I closed out a recent post with the following observation from David Schmidtz: Even when justice is cruel, it isn’t petty. Here, Schmidtz puts his finger on something about the social justice movement that’s always bugged me. So many driving ideas behind what is labeled as “social justice” these days seem to have little to do with justice, and far more to do with spite or pettiness. One reason we’re often told we should be worried about income inequality in wealthy nations, where even the (relatively) poor are by world and historical standards fantastically well-off, is because people are more concerned about their relative well-being than their absolute well-being. Michael Shermer once described a particularly dramatic illustration of this: Would you rather earn $50,000 a year while other people make $25,000, or would you rather earn $100,000 a year while other people get $250,000? Assume for the moment that prices of goods and services will stay the same. Surprisingly — stunningly, in fact — research shows that the majority of people select the first option; they would rather make twice as much as others even if that meant earning half as much as they could otherwise have. How irrational is that? Shermer goes on to describe how this is one of many cases where our baser instincts drive us to make others and ourselves worse off in the name of vague notions of fairness – similar behavior can be observed in other primates. But the simple fact that a particular instinct is evolved does not give us a reason to rate it as good, let alone build social conventions or political institutions to reinforce it. After all, there are all kinds of other similarly evolved primate behaviors that are widely recognized as bad and are subject to social sanction for that reason, however “natural” they may be. This particular knee-jerk reaction is a very destructive one. To say “I would prefer to live in a world where I have half as much as I otherwise could, as long as I can make sure everyone else gets even less” is pettiness to an extreme degree. A world where real per capita income is $250k is very different from a world where real per capita income is $25k. To be willing to reduce everyone else’s income to one-tenth of what it otherwise would be and to cut your own income in half in the process in the name of relative well-being comes close to preferring that millions of your fellow humans die in an earthquake in order to save your own little finger. Certain key concepts from John Rawls strike me as equally petty. Rawls’ original position stipulates that if we didn’t know what position we’d be born into in a given society, we’d prefer a world that maximizes the well-being of the least well-off person in that society. This means that if given a choice between two worlds, one where everyone lives in Star Trek level abundance, free from scarcity, aside from one unfortunate person who lives in terrible poverty, and another world where everyone equally lives at a just-slightly-above-terrible level of poverty, everyone in the original position would prefer the second world. Think about that for a moment. Imagine God makes a rare public appearance and says to you: “Hey, I’ve decided to reboot the world. I’m going to let you choose which new world I create. In the first, you’ll be terribly poor, but everyone else in the world can enjoy incredible prosperity. In the second, you’ll be slightly less poor but still very, very poor, and instead of being prosperous and wealthy, everyone else in the world will be just as poor as you.” I’m rarely accused of being excessively altruistic, but I’d feel like an absolute monster if I chose to create that second world and condemned billions of other people to lives of poverty just to make myself slightly better off. That’s not justice. That’s pettiness. As a final example, Rawls’ notion of the natural lottery has always struck me as petty, too. In Rawls’ view, nobody deserves to benefit from their natural endowments. He doesn’t simply mean the more milquetoast claim that someone born to wealthy parents who pour massive resources into giving them every possible benefit has gained some kind of unfair advantage as a result. Even if someone was born poor to uneducated parents but, through intelligence, hard work, and sheer dedication manages to become very wealthy, that too is unjust. After all, that person doesn’t deserve to be a smart, dedicated, hardworking person, so the benefits they gain from these having attributes is fundamentally unjust. More than anything, this kind of attitude reminds me of what Boromir says to Frodo when attempting to take the Ring of Power for himself: It’s not yours, save by unhappy chance! It could have been mine! It should be mine! Give it to me! To Tolkien, these are the words of someone whose mind has been corrupted under the influence of a demonic evil. But to Rawls, this is merely what justice requires due to the unfairness of benefitting from your own attributes. As far as I’m concerned, Tolkien has more genuine wisdom to share with the world than Rawls.     (1 COMMENTS)

