taxes between now and then.

I am so very thankful for all of the wonderful things our government has done for me over these past 9 years, it has really made the “pain” of my lower real wages so much easier to bear.

Since 2006, my nominal wage has fallen by a total of 6.5% or about 0.8% per year compounded. I would note that my compensation has probably remained flat.

The average price level has increased by about 18% over this time period. Therefore, my real wage today is about 25% lower than it was in 2006.

Without my commentary on what is “causing” this or my feelings about it, note that:

  1. My wages are not falling because some rich dudes are refusing to share with me
  2. My falling wages say nothing at about whether or not I am happier or sadder today than I was in 2006
  3. You can learn nothing at all from this information about what has happened to my wealth over this time period (on the one hand, we’ve been saving a larger chunk of our lower earnings, but on the other hand, we lost a HUGE pile of money due to the burst of the housing bubble, willingly by the way).
  4. My ta x and regulatory burdens are higher today, when I am 25% poorer, than when I was 25% richer.
  5. You can learn nothing about either my on the job productivity or my off-the-job productivity, as an individual, from this observation.

Lots more to say, just thought I’d “share”this info with you during this season of sharing.

Who wants to bet?

Another “scientific” claim is that global warming and our profilgate selves will cause us to run out of chocolate.

We won’t. My prediction is not only will be not run out, but global chocolate prices 30 years from now will be lower than they are today, and more people will be able to obtain chocoloate, should they want it, 30 years from now than do today. Of course this assumes our health consciousness does not get in the way, or better yet that the nutrition nannies don’t ban the stuff before that time comes.

About the only useful contribution I can make to the immigration question, at this point is to lament one thing about the current proceedings. While this is all great political controversy and surely educational for those folks who worry about precedent and the limits of constitutional authority and what the original intent was and what Reagan or Bush did or did not do, what the entire conversation at the moment seems to be missing is an examination of what economists know about the impacts of immigration in America.

What better time would there be to have economists, who seem to have something useful to say about this topic, to be heard? We have written on the impacts of immigration on high-skilled employment and wages; we have written about the impacts of immigration on low-skilled employment and wages; we have written about the impacts of immigration on crime; we have written on the success of immigrant children and their descendants economically and on other aspects of assimilation. Yet we see almost nothing about this. I won’t cover all of that here, I bet most Americans would be very surprised to learn what those literatures have to say.

On another note, back to the political angle, I do believe that Coyote is onto something (again) here:

Imagine a Republican President who is opposed to the minimum wage.  The Executive branch is tasked with enforcing that law, so wold the folks defending the President’s methods also argue hat the government can issue permits to 5 million businesses allowing them to  ignore labor law?  Or emissions standards?  Or insider trading laws?

People are just being blinded by what they rightly see as a positive goal (helping millions of people) if they fail to see that the President issuing licenses to not be prosecuted for certain crimes is a huge new precedent.  Proprietorial discretion is supposed to be used to avoid patent unfairness in certain cases (e.g. the situation in Colorado with conflicting state and Federal laws on marijuana).  It is not meant to be a veto power for the President over any law on the books.  But I can tell you one thing — it is going to be seen by future Presidents as just this.  Presidents and parties change, and for those of you swearing this is a totally legal, normal, fully-precedented action, be aware that the next time 5 million wavers are issued, it may well be for a law you DO want enforced.  Then what?

Tax Riddle, or Not?

I have read dozens of times, and have even espoused the view myself, that the American electorate gets ill at the idea of the government directly taxing THEM. Sure, when taxes are proposed on “other people” like “the rich” the electorate does not seem to have a problem with it, but when we are talking about anything other than redistributive policy, people turn green at the thought that higher taxes to us are a potential solution to a problem like global warming. As a result, the political process responds to this in a very sensible way – when it needs to enact policies that are required to raise the costs of some action, the politicians design a program that masks the tax increase. This is bad first because it will be more costly politically and economically to structure policy this way, and of course secondly because it undermines faith in the transparency and legitimacy of democratic political institutions. A simple illustration is that if there is ever going to be movement on climate change, then it would have to be something like a carbon permit system, or the executive using his authority to simply regulate on his own.

But if this is the case, and I really do think it is true, then how come we really do not see the opposite? If people are so, so, so, so sick of taxes, then how come politicians are not falling all over themselves to shower tax breaks and tax rate cuts and tax credits and tax deductions all over the American voter? One possible theory is that they have already exhausted all possible ways of doing this … which you might actually believe if you look at the distribution of who pays taxes. The “rich” pay the lions’ share of taxes already and the rest of us pay little. I happen to not think this resolves the paradox and that there are simpler answers. Let’s see your thoughts down in the comments.

As usual, my colleague Steve Landsburg provides spot on and clear-headed analysis of the Gruber-Gate “scandal” … here is a bit:

If the voters favor a law that says all drivers must be licensed, but oppose a law that says nobody without a license is allowed to drive, then I don’t think it’s immoral to propose the first law instead of the second. That’s basically all Gruber did. I would prefer that he had tried to point out the inconsistency, but Gruber is under no obligation to live by my preferences.

Earlier in the piece, he reminds us of a little basic economics:

1) Our tax system subsidizes employer-provided health insurance. That’s dumb. Pretty much all economists agree that it’s dumb.

2) On the other hand, it’s politically hard to eliminate a subsidy once people get used to it.
3) In 2008, we had an election. The candidates were named Barack Obama and John McCain. Exactly one of those candidates took the politically courageous step of proposing to eliminate the subsidies (and replace them with other subsidies, far more sensibly designed). The other candidate took the low road, leaping to the defense of subsidies he had to know were indefensible, playing to the crowd, and staking all on what could reasonably be called “the stupidity of the American voter” (though I myself would prefer to call it “the inattentiveness of the American voter”). That candidate won in a landslide.

Do read the rest.

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