Archive for March, 2011

Campbell’s Law

Wednesday, March 30th, 2011

Andrew Sullivan and Ezra Klein both posted today about Campbell’s Law, citing an article by Dana Goldstein in the Daily Beast about corruption in schools under Michelle Rhee’s chancellorship in Washington, D.C.:

In the social sciences, there is an oft-repeated maxim called Campbell’s Law, named after Donald Campbell, a psychologist who studied human creativity. Campbell’s Law states that incentives corrupt. In other words, the more punishments and rewards—such as merit pay—are associated with the results of any given test, the more likely it is that the test’s results will be rendered meaningless, either through outright cheating or through teaching to the test in a way that narrows the curriculum and renders real learning obsolete.

I can think of cooler things that might be called Campbell’s Law — but such as it is, it goes a long way to explaining the flaw in capitalism without enough regulation. Organizing an economy around the pursuit of currency is efficient but not in the way it was intended — as any shortcut or corruption is utilized, as every possible cost is externalized.

It also goes a helps explain — but not as completely — how government tax incentives subsidizing gasoline, corn, middle class mortgages, student loans, and health care costs has led to escalating demand for these resources — seemingly distorting the market more than a direct intervention would. There seems to be something about tax incentives that distorts markets more than direct interventions. (A topic that seems up Matt Yglesias‘s alley to explore.)

On a related note, when taxpayers demand their receipt for government services– it should reflect not only disbursements, but the cost of tax benefits and loopholes.

Right Wing Mythology

Sunday, March 27th, 2011

My normal tack — when seeing a political cartoon like this that is so clearly off-base — is to “Fact-Check” it.

For example, the cartoon might lead you to believe that there was no unemployment compensation in 1950 — but unemployment compensation began in in 1935.

It’s not clear under what program the rich banker is paying for the unhygienic poor man’s mortgage either now or then. Federal housing policy offers tax subsidies to anyone paying a mortgage — which means the man on the right probably receives a bigger subsidy.

The health care point is likewise odd. In the 1950s, there was no Medicaid for the very poor. But everyone who received health insurance from their employer received a tax subsidy [pdf] both then and now.

In terms of subsidizing car ownership — federal and state policies began encouraging car ownership in the 1950s — from zoning laws requiring large amounts of parking to bailouts given to the auto industry to the construction of the federal highway system. The artificially low price of gasoline is another subsidy — as the cost of pollution and of a foreign policy of ensuring stability in the Middle East is borne by the public at large and not factored into the price. As everyone pays for pollution cleanup and foreign policy, this is a redistribution of wealth from those who minimize their use of gas to those who use more than the average. However, the complaint of cartoonist seems to be a tax subsidy given to those who purchase hybrid cars that use less gasoline. Which — though significantly less than the various other subsidies — is apparently the real obscenity.

And of course, the biggest thing the cartoonist is missing between the man on the right in 1950 and the man on the right in 2010: In 1950, the top marginal tax rate was 91%. In 2010, it was 35%. And that 35% doesn’t include all of the tax subsidies that surely would be used to lower the rich man’s tax rate — from tax subsidies for his employer-provided health insurance to any interest on mortgages or student loans or the myriad of other exemptions someone with a good accountant can find. And of course any profits from investments would be taxed at a lower rate– of 15%. Which is why today, the billionaire Warren Buffett pays a lower percentage of his income in taxes than does his secretary.

All of this makes the cartoon all the more revealing — not of the facts, which it does not reflect — but of right-wing mythology. Why does the cartoonist choose 1950 — rather than a time such when his points would have been true such as 1920 or 1890? The answer is simply that no one wants to go back those eras. Those were periods of economic growth, but inherently unstable times — an instability created by the enormous inequality between the top-most and the bottom-most parts of society. Those periods of history are remembered for the top and the bottom. The 1950s though was the era of the great middle class — robust, strong, stable. In the contemporary conservative mythology, the era personifies the American values of family and hard work. Much of the conservative intelligensia’s opposition to the Civil Rights Movement, the anti-war movement, the sexual revolution, the feminist movement, and the gay rights movement of the 1960s and 1970s came because they saw these movements as a threat to the stability of this status quo.