The internet and social media have allowed humanity to progress economically, socially, and scientifically. Information and communication are far easier to access with the internet, which has led to an improvement in education in developing nations, the overthrow of dictatorial regimes during the Arab Spring, and allowed public health institutions to disseminate accurate, life-saving information during the COVID-19 pandemic. But it’s also true that more information doesn’t mean better understanding of information or more optimal communication. Misinformation and political polarization are running rampant in today’s America about contentious issues from the 2020 election to the efficacy of the COVID vaccine. It’s difficult to see how we can put Pandora back in the box, and begin having productive conversations and forging deep connections in the age of social media. Monica Guzman joins EconTalk host Russ Roberts to discuss the importance of honesty, curiosity, and respect, the harm of having agendas in conversations, and how empathy can lead to depolarization and a better understanding of truth. Guzman is a journalist, senior fellow for public practice at Braver Angels, and author of I Never Thought of it That Way. Guzman refers to social media as the “boss level of communication,” as productive conversations are extremely difficult on social media. Interactions tend to be short, reactionary, and out of the proper context. Add to this the lack of face-to-face communication and a constantly pessimistic news cycle, and social media platforms have become cesspools of political polarization. Guzman calls this the adolescence of communication. We have all the tools to have wonderful communication, but creating the tools is the easy part; engaging with them healthily at a societal level, is the true challenge. And according to Guzman, we’re currently failing: …one of the tragedies to me is when I think of the extraordinary creative and human capital we have at our disposal…But then the filter of the way we talk to each other seems to take, like, the potential output of 100% and bring it down to 5%. Like, the good stuff coming out of this is just not that great…When you think about everything we have here, we ought to be able to collaborate. We ought to be able to understand each other and get so much more advanced–like, level-up our thinking about these tough problems, and understand why they’re tough. This leads to the politics of misinterpretation. It’s becoming increasingly difficult to tell what people mean, and therefore easier to assume that someone we disagree with is wrong or evil. Arguments are becoming weaponized through misinterpretation” I thought of a game of dodgeball: something comes and if it’s a weapon, I’m going to pick it up. Even if you didn’t intend it as a weapon or something I can use to boost up my side or what have you, that’s how I’m going to use it. I don’t care how you meant it. That’s how I’m going to use it. And, then I’m going to throw it at somebody. This game of mutual misinterpretive dodgeball is a large problem to Guzman because it creates a lack of trust in each other, and consequently causes a fear of engagement. If you feel the other side isn’t truly listening to you and will use anything they can get to hurt you and destroy your values, why would you engage in conversation or debate in the first place? Guzman asserts that this lack of trust dangerously undermines democracy. If you and I can’t trust each other to participate in a conversation fairly, then how could we trust each other to run a nation, or not to steal elections? I think one of the challenges of democracy in the United States right now is the lack of trust that the “other side” will play fairly. Therefore, when you’re in power, you have to do everything you can to get your side as far ahead so that when they come in, they won’t catch up. That could turn out very dark, indeed. In her book, Guzman describes how we’ve begun to view each other as puzzles instead of mysteries: Puzzles are problems that you solve. You already know the shape of the thing you’re making. You just have a couple of pieces you need to go find and then put in the right place, plug them in. But, mysteries, you don’t know the shape. Every piece you pick up changes the shape, draws up a bunch of new questions. Viewing people as puzzles is problematic because it leads to assumptions about others’ perspectives, instead of genuinely seeking to find out what one believes. Instead of getting to the root of why people reach certain conclusions, conversation becomes a game of posturing and accusation. If you already know the answers, why would you bother showing your work? Productive conversations require challenges, and it’s easy to avoid these challenges.. When we do this we fail democracy, and we fail each other. We create more faulty information about the other side, and therefore create a paradox of polarization. Guzman states that “one of the most pernicious things we believe is that people who oppose what we support must hate what we love.” When this is the assumption coming into a conversation, the ability to connect and change minds is already lost. Says Guzman: You are already condescending–when you look at that sign, you are approaching it with condescension and you can’t be curious. And, that kind of shuts down everything before it