The Butlerian Jihad is looking better all the time

Mar 24 JDN 2460395

A review of The Age of Em by Robin Hanson

In the Dune series, the Butlerian Jihad was a holy war against artificial intelligence that resulted in a millenias-long taboo against all forms of intelligent machines. It was effectively a way to tell a story about the distant future without basically everything being about robots or cyborgs.

After reading Robin Hanson’s book, I’m starting to think that maybe we should actually do it.

Thus it is written: “Thou shalt not make a machine in the likeness of a human mind.”

Hanson says he’s trying to reserve judgment and present objective predictions without evaluation, but it becomes very clear throughout that this is the future he wants, as well as—or perhaps even instead of—the world he expects.

In many ways, it feels like he has done his very best to imagine a world of true neoclassical rational agents in perfect competition, a sort of sandbox for the toys he’s always wanted to play with. Throughout he very much takes the approach of a neoclassical economist, making heroic assumptions and then following them to their logical conclusions, without ever seriously asking whether those assumptions actually make any sense.

To his credit, Hanson does not buy into the hype that AGI will be successful any day now. He predicts that we will achieve the ability to fully emulate human brains and thus create a sort of black-box AGI that behaves very much like a human within about 100 years. Given how the Blue Brain Project has progressed (much slower than its own hype machine told us it would—and let it be noted that I predicted this from the very beginning), I think this is a fairly plausible time estimate. He refers to a mind emulated in this way as an “em”; I have mixed feelings about the term, but I suppose we did need some word for that, and it certainly has conciseness on its side.

Hanson believes that a true understanding of artificial intelligence will only come later, and the sort of AGI that can be taken apart and reprogrammed for specific goals won’t exist for at least a century after that. Both of these sober, reasonable predictions are deeply refreshing in a field that’s been full of people saying “any day now” for the last fifty years.

But Hanson’s reasonableness just about ends there.

In The Age of Em, government is exactly as strong as Hanson needs it to be. Somehow it simultaneously ensures a low crime rate among a population that doubles every few months while also having no means of preventing that population growth. Somehow ensures that there is no labor collusion and corporations never break the law, but without imposing any regulations that might reduce efficiency in any way.

All of this begins to make more sense when you realize that Hanson’s true goal here is to imagine a world where neoclassical economics is actually true.

He realized it didn’t work on humans, so instead of giving up the theory, he gave up the humans.

Hanson predicts that ems will casually make short-term temporary copies of themselves called “spurs”, designed to perform a particular task and then get erased. I guess maybe he would, but I for one would not so cavalierly create another person and then make their existence dedicated to doing a single job before they die. The fact that I created this person, and they are very much like me, seem like reasons to care more about their well-being, not less! You’re asking me to enslave and murder my own child. (Honestly, the fact that Robin Hanson thinks ems will do this all the time says more about Robin Hanson than anything else.) Any remotely sane society of ems would ban the deletion of another em under any but the most extreme circumstances, and indeed treat it as tantamount to murder.

Hanson predicts that we will only copy the minds of a few hundred people. This is surely true at some point—the technology will take time to develop, and we’ll have to start somewhere. But I don’t see why we’d stop there, when we could continue to copy millions or billions of people; and his choices of who would be emulated, while not wildly implausible, are utterly terrifying.

He predicts that we’d emulate genius scientists and engineers; okay, fair enough, that seems right. I doubt that the benefits of doing so will be as high as many people imagine, because scientific progress actually depends a lot more on the combined efforts of millions of scientists than on rare sparks of brilliance by lone geniuses; but those people are definitely very smart, and having more of them around could be a good thing. I can also see people wanting to do this, and thus investing in making it happen.

He also predicts that we’d emulate billionaires. Now, as a prediction, I have to admit that this is actually fairly plausible; billionaires are precisely the sort of people who are rich enough to pay to be emulated and narcissistic enough to want to. But where Hanson really goes off the deep end here is that he sees this as a good thing. He seems to honestly believe that billionaires are so rich because they are so brilliant and productive. He thinks that a million copies of Elon Musks would produce a million hectobillionaires—when in reality it would produce a million squabbling narcissists, who at best had to split the same $200 billion wealth between them, and might very well end up with less because they squander it.

Hanson has a long section on trying to predict the personalities of ems. Frankly this could just have been dropped entirely; it adds almost nothing to the book, and the book is much too long. But the really striking thing to me about that section is what isn’t there. He goes through a long list of studies that found weak correlations between various personality traits like extroversion or openness and wealth—mostly comparing something like the 20th percentile to the 80th percentile—and then draws sweeping conclusions about what ems will be like, under the assumption that ems are all drawn from people in the 99.99999th percentile. (Yes, upper-middle-class people are, on average, more intelligent and more conscientious than lower-middle-class people. But do we even have any particular reason to think that the personalities of people who make $150,000 are relevant to understanding the behavior of people who make $15 billion?) But he completely glosses over the very strong correlations that specifically apply to people in that very top super-rich class: They’re almost all narcissists and/or psychopaths.

Hanson predicts a world where each em is copied many, many times—millions, billions, even trillions of times, and also in which the very richest ems are capable of buying parallel processing time that lets them accelerate their own thought processes to a million times faster than a normal human. (Is that even possible? Does consciousness work like that? Who knows!?) The world that Hanson is predicting is thus one where all the normal people get outnumbered and overpowered by psychopaths.

Basically this is the most abjectly dystopian cyberpunk hellscape imaginable. And he talks about it the whole time as if it were good.

It’s like he played the game Action Potential and thought, “This sounds great! I’d love to live there!” I mean, why wouldn’t you want to owe a life-debt on your own body and have to work 120-hour weeks for a trillion-dollar corporation just to make the payments on it?

Basically, Hanson doesn’t understand how wealth is actually acquired. He is educated as an economist, yet his understanding of capitalism basically amounts to believing in magic. He thinks that competitive markets just somehow perfectly automatically allocate wealth to whoever is most productive, and thus concludes that whoever is wealthy now must just be that productive.

I can see no other way to explain his wildly implausible predictions that the em economy will double every month or two. A huge swath of the book depends upon this assumption, but he waits until halfway through the book to even try to defend it, and then does an astonishingly bad job of doing so. (Honestly, even if you buy his own arguments—which I don’t—they seem to predict that population would grow with Moore’s Law—doubling every couple of years, not every couple of months.)

Whereas Keynes predicted based on sound economic principles that economic growth would more or less proceed apace and got his answer spot-on, Hanson predicts that for mysterious, unexplained reasons economic growth will suddenly increase by two orders of magnitude—and I’m pretty sure he’s going to be wildly wrong.

Hanson also predicts that ems will be on average poorer than we are, based on some sort of perfect-competition argument that doesn’t actually seem to mesh at all with his predictions of spectacularly rapid economic and technological growth. I think the best way to make sense of this is to assume that it means the trend toward insecure affluence will continue: Ems will have an objectively high standard of living in terms of what they own, what games they play, where they travel, and what they eat and drink (in simulation), but they will constantly be struggling to keep up with the rent on their homes—or even their own bodies. This is a world where (the very finest simulation of) Dom Perignon is $7 a bottle and wages are $980 an hour—but monthly rent is $284,000.

Early in the book Hanson argues that this life of poverty and scarcity will lead to more conservative values, on the grounds that people who are poorer now seem to be more conservative, and this has something to do with farmers versus foragers. Hanson’s explanation of all this is baffling; I will quote it at length, just so it’s clear I’m not misrepresenting it:

The other main (and independent) axis of value variation ranges between poor and rich societies. Poor societies place more value on conformity, security, and traditional values such as marriage, heterosexuality, religion, patriotism, hard work, and trust in authority. In contrast, rich societies place more value on individualism, self-direction, tolerance, pleasure, nature, leisure, and trust. When the values of individuals within a society vary on the same axis, we call this a left/liberal (rich) versus right/conservative (poor) axis.

Foragers tend to have values more like those of rich/liberal people today, while subsistence farmers tend to have values more like those of poor/conservative people today. As industry has made us richer, we have on average moved from conservative/farmer values to liberal/forager values. This value movement can make sense if cultural evolution used the social pressures farmers faced, such as conformity and religion, to induce humans, who evolved to find forager behaviors natural, to instead act like farmers. As we become rich, we don’t as strongly fear the threats behind these social pressures. This connection may result in part from disease; rich people are healthier, and healthier societies fear less.

The alternate theory that we have instead learned that rich forager values are more true predicts that values should have followed a random walk over time, and be mostly common across space. It also predicts the variance of value changes tracking the rate at which relevant information appears. But in fact industrial-era value changes have tracked the wealth of each society in much more steady and consistent fashion. And on this theory, why did foragers ever acquire farmer values?

[…]

In the scenario described in this book, many strange-to-forager behaviors are required, and median per-person (i.e. per-em) incomes return to near-subsistence levels. This suggests that the em era may reverse the recent forager-like trend toward more liberality; ems may have more farmer-like values.

The Age of Em, p. 26-27

There’s a lot to unpack here, but maybe it’s better to burn the whole suitcase.

First of all, it’s not entirely clear that this is really a single axis of variation, that foragers and farmers differ from each other in the same way as liberals and conservatives. There’s some truth to that at least—both foragers and liberals tend to be more generous, both farmers and conservatives tend to enforce stricter gender norms. But there are also clear ways that liberal values radically deviate from forager values: Forager societies are extremely xenophobic, and typically very hostile to innovation, inequality, or any attempts at self-aggrandizement (a phenomenon called “fierce egalitarianism“). San Francisco epitomizes rich, liberal values, but it would be utterly alien and probably regarded as evil by anyone from the Yanomamo.

