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September 2017 posts

O Canada

By John Morton

I just returned from the Canadian Rockies, one of the most beautiful places on Earth.  I was equally impressed with the friendly, helpful, and reserved people.  CanadaThe highways and bridges were in better shape than those in the United States even though Canada has a population of 36 million and the second largest land area in the world.  Canadians tend to live within 100 miles of the United States.  I was surprised at how few luxury cars I saw.

However, anecdotal observations can be misleading so I spent some time researching life in Canada vs. the United States.  Canada is a rich country but poorer than the United States.  Its 2016 GDP per capita (PPP) was $46,400 compared to $57,400 in the United States.  Although GDP per capita is an important statistic in determining a country’s living standards, it doesn’t tell the entire story.  The website “If It Were My Home” (http://www.ifitweremyhome.com/compare/US/CA) is used to compare two countries.  If Canada were your home rather than the United States, you would:

Be 83.09% less likely to be in prison.

Spend 35.46% less money on healthcare.

Be 63.16% less likely to be murdered.

Experience 28.67% less of a class divide.

Live 2.11 years longer.

Be 23.66% less likely to die in infancy.

Because Canada has a single-payer healthcare system, Bernie Sanders might say Canada shows that socialism works.  But he would be wrong.

The Fraser Institute, a Canadian think tank, has been measuring economic freedom around the world since 1970.  Countries with high levels of economic freedom have more personal choice, more voluntary exchange coordinated in markets, more freedom to enter and compete in markets, and more protection of persons and property from aggression.  In the latest report, the United States ranked 16th in economic freedom; Canada ranked 5th.

My analysis makes me want to move to Canada, but it’s too damn cold, and I really don’t enjoy ice hockey.

Science versus Expediency

By Jonathan B. Wight

Whenever my dog does something he knows is wrong, he hides his head under a pillow.  He just doesn’t want to see what’s coming, and he thinks hiding his face will solve his immediate problem.

This is the attitude of the Virginia state legislature toward global warming, according to Stephen Nash, who has been waging a David-vs.-Goliath struggle to inform the Virginia public (see Virginia’s leaders have a serious case of the slows on climate change).

Nash is the author of Virginia Climate Fever and other books that use science to help answer questions about the world we are living in.  Nash notes:

“In Virginia’s Republican-dominated legislature, climate change isn’t about science; it’s about what’s expedient.”

Expediency means winning elections by taking massive donations from the biggest carbon polluters in the state.  Virginia’s general assembly is so gerrymandered that the will of the people is quashed with impunity.  In 2015, every incumbent (122) in the legislature was returned to office.  That’s not democracy, it’s kleptocracy. 

Virginia voted Democratic in the last three presidential elections.  Three of the last four elected governors were Democratic.  Both U.S. Senators are currently Democratic.  In statewide elections, without gerrymandering, the will of the people leans environmentally friendly.    

But Republicans control the General Assembly and twist and distort districts to maintain power.  A narrow minority thus appears to be pulling the strings to maintain a lock on environmental progress.

[Disclosure:  Stephen Nash is a colleague and friend.]

Hypocrisy at the Top

By Jonathan B. Wight

Most people would agree that the federal budget is bloated and expenses can be cut. 

One of the supposed champions of this idea is Tom Price, Secretary of Health and Human Services.  Except it turns out Price has been jetting around the Northeast on private chartered jets at government expense.

JetA recent trip to Philadelphia that should have cost under $150 roundtrip in gas and tolls, or an equivalent amount if by train, may have actually cost up to $25,000 for a private jet.

Price isn’t the only cabinet secretary to be afflicted by the disease of grandiosity.  Treasury Secretary Mnuchin and his wife have likewise flirted with ridiculous airplane demands.   And the Trumps ... well, you know the story of their travel expenses.

There is more than just the cost.  The biggest problem with treating yourself as different from the masses is that you start to believe you are special or entitled.  It’s hard to empathize with the people you are supposed to be serving when this insidious idea creeps into your head. 

Taking a commercial flight—in the tourist class section—will quickly bring most people back to reality.  Even that flight is a privilege. 

“Ignorance and Economics”

By Jonathan B. Wight

David Colander has a lovely article with this title in the latest Forum for Social Economics

He argues that: Colander

  • Ignorance is ubiquitous, because we have so little evidence of how the world (meaning social policy) actually works;
  • Given this ignorance, economists should fashion themselves after engineers, who use common sense, history, best guesses, and ad-hoc solutions to solve problems;
  • The rules of science can be useful, but only as a rough approximation;
  • Hence, economists should not conceive of themselves as searching for the truth, but rather searching for answers to specific questions in specific contexts;
  • “Truth”—with a capital T—can be a barrier to progress, because the standards for truth seeking are different from the standards of making things better today.