starts. I find it interesting: we care a lot about facts and truth, but that doesn’t seem to apply to the truth about people’s perspectives. That’s where it seems we don’t obsess about truth. But, I just think that’s really killing us because when people feel understood, that’s when you can build trust. And without sufficient trust, we can’t collectively search for truth. Guzman and Roberts explore how agendas in conversations are problematic. In political conversations this goal is often to be correct, to affirm how your ideas are superior. With agendas, victory is valued over making a connection with another human being. Roberts adds to this, saying this is a pernicious way to dehumanize and objectify other people, as we’re not valuing what they have to say or truly listening to the personal experiences that have shaped the way they see the world, but instead we’re focused on the ways we can respond. He says, I think a lot of our discussions online, especially around politics, are about the ideas. When we focus on the ideas that’s the center of gravity, instead of focusing on each other and our journey through this world and how we interpret world events and how they mix in with our values and experiences and who we become as people and our ideas about how we should all thrive together. That’s a fascinating thing. Instead, I go behind the conversation about truth to the conversation about what’s meaningful. Who are they? What led them to these beliefs? What are the concerns and hopes and fears that animate, right? And then, what can I present about how I see those things and how can our perspectives sort of intermingle? And build trust, and build the kind of connection where maybe someday something could cross that makes them see something in a different light, or makes me see something in a different way. Guzman argues that conversations need to embody more honesty, empathy, and respect. After all, conversations are how we solve problems, and without honestly portraying your perspective, respecting the other party’s perspective, and empathetic understanding how they came to a different conclusion, agreements simply cannot be reached, and it becomes impossible to challenge your own beliefs, humanize the other party, and solve problems with anyone you disagree with. Nico Perrino and Juliette Sellgren discuss a similar theme on an episode of The Great Antidote Podcast. What tends to be forgotten is without conversation as a medium to come to agreements, violence becomes much more attractive to solve disputes, therefore if political violence is to be prevented, honest, empathetic, and respectful conversations are a necessity. Much of what Guzman and Roberts discuss in relation to conversation isn’t talking itself; much of empathy and respect comes from listening. Guzman also adds that listening can also be a very effective tool to de-radicalize people, as when people feel heard, they’re more receptive to other ideas. …I talk about listening–it’s more than paying attention, being present, making sure you’re not just waiting for your turn to speak. Listening is showing people they matter. That’s what it is. That’s the criteria we each have: Have I been heard? Do I feel like I mattered in that? Do I feel demeaned, neglected, ignored, shoved aside in one way, undervalued? Looking at bad ideas generously is more about looking at the people who hold them generously. Which, by the way, makes them more intellectually humble. There’s been research on this, too, that I’m so into right now: where, if someone just brings to mind a person in their life who tends to receive their ideas generously–not agree with them, but just listen, show them they matter–that person will become more intellectually humble. Meaning, they’ll be more likely to let some breathing room appear around their ideas so they could consider others. This gets into curiosity, the object of Guzman’s book. To Guzman and Roberts, curiosity and empathy go hand in hand. This is quite easy to imagine; when someone is genuinely curious about how you feel or what you’re thinking about a certain issue, it shows that your thoughts, feelings, and perspectives matter to them. However, Guzman doesn’t limit the effect of curiosity squarely to interpersonal relationships, she expands this principle to democracy at large. …that’s one of the things I think is the most important thing we can do for our democracy, is get curious about each other with each other. A feature of conversations that Guzman values is clarification over reaction, so much that it’s a staple in the events of Braver Angels. I work at Braver Angels, which is an amazing large nonprofit working on depolarizing America. And, in our own culture, internally, somebody proposes something and then we leave the space open for questions of clarification. So, before people give comments, that’s what we do. ‘Wait, what did you mean?’ And so, we each kind of query our own way that we heard what was said, and then if there’s something where we’re like, ‘What???’ that’s when we ask. And, the way that clears things up–right?–and it models, ‘We’re trying to get you right before we use what you say.’ Before we dissect and judge it, let’s make sure we know what you mean. As Guzman states, clarification isn’t limited to what someone believes, but it also extends to why someone believes what they do. This is crucial because we tend to forget that people who believe in reprehensible things don’t have the same experiences we do. Neo-Nazis, neo-confederates, white supremacists, etc. are often victims of propaganda and general societal ills. The socio-political environment is at fault for creating racists, homophobes, and anti-Semites. It’s comforting to think that if one was raised in the antebellum south that we would be a part of the underground railroad, would’ve fought for the union, and battled against slavery. This doesn’t mean slavery, racism, and secession are moral or defensible, but it does mean that we should seek to understand why people laid down their lives for evil. E After all, as Guzman states, “The end goal is persuasion. The end goal absolutely is persuasion. We need a society where we can mix our ideas generously and the best ideas actually win.” Humanization and empathy clearly have an end goal, that being education, and the emergence of knowledge. Roberts likens this to his experience as President of Shalem College, as when great works of literature are discussed in classes, the professor isn’t teaching the students what meaning is to be derived from the text, it’s discovered in conversation and reflection in discussion. We need to trust each other a little more to find the truth within conversations. Most of us, again, hardwired probably, we like our own beliefs a lot more than the truth. And, we don’t trust that conversation to create that understanding and wisdom because we’re afraid we might find out we’re wrong, and that hurts. And if you get to a point where it doesn’t hurt, it delights. I had a few questions and points to add while listening to this episode. We hope you’ll take the time to share your thoughts as well.   Guzman states that we don’t apply truth to people’s perspectives as much as we should. I somewhat disagree. The reason behind this is because people can lie or not understand their own positions. Anyone who’s been in their fair share of debates can attest to the latter. People are often very unwilling to bite the bullet on uncomfortable positions that their ideas justify. For example, conservatives are quick to condemn the riots in the summer of 2020, but minimize the significance of January 6th. Regarding lying, this is called dog whistling, coded language which is designed to sneak oftentimes morally reprehensible positions in through the guise of uncontroversial ones. A common example of this is alt-righters using the term “freedom of association” to justify a white ethno-state. That being said, can focusing on finding good faith reasons for a person’s perspective go too far to the point where defense is being run for genuinely horrible positions or people? What’s the line between humanization and empathy, and implicit endorsement?     1- What does a resistance to debate mean for the future of free speech and democracy? Could a social enforcement of certain topics being off limits for discussion lead to spaces for anti-democratic or morally reprehensible ideas to grow or would it stifle them?   2- Towards the end of the podcast Guzman states that “you don’t have to talk to a Nazi tomorrow,” to highlight the importance of small steps in challenging your beliefs. However, a problem occurs when the Nazi’s don’t want to have a discussion. How can people who don’t want to engage with those outside of their ingroups be engaged in conversation, and eventually persuaded to change their beliefs?   3- Guzman and Roberts discussed methods of curious and empathic conversation at length. So, how can a conversation that goes off the rails be reset to a healthy and productive engagement? (0 COMMENTS)

It is a commonly accepted idea that, in America, college is out of reach because of its price (tuition and fees). Commonly accepted, but false, as shown by The Economist in a recent article: “American Universities Have an Incentive to Seem Extortionate: They Are Much Cheaper than the ‘Crisis of College Affordability’ Suggests,” (July 23, 2023). The main facts are the following. In the OECD’s country comparison, the price of college in America is exaggerated because it is based on sticker prices, which are typically discounted, as opposed to foreign prices, generally determined by governments and not subject to market competition. In America, the average private advertised college tuition (including fees) is $40,000 per year, but few students, except wealthy ones, actually pay it; prices are discounted by an average of more than 50%. At Princeton, for example, the average price paid is $16,600, compared to a $56,000 price tag. Moreover, the average discounted price has fallen by $2,000 over the past 15 years, even as the published tuition fees have increased. Add to this that public state universities (in which three-quarters of college students are enrolled) offer college to state residents for an average price of $10,000. And at the bottom of the price range, community colleges are 50% less expensive than public state colleges, and their two-year degrees can then be applied to a regular four-year college