A Stitch in Haste

Tyler Cowen asks a simple question:

How good would the abolition of zoning in New York City be?

Of course, that question completely drops the context within which "good" is embedded. Stated differently: "Good" -- by what metric? Real estate values? Total available housing stock? Aesthetics? Whose aesthetics?

Suddenly it's not so simple a question after all.

How about defining "good" as "respecting property rights and constitutional principles"? As I commented at Cowen's blog:

Sorry for the Clintonism, but it depends (as you note) on what your definition of "zoning" is.

First-order zoning -- an area is simply designated "residential," "commercial" or "industrial" -- is not an excruciating abomination to libertarians and can be defended, at least in the abstract, as externality-correcting.

Second-order zoning -- height restrictions are the best example -- are less defensible and should be presumed illegitimate (i.e., restrictions should be subject to heightened scrutiny). This is the kind of "zoning" imposed on most of Manhattan.

Third-order zoning -- where any and every alteration, expansion or demolition must be submitted to an unelected board with near-plenary authority to approve or reject the project -- for any reason up to and including the whim and caprice of the board members -- is per se illegitimate, and under any sane jurisprudence such an infringement of fundamental property rights would be an irrebuttable due process violation. (So-called "historic districts" -- of which there are many in New York City -- are the most egregious example.)

Yes, the "first-second-third" nomenclature is my own concoction, inspired by similar terminology in the context of price discrimination.

More thoughts from Perfect Substitute

Thomas More would be pleased:

The Bishop of Nottingham Malcolm McMahon says his diocese will cut its ties with an adoption agency because it cannot accept the government's new laws on homosexual rights.

Bishop Malcolm McMahon said he and the trustees of the Catholic Children's Society adoption agency felt that they had been forced into the decision by the Sexual Orientation Regulations which bans discrimination against gays in the provision of goods and services. The law would compel the diocese in certain circumstances to place children in the care of same-sex couples.

"We have been coerced into this, I am not happy about it at all," Bishop McMahon said. "The regulations have coerced the children's society into going against the Church's teaching, and we don't wish to do that."

A Vatican directive issued in 2003 said it was morally wrong to place children in the care of same-sex couples.

As I have noted previously, the "Catholic" opposition to gay adoption is invariably imposed from on high -- from Church officials and not from the Catholic adoption professionals themselves. Vatican theocrats and their henchmen bishops in the dioceses not only turn a blind eye to the independent objective research that universally shows that gays as a group make as good parents as straights, but they even ignore their own employees working in and running the charities -- people whom, one would think, the Church has no basis to mistrust when it comes to the best interests of children (unlike, say, the Church's own child-rapist priests here in the U.S.).

Incidentally, this particular Catholic adoption agency -- one of 13 in the U.K. -- will not close but will simply merge with its Anglican counterpart. The Church has hinted that this will be the preferred approach rather than to shut the remaining agencies down. While this is obviously good news for the children, it suggests a touch of hypocrisy on the Church's part: Isn't gay adoption arranged by Anglicans just as abominable as gay adoption arranged by Catholics? Isn't the Church conspiring in the commission of an egregious sin by turning its facilities over to heretics and their sodomite clientele?

In reality, this merely confirms that the people actually running these agencies in fact have little or no problem with gay adoption -- Catholic, Anglican or otherwise. They're not the ones quitting over this, the Catholic priests are. That speaks volumes.

(Via Religion Clause.)

A self-contained comment left elsewhere:

While I certainly embrace cynicism toward the politicians, I don't entirely embrace cynicism toward the gas tax itself.

The gas tax is either a legitimate Pigou tax or it isn't. Reasonable people can disagree on that.

But what reasonable people cannot disagree on is the absurdity of suggesting that the gas tax can somehow be a legitimate Pigou tax on Thanksgiving Day but not on Independence Day.

So in that sense, "advantage Obama." (The fact that he may have flip-flopped on the issue [since his state legislator days] simply returns them to "Deuce.")

One should also note the Econ 101 truth that abolishing a per-unit tax on a good will not lower the equilibrium price of the good by the full amount of the tax, but only by a fraction of the tax — the size of the fraction determined by the price elasticity of demand for that good. Gasoline and diesel demand may be very price inelastic, but not perfectly so.

(Inspired by posts at QandO, Reason, Greg Mankiw, DealBreaker.)

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Via Obsidian Wings:

Dean Baker: "Actually, almost all economists would agree that the tax cut proposed by Senators Clinton and McCain would save consumers nothing."

I sincerely hope that none of those "almost all economists" are teaching Econ. 101, because they are dead wrong.

Tax incidence is determined by BOTH price elasticity of supply AND by price elasticity of DEMAND.

Even if supply were highly inelastic (a questionable premise except in the very very short run), the low elasticity of demand (NOT a questionable premise under any circumstances) would far outweigh the supply effects and the bulk of the rebate would therefore be passed on to consumers.

(This is not to say I advocate any candidate's specific policy position.)

More on this from Econbrowser, which estimates that the benefit of a tax holiday would be shared roughly 50-50 by buyers and sellers.

Finally, let's also recall that:

--The federal gas tax is a puny 18.4 cents per gallon.

--There is a difference between an oil producer and an oil refiner.

--Record profits mean record taxes on those profits.

--There is more to "oil" than "gasoline." The markets for diesel and jet fuel also factor into the economics of "the price at the pump."

--Is it a proper function of the Border Patrol to conduct "spot checks" on a ferry servicing islands in Washington State (i.e., running exclusively within the United States)?

--Is it a proper use of government anti-terrorism surveillance cameras to spy on violators of littering and pooper-scooper laws?

--Which supposedly free nation is allowing one of its local subdivisions to make unlicensed religious conversions a crime?

--Which supposedly free (super-)nation has banned loud bagpipe playing ?

Special Follow-Up Question: Does this amount to a ban on all bagpipe playing? ("You can't play the pipe quietly; they haven't got a volume switch.") (Via Lowering the Bar.)

--Who said the following, and in what context?

"If we don't have some semblance of order, we'd just have a libertarian society where anything goes."

The Urban Institute recently published a report called "Poverty Facts, 2004."