Second, there is absolutely no reason to predict any kind of random walk. That’s just nonsense. Would you predict that scientific knowledge is a random walk, with each new era’s knowledge just a random deviation from the last’s? Maybe next century we’ll return to geocentrism, or phrenology will be back in vogue? On the theory that liberal values (or at least some liberal values) are objectively correct, we would expect them to advance as knowledge doesimproving over time, and improving faster in places that have better institutions for research, education, and free expression. And indeed, this is precisely the pattern we have observed. (Those places are also richer, but that isn’t terribly surprising either!)

Third, while poorer regions are indeed more conservative, poorer people within a region actually tend to be more liberal. Nigeria is poorer and more conservative than Norway, and Mississippi is poorer and more conservative than Massachusetts. But higher-income households in the United States are more likely to vote Republican. I think this is particularly true of people living under insecure affluence: We see the abundance of wealth around us, and don’t understand why we can’t learn to share it better. We’re tired of fighting over scraps while the billionaires claim more and more. Millennials and Zoomers absolutely epitomize insecure affluence, and we also absolutely epitomize liberalism. So, if indeed ems live a life of insecure affluence, we should expect them to be like Zoomers: “Trans liberation now!” and “Eat the rich!” (Or should I say, “Delete the rich!”)

And really, doesn’t that make more sense? Isn’t that the trend our society has been on, for at least the last century? We’ve been moving toward more and more acceptance of women and minorities, more and more deviation from norms, more and more concern for individual rights and autonomy, more and more resistance to authority and inequality.

The funny thing is, that world sounds a lot better than the one Hanson is predicting.

A world of left-wing ems would probably run things a lot better than Hanson imagines: Instead of copying the same hundred psychopaths over and over until we fill the planet, have no room for anything else, and all struggle to make enough money just to stay alive, we could moderate our population to a more sustainable level, preserve diversity and individuality, and work toward living in greater harmony with each other and the natural world. We could take this economic and technological abundance and share it and enjoy it, instead of killing ourselves and each other to make more of it for no apparent reason.

The one good argument Hanson makes here is expressed in a single sentence: “And on this theory, why did foragers ever acquire farmer values?” That actually is a good question; why did we give up on leisure and egalitarianism when we transitioned from foraging to agriculture?

I think scarcity probably is relevant here: As food became scarcer, maybe because of climate change, people were forced into an agricultural lifestyle just to have enough to eat. Early agricultural societies were also typically authoritarian and violent. Under those conditions, people couldn’t be so generous and open-minded; they were surrounded by threats and on the verge of starvation.

I guess if Hanson is right that the em world is also one of poverty and insecurity, we might go back to those sort of values, borne of desperation. But I don’t see any reason to think we’d give up all of our liberal values. I would predict that ems will still be feminist, for instance; in fact, Hanson himself admits that since VR avatars would let us change gender presentation at will, gender would almost certainly become more fluid in a world of ems. Far from valuing heterosexuality more highly (as conservatives do, a “farmer value” according to Hanson), I suspect that ems will have no further use for that construct, because reproduction will be done by manufacturing, not sex, and it’ll be so easy to swap your body into a different one that hardly anyone will even keep the same gender their whole life. They’ll think it’s quaint that we used to identify so strongly with our own animal sexual dimorphism.

But maybe it is true that the scarcity induced by a hyper-competitive em world would make people more selfish, less generous, less trusting, more obsessed with work. Then let’s not do that! We don’t have to build that world! This isn’t a foregone conclusion!

There are many other paths yet available to us.

Indeed, perhaps the simplest would be to just ban artificial intelligence, at least until we can get a better handle on what we’re doing—and perhaps until we can institute the kind of radical economic changes necessary to wrest control of the world away from the handful of psychopaths currently trying their best to run it into the ground.

I admit, it would kind of suck to not get any of the benefits of AI, like self-driving cars, safer airplanes, faster medical research, more efficient industry, and better video games. It would especially suck if we did go full-on Butlerian Jihad and ban anything more complicated than a pocket calculator. (Our lifestyle might have to go back to what it was in—gasp! The 1950s!)

But I don’t think it would suck nearly as much as the world Robin Hanson thinks is in store for us if we continue on our current path.

So I certainly hope he’s wrong about all this.

Fortunately, I think he probably is.

How to pack the court

Jul 10 JDN 2459790

By now you have no doubt heard the news that Roe v. Wade was overturned. The New York Times has an annotated version of the full opinion.

My own views on abortion are like those of about 2/3 of Americans: More nuanced than can be neatly expressed by ‘pro-choice’ or ‘pro-life’, much more comfortable with first-trimester abortion (which is what 90% of abortions are, by the way) than later, and opposed to overturning Roe v. Wade in its entirety. I also find great appeal in Clinton’s motto on the issue: “safe, legal, and rare”.Several years ago I moderated an online discussion group that reached what we called the Twelve Week Compromise: Abortion would be legal for any reason up to 12 weeks of pregnancy, after which it would only be legal for extenuating circumstances including rape, incest, fetal nonviability, and severe health risk to the mother. This would render the vast majority of abortions legal without simply saying that it should be permitted without question. Roe v. Wade was actually slightly more permissive than this, but it was itself a very sound compromise.

But even if you didn’t like Roe v. Wade, you should be outraged at the manner in which it was overturned. If the Supreme Court can simply change its mind on rights that have been established for nearly 50 years, then none of our rights are safe. And in chilling comments, Clarence Thomas has declared that this is his precise intention: “In future cases, we should reconsider all of this Court’s substantive due process precedents, including Griswold, Lawrence, and Obergefell.” That is to say, Thomas wants to remove our rights to use contraception and have same-sex relationships. (If Lawrence were overturned, sodomy could be criminalized in several states!)

The good news here is that even the other conservative justices seem much less inclined to overturn these other precedents. Kavanaugh’s concurrent opinion explicitly states he has no intention of overturning “Griswold v. Connecticut, 381 U. S. 479 (1965); Eisenstadt v. Baird, 405 U. S. 438 (1972); Loving v. Virginia, 388 U. S. 1 (1967); and Obergefell v. Hodges, 576 U. S. 644 (2015)”. It seems quite notable that Thomas did not mention Loving v. Virginia, seeing as it was made around the same time as Roe v. Wade, based on very similar principles—and it affects him personally. And even if these precedents are unlikely to be overturned immediately, this ruling shows that the security of all of our rights can depend on the particular inclinations of individual justices.

The Supreme Court is honestly a terrible institution. Courts should not be more powerful than legislatures, lifetime appointments reek of monarchism, and the claim of being ‘apolitical’ that was dubious from the start is now obviously ludicrous. But precisely because it is so powerful, reforming it will be extremely difficult.

The first step is to pack the court. The question is no longer whether we should pack the court, but how, and why we didn’t do it sooner.

What does it mean to pack the court? Increase the number of justices, appointing new ones who are better than the current ones. (Since almost any randomly-selected American would be better than Clarence Thomas, Samuel Alito, or Brent Kavanaugh, this wouldn’t be hard.) This is 100% Constitutional, as the Constitution does not in any way restrict the number of justices. It can simply be done by an act of Congress.

But of course we can’t stop there. President Biden could appoint four more justices, and then whoever comes after him could appoint another three, and before we know it the Supreme Court has twenty-seven justices and each new President is expected to add a few more.

No, we need to fix the number of justices so that it can’t be increased any further. Ideally this would be done by Constitutional Amendment, though the odds of getting such a thing passed seem rather slim. But there is in fact a sensible way to add new justices now and then justify not adding any more later, and that is to tie justices to federal circuits.

There are currently 13 US federal circuit courts. If we added 4 more Supreme Court justices, there would be 13 Supreme Court justices. Each could even be assigned to be the nominal head of that federal circuit, and responsible for being the first to read appeals coming from that circuit.

Which justice goes where? Well, what if we let the circuits themselves choose? The selection could be made by a popular vote among the people who live there. Make the federal circuit a federal popular vote. The justice responsible for the federal circuit can also be the Chief Justice.

That would also require a Constitutional Amendment, but it would, at a stroke, fundamentally reform what the Supreme Court is and how its justices are chosen. For now, we could simply add three new justices, making the current number 13. Then they could decide amongst themselves who will get what circuit until we implement the full system to let circuits choose their justices.

I’m well aware that electing judges is problematic—but at this point I don’t think we have a choice. (I would also prefer to re-arrange the circuits: it’s weird that DC gets its own circuit instead of being part of circuit 4, and circuit 9 has way more people than circuit 1.) We can’t simply trust each new President to appoint a new justice whenever one happens to retire or die and then leave that justice in place for decades to come. Not in a world where someone like Donald Trump can be elected President.

A lot of centrist people are uncomfortable with such a move, seeing it as ‘playing dirty’. But it’s not. It’s playing hardball—taking seriously the threat that the current Republican Party poses to the future of American government and society, and taking substantive steps to fight that threat. (After its authoritarian shift that started in the mid 2000s but really took off under Trump, the Republican Party now has more in common with far-right extremist parties like Fidesz in Hungary than with mainstream center-right parties like the Tories.) But there is absolutely nothing un-Constitutional about this plan. It’s doing everything possible within the law.

We should have done this before they started overturning landmark precedents. But it’s not too late to do it before they overturn any more.