program. We can understand why publishing sticker prices much higher than the price actually charged is often in universities’ interest (it is in their interest “to seem extortionate”): that’s a way to advertise their quality; and they can offer merit scholarships in lieu of discounts, which make the students and their parents proud. All that makes sense. The average household income (before tax) in America is $70,000 a year. If the price of college corresponded to sticker prices, it might be difficult to understand how some 50% of Americans hold a college degree, putting the country at the 10th rank from the top among 44 OECD members (OECD data). Finally, note that college subsidized prices (through federal student loans and public universities) increase quantity demanded and push up college prices (technically, a substitution effect), but the taxes that pay these subsidies have an opposite effect (an income effect) that partly compensates the impact on prices. (0 COMMENTS)

  Republicans on the House Ways and Means Committee have proposed three tax bills under the umbrella titled “American Families and Jobs Act.” It’s impossible to do a comprehensive analysis in this short article. Instead, I focus here on one good thing: it keeps the State and Local Tax (SALT) limit, a key feature of the 2017 Tax Cuts and Jobs Act. The SALT limit caps the amount of state and local tax that taxpayers can claim if they itemize their deductions. The cap is $10,000 annually for individual taxpayers and for married taxpayers filing jointly. Before the 2017 tax cut law, taxpayers who itemized faced no limit on the amount of state and local tax they could deduct. The change meant that high-income taxpayers who live in states with high income taxes took a huge hit. Even so, most taxpayers gained at least a little because the standard deduction was raised substantially to make up for the SALT limit, and marginal tax rates were cut somewhat for the vast majority of taxpayers. Of course, politicians from high tax states like New York and California don’t like the SALT limit. So why do I think it’s so good? This is from David R. Henderson, “Don’t Trade SALT for Broccoli,” TaxBytes, Institute for Policy Innovation, August 3, 2023. Read the whole thing, which is short. By the way, I love broccoli. I’m using broccoli to stand for higher tax rates because my impression is that many people hate broccoli. (0 COMMENTS)

During recent months, opinion has shifted toward the view that the economy might avoid a “hard landing” (i.e. recession) as the Fed tries to bring inflation back to 2%. I agree that a soft landing looks increasingly likely, but fear that too little attention is being paid to the risk of no landing at all.Today’s jobs report showed unemployment falling to 3.5% while 187,000 new jobs were created. Some of the media commentary suggests that this was a soft report, as the payroll employment figures were lower than the recent pace of job growth, and lower than anticipated by forecasters.  In fact, 187,000 new jobs is an extremely strong figure, evidence of a booming labor market. When it comes to evaluating the prospects for a soft landing, the growth in average hourly earnings is a far more important data point than jobs or unemployment.  The 12-month growth rate fell from a peak of 5.9% in March 2022 to 4.4% in January 2023.  It needs to fall to about 3%.  Unfortunately, there has been no further progress toward that goal since January, as the 12-month growth rate remained at 4.4% in July: An examination of even more fine-grained data shows a slight recent uptick in monthly wage growth to nearly 5% over the past 4 months.  That might just be noise in the data (wages are a lagging indicator), but it is an indication that we have yet to achieved the necessary slowdown in wage inflation required for a soft landing.  Pundits keep asking why the inflation slowdown hasn’t yet been more painful. The answer is that wage inflation is still elevated, and it’s wage inflation that is painful to stop.  The Fed’s tardiness in responding to the inflation problem will probably make the endgame more painful than necessary. [Price inflation is of interest to shoppers, but plays no important role in business cycle theory.  Jobs, nominal wage inflation and nominal GDP are the variables that truly matter.  I talk about price inflation only because the Fed targets it.  If price inflation has any use in economics, it is in guesstimating changes in long run living standards.] Today, economists use the term “Phillips curve” to refer to the relationship between price inflation and real variables such as unemployment.  There are two problems with this. First, the curve is misnamed, as Irving Fisher invented this model back in 1923.  Second, the relationship that A.W.H. Phillips (pictured above) examined back in 1958 was between wage inflation and unemployment.  That’s the correct relationship!  It’s far more meaningful than the relationship between price inflation and unemployment (which is contaminated by supply shocks in sectors like food and energy.)  The price inflation/unemployment graph should be called the Fisher curve, while the wage inflation/unemployment graph should be called the Phillips curve.  