In 2004, 36.6 million people — or 12.6 percent of the U.S. population — were poor. The "poverty gap" — the amount of additional income required to remove all Americans from poverty — was $105.6 billion. Poverty rates were highest for African Americans, Hispanics, women, and persons under 25. Without government benefits, 61 million people would be poor. Social Security and other social insurance programs remove 21 million people from poverty. Means tested programs remove 3 million people from poverty. If food and housing assistance were counted as income for poverty purposes, an additional 7.6 million people would be counted as not poor.

The report packages government data on American poverty in a variety of ways, all pegged to the official federal poverty level thresholds and most of which are unbiased and informative. But I do have some hasty stitches:

--I found it annoying at best, and evasive at worst, that nowhere in the 15-page report could they be bothered to disclose what the federal poverty level actually is; the best they do is bury a hyperlink to the Census Bureau in a footnote near the end of the report.

In fact, the federal poverty level in 2004 (the year studied) was $9,827 for a single adult under 65, $12,334 for a childless non-elderly couple and $19,307 for a family of four.

Now is also as good a time as any to note that the "poverty level" is an essentially arbitrary number

originally derived in 1963-1964, using U.S. Department of Agriculture food budgets designed for families under economic stress [and] data about what portion of their income families spent on food[.]

The poverty level is also not adjusted for geography (so, for instance, heating costs in the North and air conditioning costs in the Southwest are not factored in). Also ignored are housing cost differentials between urban, suburban and rural settings. It's strictly a food-oriented construct — and therefore of very limited usefulness.

--In any case, as low as $9,827 undeniably is, it is still orders of magnitude better than "$1 to $2 dollars a day." As unfortunate — or even tragic — as poverty is, one simply cannot escape the truth that "American poverty" is — thanks to capitalism — very, very, very different from "global poverty."

--The report breaks down poverty in several ways, one of which is by age: 12.9 million people under 18 were in households beneath their federal poverty threshold — 17.5% of the under-18 population. While fully acknowledging the almost instinctive revulsion that all civilized people, especially libertarians, feel toward anything that could possibly be corrupted into "eugenics," one cannot help but wonder whether the focus of anti-poverty efforts should shift toward the simple notion of persuading poor people not to have poor babies.

--One way the report does not at all break down the numbers is by immigration status (i.e., citizens versus legal immigrants versus illegal aliens). Does the Urban Institute think such a partition is irrelevant? I don't.

--The report commits one egregious sin: misstating the anti-poverty impact of Social Security —

Social insurance, including Social Security and other programs available to persons regardless of income remove 21 million people from poverty.

The term "social insurance" is meaningless gobbledygook. An entitlement is either welfare ("anti-poverty") or it isn't. Social Security isn't. It is an intergenerational transfer from the young to the old, pure and simple.

Moreover, the "21 million" figure is overstated for the pesky reason that Social Security itself contributes to poverty. By seizing one-eighth of the working poor's paychecks — week-in, week-out — over their entire working careers in exchange for low (or zero or even negative) rate of return income streams, Social Security is an anchor around the neck, making it difficult for the working poor to tread water, let alone swim away from the undertow of poverty.

Data on American poverty are always useful — including for those who would use the poor as pawns to further their own agendas. Keeping the data objective and well-presented therefore becomes all the more important.

Can it be? Am I actually defending "Olympinomics"?

A critic of spending taxpayer money on the Olympics recites from the hymnal:

As reported in the press and media events, an overwhelming majority of Chicagoans -- 84 percent -- was supportive of the city's bid to host the 2016 Olympic events.
...
Another way to tease out how residents feel would be for pollsters to present some menu options: "If Chicago were going to spend an additional $1 billion over the next few years on various civic projects, how would you like to see the mayor, City Council and other public agencies allocate that amount of money?" Alternatives could be: (a) The 2016 Olympic Games; (b) Shoring up our roads, bridges and public transportation; (c) Putting more police on the streets and in neighborhoods; (d) Public schools and health care; (e) Efforts to make Chicago a greener, more environmentally responsible city.

I would be willing to wager a sizable sum of money on where having a public party in eight years would rank on people's priority list -- and how much they would be voluntarily willing to shell out for it.

Sounds about right.

But then the author seems to over-extend a bit:

If Boeing, Sears, Motorola or McDonald's gives $1 million to help finance our Olympic bid, that is $1 million that does not get returned to stockholders as dividends or plowed back into the company for new projects and production. In addition, that is $1 million that does not, then, support an exhibition at the Field Museum, a new gallery at the Art Institute, or an after-school youth program.

When I sit down each December to write out checks to local, national and international charities and other non-profit organizations, I am implicitly choosing how to allocate, say, $2,000 among various groups and activities. The slice that goes to WTTW Ch. 11 doesn't go to the Chicago Coalition for the Homeless or the American Cancer Society—or to the University of Chicago. It's still just $1 million or $2,000 no matter how a corporation, a wealthy benefactor or I cut it.

There is no free lunch in this world and no free Olympic Games either.

As I commented at another blog that first noted the op-ed:

I'm not sure this reasoning is very robust.

If one assumes that a corporate sponsor of the Olympics has a constant expenditure function for advertising (hardly an outlandish assumption), then the only opportunity cost from sponsoring the Olympics is the next best alternative advertising, not the next best alternative use imaginable. There is no basis to assume that the money would, almost by definition, be returned to shareholders, invested in capital projects, deployed to research & development, etc., "but for" the Olympics.

My employer matches charitable donations by employees (up to a certain limit). My employer also makes (anti-Friedman?) direct donations to charity. I have no doubt whatsoever that the budgetary flowchart is that the firm allocates a certain amount to charitable donations ex ante, then reduces that amount to reflect employee matching (i.e., the total outlay is constant regardless of how much or how little employees apply for matching grants). But that is simply not the same as saying that, by matching employee donations, the firm is reducing capital expenditures, R&D or returns to shareholders.

It's one thing to oppose the Beijing Olympics on moral grounds. It's one thing to note that a stadium is not a legitimate public good. It's one thing to note that the same moral defect that drives someone into politics in the first place often manifests as an obsession with foolish vanity projects at taxpayer expense.

But none of those valid criticisms equates to summarily concluding that a private party's subjective preferences and decisions as to how to spend their private money can ever be objectively "irrational." That crosses the line into Kip's Law.