Trump is finally being impeached

Post 310 Oct 6 JDN 2458763

Given that there have been efforts to impeach Trump since before he took office (which is totally unprecedented, by the way; while several others have committed crimes and been impeached while in office, no other US President has gone into office with widespread suspicion of mass criminal activity), it seems odd that it has taken this long to finally actually start formal impeachment hearings.

Why did it take so long? We needed two things to happen: One, absolutely overwhelming evidence of absolutely flagrant crimes, and two, a Democratic majority in the House of Representatives.

This is how divided America has become. If the Republicans were really a mainstream center-right party as they purport to be, they would have supported impeachment just as much as the Democrats, we would have impeached Trump in 2017, and he would have been removed from office by 2018. But in fact they are nothing of the sort. The Republicans no longer believe in democracy. The Democrats are a mainstream center-right party, and the Republicans are far-right White-nationalist crypto-fascists (and less ‘crypto-‘ all the time). After seeing how they reacted to his tax evasion, foreign bribes, national security leaks, human rights violations, obstruction of justice, and overall ubiquitous corruption and incompetence, by this point it’s clear that there is almost nothing that Trump could do which would make either the voter base or the politicians of the Republican Party turn against him—he may literally be correct that he could commit a murder in broad daylight on Fifth Avenue. Maybe if he raised taxes on billionaires or expressed support for Roe v. Wade they would finally revolt.

Even as it stands, there is good reason to fear that the Republican-majority Senate will not confirm the impeachment and remove Trump from office. The political fallout from such a failed impeachment is highly uncertain. So far, markets are taking it in stride; it may even turn out to be good for the economy. (Then again, a good economy may be good for Trump in 2020!) But at this point the evidence is so damning that if we don’t impeach now, we may never impeach again; if this isn’t enough, nothing is. (The Washington Examiner said that months ago, and may already have been right; but the case is even stronger now.)

So, the most likely scenario is that the impeachment goes through the House, but fails in the Senate. The good news is that if the Republicans do block the impeachment, they’ll be publicly admitting that even charges this serious and this substantiated mean nothing to them. Anyone watching who is still on the fence about them will see how corrupt they have become.

After that, this is probably what will happen: The impeachment will be big news for a month or two, then be largely ignored. Trump will probably try to make himself a martyr, talking even louder about ‘witch hunts’. He will lose popularity with a few voters, but his base will continue to support him through thick and thin. (Astonishingly, almost nothing really seems to move his overall approval rating.) The economy will be largely unaffected, or maybe slightly improve. And then we’ll find out in the 2020 election whether the Democrats can mobilize enough opposition to Trump, and—just as importantly—enough support for whoever wins the primaries, to actually win this time around.

If by some miracle enough Republicans find a moral conscience and vote to remove Trump from office, this means that until 2020 we will have President Mike Pence. In a sane world, that in itself would sound like a worst-case scenario; he’s basically a less-sleazy Ted Cruz. He is misogynistic, homophobic, and fanatically religious. He is also a partisan ideologue who toes the party line on basically every issue. Some have even argued that Pence is worse than Trump, because he represents the same ideology but with more subtlety and competence.

But subtlety and competence are important. Indeed, I would much rather have an intelligent, rational, competent ideologue managing our government, leading our military, and controlling our nuclear launch codes than an idiotic, narcissistic, impulsive one. Pence at least can be trusted to be consistent in his actions and diplomatic in his words—two things which Trump has absolutely never been.

Indeed, Pence’s ideological consistency has benefits; unlike Trump, he reliably supports free trade and his fiscal conservatism actually seems genuine for once. Consistency in itself has value: Life is much easier, and the economy is much stronger, when the rules of the game remain the same rather than randomly lurching from one extreme to another.

Pence is also not the pathological liar that Trump is. Yes, Pence has lied many times (only 22% of his statements were evaluated by PolitiFact as “Mostly True” or “True”, and 30% were “False” or “Pants on Fire”). But Trump lies constantly. A mere 14% of Trump’s statements were evaluated by Trump as “Mostly True” or “True”, while 48% were “False” or “Pants on Fire”. For Bernie Sanders, 49% were “Mostly True” or better, and only 11% were “False”, with no “Pants on Fire” at all; for Hillary Clinton, 49% were “Mostly True” or better, and only 10% were “False”, with 3% “Pants on Fire”. People have tried to keep running tallies of Trump’s lies, but it’s a tall order: The Washington Post records over 12,000 lies since he took office less than three years ago. Four thousand lies a year. More than ten every single day. Most people commit lies of omission or say ‘white lies’ several times per day (depending on who you ask, I’ve seen everything from an average of 2 times per day to an average of 100 times per day), but that’s not what we’re talking about here. These are consequential, outright statements of fact that aren’t true. And these are not literally everything he has said that wasn’t true; they are only public lies with relevance to policy or his own personal record. Indeed, Trump lies recklessly, stupidly, pointlessly, nonsensically. He seems like a pathological liar, or someone with dementia who is confabulating to try to fill gaps in his memory. (Indeed, a lot of his behavior is consistent with dementia, and similar to how Reagan acted in the early days of his Alzheimer’s.) At least if Pence takes office, we’ll be able to believe some of what he says.

Of course, Pence won’t be much better on some of the most important issues, such as climate change. When asked how important he thinks climate change is and what should be done about it, Pence always gives mealy-mouthed, evasive responses—but at least he doesn’t make up stories about windmills getting special permits to kill endangered birds.

I admit, choosing Pence over Trump feels like choosing to get shot in the leg instead of the face—but that’s really not a difficult choice, is it?

No, this isn’t like Watergate. It’s worse.

May 21, JDN 2457895

Make no mistake: This a historic moment. This may be the greatest corruption scandal in the history of the United States. Donald Trump has fired the director of the FBI in order to block an investigation—and he said so himself.

It has become cliche to compare scandals to Watergate—to the point where we even stick the suffix “-gate” on things to indicate scandals. “Gamergate”, “Climategate”, and so on. So any comparison to Watergate is bound to draw some raised eyebrows.

But just as it’s not Godwin’s Law when you’re really talking about fascism and genocide, it’s not the “-gate” cliche when we are talking about a corruption scandal that goes all the way up to the President of the United States. And The Atlantic is right: this isn’t Watergate; it’s worse.

First of all, let’s talk about the crime of which Trump is accused. Nixon was accused of orchestrating burglary and fraud. These are not minor offenses, to be sure. But they are ordinary criminal offenses, felonies at worst. Trump is accused of fundamental Constitutional violations (particularly the First Amendment and the Emoluments Clause), and above all, Trump is accused of treason. This is the highest crime recognized by the Constitution of the United States. It is the only crime with a specifically listed Constitutional punishment—and that punishment is execution.

Donald Trump is being investigated not for stealing something or concealing information, but for colluding with foreign powers in the attempt to undermine American democracy. Is he guilty? I don’t know; that’s why we’re investigating. But let me say this: If he isn’t guilty of something, it’s quite baffling that he would fight so hard to stop the investigation.

Speaking of which: Trump’s intervention to stop Comey is much more direct, and much more sudden, than anything Nixon did to stop the Watergate investigations. Nixon of course tried to stonewall the investigations, but he did so subtly, cautiously, always trying to at least appear like he valued due process and rule of law. Trump made no such efforts, openly threatening Comey personally on Twitter and publicly declaring on national television that he had fired him to block the investigation.

But perhaps what makes the Trump-Comey affair most terrifying is how the supposedly “mainstream” Republican Party has reacted. The Republicans of Nixon had some honor left in them; several resigned rather than follow Nixon’s illegal orders, and dozens of Republicans in Congress supported the investigations and called for Nixon’s impeachment. Apparently that honor is gone now, as GOP leaders like Mitch McConnell and Lindsey Graham have expressed support for the President’s corrupt and illegal actions citing no principle other than party loyalty. If we needed any more proof that the Republican Party of the United States is no longer a mainstream political party, this is it. They don’t believe in democracy or rule of law anymore. They believe in winning at any cost, loyalty at any price. They have become a radical far-right organization—indeed, if they continue down this road of supporting the President in undermining the freedom of the press and consolidating his own power, I think it is fair to call them literally neo-fascist.

We are about to see whether American institutions can withstand such an onslaught, whether liberty and justice can prevail against corruption and tyranny. So far, there have been reasons to be optimistic: In particular, the judicial branch has proudly and bravely held the line, blocking Trump’s travel ban (multiple times), resisting his order to undermine sanctuary cities, and standing up to direct criticisms and even threats from the President himself. Our system of checks and balances is being challenged, but so far it is holding up against that challenge. We will find out soon enough whether the American system truly is robust enough to survive.

“Polarization” is not symmetric

I titled the previous post using the word “polarization”, because that’s the simplest word we have for this phenomenon; but its connotations really aren’t right. “Polarization” suggests that both sides have gotten more extreme, and as a result they are now more fiercely in conflict. In fact what has happened is that Democrats have more or less stayed where they were, while Republicans have veered off into insane far-right crypto-fascist crazyland.

If you don’t believe my graph from ThinkProgress, take it from The Washington Post.

Even when pollsters try to spin it so that maybe the Democrats have also polarized, the dimensions upon which Democrats have gotten “more extreme” are not being bigoted toward women, racial minorities, immigrants, and gay people. So while the Republicans have in fact gotten more extreme, Democrats have simply gotten less bigoted.

