I greatly enjoyed Russ Roberts’s masterful interview of Roya Hakakian and her story of immigrating from Iran to the United States when she was 19, and her appreciation of the United States. I also found an interesting a comment on the EconTalk site by Todd Mora. Hakakian stated: And, I think that’s a very important fundamental fact that almost everybody misses about immigrants and immigration: Nobody wants to leave their birthplaces voluntarily. Nobody wants to be forced out. Nobody wants to be transplanted out of not having another choice. I would bet that she’s right that no one wants to be forced out. But as Todd Mora pointed out, many people come here completely voluntarily. It doesn’t mean that they don’t miss where they came from. But many of us immigrants came here because we shared at least some of the values that Hakakian talks about. I was at a Hoover retreat about 8 years ago, listening to a speaker who decried the fact that many Americans who grow up here don’t learn in schools an appreciation of this society. He listed ways that we could fill that gap. I’ve forgotten what they were but I noticed one major omission. So I got up and said that as an immigrant, I picked up an appreciation of America by working. Afterwards someone came up to me and said, “Your English is so good; where do you come from?” “Canada,” I replied, and the person said words to the effect “Big deal; that doesn’t count.” In the next couple of hours 3 or 4 people came up and asked the same question, in some cases preceded by variations of “your English is so good,” and similarly showed disappointment at my answer. I had a chance to think through those reactions before it was my turn to give a talk in the afternoon. I decided to address it at the start. I told the audience about the reaction I got when I said I was from Canada and then I said, “Is coming from Canada not a big deal simply because I was able to read my deportation notice in my native language?” That deportation notice was the bad part of being an immigrant. But I saw so many good parts so quickly. Obviously, the differences between Iranian society and American society are huge compared to the differences between Canadian society and American society.  Nevertheless I noticed important differences right away. I’ll mention two. One is mixed, and the other is wholly positive. First, the mixed one. Americans respect authority less than Canadians do. That can be bad or good, depending on the kind of authority. I wrote about it at length on EconLog back in 2013 and, rather than repeat it here, I’ll refer you to my earlier post, “Respect for Authority: The Case of Canada.” Do read the comments also because they are unusually good, especially the one by “yet another David” that challenges my claim that Canadians respect government more than Americans do. Although right now, with Ontario’s Premier blocking the border with Manitoba on the west and Quebec on the east, and not letting people through unless they have one of a small list of reasons, I think the United States is winning. (I can only imagine what my Winnipeg friends, one couple in particular who love Minaki even more than I do, must be going through.) Now the wholly positive one. I noticed it within a week of arriving in Los Angeles in September 1973. Americans are much more likely to ask for what they want. Many of us Canadians grew up being told that it was wrong to ask for what we want or even to say “yes, I want it” when asked if we wanted it. One case stands out from when I lived in Canada and was visiting “the States.” My friend and mentor, Clancy Smith, and I were visiting his Aunt Harriett in Philadelphia. One day she made us wonderful hoagies for lunch. “Do you want a Coke with that?” she asked. “No, I’m fine with water,” I answered. Halfway through the delicious hoagie, I said, “A Coke sure would be nice right now.” “But I offered you one,” she said, “and you said no.” “I know,” I said. “Why did you say no?” she asked. “Because I was brought up to say no when people offered you something,” I answered. “That doesn’t make sense,” said Aunt Harriett. “It doesn’t, does it?” I said. I then enjoyed the Coke. But I didn’t change until I had lived here for a few months.         (0 COMMENTS)

To anyone with knowledge of public finance theory, reading media reports of capital gains taxation is almost painful. Here’s an example from Bloomberg: A group of economists recently argued in the Chicago Booth Review that the prevailing wisdom among scorekeepers that the revenue-maximizing rate is about 30% may be misplaced — and could allow for an even higher rate. A pair of Princeton University economists published research in December showing that hikes may raise “substantially more tax revenue” than scorekeepers currently believe and that the revenue-maximizing rate may be about 40% — almost exactly where Biden’s proposal falls. Economists and analysts have also made the case that cuts in capital gains rates have a negligible impact on investment decisions and economic growth. (Though, like much around capital gains, that debate isn’t entirely settled.) If capital gains taxes have almost no impact on behavior, then why isn’t the revenue-maximizing rate 100%?  And why does the revenue maximizing rate even matter?  I don’t know of any public finance model where the optimal tax rate is the revenue-maximizing rate. You also see the media discuss the “principle” that capital gains should be taxed the same as wage income.  That’s about as sensible as saying that “in principle”, a gallon of gasoline should pay the same tax as a gallon of Scotch whiskey.  Exactly what principle is that?  Capital gains income is nothing like wage income, indeed calling both “income” is nonsensical.  For instance, the real and nominal tax rate on wage income is identical, and the real and nominal tax rate on capital gains is very different.  So if it’s a matter of “principle”, then why should we set the nominal tax rates equal?  Why not equalize the real tax rates?  And if they are merely two forms of “income”, then why don’t we allow full deduction of capital losses from wage income? A wage tax essentially taxes current and future consumption at the same rate.  A capital gains tax taxes future consumption at a higher rate than current consumption.  What “principle” suggests that patient people should be taxed at higher rates than impatient people—even if they have the same lifetime wealth? There are reasonable arguments for capital gains taxes (related to catching people who evade wage taxation).  But you almost never see those arguments presented in the media. (3 COMMENTS)