Of all the various forms of economic protectionism available to faction-pandering activist legislators, the one that has always befuddled me the most is the anti-dumping law. If a foreign, state-controlled "mixed economy" is perfectly willing to sell us stuff below cost, then why would we possibly say no? Lower prices for consumers is the beginning, and the end, of the analysis.

The (entirely fraudulent) consequentialist rationalization (it is not a "rationale") for anti-dumping laws is a dynamic one: if the foreign competitor "undercuts" American firms, the latter will eventually go out of business and the former will then be able to charge higher prices. But of course, "dynamism" cuts both ways in a market: if the "evil" foreign firm ("evil," remember, because it dared to sell us cheap stuff) suddenly tries, having finished off the competition, to now "exploit" us by charging higher prices, then those "eliminated" competitors will simply re-emerge. All market power is fleeting.

In reality, anti-dumping laws -- which, remember always, prevent consumers from buying cheap stuff -- protect not consumers (or "the economy") but the domestic competitors supposedly "threatened" by the dumping. The protectionist restrictions allow them to continue to charge higher prices to consumers. This, the politicians will tell you -- is "good for America." Somehow.

Of course, protectionism is not always a simple case of politically favored industries rent-seeking excess profits from consumers. Sometimes there is another industry wedged in between the protected industry and consumers, collateral damage in the War on Low Prices.

One example of an industry taken to the cleaners by interventionism is -- the cleaners:

After a federal tariff was imposed last month on wire hangers imported from China, [Young Hoon] Jung explained, the wholesale price skyrocketed. As a result, many dry cleaners say, already slim profits have grown even slimmer.

"It increased 60 percent from one week to the next," Mr. Jung said of hanger prices. "We do 4,000 pieces a week, so obviously we need 4,000 hangers. Raise the price a little, O.K., but not 60 percent."
...
"Everyone in the Korean community is talking about it," continued Mr. Jung, who said that he might have to raise prices soon. "They're saying: 'What are we doing this for? The government? The landlords? We can't do this business anymore.'"

But of course any economically literate, or politically savvy, observer knows full well "what we are we doing this for." We are doing this, not to help dry cleaners, not to help consumers, not to help "the economy," but to help one uncompetitive industry -- one that happens to be far more influential in Washington than Korean dry cleaners.

Even ignoring the dynamic counterargument to the assertion that dumping "hurts domestic companies," what about the additional counterargument that anti-dumping also hurts domestic companies (as well as consumers, obviously).

The only resolution of the paradox is to admit that protectionism is not about economics but about politics.

Separated at birth?

Megalomaniacal villain with evil creation:


Megalomaniacal villain with evil creation:


Just saying...

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Meanwhile:

A top Iranian judiciary official has warned against the "destructive" cultural and social consequences of importing Barbie dolls and other Western toys.

Prosecutor General Ghorban Ali Dori Najafabadi said in an official letter to Vice President Parviz Davoudi that the Western toys was a "danger" that needed to be stopped.

Iranian markets have been inundated with smuggled Western toys in recent years partly due to a dramatic rise in purchasing power as a result of huge increase in oil revenues.

In Monday's letter, Najafabadi called for a crackdown on the smuggling of these toys which threatened Iranian culture.

No word yet on whether Iran will seek to -- wait for it -- "exterminate" toy Daleks.

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Some classic Doctor v. Davros:

"A provision of the Constitution, it is hardly necessary to say, does not admit of two distinctly opposite interpretations. It does not mean one thing at one time and an entirely different thing at another time."
--Home Building & Loan Assn. v. Blaisdell, 290 U.S. 398 (1933) (Sutherland, J., dissenting)

If this doesn't violate the Contracts Clause, then nothing ever does:

Warning that America is experiencing a "housing emergency," six Boston city councilors want to force lenders who foreclose on Hub properties to rent seized houses and apartments back to occupants.
...
The proposal would order lenders to lease foreclosed properties back to ex-owners or tenants at market rates until either third parties buy the homes or the measure expires in 2014. Violators would face fines of at least $10,000.
...
Ross said the measure aims to primarily help tenants who've paid rent on time but face eviction anyway because their landlords fell into foreclosure. However, the measure would also cover individual homeowners who fell behind on their own mortgages.

That was a trick observation, incidentally: It doesn't violate the Contracts Clause because, under current Supreme Court precedent, nothing ever does.

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There are two distinct issues here that need to be disentangled.

As a common law principle (individual jurisdictions may of course have their own nuances), renters are already insulated from any and all changes in title to the property they rent (with one huge exception — eminent domain). If I own a house and rent it to you, then (absent mutually agreed-to provisions to the contrary) your lease is binding on any future owners of the land during the period of the tenancy. Even if I sell the house, gift it, die — or default on my mortgage — the lease is the lease and you are protected by it while it remains in effect.

These activist legislators are, therefore, offering you a protection that you already have. Don't you feel "indebted" to them?

---

I as the owner facing foreclosure, on the other hand, am screwed. As I should be, given that I'm a defaulter who failed to meet my voluntarily-entered-into obligations. Maybe I was the victim of circumstance, maybe I was reckless in my finances, maybe I was a predatory borrower. It doesn't really matter which. I defaulted on a debt, I breached a contract, my counterparty has both a legal and equitable remedy.

And, under the Constitution, there ought not be a damned thing either I or these hack politicians could do about it:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

The Contracts Clause (Article I, Section 10, Clause 1) is one of the least appreciated libertarian aspects of the Constitution. The fact that it applies only to states and not the federal government is, one could plausibly argue, the single worst flaw in the original 1787 document.

But it is still there and still wholly applicable to this fact pattern. A mortgage is unarguably a "contract," the requirement to surrender to a valid foreclosure is unarguably an "obligation" and requiring lenders to lease to defaulters is unarguably an "impairment." Q.E.D.

Or not: Essentially the exact same law was enacted in Minnesota in 1933 and the same five Supreme Court Justices who would later finish off the last traces of economic liberty in America* also killed off economic substantive due process — and an entire clause of the Constitution as collateral damage — in the nightmarish case, Home Building & Loan Assn. v. Blaisdell.

The policy of protecting contracts against impairment presupposes the maintenance of a government by virtue of which contractual relations are worthwhile — a government which retains adequate authority to secure the peace and good order of society. This principle of harmonizing the constitutional prohibition with the necessary residuum of state power has had progressive recognition in the decisions of this Court.