Yes, I suppose you can technically say that this means we’ve gotten “more extremely liberal on social issues”; but we live in a world in which “liberal on social issues” means “you don’t hate and oppress people based on who they are”. Democrats did not take on some crazy far-left social view like, I don’t know, legalizing marriage between humans and dogs. They just stopped being quite so racist, sexist, and homophobic.

It’s on issues where there is no obvious moral imperative that it makes sense to talk about whether someone has become more extreme to the left or the right.

Many economic issues are of this character; one could certainly go too far left economically if one were to talk about nationalizing the auto industry (because it worked so well in East Germany!) or repossessing and redistributing all farmland (what could possibly go wrong?). But Bernie Sanders’ “radical socialism” sounds a lot like FDR’s New Deal—which worked quite well, and is largely responsible for the rise of the American middle class.

Meanwhile, Donald Trump’s economic policy proposals (if you can even call them that) are so radical and so ad hoc that they would turn back the clock on decades of economic development and international trade. He wants to wage a trade war with China that would throw the US into recession and send millions of people in China back into poverty. And that’s not even including the human rights violations required to implement the 11 million deportations of immigrants that Trump has been clamoring for since day one.

Or how about national defense? There is room for reasonable disagreement here, and there definitely is a vein of naive leftist pacifism that tells us to simply stay out of it when other countries are invaded by terrorists or commit genocide.

FDR’s view on national defense can be found in his “Day of Infamy” speech after Pearl Harbor

The attack yesterday on the Hawaiian Islands has caused severe damage to American naval and military forces. I regret to tell you that very many American lives have been lost. In addition, American ships have been reported torpedoed on the high seas between San Francisco and Honolulu.

Yesterday the Japanese Government also launched an attack against Malaya.
Last night Japanese forces attacked Hong Kong.
Last night Japanese forces attacked Guam.
Last night Japanese forces attacked the Philippine Islands.
Last night the Japanese attacked Wake Island.
And this morning the Japanese attacked Midway Island.

Japan has therefore undertaken a surprise offensive extending throughout the Pacific area. The facts of yesterday and today speak for themselves. The people of the United States have already formed their opinions and well understand the implications to the very life and safety of our nation.

As Commander-in-Chief of the Army and Navy I have directed that all measures be taken for our defense, that always will our whole nation remember the character of the onslaught against us.

No matter how long it may take us to overcome this premeditated invasion, the American people, in their righteous might, will win through to absolute victory.

When Hillary Clinton lived through a similar event—9/11—this was her response:

We will also stand united behind our President as he and his advisors plan the necessary actions to demonstrate America’s resolve and commitment. Not only to seek out an exact punishment on the perpetrators, but to make very clear that not only those who harbor terrorists, but those who in any way aid or comfort them whatsoever will now face the wrath of our country. And I hope that that message has gotten through to everywhere it needs to be heard. You are either with America in our time of need or you are not.

We also stand united behind our resolve — as this resolution so clearly states — to recover and rebuild in the aftermath of these tragic acts. You know, New York was not an accidental choice for these madmen, these terrorists, and these instruments of evil. They deliberately chose to strike at a city, which is a global city — it is the city of the Twenty First century, it epitomizes who we are as Americans. And so this in a very real sense was an attack on America, on our values, on our power, and on who we are as a people. And I know — because I know America — that America will stand behind New York. That America will offer whatever resources, aid, comfort, support that New Yorkers and New York require. Because the greatest rebuke we can offer to those who attack our way of life is to demonstrate clearly that we are not cowed in any way whatsoever.

Sounds pretty similar to me.

Now, compare Eisenhower’s statements on the military to Ted Cruz’s.

First Eisenhower, his famous “Cross of Iron” speech

The best would be this: a life of perpetual fear and tension; a burden of arms draining the wealth and the labor of all peoples; a wasting of strength that defies the American system or the Soviet system or any system to achieve true abundance and happiness for the peoples of this earth.

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.

This world in arms in not spending money alone.

It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children.

The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities.

It is two electric power plants, each serving a town of 60,000 population.

It is two fine, fully equipped hospitals.

It is some 50 miles of concrete highway.

We pay for a single fighter with a half million bushels of wheat.

We pay for a single destroyer with new homes that could have housed more than 8,000 people.

This, I repeat, is the best way of life to be found on the road the world has been taking.

This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.

That is the most brilliant exposition of the opportunity cost of military spending I’ve ever heard. Let me remind you that Eisenhower was a Republican and a five-star general (we don’t even have those anymore; we stop at four stars except in major wars). He was not a naive pacifist, but a soldier who understood the real cost of war.

Now, Ted Cruz, in his political campaign videos:

Instead we will have a President who will make clear we will utterly destroy ISIS.We will carpet bomb them into oblivion. I don’t know if sand can glow in the dark, but we’re gonna find out. And we’re gonna make abundantly clear to any militant on the face of the planet, that if you go and join ISIS, if you wage jihad and declare war on America, you are signing your death warrant.

 

Under President Obama and Secretary Clinton the world is more dangerous, and America is less safe. If I’m elected to serve as commander-in-chief, we won’t cower in the face of evil. America will lead. We will rebuild our military, we will kill the terrorists, and every Islamic militant will know, if you wage jihad against us, you’re signing your death warrant.
And under no circumstances will I ever apologize for America.

In later debates Cruz tried to soften this a bit, but it ended up making him sound like he doesn’t understand what words mean. He tried to redefine “carpet bombing” to mean “precision missile strikes” (but of course, precision missile strikes are what we’re already doing). He tried to walk back the “sand can glow in the dark” line, but it’s pretty clear that the only way that line makes sense is if you intend to deploy nuclear weapons. (I’m pretty sure he didn’t mean bioluminescent phytoplankton.) He gave a speech declaring his desire to commit mass murder, and is now trying to Humpty Dumpty his way out of the outrage it provoked.

This is how far the Republican Party has fallen.

Medicaid expansion and the human cost of political polarization

JDN 2457422

As of this writing, there are still 22 of our 50 US states that have refused to expand Medicaid under the Affordable Care Act. Several other states (including Michigan) expanded Medicaid, but on an intentionally slowed timetable. The way the law was written, these people are not eligible for subsidized private insurance (because it was assumed they’d be on Medicaid!), so there are almost 3 million people without health insurance because of the refused expansions.

Why? Would expanding Medicaid on the original timetable be too arduous to accomplish? If so, explain why 13 states managed to do it on time.

Would expanding Medicaid be expensive, and put a strain on state budgets? No, the federal government will pay 90% of the cost until 2020. Some states claim that even the 10% is unbearable, but when you figure in the reduced strain on emergency rooms and public health, expanding Medicaid would most likely save state money, especially with the 90% federal funding.

To really understand why so many states are digging in their heels, I’ve made you a little table. It includes three pieces of information about each state: The first column is whether it accepted Medicaid immediately (“Yes”), accepted it with delays or conditions, or hasn’t officially accepted it yet but is negotiating to do so (“Maybe”), or refused it completely (“No”). The second column is the political party of the state governor. The third column is the majority political party of the state legislatures (“D” for Democrat, “R” for Republican, “I” for Independent, or “M” for mixed if one house has one majority and the other house has the other).

State Medicaid? Governor Legislature
Alabama No R R
Alaska Maybe I R
Arizona Yes R R
Arkansas Maybe R R
California Yes D D
Colorado Yes D M
Connecticut Yes D D
Delaware Yes D D
Florida No R R
Georgia No R R
Hawaii Yes D D
Idaho No R R
Illinois Yes R D
Indiana Maybe R R
Iowa Maybe R M
Kansas No R R
Kentucky Yes R M
Lousiana Maybe D R
Maine No R M
Maryland Yes R D
Massachusetts Yes R D
Michigan Maybe R R
Minnesota No D M
Mississippi No R R
Missouri No D M
Montana Maybe D M
Nebraska No R R
Nevada Yes R R
New Hampshire Maybe D R
New Jersey Yes R D
New Mexico Yes R M
New York Yes D D
North Carolina No R R
North Dakota Yes R R
Ohio Yes R R
Oklahoma No R R
Oregon Yes D D
Pennsylvania Maybe D R
Rhode Island Yes D D
South Carolina No R R
South Dakota Maybe R R
Tennessee No R R
Texas No R R
Utah No R R
Vermont Yes D D
Virginia Maybe D R
Washington Yes D D
West Virginia Yes D R
Wisconsin No R R
Wyoming Maybe R R

I have taken the liberty of some color-coding.

The states highlighted in red are states that refused the Medicaid expansion which have Republican governors and Republican majorities in both legislatures; that’s Alabama, Florida, Georgia, Idaho, Kansas, Mississippi, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah, and Wisconsin.

The states highlighted in purple are states that refused the Medicaid expansion which have mixed party representation between Democrats and Republicans; that’s Maine, Minnesota, and Missouri.

And I would have highlighted in blue the states that refused the Medicaid expansion which have Democrat governors and Democrat majorities in both legislatures—but there aren’t any.

There were Republican-led states which said “Yes” (Arizona, Nevada, North Dakota, and Ohio). There were Republican-led states which said “Maybe” (Arkansas, Indiana, Michigan, South Dakota, and Wyoming).

Mixed states were across the board, some saying “Yes” (Colorado, Illinois, Kentucky, Maryland, Massachusetts, New Jersey, New Mexico, and West Virginia), some saying “Maybe” (Alaska, Iowa, Lousiana, Montana, New Hampshire, Pennsylvania, and Virginia), and a few saying “No” (Maine, Minnesota, and Missouri).

