The moral of the story is, don't invite Amy Langfield over unless you want her dancing around with a tequila bottle at 2 am saying "What are you, some kind of a wimp? It's pansies like you who are dragging down the spirit of A Once Great Nation."
But out of pounding, throbbing, hangovers, and the untold suffering of those whose immune systems, impaired by tequila, have succumbed to a miserable flu, comes. . . genius.
Question of the Day: Is there anything the Clinton foreign policy team did that was successful?
I'm serious about this, not inviting partisan rants. So far this year, we've seen Ireland unravel, Palestine implode, North Korea admit that they've got nukes and the means to deliver them, Pakistan and India go head to head with weapons they acquired on Clinton's watch, Al Qaeda confess that Clinton's response to their incursions led them to believe that they could stage 9/11 with impunity.
Am I being unfair? Was this simply the inevitable result of the post-Cold-War reality, that no one but a brilliant visionary could have halted?
Did the administration have some successes that I'm not thinking of?
Incidentally, as I've said before, I think Clinton's foreign policy failures are at least as much ours as his -- we didn't want to act like grownups because we were having too much fun to stop the party for boring old international security. So I'm not looking for indictments of the man -- rather, I want to know what was going on in his foreign policy, and whether we could realistically have expected significantly different results from a different president.
I'm sick as a dog and can't come up with anything witty to say, but go read Arthur Silber on Michael Bellesiles and the echo chambers of the left and right.
Titter. Snort. Someone is letting the power of the web administration tools go to their head:
For the last 21 months, we have tried very hard to keep this discussion board open to all left-wing points of view. It was one of our guiding principles, because we believed deeply that talking is better than not talking.
But now we have come to the conclusion that the current state of affairs is untenable. In the past few months I have become convinced of two things:
1) There is a small but outspoken group of liberals who simply are not our friends. Please be aware that I am not singling out Greens, most of whom are capable of participating on this message board in a productive and thought-provoking way. Rather, I am referring to people who are consumed with hatred and contempt for any and all liberals who don't share their exact point of view.
2) It is simple to disrupt this message board, and post the most vile and offensive propaganda if you simply declare yourself to be a liberal, Green, or even a Democrat. Some of the things posted by our "fellow liberals" would make a FReeper blush. In fact, some of these "fellow liberals" might even be FReepers. If they are, they've found a rich vein for disruption, because I let them get away with it. Well, no more.
Over time, the result has been an increase in postings by rude, anti-social disruptors, and a decrease in postings by thoughtful, productive members.
In case you haven't heard, there is a very important election occurring in less than three weeks. The stakes in this election are as high as they have ever been. You are being given a clear choice: Hand over complete control of all three branches of government to the forces of evil - or don't.
There is no viable third option. Choosing not to vote (or to vote for a third party) is a morally bankrupt decision during this time of crisis when the potential harm to our country is so great. You may claim you are standing on principle, but simply calling it "principled" does not make it so. Your stand on principle will have dire consequences, and you will share the blame when the Republicans in the House, Senate, White House, and Federal Courts undo a half century of progress.
As the administrator of this message board, I have the opportunity to have an impact on the outcome of this election. As an American, I have a moral obligation to do what I can to stop the conservative juggernaut. For the next three weeks, that is my greatest concern.
We still allow all points of view, but we have our limits.
For the next three weeks:
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The forces of evil. Not naughtiness, venality, or sheer old fashioned greed. Evil. I confess that I found it hard to read past this point, as with every word I was more firmly seized with the vision of Mr. Skinner composing his posts wearing his Dick Tracy Secret Decoder Ring and his Superfriends underoos.
Which would be, of course, how he knows that his cause is so very just -- so very, very important and special -- that it must be advanced by any means necessary, including rigidly censoring opposing viewpoints so that we don't risk the readers making up their own minds. This cause, mind you, is making sure that the center-left party signs the checks for the farm bill and associated boondoggles, instead of the center-right.