In other words, a state's "police power" (a grant of power that appears only implicitly in the Tenth Amendment) can summarily trump the Contracts Clause (a limitation of power that appears explicitly in Article I), whenever "the peace and good order of society" require it (i.e., whenever activist legislators feel like it).

I'm surprised the Bush Administration never cited to Blaisdell in the War on Terror. The decision's twisted "police powers" reasoning makes John Yoo's memos seem like ACLU briefs.**

It is sad to have to repeat such a axiomatic statement, but it is precisely during emergencies that we need constitutional limitations on government power the most. It is precisely during emergencies that the more vague elements of constitutional law (e.g., "police power" or "executive authority") must yield to the less vague (e.g., "no impairment of contracts" or "no suspension of habeas corpus"). It is precisely when the government wants to act the most that it needs to be constrained the most.

(Incidentally, who but the most opportunistic malcontents would dare suggest that the current housing "crisis" rises to the level of the Great Depression — or the War on Terror? Note that the hack politicians in Boston were quite careful to label their proposal a "housing emergency" measure and to give it a specific expiration date — precisely as the Blaisdell court suggested was necessary to survive a Contracts Clause challenge. Someone on their staff certainly did their homework.)

If I were to expand my list of the Ten Worst Supreme Court Cases to twenty or even fifteen, Blaisdell would definitely make the cut.

More thoughts from Cato.

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*Via Nebbia v. New York, 291 U.S. 502 (1934), impliedly overturning Lochner v. New York, 198 U.S. 45 (1905).

**But, cf., this oft-quoted passage from Blaisdell:

Emergency does not create power. Emergency does not increase granted power or remove or diminish the restrictions imposed upon power granted or reserved. The Constitution was adopted in a period of grave emergency. Its grants of power to the Federal Government and its limitations of the power of the States were determined in the light of emergency, and they are not altered by emergency. What power was thus granted and what limitations were thus imposed are questions which have always been, and always will be, the subject of close examination under our constitutional system.

How the Blaisdell majority gymnastically went from that to actually upholding the "no foreclosures" law remains one of the great embarrassments of Supreme Court jurisprudence.

"This money is going to help Americans offset the high prices we're seeing at the gas pump and at the grocery store, and it will also give our economy a boost to help us pull out of this economic slowdown."
--Remarks by President Bush, 25 April 2008

Of course, giving people more money to buy even more gas and groceries will only drive the demand -- and therefore the prices -- of those goods higher. And in a time of government budget deficits, giving free money to people today will only make buying gas and groceries more expensive for their children tomorrow.

No matter how great the need to "stimulate the economy" ever becomes, the need to stimulate basic economic literacy is always far greater.

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For those who need a refresher course on "Our MBA President."

I suppose it's marginally better than May Day:

America trusts in the abiding power of prayer and asks for the wisdom to discern God's will in times of joy and of trial. As we observe this National Day of Prayer, we recognize our dependence on the Almighty, we thank Him for the many blessings He has bestowed upon us, and we put our country's future in His hands.

From our Nation's humble beginnings, prayer has guided our leaders and played a vital role in the life and history of the United States. Americans of many different faiths share the profound conviction that God listens to the voice of His children and pours His grace upon those who seek Him in prayer. By surrendering our lives to our loving Father, we learn to serve His eternal purposes, and we are strengthened, refreshed, and ready for all that may come.
...
NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of America, do hereby proclaim May 1, 2008, as a National Day of Prayer. I ask the citizens of our Nation to give thanks, each according to his or her own faith, for the freedoms and blessings we have received and for God's continued guidance, comfort, and protection. I invite all Americans to join in observing this day with appropriate programs, ceremonies, and activities.

Would it have been so damnable (either figuratively or literally, depending on your particular form of mysticism) to toss in a "many" or "most" here and there?

For example:

Much of America trusts in the abiding power of prayer and many Americans ask for the wisdom to discern God's will in times of joy and of trial. As we Jews and Christians observe this National Day of Prayer, we they recognize our their dependence on the Almighty, we they thank Him for the many blessings He has bestowed upon us them, and we they put their hope for our country's future in His hands.

From our Nation's humble beginnings, private prayer has guided several of our leaders and, coupled with a perpetual and sacred commitment to the separation of religion and government, played a vital role in the life and history of the United States. While America is now and has always been a country also for Muslims, Buddhists, Hindus and other less common beliefs, Americans of many different faiths share the profound conviction that God listens to the voice of His children and pours His grace upon those who seek Him in prayer. By surrendering our their lives to our their loving Father, we they learn to serve His eternal purposes, and we they are strengthened, refreshed, and ready for all that may come.
...
NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of America, do hereby proclaim May 1, 2008, as a National Day of Prayer. I ask the religious citizens of our Nation to give thanks, each according to his or her own faith or other moral code, for the freedoms and blessings we have received and for God's continued guidance, comfort, and protection. I invite all Americans to join in observing this day with appropriate programs, ceremonies, and activities.

Notice that I'm not even playing the atheist card -- just the non-Judeo-Christian card.

But I suppose even that's too much to ask from our Theocrat-in-Chief.

Last year's post here. More thoughts from Americans United.

Time to clean out the aggregator --

ITEM: Congressional leaders appear to have reached a consensus on a five-year, $300 billion farm bill. The bill continues to distort crop markets via biofuel subsidies and continues to provide taxpayer money to high-income farmers (a population that is growing, incidentally, as commodity food prices continue to rise). As I noted previously, the disproportionate representation of low-population agricultural states in the Senate makes meaningful agricultural policy reform difficult if not impossible.

ITEM: Congressional leaders also found time, in between sessions debating how best to distort the agricultural markets, to demand that the Federal Trade Commission use its recently conferred authority to investigate distortions in the gasoline market -- which they call "gouging." Economists, and I, call it nonsense.

ITEM: Yet another report that the Army, unable to fill recruitment quotas and unwilling to ask Congress to revisit Don't Ask, Don't Tell, is more frequently waiving the "no criminal record" requirement for potential recruits. No update though on how many grandmothers or idiots the Army has recruited recently.