But every single Democrat-led state said “Yes”. California, Connecticut, Delaware, Hawaii, New York, Oregon, Rhode Island, Vermont, and Washington. There aren’t even any Democrat-led states that said “Maybe”.

Perhaps it is simplest to summarize this in another table. Each row is a party configuration (“Democrat, Republican”, or “mixed”); the column is a Medicaid decision (“Yes”, “Maybe”, or “No”); in each cell is the count of how many states that fit that description:

Yes Maybe No
Democrat 9 0 0
Republican 4 5 14
Mixed 8 7 3

Shall I do a chi-square test? Sure, why not? A chi-square test of independence produces a p-value of 0.00001. This is not a coincidence. Being a Republican-led state is strongly correlated with rejecting the Medicaid expansion.

Indeed, because the elected officials were there first, I can say that there is Granger causality from being a Republican-led state to rejecting the Medicaid expansion. Based on the fact that mixed states were much less likely to reject Medicaid than Republican states, I could even estimate a dose-response curve on how having more Republicans makes you more likely to reject Medicaid.

Republicans did this, is basically what I’m getting at here.

Obamacare itself was legitimately controversial (though the Republicans never quite seemed to grasp that they needed a counterproposal for their argument to make sense), but once it was passed, accepting the Medicaid expansion should have been a no-brainer. The federal government is giving you money in order to give healthcare to poor people. It will not be expensive for your state budget; in fact it will probably save you money in the long run. It will help thousands or millions of your constituents. Its impact on the federal budget is negligible.

But no, 14 Republican-led states couldn’t let themselves get caught implementing a Democrat’s policy, especially if it would actually work. If it failed catastrophically, they could say “See? We told you so.” But if it succeeded, they’d have to admit that their opponents sometimes have good ideas. (You know, just like the Democrats did, when they copied most of Mitt Romney’s healthcare system.)

As a result of their stubbornness, almost 3 million Americans don’t have healthcare. Some of those people will die as a result—economists estimate about 7,000 people, to be precise. Hundreds of thousands more will suffer. All needlessly.

When 3,000 people are killed in a terrorist attack, Republicans clamor to kill millions in response with carpet bombing and nuclear weapons.

But when 7,000 people will die without healthcare, Republicans say we can’t afford it.

What happened in Flint?

JDN 2457419

By now you’ve probably heard about the water crisis in Flint, where for almost two years highly dangerous levels of lead were in the city water system, poisoning thousands of people—including over 8,000 children. Many of these children will suffer permanent brain damage. We can expect a crime spike in the area once they get older; reduction in lead exposure may explain as much as half of the decline in crime in the United States—and increase in lead exposure will likely have the opposite effect. At least 10 people have already died.

A state of emergency has now been declared. Governor Snyder of Michigan will be asked to testify in Congress—and what he says had better be good. We have emails showing that he knew about the lead problems as early as February 2015, and as far as we can tell he did absolutely nothing until it all became public.

President Obama has said that the crisis was “inexplicable and inexcusable”. Inexcusable, certainly—but inexplicable? Hardly.

Indeed, this is a taste of the world that Republicans and Libertarians want us to live in, a world where corporations can do whatever they want and get away with it; a world where you can pollute any river, poison any population, and as long as you did it to help rich people get richer no one will stop you.

Every time someone says that our environmental regulations are “too harsh” or “stifle business” or are based on “environmentalist alarmism”, I want you to think of lead in the water in Flint.

Every time someone says that we need to “cut wasteful government spending” and “get government out of the way of business”, I want you to think of lead in the water in Flint.

This was not a natural disaster, a so-called “act of God” beyond human control. This was not some “inexplicable” event beyond our power to predict or understand.

This was a policy decision.

The worst thing about this is that people are taking exactly the wrong lesson. I’ve already seen a meme going around saying “government water/free market water” and showing Flint’s poisoned water next to (supposedly) pristine bottled water. I even saw one tweet with the audacity to assert that teacher pensions were the reason why Flint was so cash-starved that they had no choice but to accept poisoned water. The spin doctors are already at work trying to convince you that this proves that government is the problem and free markets are the solution.

But that is exactly the opposite lesson you should be taking from this.

This was not a case of excessive government intervention. This was a case of total government inaction. This was not the overbearing “nanny state” of social democracy they tell you to fear. This was the passive, ineffectual “starve the beast” government you have been promised by the likes of Reagan.

There were indeed substantial failures by governments at every level. But these failures were always in the form of doing too little, of ignoring the problem; and the original reason why Flint moved away from the municipal water supply was to reduce government spending.

(There were also failures of journalism; but does anyone think this means we should get rid of journalism?)

Nevermind that any sane person would say that clean water should be a top priority, one of the last things you’d even consider cutting spending on. Flint’s government found a way to save a few million dollars (which will now cost several billion to repair—insofar as it is even possible), so they did it. Institutionalized racism very likely contributed to their willingness to sacrifice so many people for so little money (would you poison someone for $100? Snyder and his “emergency manager” Earley apparently would).

I say “they”, and I keep saying the “government” did this; but in fact this was not a government action in the usual sense of a democratically-elected mayor and city council. The decision was made by a so-called “emergency manager”, personally appointed by the Governor and accountable to no one else. This is supposed to be a temporary office to solve emergencies, just like the dictator was in Rome until Julius Caesar decided he didn’t like that “temporary” part. Since it’s basically the same office with the same problems, I suggest we drop the “emergency manager” euphemism and start calling these people what they are—dictators.

This is actually a remarkable First World demonstration of the Sen Hypothesis: Famines don’t occur under democracies, because people who are represented in government don’t allow themselves to be starved. Similarly, people who are represented in government are much less likely to allow their water to be poisoned. It’s not that democratic governments never do anything wrong—but their wrongness is bounded by their accountability to public opinion. Every time we weaken democracy in the name of expediency or “efficiency”, we weaken that barrier against catastrophe.

MoveOn has a petition to impeach Snyder and arrest him on criminal charges. I’ve signed it, and I suggest you do as well. This perversion of democracy and depraved indifference must not stand.

The good news is that humans are altruistic after all, and many people are already doing things to help. You can help, too.

Free trade, fair trade, or what?

JDN 2457271 EDT 11:34.

As I mentioned in an earlier post, almost all economists are opposed to protectionism. In a survey of 264 AEA economists, 87% opposed tariffs to protect US workers against foreign competition.

(By the way, 58% said they usually vote Democrat and only 23% said they usually vote Republican. Given that economists are overwhelmingly middle-age rich White males—only 12% of tenured faculty economists are women and the median income of economists is over $90,000—that’s saying something. Dare I suggest it’s saying that Democrat economic policy is usually better?)

There are a large number of published research papers showing large positive effects of free trade agreements, such as this paper, and this paper, and this paper, and this paper. It’s hard to find any good papers showing any significant negative effects. This is probably why the consensus is so strong; the empirical evidence is overwhelming.

Yet protectionism is very popular among the general public. The majority of both Democrat and Republican voters believe that free trade agreements have harmed the United States. For decades, protectionism has always been the politically popular answer.

To be fair, it’s actually possible to think that free trade harms the US but still support free trade; actually there are some economists who argue that free trade has harmed the US, but has benefited other countries like China and India so much more that it is worth it, making free trade an act of global altruism and good will (for the opposite view, here’s a pretty good article about how “free trade” in principle is often mercantilism in practice, and by no means altruistic). As Krugman talks about, there is some evidence that income inequality in the First World has been exacerbated by globalization—but it’s clearly not the primary reason for rising inequality.

What’s going on here? Are economists ignoring the negative impacts of free trade because it doesn’t fit their elegant mathematical models? Is the general public ignorant of how trade actually works? Does the way free trade works, or its interaction with human psychology, inherently obscure its benefits while emphasizing its harms?

Yes. All of the above.

One of the central mistakes of neoclassical economics is the tendency to over-aggregate. Instead of looking at the impact on individuals, it’s much easier to look at the impact on aggregated abstractions like trade flows and GDP. To some extent this is inevitable—there are simply too many people in the world to keep track of them all. But we need to be aware of what welose when we aggregate, and we need to test the robustness of our theories by applying different models of aggregation (such as comparing “how does this affect Americans” with “how does this affect the First World middle class”).

It is absolutely unambiguous that free trade increases trade flows and GDP, and for small countries these benefits can be mind-bogglingly huge. A key part of the amazing success story of economic development that is Korea is that they dramatically increased their openness to global trade.

The reason for this is absolutely fundamental to economics, and in grasping it in 1776 Adam Smith basically founded the field: Voluntary trade benefits both parties.

As most economists would put it today, comparative advantage leads to Pareto-improving gains from trade. Or as I’d tend to put it, more succinctly yet just as thoroughly based in modern game theory: Trade is nonzero-sum.

When you sell a product to someone, it is because the money they’re offering you is worth more to you than the product—and because the product is worth more to them than the money. You each lose something you value less and gain something you value more—so you are both better off.

This mutual benefit occurs whether you are individuals, corporations, or nations. It’s a fundamental principle of economics that underlies the operation of markets at every scale.