One imagines that if the adults hadn't left already, the open admission that he considers them as childish mentally as he is rhetorically would push them out the door.
I just read this piece on journalism in Iraq by Franklin Foer. It gives example after example of something we all kinda knew -- that journalists in Iraq are too busy trying to maintain their presence in Iraq by sucking up to the regime to actually do any reporting.
When I asked CNN's Jordan to explain why his network is so devoted to maintaining a perpetual Baghdad presence, he listed two reasons: "First, because it's newsworthy; second, because there's an expectation that if anybody is in Iraq, it will be CNN." His answer reveals the fundamental attitude of most Western media: Access to Baghdad is an end in itself, regardless of the intellectual or moral caliber of the journalism such access produces. An old journalistic aphorism holds "access is a curse." The Iraqi experience proves it can be much worse than that.
I really don't understand this. Why would you want to dress up and pretend to be a reporter in Iraq, knowing it was all a sham? Especially when by doing so, you're spreading propaganda for one of the world's most apalling dictators. I suppose it's the all too-human desire to feel important -- which just makes it more horrifying.
N. Korea Admits Having Secret Nuclear Arms U.S. stunned after Pyongyang admits program violates 1994 agreement
A secretive dictator who has apparently starved millions of his own people actually violated an international arms control agreement? Who could have imagined? Is there nothing sacred left on God's green earth?
Meanwhile, I'm waiting for the anti-war crowd to crawl out of the woodwork to tell us
1) The government is lying 2) This in no way means that they should reconsider the idea that Saddaam might be developing weapons we don't know about. North Korea is totally different. For one thing, it's on the Korean peninsula. And for another, it's full of Koreans. And Koreans are different from Iraqis. They talk different, and they're not Islamic. And they eat kimchee. Iraqis hate kimchee.
Tell me again how much better the Gore foreign policy team would be handling the war on terror?
Eugene Volokh has picked up on a DSA bulletin (Democratic Socialists of America), trying to mobilize young people to come to Minnesota to save Paul Wellstone:
DSA’s national electoral project this year is the Minnesota Senate Election. Together with YDS, DSA’s Youth Section, we are mobilizing to bring young people to Minnesota. Minnesota is one of the few states that allow same day voter registration. We will therefore focus our energy on registering young Minnesotans. Wellstone will need a high percentage of young people to register and vote for him if he is to stave off the campaign that Bush, the Republicans and the Greens are waging against him. He is the Right’s Number One electoral target.
Volokh says it sounds fishy. Mark Kleiman argues not so; to him, sounds like it's just a drive to get people to come to Minnesota to help register young voters. He asks the sensible question -- why would they bother trucking voters in from outside Minnesota?
Well, here are a couple of thoughts:
1) Why would they bother waiting until election day? Why not have their drive during the weekends, when young people are thick on the ground, than on election day, when they are likely to be in class or at work?
2) Why the emphasis on youth? It could be that they think young people are more likely to convince other young people to vote. But it could also be that young people move around a lot, and are less likely to have utility bills and such in their name. Note the procedure for registering:
Can I register on election day?
If you miss pre-registering, you can still register on election day at your polling place. You will need proof of your identity and the address where you are living on election day. Use one of these for proof...
A current Minnesota Driver License, learner permit or identification card (or receipt for a new one) with your address
One of the above with a former address and a utility bill*
A U.S. passport or military ID card and a utility bill*
a "Notice of Ineffective Registration" card mailed to you by your county auditor (if you turned in a registration card late)
someone who is registered in the precinct where you live to vouch for you at the polling place
someone who is registered in the precinct where you live to vouch for you at the polling place
Now, if you try to get say, one Democratic Socialist to allege that 20 adults live in their precinct, but are not possessed of such sundries as utility bills or driver's licenses, this is probably not going to fly. If you do the same thing with college-aged people in a University precinct, on the other hand, it's more believable, since college students tend to live like sardines, and only one person can have the utility bill in their name.