ITEM: Speaking of the military, a U.S. soldier in good standing was sent home early from Iraq due to threats of violence from his fellow servicemen after he disclosed that he was an atheist. The soldier is suing the Department of Defense for failure to enforce the First Amendment's separation of church and state within the military. As I noted previously, that can be hard when the Chairman of the Joint Chiefs of Staff at the time was himself an unrepentant theocrat and anti-atheist bigot.

ITEM: Speaking of former generals, CIA Director Michael Hayden, a/k/a General Michael Hayden, has announced that he will finally give up his uniform and retire from the Air Force. I noted the impropriety of a military commander serving in a high-profile, civil-liberties-threatening, civilian post here.

ITEM: Speaking of long-overdue resignations, Mayor Bloomberg's Buildings Commissioner has resigned in disgrace after several construction accidents and the disclosure of widespread mismanagement of the building permit process. But remember that safety is "too important to leave to the private sector." Somehow. Previous post here.

It's been quite a while since we had any dancing here on Sunday CuteTuber™. And after such an intense post last Sunday (not to mention yesterday), I think we could use some lightheartness.

Fortunately, the Internet has an endless supply:



I broke a sweat just watching that routine by poolerubgy.

Serious blogging will resume as soon as is humanly possible.

Sunday CuteTuber™ FAQ

An astonishingly arrogant, and economically oblivious, op-ed in today's Washington Post by the mayors of Cincinnati, Rochester and Stamford:

Although the House and Senate have both defeated a moratorium on earmarks, the debate about direct congressional grants rages on. And generally absent is any mention of the pressing needs that these grants have helped so many of our nation's communities meet.

Are programs to reduce gang violence a good use of taxpayer funds? How about keeping sewage out of local streams? Or fixing unsafe roads and bridges before another tragedy?

By any reasonable standard, nearly all congressionally directed grants would be considered a good use of taxpayer funds.

Putting aside the Bridge to Nowhere, let's dissect (actually, "psychoanalyze" might be a better word) this bizarre reasoning:

1. It completely ignores opportunity cost, a/k/a the Broken Window Fallacy. The question, properly framed, is not whether "programs to reduce gang violence are a good use of taxpayer funds." The question, properly framed, is whether such programs are a better use of funds than the next best alternatives: Is "reducing gang violence" more important than whatever it was that we didn't get instead?

(And yes, that "whatever it was that we didn't get instead" can be lower taxes or budget deficits and not just some other expenditure. There are "public benefits" to low taxes and fiscal restraint and not just to unbridled majoritarian spending.)

From the op-ed:

Contrary to conventional wisdom, such congressional grants do not increase federal spending but only help to guide how this funding is directed. For fiscal 2008, Congress held to the total discretionary spending caps that President Bush demanded. So congressional grants did not add one dollar to federal spending or to the deficit.

You read that right: When we spend taxpayer money we're not really spending taxpayer money. There really is such a thing as a free lunch. Somehow.

2. It completely ignores fiscal federalism. Reducing gang violence in Cincinnati may be a "good use of taxpayer funds" when it's Cincinnati taxpayers who do the funding. But why should I pay taxes to reduce gang violence in Cincinnati? Why should taxpayers in Cincinnati pay to give me a Second Avenue subway? ("Because we took a vote" is of course not a valid answer.)

There is a moral justification (except perhaps to the anarcho-capitalists) to requiring people to pay taxes to fund legitimate public goods that they cannot help but benefit from. But that requires strict fiscal federalism: Federal taxes should only be extracted to fund federal public goods, state taxes should only be extracted to fund state public goods, and local taxes should only be extracted to fund local public goods. Any breach of those barriers is pure looting by the majoritarian mob.

3. It completely ignores progressive income taxation. There are defenders of earmarks (and their cousins, block grants) who are less unapologetic than these three mayors and who will, when called out on the fiscal federalism question, default down to the argument that, when all the taxes and expenditures are netted out, it reduces to a case of, "Everybody pays for everything, and what's so bad about that?"

Well, what's "so bad about that" is that it conveniently omits the fact that not everybody is paying for everything. It omits the fact that the bottom 40% of households, reflecting almost 50% of the population, pays no federal income tax. So, when the three mayors assert ...

In addition to local taxes, Americans send more than $1 trillion in federal taxes each year to Washington to fund projects that localities cannot undertake alone: building highways, providing for defense and so on.

... they really mean a subset of Americans — the small subset that pays the overwhelming majority of federal income taxes. So earmarks and block grants are not merely a case of "New Yorkers funding Cincinnati programs," (bad enough) but actually a case of "New York taxpayers funding Cincinnati non-taxpayers" (much worse). How is that not naked, brazen looting?

4. It completely betrays "the democratic process." It would still be illegitimate even if it didn't — "two wolves and a sheep," etc. But to suggest that it is somehow "the democratic process" to simply give legislators taxpayer money to dole out as they see fit, with no debate, no individual votes and no independent oversight (beyond the legislators patting each other on the back for their "civic-mindedness") is about as far from "the democratic process" as a non-dictatorship can get.

(Incidentally, does it really need repeating that the Senate — where North Dakota has the same representation as California — is hardly a "democratic" institution? See also, "farm subsidies.")

5. It completely ignores the fact that all politicians are, by definition, moral defectives. The three mayors:

For fiscal 2007, Congress placed a moratorium on grants ... and spending decisions were left solely to the Bush administration. What happened? The administration picked a select group of winners that got all the money — and hundreds of smaller and less well-connected communities were left out in the cold.

So the Bush administration succumbs to rent-seeking, but members of Congress do not? That lunacy does not require a detailed response any more than would a belief that the Sun-God revolves around the Flat Earth.

One last point, from the original excerpt:

By any reasonable standard, nearly all congressionally directed grants would be considered a good use of taxpayer funds.

When the ad hominem card is the only card you have, you play it. Anyone who disagrees is simply not "reasonable." Q.E.D.

Could you imagine someone saying, "Chocolate is better than vanilla, because it is unreasonable to suggest that vanilla is better than chocolate..."? It makes no sense in ice cream, and it makes no sense in economics or politics.

Indeed, the very fact that earmarks and pork are so controversial would, if anything, suggest that the "reasonable" conclusion is to scrap them. But when you're the local hack politician who is doing the actual sucking at the teat of an anonymous taxpayer halfway across the country, "reasonable" seems to take on a whole new meaning.

More thoughts from Cato@Liberty.