This is what I think most people don’t understand when they say they want to “stop sending jobs overseas”. If by that all you mean is ensuring that there aren’t incentives to offshore and outsource, that’s quite reasonable. Even some degree of incentive to keep businesses in the US might make sense, to avoid a race-to-the-bottom in global wages. But I get the sense that it is more than this, that people have a general notion that jobs are zero-sum and if we hire a million people in China that means a million people must lose their jobs in the US. This is not simply wrong, it is fundamentally wrong; it misses the entire point of economics. If there is one core principle that defines economics, I think it would be that the universe is nonzero-sum; gains for some can also be gains for others. There is not a fixed amount of stuff in the world that we distribute; we can make more stuff. Handled properly, a trade that results in a million people hired in China can mean an extra million people hired in the US.

Once you introduce a competitive market, things get more complicated, because there aren’t just winners—there are also losers. When you have competitors, someone can buy from them instead of you, and the two of them benefit, but you are harmed. By the standard methods of calculating benefits and harms (which admittedly leave much to be desired), we can show quite clearly that in general, on average, the benefits outweigh the harms.

But of course we don’t live “in general, on average”. Despite the overwhelming, unambiguous benefit to the economy as a whole, there is some evidence that free trade can produce a good deal of harm to specific individuals.

Suppose you live in the US and your job is to assemble iPads. You’re good at it, you like it, it pays pretty well. But now Apple says that they want to “reduce labor costs” (they are in fact doing nothing of the sort; to really reduce labor costs in a deep economic sense you’d have to make work easier, more productive, or more fun—the wage and the cost are fundamentally different things), so they outsource production to Foxconn in China, who pay wages 1/30 of what you were being paid.

The net result of this change to the economy as a whole is almost certainly positive—the price of iPads goes down, we all get to have iPads. (There’s a meme going around claiming that the price of an iPad would be almost $15,000 if it were made in the US; no, it would cost about $1000 even if our productivity were no higher and Apple could keep their current profit margin intact, both of which are clearly overestimates. But since it’s currently selling for about $500, that’s still a big difference.) Apple makes more profits, which is why they did it—and we do have to count that in our GDP. Most importantly, workers in China get employed in safe, high-skill jobs instead of working in coal mines, subsistence farming, or turning to drugs and prostitution. More stuff, more profits, better jobs for some of the world’s poorest workers. These are all good things, and overall they outweigh the harm of you losing your job.

Well, from a global perspective, anyway. I doubt they outweigh the harm from your perspective. You still lost a good job; you’re now unemployed, and may have skills so specific that they can’t be transferred to anything else. You’ll need to retrain, which means going back to school or else finding one of those rare far-sighted companies that actually trains their workers. Since the social welfare system in the US is such a quagmire of nonsensical programs, you may be ineligible for support, or eligible in theory and unable to actually get it in practice. (Recently I got a notice from Medicaid that I need to prove again that my income is sufficiently low. Apparently it’s because I got hired at a temporary web development gig, which paid me a whopping $700 over a few weeks—why, that’s almost the per-capita GDP of Ghana, so clearly I am a high-roller who doesn’t need help affording health insurance. I wonder how much they spend sending out these notices.)

If we had a basic income—I know I harp on this a lot, but seriously, it solves almost every economic problem you can think of—losing your job wouldn’t make you feel so desperate, and owning a share in GDP would mean that the rising tide actually would lift all boats. This might make free trade more popular.

But even with ideal policies (which we certainly do not have), the fact remains that human beings are loss-averse. We care more about losses than we do about gains. The pain you feel from losing $100 is about the same as the joy you feel from gaining $200. The pain you feel from losing your job is about twice as intense as the joy you feel from finding a new one.

Because of loss aversion, the constant churn of innovation and change, the “creative destruction” that Schumpeter considered the defining advantage of capitalism—well, it hurts. The constant change and uncertainty is painful, and we want to run away from it.

But the truth is, we can’t. There’s no way to stop the change in the global economy, and most of our attempts to insulate ourselves from it only end up hurting us more. This, I think, is the fundamental reason why protectionism is popular among the general public but not economists: The general public sees protectionism as a way of holding onto the past, while economists recognize that it is simply a way of damaging the future. That constant churning of people gaining and losing jobs isn’t a bug, it’s a feature—it’s the reason that capitalism is so efficient in the first place.

There are a few ways we can reduce the pain of this churning, but we need to focus on that—reducing the pain—rather than trying to stop the churning itself. We should provide social welfare programs that allow people to survive while they are unemployed. We should use active labor market policies to train new workers and match them with good jobs. We may even want to provide some sort of subsidy or incentive to companies that don’t outsource—a small one, to make sure they don’t do so needlessly, but not a large one, so they’ll still do it when it’s actually necessary.

But the one thing we must not do is stop creating jobs overseas. And yes, that is what we are doing, creating jobs. We are not sending jobs that already exist, we are creating new ones. In the short run we also destroy some jobs here, but if we do it right we can replace them—and usually we do okay.

If we stop creating jobs in India and China and around the world, millions of people will starve.

Yes, it is as stark as that. Millions of lives depend upon continued open trade. We in the United States are a manufacturing, technological and agricultural superpower—we could wall ourselves off from the world and only see a few percentage points shaved off of GDP. But a country like Nicaragua or Ghana or Vietnam doesn’t have that option; if they cut off trade, people start dying.

This is actually the main reason why our trade agreements are often so unfair; we are in by far the stronger bargaining position, so we can make them cut their tariffs on textiles even as we maintain our subsidies on agriculture. We are Mr. Bumble dishing out gruel and they are Oliver Twist begging for another bite.

We can’t afford to stop free trade. We can’t even afford to significantly slow it down. A global economy is the best hope we have for global peace and global prosperity.

That is not to say that we should leave trade completely unregulated; trade policy can and should be used to enforce human rights standards. That enormous asymmetry in bargaining power doesn’t have to be used to maximize profits; it can be used to advance human rights.

This is not as simple as saying we should never trade with nations that have bad human rights records, by the way. First of all that would require we cut off Saudi Arabia and China, which is totally unrealistic and would impoverish millions of people; second it doesn’t actually solve the problem. Instead we should use sanctions, tariffs, and trade agreements to provide incentives to improve human rights, rewarding governments that do and punishing governments that don’t. We could have a sliding tariff that decreases every time you show improvement in human rights standards. Think of it like behavioral reinforcement; reward good behavior and you’ll get more of it.

We do need to have sweatshops—but as Krugman has come around to realizing, we can make sweatshops safer. We can put pressure on other countries to treat their workers better, pay them more—and actually make the global economy more efficient, because right now their wages are held down below the efficient level by the power that corporations wield over them. We should not demand that they pay the same they would here in the First World—that’s totally unrealistic, given the difference in productivity—but we should demand that they pay what their workers actually deserve.

Similar incentives should apply to individual corporations, which these days are as powerful as some governments. For example, as part of a zero-tolerance program against forced labor, any company caught using or outsourcing to forced labor should have its profits garnished for damages and the executives who made the decision imprisoned. Sometimes #Scandinaviaisnotbetter; IKEA was involved in such outsourcing during the Cold War, and it is currently being litigated just how much they knew and what they could have done about it. If they knew and did nothing, some IKEA executive should be going to prison. If that seems extreme, let me remind you what they did: They used slaves.

My standard for penalizing human rights violations, whether by corporations or governments, is basically like this: Follow the decision-making up the chain of command, stopping only when the next-higher executive can clearly show to the preponderance of evidence that they were kept out of the loop. If no executive can provide sufficient evidence, the highest-ranking executive at the time the crime was committed will be held responsible. If you don’t want to be held responsible for crimes committed by people who work for you, it’s your responsibility to bring them to justice. Negligence in oversight will not be exonerating because you didn’t know; it will be incriminating because you should have. When your bank is caught laundering money for terrorists and drug lords, it isn’t enough to have your chief of compliance resign; he should be imprisoned—and if his superiors knew about it, so should they.

In fact maybe the focus should be on corporations, because we have the legal authority to do that. When dealing with other countries, there are United Nations rules and simply the de facto power of large trade flows and national standing armies. With Saudi Arabia or China, there’s a very real chance that they’ll simply tell us where we can shove it; but if we get that same kind of response from HSBC or Goldman Sachs (which, actually, we did), we can start taking out handcuffs (that, we did not do—but I think we should have).

We can also use consumer pressure to change the behavior of corporations, such as Fair Trade. There’s some debate about just how effective these things are, but the comparison that is often made between Fair Trade and tariffs is ridiculous; this is a change in consumer behavior, not a change in government policy. There is absolutely no loss of freedom. Choosing not to buy something does not constitute coercion against someone else. Maybe there are more efficient ways to spend money (like donating it directly to the best global development charities), but if you start going down that road you quickly turn into Peter Singer and start saying that wearing nicer shoes means you’re committing murder. By all means, let’s empirically study different methods of fighting poverty and focus on the ones that work best; but there’s a perverse smugness to criticisms of Fair Trade that says to me this isn’t actually about that at all. Instead, I think most people who criticize Fair Trade don’t support the idea of altruism at all—they’re far-right Randian libertarians who honestly believe that selfishness is the highest form of human morality. (It is in fact the second-lowest, according to Kohlberg.) Maybe it will turn out that Fair Trade is actually ineffective at fighting poverty, but it’s clear that an unregulated free market isn’t good at that either. Those aren’t the only options, and the best way to find out which methods work is to give them a try. Consumer pressure clearly can work in some cases, and it’s a low-cost zero-regulation solution. They say the road to Hell is paved with good intentions—but would you rather we have bad intentions instead?