3) Moving votes could help the DSA in several ways.
One of the really atrocious parts of our election system is that there's no cross checking between states; I knew people in college who voted two or three times, by absentee at their parents' residences, and in person at school. I'm sure Kleiman, who is a professor, is familiar with the phenomenon. So students, who usually have absentee ballots anyway, could easily hop over to Minnesota and vote again. Hell, I've heard of people voting multiple times in the same state.
It could also leverage votes. Say you work or go to school in a state where the Republicans have a lock on all the important offices. Why not bring your socialist vote to Minnesota, where it could make a difference?
Contrariwise, say you go to school in New York, where the Dems are going to sweep the area just fine without your help. Why not shift your vote to help out where it's needed?
Well, because the express purpose of the system is not to let voters selectively apply leverage; if we had a national system, it would look a lot different, and Paul Wellstone would never be elected. It's illegal and immoral to switch states, and if you don't think so, just imagine the other side doing it to your candidates. . . howdja like a couple of Republican Senators from New York? Paul Wellstone is supposed to represent the voters from Minnesota, not the DSA.
4) Is it unlikely? Well, I belonged to similar organizations in college, and let's just say it wouldn't surprise me. They tend to be young, arrogant, extremely ideological, and their ethics are . . . let's just say, somewhat situational. I think anyone who has spent time in this sort of group would be hard pressed to honestly say that such a tactic is beyond them. (I don't know whether the right-wing groups are similar; I'm not sure there really is a parallel sort of group, and I've never belonged to one if there is.)
I don't know whether they're trying to commit fraud or not. But given the history of elections in this country, I wouldn't be the least little bit surprised. It's crystal clear that we need a real registration system, one that requires photo ID and a social security number to make sure the voter belongs in the database. Obviously that wouldn't eliminate fraud. But it might do away with a lot of the graveyard vote, and about time. That we're even asking this question is unworthy of a democracy as rich as ours.
Jim Henley has been advancing several interesting theories on what kind of person the Maryland sniper might be. The analysis centers around the pattern -- no weekends -- and the vehicle.
Of course, I have to quibble, so I'll point out that the initial reports of a white van in the area have probably resulted in the police getting reports of any white vehicle that was within a 25-mile radius of the shootings. And weekends are a bad time to do anything if you want to get maximum media exposure, which seems to be what this fellow is after. But those are just quibbles; his theories make a lot of sense.
Personally, I have entertained three theories about what might be going on.
First, it's possible that this is some sort of a terrorist. I don't think it's a domestic terrorist, not because they're incapable of such things, but because I don't see how this tactic advances the goals of our homegrown nuts. So a foreign terrorist, presumably Islamic. In which case, I would think that this is aimed at distracting the police in preparation for something else. However, it's gone on for so long right now that if it is meant as a distraction, we're so royally screwed that it doesn't bear thinking about.
Second, it could be someone who's trying to cover up a crime. He wants someone dead, but he doesn't want the police asking questions. So he shoots a bunch of other people so that his target's death will be written off to the sniper. Possible, but at this point, it's gone on a little too long. It's getting damn risky now, and he keeps going, which wouldn't be necessary if he just wanted to cover up a crime.
Third, it could be a nut job. The only problem with this theory is that this is not a typical pattern for a nut job. It's also frightening because there's no particular reason it should end. Unless you blanket Maryland and Virginia with police, your odds of running across the guy are just damn slim; he can be out of sight before anyone even knows there's been a shooting. And because his targets are random, it's hard to gather any evidence. And he can always just start driving farther to commit his crimes, if it gets too hot in Maryland.