Kip's Law: Every advocate of central planning always — always — envisions himself as the central planner.

--Is it a proper function of government to forbid a brewer from calling his product "Weed"? Would your answer change if he were based in the town of Weed, California? And would your answer change after being reminded that the government allows a certain other brewer to call its product "Bud"?

--What are the latest recruitment figures from the Culture Wars?

--A Special Guest Question: "If a train heading east leaves Chicago at noon and a train heading west leaves New York an hour later, will that make you any better at math?"

--In which U.S. city did two gay men kissing in public result in a 911 call? ("I imagine you could complain if you like ma'am. We can always send an officer down there.")

--Are dogs proof of intelligent design? (But cf. this post.)

No other posting today.



More info here.

A quick addendum to my last post on Judge Posner's bizarre, sad -- and wrong -- opinion today in the "Be Happy, Not Gay" t-shirt case, Nuxoll v. Indian Prairie School District #204:

The plaintiff calls Justice Alito's concurrence the "controlling" opinion in Morse* because Justices Alito and Kennedy were part of a five-Justice majority, so that their votes were crucial to the decision. But they joined the majority opinion, not just the decision, and by doing so they made it a majority opinion and not merely, as the plaintiff believes (as does the Fifth Circuit), a plurality opinion.

Lawyers' quibbles. As I explained in the first Stitch in Haste Podcast, it doesn't really matter whether one calls Chief Justice Roberts' ruling in Morse v. Frederick (a/k/a the "Bong Hits 4 Jesus" case) a "majority opinion" or a "plurality opinion." What matters is that Justice Alito made it unambiguously clear in his concurrence that Morse was not to be extended to any fact pattern other than purely apolitical speech advocating illegal drug use. Any extension of Morse to such fact patterns -- including "Be Happy, Not Gay" t-shirts -- is plain error.

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*Morse v. Frederick, 127 S. Ct. 2618 (2007)

The latest round in the "Be Happy, Not Gay" t-shirt wars —

"Be Happy, Not Gay" is only tepidly negative; "derogatory" or "demeaning" seems too strong a characterization. As one would expect in a school the size of Neuqua Valley High School, there have been incidents of harassment of homosexual students. But it is highly speculative that allowing the plaintiff to wear a T-shirt that says "Be Happy, Not Gay" would have even a slight tendency to provoke such incidents, or for that matter to poison the educational atmosphere.

"As one would expect"? Why should anyone ever expect a single "incident of harassment of homosexual students"? And I suppose the killing of Lawrence King was also "highly speculative" and "only tepidly negative."

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The framework that Judge Posner lays out for analyzing this case is actually quite reasonable:

Taking the case law as a whole we don't think a school is required to prove that unless the speech at issue is forbidden serious consequences will in fact ensue. That could rarely be proved.
...
But what is "substantial disruption"? Must it amount to "disorder or disturbance"? Must classwork be disrupted and if so how severely? We know from Morse* that the Supreme Court will let a school ban speech — even speech outside the school premises — that encourages the use of illegal drugs, without the school's having to prove a causal relation between the speech and drug use. We know too that avoiding violence, if that is what "disorder or disturbance" connotes, is not a school's only substantial concern. Violence was not the issue in Morse, or in Fraser**, the lewd-speech case. In fact one of the concerns expressed by the Supreme Court in Morse was with the psychological effects of drugs. Imagine the psychological effects if the plaintiff wore a T-shirt on which was written "blacks have lower IQs than whites" or "a woman's place is in the home."

The whole point of the Day of Silence is that anti-gay bigotry often, perhaps usually, results not in "disorder or disturbance" but in intimidation. Intimidation that disrupts the school environment for them. Gay students insulted, teased, taunted or harassed (or worse) often suffer in silence.

From Morse and Fraser we infer that if there is reason to think that a particular type of student speech will lead to a decline in students' test scores, an upsurge in truancy, or other symptoms of a sick school — symptoms therefore of substantial disruption — the school can forbid the speech. The rule challenged by the plaintiff appears to satisfy this test.

That should have been the end of the opinion and of the "Be Happy, Not Gay" t-shirt.

But alas, this is Richard Posner and these are gays who are being targeted, so of course there is going to be an "on the other hand" —

The expression "Be Happy, Not Gay" is a play on words, since "gay" used to be an approximate synonym for "happy" but now has been appropriated to designate homosexual orientation. One cannot even be certain that it is a "derogatory" comment; for "not gay" is a synonym for "straight," yet the school has told us that it would not object to a T-shirt that said "Be Happy, Be Straight." It wouldn't object because to advocate X is not necessarily to disparage Y. If you say "drink Pepsi" you may be showing your preference for Pepsi over Coke, but you are not necessarily deriding Coke. It would be odd to call "Be Happy, Drink Pepsi" a derogatory comment about Coke.

Bigoted antipathy toward gays is comparable to preferring Pepsi over Coke? Posner himself can't help but acknowledge the sheer idiocy of such an analogy and promptly abandons it. Still, two paragraphs later, we get the hopelessly-disconnected-from-reality "tepidly negative" passage at the top of this post.

The controlling case for this fact pattern is clearly Fraser, which — while crafted in the context of lewd and offensive speech — set a straightforward, robust test for curtailing student speech on school grounds:

In upholding the students' right to engage in a nondisruptive, passive expression of a political viewpoint in Tinker***, this Court was careful to note that the case did "not concern speech or action that intrudes upon the work of the schools or the rights of other students."

Posner, somehow, actually cites Fraser as a counterargument against the school banning the bigot-shirts: since "Be Happy, Not Gay" is not lewd speech, Fraser must not apply. How convenient.

The case is Nuxoll v. Indian Prairie School District #204, No. 08-1050 (7th Cir., April 23, 2008) (PDF - 20 pages). More thoughts at Decision of the Day, Good As You.

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The Day of Silence, incidentally, is tomorrow.

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*Morse v. Frederick, 127 S. Ct. 2618 (2007)
**Bethel School Dist. No. 403 v. Fraser, 478 U.S. 675 (1986)
***Tinker v. Des Moines School Dist., 393 U.S. 503 (1969)

--Is the standardization of widescreen laptops merely an attempt by computer manufacturers to cheat consumers? ("[T]hey can still advertise that they offer 14.1 or 15.4 screens, but the screen area is smaller, and thus they save more money. ... How can laptop manufacturers still claim that they look after their customers when the move to widescreens is clearly a selfish one?")