When I criticize leaders great and small, critics often reply: “You’re so naive.  These leaders are under immense pressure to act as they do.  Even if what they’re doing is as bad as you say, they have no choice.”   Question: What exactly does it mean to say, “Leaders have no choice but to do X”?  Here are a few interpretations: 1. If leaders tried to do not-X, they would instantly lose their leadership position.  The leader’s only choice is to do X, or get fired and watch their replacement do X. 2. If leaders tried to do not-X on any major decision, they would soon lose their leadership position.  So while leaders have a wiggle room on details, they’re still tightly constrained. 3. If leaders tried to do not-X on many major decisions, they would have a markedly higher probability of prematurely losing their leadership position. 4. If leaders tried to do not-X on many major decisions, they would endure a lot of aggravating criticism.   If my critics mean #1, I say they’re obviously wrong.   Leaders almost never suddenly lose their job over a single “bad call.”  Crazed media scandals are the exception that proves the rule. If my critics mean #2, I still say they’re obviously wrong.  New leaders standardly make a large number of rather arbitrary changes.  When I talk to friends with office jobs, for example, they often tell me how a new boss suddenly rearranged the floor plan or telework policy because he happened to have an odd “management philosophy.”  And even when such decisions are plainly unpopular, these leaders usually hew to their eccentricities for years.  This is even more obvious for politicians, who hold their jobs with near-certainty until the next election no matter how unpopular their decisions are. If my critics mean #3, they might be right.  But this hardly shows that leaders “have no choice” but to continue whatever specific policy I’m criticizing.  Indeed, #3 means precisely the opposite.  Maybe the leader in question couldn’t do everything I want and retain power, but they can easily do the specific thing on my mind. Finally, if my critics mean #4, they’re definitely right.  But so what?  Plenty of people choose careers that practically guarantee a lifetime full of aggravating criticism.  Since they choose it, they undeniably “have a choice.”   Overall, then, it’s my critics who are naive.  In reality, leaders have considerable slack.  Many have immense slack.  Indeed, that’s the main reason why people want to be leaders!  It’s hard to quench your thirst for power when you can only exercise your “power” one way.   Where, though, do my critics go wrong?  While it’s tempting to say, “Non-leaders are tightly constrained, so they assume their leaders are, too,” this is a silly story.  Every rank-and-file worker has some slack, so the natural inference is that their leaders have some, too.  Probably more.  In any case, most of my critics are tenured professors, who infamously swim in a sea of slack.  At long as you half-heartedly teach 150 hours a year and keep your hands to yourself, you can do whatever you like.  For tenured professors to deny the existence of slack is like fish denying the existence of water. The better story comes from Mike Huemer’s Problem of Political Authority.  In chapter 6, “The Psychology of Authority,” Huemer argues that human beings have a pronounced tendency to justify even the least-justifiable actions of authorities.  Government is Stockholm Syndrome writ large.  Responding to “The leader is wrong to do X” with “The leader has no choice but to do X” is yet another desperate effort to pretend that bad leaders aren’t as bad as they seem.  The sad reality is that they’re even worse, for with great power comes great responsibility. Though perhaps the best story is that my critics confuse past selection with present constraints.  People in current leadership positions have plenty of slack.  To attain such a leadership position, however, you generally have to tow the line.  And in organizations prone to do evil, men and women of conscience do not tow the line.  The reason leaders of bad organization do so much evil is not that they couldn’t do good if they wanted to.  It’s that people who rise to the top of bad organizations are usually bad themselves.   (0 COMMENTS)

Author and poet Roya Hakakian talks about her latest book, A Beginner’s Guide to America: For the Immigrant and the Curious with EconTalk host Russ Roberts. Hakakian was born in Iran and came to the United States as a 19 year-old, not speaking any English, and carrying only the things she could stuff in her backpack. She tells […] The post Roya Hakakian on A Beginner’s Guide to America appeared first on Econlib.