By these two methods we could send a clear message to multinational corporations that if they want to do business in the US—and trust me, they do—they have to meet certain standards of human rights. This in turn will make those corporations put pressure on their suppliers, all the way down the supply chain, to uphold the standards lest they lose their contracts. With some companies upholding labor standards in Third World countries, others will be forced to, as workers refuse to work for companies that don’t. This could make life better for many millions of people.

But this whole plan only works on one condition: We need to have trade.

Why the Republican candidates like flat income tax—and we really, really don’t

JDN 2456160 EDT 13:55.

The Republican Party is scrambling to find viable Presidential candidates for next year’s election. The Democrats only have two major contenders: Hillary Clinton looks like the front-runner (and will obviously have the most funding), but Bernie Sanders is doing surprisingly well, and is particularly refreshing because he is running purely on his principles and ideas. He has no significant connections, no family dynasty (unlike Jeb Bush and, again, Hillary Clinton) and not a huge amount of wealth (Bernie’s net wealth is about $500,000, making him comfortably upper-middle class; compare to Hillary’s $21.5 million and her husband’s $80 million); but he has ideas that resonate with people. Bernie Sanders is what politics is supposed to be. Clinton’s campaign will certainly raise more than his; but he has already raised over $4 million, and if he makes it to about $10 million studies suggest that additional spending above that point is largely negligible. He actually has a decent chance of winning, and if he did it would be a very good sign for the future of America.

But the Republican field is a good deal more contentious, and the 19 candidates currently running have been scrambling to prove that they are the most right-wing in order to impress far-right primary voters. (When the general election comes around, whoever wins will of course pivot back toward the center, changing from, say, outright fascism to something more like reactionism or neo-feudalism. If you were hoping they’d pivot so far back as to actually be sensible center-right capitalists, think again; Hillary Clinton is the only one who will take that role, and they’ll go out of their way to disagree with her in every way they possibly can, much as they’ve done with Obama.) One of the ways that Republicans are hoping to prove their right-wing credentials is by proposing a flat income tax and eliminating the IRS.

Unlike most of their proposals, I can see why many people think this actually sounds like a good idea. It would certainly dramatically reduce bureaucracy, and that’s obviously worthwhile since excess bureaucracy is pure deadweight loss. (A surprising number of economists seem to forget that government does other things besides create excess bureaucracy, but I must admit it does in fact create excess bureaucracy.)

Though if they actually made the flat tax rate 20% or even—I can’t believe this is seriously being proposed—10%, there is no way the federal government would have enough revenue. The only options would be (1) massive increases in national debt (2) total collapse of government services—including their beloved military, mind you, or (3) directly linking the Federal Reserve quantitative easing program to fiscal policy and funding the deficit with printed money. Of these, 3 might not actually be that bad (it would probably trigger some inflation, but actually we could use that right now), but it’s extremely unlikely to happen, particularly under Republicans. In reality, after getting a taste of 2, we’d clearly end up with 1. And then they’d be complaining about the debt and clamor for more spending cuts, more spending cuts, ever more spending cuts, but there would simply be no way to run a functioning government on 10% of GDP in anything like our current system. Maybe you could do it on 20%—maybe—but we currently spend more like 35%, and that’s already a very low amount of spending for a First World country. The UK is more typical at 47%, while Germany is a bit low at 44%; Sweden spends 52% and France spends a whopping 57%. Anyone who suggests we cut government spending from 35% to 20% needs to explain which 3/7 of government services are going to immediately disappear—not to mention which 3/7 of government employees are going to be immediately laid off.

And then they want to add investment deductions; in general investment deductions are a good thing, as long as you tie them to actual investments in genuinely useful things like factories and computer servers. (Or better yet, schools, research labs, or maglev lines, but private companies almost never invest in that sort of thing, so the deduction wouldn’t apply.) The kernel of truth in the otherwise ridiculous argument that we should never tax capital is that taxing real investment would definitely be harmful in the long run. As I discussed with Miles Kimball (a cognitive economist at Michigan and fellow econ-blogger I hope to work with at some point), we could minimize the distortionary effects of corporate taxes by establishing a strong deduction for real investment, and this would allow us to redistribute some of this enormous wealth inequality without dramatically harming economic growth.

But if you deduct things that aren’t actually investments—like stock speculation and derivatives arbitrage—then you reduce your revenue dramatically and don’t actually incentivize genuinely useful investments. This is the problem with our current system, in which GE can pay no corporate income tax on $108 billion in annual profit—and you know they weren’t using all that for genuinely productive investment activities. But then, if you create a strong enforcement system for ensuring it is real investment, you need bureaucracy—which is exactly what the flat tax was claimed to remove. At the very least, the idea of eliminating the IRS remains ridiculous if you have any significant deductions.

Thus, the benefits of a flat income tax are minimal if not outright illusory; and the costs, oh, the costs are horrible. In order to have remotely reasonable amounts of revenue, you’d need to dramatically raise taxes on the majority of people, while significantly lowering them on the rich. You would create a direct transfer of wealth from the poor to the rich, increasing our already enormous income inequality and driving millions of people into poverty.

Thus, it would be difficult to more clearly demonstrate that you care only about the interests of the top 1% than to propose a flat income tax. I guess Mitt Romney’s 47% rant actually takes the cake on that one though (Yes, all those freeloading… soldiers… and children… and old people?).

Many Republicans are insisting that a flat tax would create a surge of economic growth, but that’s simply not how macroeconomics works. If you steeply raise taxes on the majority of people while cutting them on the rich, you’ll see consumer spending plummet and the entire economy will be driven into recession. Rich people simply don’t spend their money in the same way as the rest of us, and the functioning of the economy depends upon a continuous flow of spending. There is a standard neoclassical economic argument about how reducing spending and increasing saving would lead to increased investment and greater prosperity—but that model basically assumes that we have a fixed amount of stuff we’re either using up or making more stuff with, which is simply not how money works; as James Kroeger cogently explains on his blog “Nontrivial Pursuits”, money is created as it is needed; investment isn’t determined by people saving what they don’t spend. Indeed, increased consumption generally leads to increased investment, because our economy is currently limited by demand, not supply. We could build a lot more stuff, if only people could afford to buy it.

And that’s not even considering the labor incentives; as I already talked about in my previous post on progressive taxation, there are two incentives involved when you increase someone’s hourly wage. On the one hand, they get paid more for each hour, which is a reason to work; that’s the substitution effect. But on the other hand, they have more money in general, which is a reason they don’t need to work; that’s the income effect. Broadly speaking, the substitution effect dominates at low incomes (about $20,000 or less), the income effect dominates at high incomes (about $100,000 or more), and the two effects cancel out at moderate incomes. Since a tax on your income hits you in much the same way as a reduction in your wage, this means that raising taxes on the poor makes them work less, while raising taxes on the rich makes them work more. But if you go from our currently slightly-progressive system to a flat system, you raise taxes on the poor and cut them on the rich, which would mean that the poor would work less, and the rich would also work less! This would reduce economic output even further. If you want to maximize the incentive to work, you want progressive taxes, not flat taxes.

Flat taxes sound appealing because they are so simple; even the basic formula for our current tax rates is complicated, and we combine it with hundreds of pages of deductions and credits—not to mention tens of thousands of pages of case law!—making it a huge morass of bureaucracy that barely anyone really understands and corporate lawyers can easily exploit. I’m all in favor of getting rid of that; but you don’t need a flat tax to do that. You can fit the formula for a progressive tax on a single page—indeed, on a single line: r = 1 – I^-p

That’s it. It’s simple enough to be plugged into any calculator that is capable of exponents, not to mention efficiently implemented in Microsoft Excel (more efficiently than our current system in fact).

Combined with that simple formula, you could list all of the sensible deductions on a couple of additional pages (business investments and educational expenses, mostly—poverty should be addressed by a basic income, not by tax deductions on things like heating and housing, which are actually indirect corporate subsidies), along with a land tax (one line: $3000 per hectare), a basic income (one more line: $8,000 per adult and $4,000 per child), and some additional excise taxes on goods with negative externalities (like alcohol, tobacco, oil, coal, and lead), with a line for each; then you can provide a supplementary manual of maybe 50 pages explaining the detailed rules for applying each of those deductions in unusual cases. The entire tax code should be readable by an ordinary person in a single sitting no longer than a few hours. That means no more than 100 pages and no more than a 7th-grade reading level.

Why do I say this? Isn’t that a ridiculous standard? No, it is a Constitutional imperative. It is a fundamental violation of your liberty to tax you according to rules you cannot reasonably understand—indeed, bordering on Kafkaesque. While this isn’t taxation without representation—we do vote for representatives, after all—it is something very much like it; what good is the ability to change rules if you don’t even understand the rules in the first place? Nor would it be all that difficult: You first deduct these things from your income, then plug the result into this formula.

So yes, I absolutely agree with the basic principle of tax reform. The tax code should be scrapped and recreated from scratch, and the final product should be a primary form of only a few pages combined with a supplementary manual of no more than 100 pages. But you don’t need a flat tax to do that, and indeed for many other reasons a flat tax is a terrible idea, particularly if the suggested rate is 10% or 15%, less than half what we actually spend. The real question is why so many Republican candidates think that this will appeal to their voter base—and why they could actually be right about that.

Part of it is the entirely justified outrage at the complexity of our current tax system, and the appealing simplicity of a flat tax. Part of it is the long history of American hatred of taxes; we were founded upon resisting taxes, and we’ve been resisting taxes ever since. In some ways this is healthy; taxes per se are not a good thing, they are a bad thing, a necessary evil.