But the right wing was supported by forces equally opposed to the status quo — who sought a change every bit as dramatic as the radicals of the 1960s sought. Rather than free love, they sought free trade and deregulation. Rather than rights for gays and women, they sought favors for the financial industry. Rather than civil rights for people, they sought corporate rights to influence the political process. Rather than the naive dream of destroying bigotry, they sought the more practical dream of destroying the labor unions.

Since these twin political revolutions, the stability and the strong middle class of the 1950s are remembered with fondness — by mythologists of both the left and right. The conservative argument used to be that radicalism of Civil Rights for women, blacks, gays, and other minorities was what caused the unraveling of this mythological utopia. It has now evolved to blaming the government for redistributing too much to the poor and holding back business with taxes and regulation. The only problem with this story is that the past 60 years have seen a government retreat — with regulations being repealed and failing to keep up with changing times, with taxes having been more than halved, with the rich getting more and more of the wealth and power in the country and the poor less and less.

Which is how you can get a political cartoon such as this — harking back to a flatly false view of an era lost that never was.

The Sheeple of r/libertarian

Tuesday, March 15th, 2011

The rantings of a self-proclaimed “Libertarian Asshole” who is so incredibly deluded as to think that the America is approaching something worse than a despotic government — an “Absolute Despotism!” — aren’t generally worth responding to. But I like reddit — and I like libertarians. Which is why I’ve been consistently frustrated with the regressive turn that the /r/libertarian has taken since Obama’s election.

How else to explain the popularity of the Libertarian Asshole’s factually-challenged post blaming “Liberals” for the Bush administration’s regulation being enforced in his story?

As a liberal, let me tell you that stories of government corruption and government idiocy, of victimless crimes prosecuted and overreach make me mad. I believe in good government — and not government and regulation for it’s own sake. I believe a law should not be unjustly applied. Liberals have made a strong showing in opposing regulatory capture – when organized lobbies of special interests (such as optometrists) are able to get a regulatory agency to act against the interests of the public and in favor of the lobby. That’s why liberals have fought against the FCC to allow for more competition on the radio waves and that’s why liberals pointed to the corruption in the Minerals Management Service. That’s why Matt Yglesias — one of the web’s most prominent liberals — focuses so much on opposing rent-seeking and unnecessary regulation. As a liberal, I believe the government is capable of acting in the public interest — but that citizens must always provide a check against the inevitable abuses.

I only state this because in the world of the Libertarian Asshole, the phantom “Liberals” are those who say the “Law’s the Law” as they turned in runaway slaves because they…are like “cheap whores” with no self esteem.

With that brilliant insight into the Liberal mind, this Asshole struck r/libertarian gold — as 268 redditors and counting demonstrate.

——–

One more thing: The Libertarian Asshole apparently wasn’t satisfied with a rather sympathetic story of a businesswoman who was busted for selling decorative contact lenses without prescriptions and made to sell her car.

He had to embellish. And by embellish, I mean, apparently, to lie. A few minutes on Google reveals the following:

  1. Lie: The Libertarian Asshole claims that Da Young Kim, who ran an internet store selling contact lenses, was “arrested” for doing so.
    Fact: The Court records and the FTC’s records both show that this was a “civil complaint” — not a criminal one. No where does the news or any other source support the out-of-the-blue claim that Kim was arrested.
  2. Lie: The Libertarian Asshole claims that the FTC spent “your tax dollars on an undercover sting operation.”
    Fact: There’s nothing in the news or in the record or elsewhere on the web to back this up. None of the evidence presented against Kim was from any sting operation.
  3. Lie: The FTC acted because they believed the internet store run by Da Young Kim “might not be checking every customer’s prescription.”
    Fact: According to the FTC complaint, Kim kept no records of prescriptions at all. This wasn’t a few contact lenses sold without prescription — this was a business plan.

A Soft Re-Launch of 2parse

Tuesday, March 8th, 2011

As many have noticed, I have let the blog lag for a while.

Blogging, even at the modest pace I was, is exhausting.

But I’ve been feeling that familiar urge again — and so, I will indulge myself.

My new motto is: Shorter blogposts. Less extrapolation and hedging. The goal: To distill the essence of complicated thoughts into a paragraph or two.