--Should laws that red-line sex offenders by forbidding them to be within a certain radius of a school apply to Election Day, when the school is the offender's polling place? (Via Sex Crimes Blawg.)

--Why are "suspected sorcerers" in the D.R. Congo being arrested and in some cases almost lynched by angry mobs?

--A Special Guest Question: "Why have the genetic traits predisposing to homosexuality not been eliminated long ago?"

--Who should get to keep the pot?

Far too much cyber-ink is being spilled regarding a new book by a noted legal scholar, Cass Sunstein, and an equally noted economist, Richard Thaler, called Nudge.

An excerpt from the book's introduction:

Many of the policies we recommend can and have been implemented by the private sector (with or without a nudge from the government). Employers, for example, are important choice architects in many of the examples we discuss in this book. In areas involving health care and retirement plans, we think that employers can give employees some helpful nudges. Private companies that want to make money, and to do good, can even benefit from environmental nudges, helping to reduce air pollution (and the emission of greenhouse gases). But as we shall show, the same points that justify libertarian paternalism on the part of private institutions apply to government as well.

The premise of Nudge, usually referred to as "soft paternalism" (or, outrageously, "libertarian paternalism") can be summed up with great ease:

You're stupid.
If "stupid" seems too harsh a word, then substitute "irrational."

You're irrational, for example, because you don't max out or even contribute at all to your 401(k) plan, even if your employer matches your contributions. You're irrational because you don't sign your organ donor card. You're irrational because you make all kinds of choices that are "wrong."

What (supposedly) makes Sunstein and Thaler different from any other two-bit hubris-drenched central planner wannabe is that they claim to define "wrong" not by their own subjective tastes and preferences, but by objective standards. To ignore a costless opportunity to get free money is, they submit, objectively irrational. To deny some innocent person access to your organs after you're dead is, they submit, objectively irrational. And so on.

What also (supposedly) makes Sunstein and Thaler different is that they claim not to want to coerce anybody to behave rationally. They do not want to force you to enroll in your 401(k) plan. They do not want to seize your body after you die. All they want is to rejigger the rules a bit so that you do not have to "choose to be rational" (e.g., by having to opt in to a 401(k) plan) but rather that you would have to "choose to be irrational" (e.g., by having to opt out of your 401(k) plan). Yes, they're going to be paternalistic toward you, but not at the point of a gun.

All they want to do is "nudge" you.

What of course does not make Sunstein and Thaler different, meanwhile, is that they want to be ones doing the nudging. Kip's Law prevails yet again.

Two things amaze me about the excessive hype over Nudge. First, it seems to me that the book's thesis is, at the end of the day, its own worst enemy. A complex, dual-disciplined (i.e., law and economics) theory that, when put to the test, can only generate a handful of de minimis policy recommendations — default opt-in to 401(k) plans, a presumption of consent in organ donation, etc. — can hardly be described as revolutionary — or, for that matter, useful. To the extent that the soft paternalists truthfully say, "this far, no further" (i.e., to the extent they are eager to assure us that their proposals are "no big deal"), then they only win by losing. If the debate is simply whether the entry for "soft paternalism" should read, "harmless" or "mostly harmless,"* then the soft paternalists have lost that debate before they've even started.

Second, and far more relevant in the context of Kip's Law, is that the debate is definitely not between "harmless" and "mostly harmless." No activist legislator, nanny-stater or other anti-freedom malcontent is going to take a theory like "soft paternalism" and invoke it only in the context of 401(k) plans and organ donation. Even if all you promise to do is "nudge," then suddenly you're going to start seeing lots of things that need "nudging."

The tax code is one giant nudge: nudging us into home ownership, child rearing, charitable donating, etc. Apologists for Social Security insist that it is merely a "nudge" into saving for retirement (indeed, Thaler was a leading advisor to President Bush on Social Security reform). Hillary Clinton insists that she is not a health care socialist — she just wants to "nudge" us into (compulsory) insurance programs (which, somehow, does not constitute "socialized medicine" — but that's a whole other blogpost).

Practically any incursion into personal autonomy can be repackaged as a "nudge" — from seat belt laws to the war on drugs. Some anti-liberty laws are "nudgier" than others, to be sure. But all derive from a belief that the government is legitimately authorized not just to protect us from each other, but also to protect us from ourselves — to "nudge" us.

Mario Rizzo, a noted free-market economist at NYU, puts this in terms of "slippery slopes" —

The new paternalism claims that careful policy interventions can help people make better decisions in terms of their own welfare, with only mild or nonexistent infringement of personal autonomy and choice. This claim to moderation is not sustainable. Applying the insights of the modern literature on slippery slopes to new paternalist policies suggests that such policies are particularly vulnerable to expansion. This is true even if policymakers are fully rational. More importantly, the slippery-slope potential is especially great if policymakers are not fully rational, but instead share the behavioral and cognitive biases attributed to the people their policies are supposed to help. Accepting the new paternalist approach creates a risk of accepting, in the long run, greater restrictions on individual autonomy than have been heretofore acknowledged.

Or you can just "opt out" of Rizzo and "opt in" to Lewis Black: Government is human beings.

More thoughts from Will Wilkinson.

Kip's Law: Every advocate of central planning always — always — envisions himself as the central planner.

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(*Explanation, for the uninitiated, here.)

My recent post on some reported shenanigans by Cablevision in the wake of FCC-mandated digitization of broadcast television reminded me that I haven't blogged about "net neutrality" -- where my position qua libertarian is somewhat anti-consensus -- in some time.

Fortunately Tony gives me an excuse to summarize and restate my position:

I actually support government-imposed net neutrality because these backbone companies (AT&T, Comcast, etc.) were spawned by the government in the first place.

Government-chartered monopoly = government rate regulation.

(The fact that they are no longer rate-regulated does not change the fact that it was the original monopoly charters that gave them the backbone in the first place.)

But if, e.g., Google were to build its own pipe with its own money — as it has threatened to do — then it should be free to price it however it sees fit.

The notion, meanwhile, that the backbone companies need more revenue to build more capacity is all well and good, but you can still get that revenue from one end of the pipe exclusively — the subscriber.