Author and poet Roya Hakakian talks about her latest book, A Beginner’s Guide to America: For the Immigrant and the Curious with EconTalk host Russ Roberts. Hakakian was born in Iran and came to the United States as a 19 year-old, not speaking any English, and carrying only the things she could stuff in her backpack. She tells […] The post Roya Hakakian on A Beginner’s Guide to America appeared first on Econlib.

Author and poet Roya Hakakian talks about her latest book, A Beginner’s Guide to America: For the Immigrant and the Curious with EconTalk host Russ Roberts. Hakakian was born in Iran and came to the United States as a 19 year-old, not speaking any English, and carrying only the things she could stuff in her backpack. She tells […] The post Roya Hakakian on A Beginner’s Guide to America appeared first on Econlib.

I used to say, half-jokingly, that the ACLU reduced life and freedom to what happened between the waist and the knees. It is true, though, that the venerable association was defending free speech, so I should have said “between the upper lip and the knees.” They were also defending the 4th and 5th Amendments. That kept me a due-paying member for a number of years. The woke movement and its LGBTQ+ wing, which are in many ways the successors of the ACLU,  reduce life to what happens between the chest and the knees (due care being taken of the skin color). The delisting by Amazon of Ryan Anderson’s book When Harry Became Sally (Encounter Books, 2018) is revealing. As a private company, of course, Amazon has and should have the right to refuse to bake Anderson’s cake. Fortunately, more enlightened bookstores continue to sell the book. Anderson’s book is about the transgender ideology. It argues that gender is the social manifestation of sex, that drugs and surgery cannot change one’s biological sex, and that to encourage “transitioning” including among teenagers is an error paid by those who later regret it and try to “detransition.” It is a strange society where, often under the indoctrination of public-school programs, children can start changing their sex with puberty blockers and teenage girls can get mastectomies at 13, while they won’t have the right to buy cigarettes or vaping pens until they reach 21! (Besides Anderson’s book, see Johanna Olson-Kennedy et al., “Chest Reconstruction and Chest Dysphoria in Transmasculine Minors and Young Adults: Comparisons of Nonsurgical and Postsurgical Cohorts,” JAMA Pediatrics 172:5 [2018], notably the figure.) Anderson’s description of the transgender movement suggests an anti-scientific ideology not dissimilar to that of the public health movement in general. (See my “Public Health Models and Related Government Interventions: A Primer,” Reason Foundation, March 22, 2021.) Not surprisingly, Anderson has been attacked by woke activists, who have not shown more respect for the truth than expected. Amazon followed the woke reincarnation of Mrs. Grundy. Originally a fictional character in a 1798 play by Thomas Morton, Mrs. Grundy had a long literary career. In The Subjection of Women, John Stuart Mill makes her the censorious guardian of stifling social acceptability. Today, she can be recognized in the conformity, ignorance, and righteousness of the woke movement and its little red guards. I don’t agree with everything Anderson says or implies, but he does present serious and rational arguments that should be heard. An indication that the book is challenging for Mrs. Grundy is indeed that that it was delisted by Amazon. The company explained that they have chosen not to sell books that frame LGBTQ+ identity as a mental illness,” which is not really what Anderson claims. The whole episode illustrates the importance of understanding the difference between children and adults, heeding reality, combatting groupthink, and protecting free speech and free competition. It also shows the peril of a powerful movement that marshal the power of the government and its anti-discrimination laws. These observations are consistent with the economic way of thinking. Contrary to the woke bien-pensants, I would argue for the principle or presumption that governments should stay out of what adult individuals do with their own bodies, except if they used it to directly interfere with somebody else’s body and other property. As John Stuart Mill wrote in his book On Liberty (1859), “over himself, over his own body and mind, the individual is sovereign.” If an adult wants to modify his body at his own expense, he should of course be free to do so, and we should respect his decision. In that area, governments should neither ban nor subsidize. We are far, very far from that ideal. (0 COMMENTS)