Back in the 1960s, the economics profession made a big mistake when they replaced Phillips’s (wage) version with Fisher’s (price) version. The negative relationship between wage inflation and unemployment occurs because nominal wages are sticky.  Thus when the equilibrium nominal wage declines sharply (usually in a recession) the actual nominal wage falls more slowly.  This means that during periods of falling wages, the equilibrium wage will fall faster than the actual wage, and the above equilibrium actual wage will cause elevated unemployment. Of course this model also has flaws, as it fails to account for the impact of expectations.  A soft landing is easier to achieve if workers expect slower growth in equilibrium wages, and hence are willing to settle for slower growth in actual wages.  (Again, ignore price inflation—it plays no role here.) PS. After writing this post, I saw that Larry Summers has similar concerns.  I’m actually a bit less pessimistic than Summers.  I believe all three possibilities (hard landing, soft landing, and no landing) are still in play.  I still see soft landing as the most likely outcome, even if the odds are only 40% vs. 30% for each of the other two outcomes—say through calendar 2024.)  In other words, my forecast is ¯_(ツ)_/¯. PPS.  The graph below shows annualized one-month nominal wage growth rates:       (0 COMMENTS)

One of Furman’s and Summers’s arguments was that the main culprit behind higher deficits was tax cuts, not increases in government spending on entitlements. They wrote: The tax cuts passed by Presidents George W. Bush and Donald Trump totaled 3 percent of GDP—much more than the projected increases in entitlement spending over the next thirty years. Those cuts meant that in 2018, the federal government took in revenue equivalent to just 16 percent of GDP, the lowest level in half a century, except for a few brief periods in the aftermath of recessions. But that argument no longer holds water. In 2023, according to the Congressional Budget Office, federal revenue will be 18.4 percent of GDP. That’s 1.2 percentage points above its 17.2 percent average in the thirty years from 1993 to 2022. And, more relevant to Furman’s and Summers’s argument, it’s over 2 percentage points above the 16 percent on which they grounded much of their argument. On the spending side in 2023, the CBO estimates, federal government outlays, which averaged 21.0 percent of GDP between 1993 and 2022, will be a whopping 24.2 percent of GDP. In short, the higher deficits are largely a result of spending increases, not tax cuts. This is from David R. Henderson, “To Tame Deficits, Cut Spending Growth,” Defining Ideas, August 3, 2023. An excerpt on taxes: The other practical problem with raising taxes is that overall federal tax revenues as a percent of GDP appear to be a political constant. Since the end of the Korean War in 1953, except during deep recessions, they have rarely dropped below 16 percent and have rarely increased beyond 19 percent of GDP. Indeed, when they do pierce the 19 percent ceiling, we get tax cuts, as with Ronald Reagan in 1981 and George W. Bush in 2001. It’s difficult to know why this is a political constant. My own view is that the majority of Americans still object to large government and they see taxes as the price of government. They really should see government spending as the main price of government, but they don’t see government spending on their pay stub. But we don’t necessarily need to know why this political constant exists to know that it does. So there’s a good case to be made that we are “stuck” with federal tax revenues being below 19 percent of GDP. Read the whole thing. (0 COMMENTS)

I rarely post something unrelated at all to economics. But I’m posting this. It’s a long article by David Samuels titled “The Obama Factor.” It ends with a long interview that Samuels does with historian David Garrow, who wrote a biography of Obama titled Rising Star. One thing to be aware of is that Samuels’s questions are in bold and Garrow’s answers aren’t. That confused me after a while because the questions, though typically interesting and informative, are often longer than the answers. There are so many excerpts to quote. I’ll settle for two. There is a fascinating passage in Rising Star, David Garrow’s comprehensive biography of Barack Obama’s early years, in which the historian examines Obama’s account in Dreams from My Father of his breakup with his longtime Chicago girlfriend, Sheila Miyoshi Jager. In Dreams, Obama describes a passionate disagreement following a play by African American playwright August Wilson, in which the young protagonist defends his incipient embrace of Black racial consciousness against his girlfriend’s white-identified liberal universalism. As readers, we know that the stakes of this decision would become more than simply personal: The Black American man that Obama wills into being in this scene would go on to marry a Black woman from the South Side of Chicago named Michelle Robinson and, after a meteoric rise, win election as the first Black president of the United States. Yet what Garrow documented, after tracking down and interviewing Sheila Miyoshi Jager, was an explosive fight over a very