But those two things alone cannot explain why anyone would advocate raising taxes on the poorest half of the population while dramatically cutting them on the top 1%. If you are opposed to taxes in general, you’d cut them on everyone; and if you recognize the necessity of taxation, you’d be trying to find ways to minimize the harm while ensuring sufficient tax revenue, which in general means progressive taxation.

To understand why they would be pushing so hard for flat taxes, I think we need to say that many Republicans, particularly those in positions of power, honestly do think that rich people are better than poor people and we should always give more to the rich and less to the poor. (Maybe it’s partly halo effect, in which good begets good and bad begets bad? Or maybe just world theory, the ingrained belief that the world is as it ought to be?)

Romney’s 47% rant wasn’t an exception; it was what he honestly believes, what he says when he doesn’t know he’s on camera. He thinks that he earned every penny of his $250 million net wealth; yes, even the part he got from marrying his wife and the part he got from abusing tax laws, arbitraging assets and liquidating companies. He thinks that people who live on $4,000 or even $400 a year are simply lazy freeloaders, who could easily work harder, perhaps do some arbitrage and liquidation of their own (check out these alleged “rags to riches” stories including the line “tried his hand at mortgage brokering”), but choose not to, and as a result deserve what they get. (It’s important to realize just how bizarre this moral attitude truly is; even if I thought you were the laziest person on Earth, I wouldn’t let you starve to death.) He thinks that the social welfare programs which have reduced poverty but never managed to eliminate it are too generous—if he even thinks they should exist at all. And in thinking these things, he is not some bizarre aberration; he is representing an entire class of people, nearly all of whom vote Republican.

The good news is, these people are still in the minority. They hold significant sway over the Republican primary, but will not have nearly as much impact in the general election. And right now, the Republican candidates are so numerous and so awful that I have trouble seeing how the Democrats could possibly lose. (But please, don’t take that as a challenge, you guys.)

Beware the false balance

JDN 2457046 PST 13:47.

I am now back in Long Beach, hence the return to Pacific Time. Today’s post is a little less economic than most, though it’s certainly still within the purview of social science and public policy. It concerns a question that many academic researchers and in general reasonable, thoughtful people have to deal with: How do we remain unbiased and nonpartisan?

This would not be so difficult if the world were as the most devoted “centrists” would have you believe, and it were actually the case that both sides have their good points and bad points, and both sides have their scandals, and both sides make mistakes or even lie, so you should never take the side of the Democrats or the Republicans but always present both views equally.

Sadly, this is not at all the world in which we live. While Democrats are far from perfect—they are human beings after all, not to mention politicians—Republicans have become completely detached from reality. As Stephen Colbert has said, “Reality has a liberal bias.” You know it’s bad when our detractors call us the reality-based community. Treating both sides as equal isn’t being unbiased—it’s committing a balance fallacy.

Don’t believe me? Here is a list of objective, scientific facts that the Republican Party (and particularly its craziest subset, the Tea Party) has officially taken political stances against:

  1. Global warming is a real problem, and largely caused by human activity. (The Republican majority in the Senate voted down a resolution acknowledging this.)
  2. Human beings share a common ancestor with chimpanzees. (48% of Republicans think that we were created in our present form.)
  3. Animals evolve over time due to natural selection. (Only 43% of Republicans believe this.)
  4. The Earth is approximately 4.5 billion years old. (Marco Rubio said he thinks maybe the Earth was made in seven days a few thousand years ago.)
  5. Hydraulic fracturing can trigger earthquakes.(Republican in Congress are trying to nullify local regulations on fracking because they insist it is so safe we don’t even need to keep track.)
  6. Income inequality in the United States is the worst it has been in decades and continues to rise. (Mitt Romney said that the concern about income inequality is just “envy”.)
  7. Progressive taxation reduces inequality without adversely affecting economic growth. (Here’s a Republican former New York Senator saying that the President “should be ashamed” for raising taxes on—you guessed it—”job creators”.)
  8. Moderate increases in the minimum wage do not yield significant losses in employment. (Republicans consistently vote against even small increases in the minimum wage, and Democrats consistently vote in favor.)
  9. The United States government has no reason to ever default on its debt. (John Boehner, now Speaker of the House, once said that “America is broke” and if we don’t stop spending we’ll never be able to pay the national debt.)
  10. Human embryos are not in any way sentient, and fetuses are not sentient until at least 17 weeks of gestation, probably more like 30 weeks. (Yet if I am to read it in a way that would make moral sense, “Life begins at conception”—which several Republicans explicitly endorsed at the National Right to Life Convention—would have to imply that even zygotes are sentient beings. If you really just meant “alive”, then that would equally well apply to plants or even bacteria. Sentience is the morally relevant category.)

And that’s not even counting the Republican Party’s association with Christianity and all of the objectively wrong scientific claims that necessarily entails—like the existence of an afterlife and the intervention of supernatural forces. Most Democrats also self-identify as Christian, though rarely with quite the same fervor (the last major Democrat I can think of who was a devout Christian was Jimmy Carter), probably because most Americans self-identify as Christian and are hesitant to elect an atheist President (despite the fact that 93% of the National Academy of Sciences is comprised of atheists and the higher your IQ the more likely you are to be an atheist; we wouldn’t want to elect someone who agrees with smart people, now would we?).

It’s true, there are some other crazy ideas out there with a left-wing slant, like the anti-vaccination movement that has wrought epidemic measles upon us, the anti-GMO crowd that rejects basic scientific facts about genetics, and the 9/11 “truth” movement that refuses to believe that Al Qaeda actually caused the attacks. There are in fact far-left Marxists out there who want to tear down the whole capitalist system by glorious revolution and replace it with… er… something (they’re never quite clear on that last point). But none of these things are the official positions of standing members of Congress.

The craziest belief by a standing Democrat I can think of is Dennis Kucinich’s belief that he saw an alien spacecraft. And to be perfectly honest, alien spacecraft are about a thousand times more plausible than Christianity in general, let alone Creationism. There almost certainly are alien spacecraft somewhere in the universe—just most likely so far away we’ll need FTL to encounter them. Moreover, this is not Kucinich’s official position as a member of Congress and it’s not something he has ever made policy based upon.

Indeed, if you’re willing to include the craziest individuals with no real political power who identify with a particular side of the political spectrum, then we should include on the right-wing side people like the Bundy militia in Nevada, neo-Nazis in Detroit, and the dozens of KKK chapters across the US. Not to mention this pastor who wants to murder all gay people in the world (because he truly believes what Leviticus 20:13 actually and clearly says).

If you get to include Marxists on the left, then we get to include Nazis on the right. Or, we could be reasonable and say that only the official positions of elected officials or mainstream pundits actually count, in which case Democrats have views that are basically accurate and reasonable while the majority of Republicans have views that are still completely objectively wrong.

There’s no balance here. For every Democrat who is wrong, there is a Republicans who is totally delusional. For every Democrat who distorts the truth, there is a Republican who blatantly lies about basic facts. Not to mention that for every Democrat who has had an ill-advised illicit affair there is a Republican who has committed war crimes.

Actually war crimes are something a fair number of Democrats have done as well, but the difference still stands out in high relief: Barack Obama has ordered double-tap drone strikes that are in violation of the Geneva Convention, but George W. Bush orchestrated a worldwide mass torture campaign and launched pointless wars that slaughtered hundreds of thousands of people. Bill Clinton ordered some questionable CIA operations, but George H.W. Bush was the director of the CIA.

I wish we had two parties that were equally reasonable. I wish there were two—or three, or four—proposals on the table in each discussion, all of which had merits and flaws worth considering. Maybe if we somehow manage to get the Green Party a significant seat in power, or the Social Democrat party, we can actually achieve that goal. But that is not where we are right now. Right now, we have the Democrats, who have some good ideas and some bad ideas; and then we have the Republicans, who are completely out of their minds.

There is an important concept in political science called the Overton window; it is the range of political ideas that are considered “reasonable” or “mainstream” within a society. Things near the middle of the Overton window are considered sensible, even “nonpartisan” ideas, while things near the edges are “partisan” or “political”, and things near but outside the window are seen as “extreme” and “radical”. Things far outside the window are seen as “absurd” or even “unthinkable”.

Right now, our Overton window is in the wrong place. Things like Paul Ryan’s plan to privatize Social Security and Medicare are seen as reasonable when they should be considered extreme. Progressive income taxes of the kind we had in the 1960s are seen as extreme when they should be considered reasonable. Cutting WIC and SNAP with nothing to replace them and letting people literally starve to death are considered at most partisan, when they should be outright unthinkable. Opposition to basic scientific facts like climate change and evolution is considered a mainstream political position—when in terms of empirical evidence Creationism should be more intellectually embarrassing than being a 9/11 truther or thinking you saw an alien spacecraft. And perhaps worst of all, military tactics like double-tap strikes that are literally war crimes are considered “liberal”, while the “conservative” position involves torture, worldwide surveillance and carpet bombing—if not outright full-scale nuclear devastation.

I want to restore reasonable conversation to our political system, I really do. But that really isn’t possible when half the politicians are totally delusional. We have but one choice: We must vote them out.

I say this particularly to people who say “Why bother? Both parties are the same.” No, they are not the same. They are deeply, deeply different, for all the reasons I just outlined above. And if you can’t bring yourself to vote for a Democrat, at least vote for someone! A Green, or a Social Democrat, or even a Libertarian or a Socialist if you must. It is only by the apathy of reasonable people that this insanity can propagate in the first place.