Next week I’ll be the discussion leader at a colloquium on socialism. There are pro- and ant-socialist readings. One of the pro-socialist articles is by noted British socialist George Bernard Shaw. The article is his entry in The Encyclopedia Britannica, 13th ed., 1926 and is titled “Socialism: Principles and Outlook.” I always prepare discussion questions in advance. Here’s one on Shaw: Shaw writes that “the only real remedy” includes “compulsory national service in civil as in military life for all classes.” Does his proposal surprise you? Do you think he would have been happy if those who chose his form of service assigned him to be, say, a shepherd? In case you think his idea of compulsory service is a year or two when you’re young, no, that’s not it. He explains later in the page that compulsory national service “would deprive it [labor] of its right to strike.” So he has the long term in mind. (0 COMMENTS)

In the recent $1.9 trillion spending bill, Congress passed a measure to give monthly payments to parents with children. Although the measure will expire at the end of 2021, there are moves on both sides of the congressional aisle to implement a permanent child allowance. The amounts are not small. Under the current program that Congress passed, families will get a $3,600 annual tax credit for each child under age six and a $3,000 tax credit for children ages six to seventeen. Many congressional Democrats want to extend the program beyond the end of the year. And Republican Senator Mitt Romney, far from opposing such a program, has recently proposed a child allowance of $4,200 per year for a child under six and $3,000 a year for a child between ages six and seventeen. Child allowances are a bad idea. It’s wrong to forcibly take money from some and give to others simply because they have children. Moreover, child allowances would create increased dependence, are not targeted at the needy, could reduce the work effort of lower-income women, and would add to the already huge federal budget deficit and debt. Moreover, there are other ways of dealing with the legitimate concerns of those who favor a child allowance, ways that involve not more taxes and deficits but more deregulation, particularly in the areas of housing and immigration. This is the opening of latest Hoover article, “Child Tax Credits Feed Debt and Dependency,” Defining Ideas, April 23, 2021. Another excerpt: Another reason the Romney child allowance is wrong is that it’s not targeted at the needy. That lack of targeting is what makes the program so expensive. The Romney bill would grant full child allowances to single income tax filers with income up $200,000 a year and to joint (married) filers with income up to $400,000 a year. My wife is not, like me, a libertarian. Instead, she’s a normal person with a lot of common sense. When I told her that people with incomes that high would get federal subsidies, she said that was absurd. And because the subsidy phases out at a rate of $50 for every $1,000 in income above those limits, even families making $500,000 a year could get a partial child allowance. To put those numbers in perspective, in 2019, median household income was $68,703. If there is a case for per-child payments, the payments should be targeted on people with an income below the median and probably well below the median. Read the whole thing.   (1 COMMENTS)

Matt Yglesias has a post that discusses the history of zoning laws. He cites a study by Christopher Silver that shows how zoning was introduced as a way of preventing minorities from moving into white areas. Then he has this to say: The reason I’ve found myself recommending Silver’s piece is that the people I am trying to convince are generally ideologically motivated college-educated professionals. They instinctively dislike libertarian arguments and would hesitate to identify themselves as “pro-business.” They conceive of urban land use politics as pitting activists or regulators against developers and are disinclined to side with the developers. The “Racial Origins” story is, I think, a good way to try to create a permission structure for progressives to embrace a deregulatory cause. But the lever here is not mass opinion, but the internecine fights of the progressive nonprofit world. Free market policies are generally in the best interest of society.  Unfortunately, terms like ‘neoliberalism’ now have such a bad connotation that the policies need to be disguised in some way in order to make them palatable to the left.  As soon as someone points to the racial justice aspect of zoning reform, however, the right turns against the idea: One problem here is that elite politics exist on both sides. . . . Certainly on the housing front, the problem with Sameerah (one of the aforementioned YIMBY state legislators) framing his deregulatory proposal in racial justice terms is it got him denounced by a Daily Caller writer. Similarly, when Biden included an effort to reduce housing regulation in his American Jobs Plan, he got denounced by Stanley Kurtz in National Review. In both cases, you have right-of-center housing specialists saying that the Democratic proposal is directionally correct. Ed Glaeser, a Republican economist, critiqued Biden’s housing proposal on the sensible grounds that it’s not as strong as it should be. The problem is that the very same racial angles that help zoning reformers win intra-progressive arguments have the opposite impact on the right. I wish congressional Republicans would listen to Glaeser or my friends at the Mercatus Institute. But Tucker Carlson has come out swinging against zoning reform. During the 2020 campaign, Trump warned that zoning reform (once a Republican idea) would lead to undesirable people moving into nice suburban neighborhoods. This is where we end up when both sides of the political spectrum adopt identity politics. In this case I agree with the left. But I fear that presenting the zoning issue as one of racial justice will make it politically toxic. I wish I had a solution.  Martin Luther King’s vision of a colorblind society seems to be ever further in the distance. (0 COMMENTS)