different subject. In Jager’s telling, the quarrel that ended the couple’s relationship was not about Obama’s self-identification as a Black man. And the impetus was not a play about the American Black experience, but an exhibit at Chicago’s Spertus Institute about the 1961 trial of Adolf Eichmann. Garrow in the interview: He [Obama] has no interest in building the Democratic Party as an institution. I think that’s obvious. And I don’t think he had any truly deep, meaningful policy commitments other than the need to feel and to be perceived as victorious, as triumphant. I’ve sometimes said to people that I think Barack is actually just as insecure as Trump, but in ways that are not readily perceived by the vast majority of people. I think that’s probably my most basic takeaway. But it does go back to Dreams [of My Father] being a work of fiction, that the absence of an actual personal story makes him need to compose one. For every time he says, “Oh, I spent years reading the history of the civil rights movement,” I know he read BTC [Bearing the Cross], but I don’t think he read much else. This is someone who … 98 percent of his reading has always been fiction, not history. There’s also a lot of good stuff I’m not allowed to quote because of Liberty Fund’s strictures on language. I’m not complaining; I think the strictures are good. I’m just reporting. This is one of the most interesting things I’ve read this year and the most interesting thing I’ve ever read about Obama. The stuff on Michelle is interesting too. A very close friend of mine told me a few years ago that the only president or ex-president alive today whom he would like to have a conversation with for more than an hour was Barack Obama. I told him that the set of presidents or ex-presidents I would like to talk to for that long was null. Read the whole thing. (0 COMMENTS)

The Economist has two interesting articles on the changing views of the right and left in America.  One article (entitled “Frenemies”) discusses their convergence on economic issues: Normally, you need read only the first six or seven words of a senator’s sentence to be able to correctly surmise his party. See if you can tell from the next 40 or so, an extract culled from a prominent senator’s recent book: “Today, neoliberalism is in. In the eyes of our elites, the spread and support of free trade should come before all other concerns—personal, political and geopolitical. In recent years this has led to a kind of ‘free-market fundamentalism’.” Suppose you were given a hint. The three proposed solutions for the neoliberal malaise are: “putting Wall Street in its place”, bringing “critical industries back to America” and resurrecting “an obligation to rebuild America’s workforce”. If you guessed a Democrat—perhaps even more cleverly Bernie Sanders writing in his recent work, “It’s ok to be Angry About Capitalism”—you would be wrong. It was in fact Marco Rubio, the Republican senator from Florida and one-time presidential contender, writing in his just-published book, “Decades of Decadence”. . . . The diagnoses from the new right and new left of what ails America are strikingly similar. Both sides agree that the old order that prized expertise, free markets and free trade—“neoliberalism”, usually invoked as a pejorative—was a rotten deal for America. Corporations were too immoral; elites too feckless; globalisation too costly; inequality too unchecked; the invisible hand too prone to error. Another article discusses the likely policies of a second Trump administration.  They point out that Trump’s 2016 win was a surprise, and he was forced to rely on mainstream Republican officials for policymaking.  According to The Economist, a second Trump term would be far different: Once a second Trump administration had bent the bureaucracy to its will, what policies would it pursue? The department-by-department plans being drawn up at AFPI, Heritage and elsewhere give some guidance. They involve some predictable fusillades in the culture wars, such as completing a wall along the border with Mexico and directing all federal officials to consider only people’s biological sex, rather than “self-identified” gender. But some of the putative policy agenda is both more sweeping in scope and more of a break with past Republican orthodoxy. One such area is the economy. The new right is enthusiastic about the kind of industrial policy the Biden administration has pursued. “No one in Ohio…cares that the Wall Street Journal editorial board doesn’t like the chips bill on free-market economic grounds,” J.D. Vance, a senator, recently told a gathering at American Compass, a think-tank, referring to a law subsidising semiconductor factories. In some cases Mr Trump’s supporters would go further: Mr Vance advocates taxing companies that shift work offshore. The same pattern is playing out in Europe, where far right parties are on the rise and are capturing the votes of blue collar workers that once voted socialist or communist.  In Europe, both political extremes now favor statist policies, but the right gains votes through its more aggressive cultural conservatism. In the not too distant future, politics in the Western world will become almost unrecognizable to those of us who came of age in the 20th century.   (0 COMMENTS)