If I use twice as much bandwidth as you do, then I can pay twice as much as you do. No objection there. But leave whence I'm getting all that content (e.g., Netflix, iTunes or YouTube) out of it.

The idea that NetNeut will "choke the pipe" is a Chicken Little canard spread by its opponents, pure and simple.

Counterarguments welcome.

"We need a real world and not the world of economic theories."
--United Nations Secretary-General Ban Ki-moon

I noted, several times, the unfortunate phenomenon of rising food commodity prices — especially the "ethanol connection" — long before it was fashionable.

By "fashionable," I mean:

--United Nations bureaucrats calling the situation a "silent tsunami."

--Hugo Chavez' silly little "Mini-me," Bolivian socialist (and drug kingpin) Evo Morales, using the crisis as an excuse to demand the worldwide abolition of all capitalism (including, no doubt, the marketplace of ideas).

--Bureaucrats at the Asian Development Bank calling for an end to ethanol subsidies.

--Paul Krugman lamenting that we are "running out of planet to exploit."

--All of the above failing to connect the dots:

Just over 1 billion people live on $1 a day, the benchmark of absolute poverty; 1.5 billion live on $1 to $2 a day. Bob Zoellick, the president of the World Bank, reckons that food inflation could push at least 100m people into poverty, wiping out all the gains the poorest billion have made during almost a decade of economic growth.

The problem of course is thinking of "all the gains the poorest billion have made" solely in terms of "economic growth." But the "absolutely poor" of the world also tend to be the "absolutely oppressed" of the world — the two populations are essentially identical. Show me a hyper-poor economy, and I'll show you either a Communist dictatorship, a military junta, or a mob-installed socialist "worker's paradise" where the state has made it simply impossible for most of its people (other than state-installed crony capitalists and other politically connected elites) to do any better than "$1 to $2 a day."

When rising food prices turn "$1 to $2 a day" into "death by starvation," perhaps the problem isn't the "food prices" part but rather the "$1 to $2 a day" part. And fixing that requires fixing (i.e., scrapping) anti-democratic and anti-capitalist regimes and rhetoric.

The United States could, by itself, feed the world. Add in Europe, Canada, Australia and all the other free or mostly free Western economies that have significant (i.e., excess) agricultural capacity, and the world is simply drowning in food (has everyone forgotten the "obesity epidemic"?). The problem is not that we are "running out of food" — the problem is that we are running out of capitalism — and we need to start producing more of it. A lot more.

It's quite simple really: Give a man a fish and he's fed for a day. Stop stealing his fish and he's fed for a lifetime.

(Via Concurring Opinions. More thoughts from Reason's Matt Welch.)

"Endres says his company must treat its thousands of renters fairly and equally."

How, you might be wondering, could such a noble declaration be classified as, "Wow -- You guys suck!"?

Simple: All it takes is a dead fiancée:

Russ Endres, owner of Wisconsin Management, declined to say if Jordan Gonnering would be forced to fulfill the final 16 months of his lease. Gonnering found his 21-year-old fiancee, Brittany Zimmerman, murdered on April 2nd and Madison police are still looking for her killer.
...
Gonnering said he's willing to live in another one of the company's properties until his lease runs out in August 2009. Just not the one where his fiancee was murdered.

Under Wisconsin law, renters are responsible for fulfilling the terms of their lease -- even after death. Endres says his company must treat its thousands of renters fairly and equally.

How's this for "treating renters fairly and equally" -- "any and every renter whose fiancee is murdered in their apartment gets out of the lease -- if only to relocate to another apartment of ours"? Somehow I doubt such a fair and equal policy would bankrupt Wisconsin Management.

I'm not saying "there oughta be a law." I'm too libertarian for that. All I'm saying is...

Wow -- you guys suck. (Well, sucked -- past tense.)

(I'd also note that a proper -- i.e., "greedy" -- capitalist would probably want to avoid the negative publicity associated with sucking -- "doing well by doing good," etc.)

(Via QuizLaw.)

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The original guys who suck:

Question for the nullifiers: At least one state forbids the use of the so-called "gay panic defense." Should a nullifier be entitled to disregard that prohibition and vote to acquit a gay-basher in defiance of both the law and the jury instructions?

By the way, this is not entirely a hypothetical:

Students have said they witnessed confrontations between [Lawrence] King and [Brandon] McInerney in the weeks or days before the shooting, including King's teasing McInerney and telling him that he liked him.

McInerney perceived King's treatment as harassment, [Public Defender William] Quest said. ... Quest said he believes school administrators supported one student expressing himself and his sexuality — King — and ignored how it affected other kids, despite complaints. Cross-dressing isn't a normal thing in adult environments, he said, yet 12-, 13- and 14-year-olds were expected to just accept it and go on.

Besides the fact that King was in fact not cross-dressing at school, there are many aspects of this tragedy that make it a poor fact pattern for analyzing any one particular legal issue. Point conceded.

But having said that:

A.B. 1160 declares that it is against public policy for a defendant to play upon the bias of the jury, or for a jury to allow bias against the victim to enter into its decision-making.

The bill revises the current California jury instruction regarding bias, to make clear to jurors that their verdict cannot be based on bias against the victim, defendant or witnesses.
...
A.B. 1160 was introduced in response to recent cases in California in which murder defendants have tried to lessen the charges against them by arguing that they acted in a panic after discovering that the victim was gay or transgender.

So I put it again to the nullifiers: Assume a juror, who acted in good faith and made no attempt to lie her way onto the jury, simply believes that "panic" is indeed an entirely proper reaction when "harassed" by a "pervert" and that, A.B. 1160 and jury instructions notwithstanding, it's just not right for someone to go to jail for killing an uppity queer who "panicked" him.

If the power of a juror is absolute and extends not just to reviewing the facts but also the law, then is it not also perfectly appropriate, even noble, for one homophobe to acquit another homophobe?

Or do your "higher principles" regarding nullification only apply to smoking pot?

(Via Box Turtle Bulletin. no third solution offers a reply.)

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Previous Lawrence King posts starting here. Another ongoing gay panic trial here.

"This bill basically says, 'You're here. Adopt American values. ... If you want a different culture, then fine, go back to that culture.'"
--Arizona State Representative John Kavanaugh

The