Colander offers a warning to those who seek to transform development economics with evidence based policy” such as randomized control trials.  The problem is that a lot of relevant evidence—some of it anecdotal—does not meet the standards for scientific rigor.  And: “Should correlations that suggest major impact but don’t quite meet significance standards be considered?"

The bottom line:  Economists should be more humble, and more willing to work and learn outside of standard models.  This means taking a pluralist, heterodox, approach.

Creative Destruction

By Jonathan B. Wight

AppleThe new iPhone X unveiled last week will presumably sell at close to $1,000, stretching the envelope of what consumers will pay for gadgetry. 

But the iPhone isn’t that expensive, when you consider all the other things it replaces in a home:

Alarm clock / Watch / Landline phone / Taxi company (Uber) / Paper calendar \ Paper address book / Paper street map / Paper photo album / Post cards / Compass / Telegram

That is to say, all the products that have become obsolete or greatly reduced because of the iPhone.  Lots of businesses went under as a result.

The new iPhone X, despite the inevitably hype and oversell, sounds pretty ho-hum.  It’s got Facial Recognition ID… check, wireless charging… check, no home button…  check…  The Samsung Galaxy 8 phone has all these features and others. 

Sorry Apple, there isn't much creative destruction here.  The only innovation that the iPhone X is claiming to provide – other than a steeper price – is a somewhat better camera.  Is that worth $1,000?  

Don’t Show Up!

By Jonathan B. Wight

A pro-Confederate protest and rally is scheduled for Richmond this Saturday.

Statue_Robert_E._Lee_Richmond (1)The city triggered the protest by exploring the option to remove the memorials to Robert E. Lee, Stonewall Jackson, Jeb Stuart, and Jefferson Davis that line the beautiful and award-winning Monument Avenue, which is on the National Register of Historic Places.

Counter-protestors also plan to come.  Needless to say, everyone is on pins and needles, given the events in Charlottesville last month. 

(The photo shows the giant memorial to Robert E. Lee, erected in 1890.  Lee, who died in 1870, opposed erecting such statues, since he thought it would continue to divide the nation.  Get over it--he counseled fellow Virginians--the South lost the war.  It's time to move on, and that means not revering the symbols of the Lost Cause.)

Here’s a pathetic irony: the police say they will set up barriers at the protest site and will restrict the entry of people carrying weapons like bats, knives, and brass knuckles.  But people with guns will gain admission since Virginia is a “right to carry” state....

As much as the opposition drives you nuts, just stay away….  There is no meaningful discussion or discernment to come out of this event, only a play for media coverage. 

More on Football Scandals

By Jonathan B. Wight

The health concern about football (discussed here) is not the only major problem with this collegiate sport.

The industrial football academic complex—and the millions of dollars at stake for coaches and winning schools—has made a mockery of higher education. 

Let’s be clear:  At many small schools like mine, athletes are generally held to high standards and the faculty do not coddle stars.  Athletes have great work ethics and put in the time to succeed academically.  They are wonderful young men and women, who add a lot to campus life but are full-fledged students first. (I’m sure there are exceptions.)

By contrast, the New York Times has a blistering report of highly questionable activities in the School of Hospitality at Florida State University. I wonder why so many athletes want to study hospitality? 

Even as a less-than-challenging curriculum, many athletes struggled to complete basic assignments, and often those that were completed were allegedly plagiarized.

The teacher who reported these infractions was – let go.

Read it and weep.

Morally Tone Deaf

TubmanBy Jonathan B. Wight

...Treasury Secretary Steven Mnuchin seems to have blundered into such a world. 

It was reported yesterday that he is not likely to replace President Andrew Jackson with abolitionist Harriet Tubman on the $20 bill. 

This is in the aftermath of Charlottesville and the spirited debate over the past years about updating our currency to reflect our values today (and not those of 1928, when Jackson was elevated to this bill).

Let’s do some basic thinking:

  • Jackson was a slave-owner whose treatment of Native Americans also forever casts doubt on his reputation.
  • Tubman was born a slave, helped many escape, became a spy for the North, and a women’s rights advocate afterward the war.
  • There are no women or blacks celebrated on U.S. currency bills.

We should not fall into the trap of judging past heroes by modern ethical standards.  By that approach there are no heroes, only villains. 

But we can choose to celebrate values and virtues that have held true over time—and freedom for all Americans is one such value exemplified by Tubman’s work.

Mnuchin’s “compromise” is to suggest putting Tubman on the $2 bill.  Yes, I owned a $2 bill as a child.  But whoever uses one nowadays?  And keeping Jackson on the $20 would mean displacing Thomas Jefferson from the $2.  So let’s see—who has meant more to this country, Jefferson or Jackson? 

Should be an easy call.