  There’s a group of people who control what you are allowed to see–the news you read, the videos you watch, the posts you engage with. This is the opening sentence of Ben Shapiro, “Meet the Company Trying to Control Your Mind,” The Daily Signal, August 2, 2023. The whole thing is worth reading. This is a rare instance where the title is more accurate than the opening line. Shapiro makes a good case that a company called NewsGuard has inordinate influence on what ideas get spread and looked at. Indeed, one of my friends who’s managing editor of a site spent over 10 hours answering NewsGuard’s questions. NewsGuard even told him that his site should list the names of everyone who contributes $100 or more. He pointed out that NewsGuard received a high six-digit payment from the Pentagon but didn’t list the Pentagon as a finder.  Fortunately, my friend has refused to trim his site’s sails. Shapiro writes: NewsGuard is also working with others to use AI technology to enforce Brand Safety standards at scale, by identifying scalable hoaxes and misinformation in order to streamline blanket removal. This means that the news that you read, news that is supposed to be fair and objective or at least diverse, must adhere to GARM [Global Alliance for Responsible Media], the WEF [World Economic Forum], the WFA [World Federation of Advertisers], and their subjective and biased standards in order to be deemed monetizable. I think Shapiro is correct here. At the same time, he overstates. It’s not a matter of what you’re allowed to see; it’s a matter of what’s easy and convenient for you to see. I object to the “allow” language for two reasons. First, it’s inaccurate; you can, sometimes with a lot of effort and sometimes with little effort, find things that these groups don’t want you to see. Second, it’s demotivating; if Shapiro or others convince you that you can’t see certain things, you can see yourself at the effect of the world rather than a powerful person determined to make his or her own way in the world. Shapiro’s first sentence reminds me of something I wrote about some students who staged a walkout from Greg Mankiw’s economics class at Harvard. In “What Greg Mankiw’s Defenders Missed,” EconLog, November 9, 2011, I quoted this statement from one of the protestors: “As your class does not include primary sources and rarely features articles from academic journals, we have very little access to alternative approaches to economics.” I wrote: The only way they have “very little access to alternative approaches to economics” is if they don’t have the web and they don’t have libraries. Is Harvard lacking in those? I think not. That’s why I satirically led my post with: News Flash: Harvard Has no Access to the Web and No Libraries If you think you have zero power to choose, you will act as if you have zero power to choose. Don’t be that person.   (0 COMMENTS)

A Wall Street Journal headline of yesterday looks like a lesson in non-economics: “It’s Not Whether You Can Afford a Home on Lake Como—It’s Whether You Can Find One” (August 2, 2023). An economist, a financier, a merchant, and probably many ordinary businessmen would know that, if this real estate market is free to some extent, there is a price at which virtually any property around this northern Italy lake could be purchased, not only for $1 billion but probably for $50 million in not much less. Except if one has learned economics in Stalin’s Soviet Union, one cannot seriously think about the economy without factoring in prices, so central is their role. Indeed, the story itself mentions again and again prices at which properties change hands, both around the lake and in the vicinity. The author, freelance journalist Ruth Bloomfield, might save the WSJ‘s reputation—a few examples: In 2020, [Dina Branham] began negotiating the purchase of a roughly 1,000-square-foot, two-bedroom, one-bathroom condominium in a small, gated community with water views in the waterside town of Menaggio [see the featured image of this post]. It cost $254,000. … Unable to travel to Italy, she bought the property on the strength of photographs, videos and research on Google Earth. Homes on the water cost twice as much as other properties. Prime property sells at around $1,024 per square foot. For a waterfront home, prices are even higher. A 3,000-square-foot historic villa in picturesque Cernobbio with direct access to the lake would cost $11 million and up. Meanwhile … buyers willing to trek to the north end of Lake Como … could pick up a similar lakefront house for around $5.5 million. Some values or sentiments may have no price, but prices are the essence of markets. Even when sentiments and values are involved, prices are generally not absent: for example, we can meaningfully speak of the marriage market. As for the nuts and bolts with which we are concerned here, it is not because not all houses are on the market that no house can be purchased at any price. Headlines, of course, are meant to get the potential reader’s attention; the headline of my own post is an example. In my view, though, this should not be a reason for using false or misleading headlines. (0 COMMENTS)