Here's a good idea: send some flowers to the Australian embassy in condolence. I'm slightly stony this month, so I'm going to bring some to the consulate here, but Instapundit's using 1-800-FLOWERS, and for the more upscale among you, may I suggest Calyx and Corolla, which sends the nicest flowers you'll ever see anywhere. Come on, guys. . . let's start a meme! Some overwhelming support for our brethren in Australia, for whom I am sure your heart breaks as much as mine.
Stuart Buck is asking why, if the 18-34 demographic is a small group with little discretionary income and a huge overxposure to advertising, advertisers spend so much money pursuing them. On the face of it, it doesn't make much sense. But that's short term thinking. (You lawyers!) Eventually, those 18-34's are going to be well heeled 45's. And by then, many of their brand preferences will already be set.
Oh, maybe you're like me and you read consumer reports and buy what's cheap. But the majority don't. My mother used Whisk for 40 years, and trying to convince her that the cleaning stuff in whatever is on sale is exactly the same stuff as the stuff in the Whisk was like trying to convince Thomas Aquinas that maybe it's all just, y'know, random chance.
When was the last time you switched your laundry soap? Your shampoo? Your dishwashing liquid? Your toothpaste? (Switched brands, I mean). If you drive an American car, there's a very high probability that your last car was American, and chances are better than even that you're driving one made by the same auto company. People are very loyal to their brands, and while they probably won't be wearing their Tommy Hilfiger Hip Hop Specials in 10 years, in most cases, if you get them early, you've got them for life.
The 40-55 segment, on the other hand, is in their peak years. They've already got a shampoo, a laundry soap, a wrinkle cream, and a car. Advertising is both less effective, and offers lower long-term return, than it does when spent on the 18-34's.
The other night, I was discussing the problem of intellectual honesty with Susanna Cornett. It boils down to this: I don't try to fudge up numbers to back my ideological predispostitions. I try to look at the data and see what it really says, not just mine it for items that tell me what I want to here. I try to present disconfirming data as well as confirming. I try to show where I am making a value judgement that can't be validated empirically. I try to assume that my opponents are ignorant or making a different value judgement from me, not venal dishonest fools who are just lying because they're mean. I try not to engage in ad hominem attacks. Oh, sure, y'all have seen me wing a couple of people, but I hope that it was only after they'd repeatedly attacked me. Or in a couple of special cases, because I know beyond a shadow of a doubt that the person involved doesn't really believe what they're saying.
Larry Summers came and spoke at Chicago while I was there. Now, most of you probably think that Chicago economists are just a bunch of fanatic Republicans, but the fact is (apparently -- I haven't confirmed this myself) that the faculty of both the business schools and the economics department splits about 50/50 Republican/Democrat. Nonetheless, you knew that Summers was about to get roasted, because Al Gore's economic plan was a) fictional and b) dreadful.
[I thank my Democratic readers in advance for their angry letters. Yes, I am a drooling, venal dishonest fool who is just lying because she's mean. I'm sorry, I actually ran through the numbers analysis on both the Gore and Bush budget proposals, and both of them were so far off in never-never land that you couldn't even see them without a handful of pixie dust and Peter-Pan to guide you.]
What was particularly dreadful about Gore's tax plan was the "targeted tax cuts" that appear to be the dearest wish of half the left-wingers in the Blogosphere. From the point of view of most economists, there is nothing more distortionary and growth-hammering than "targeted tax cuts", aka deductions. For those of you who have run simple neo-classical models, this is the "D" variable that always produces those outlandish reductions in growth with a very small raise in the amount of the deduction. Let me see if I can explain why:
We'll work with a very simple economic model in which there are two ways to grow the economy: increase the supply of capital, or increase the supply of labor.
When we look at the effect of a tax cut on the economy, we want to know whether it encourages people to work or save more or less; this will tell us whether or not it grows or shrinks the economy.
There are two types of tax cuts you can have: cuts in marginal tax rates, like George Bush's cut, or deductions, like Al Gore's. Deductions can be implemented in a number of ways. You can increase the standard deduction, or you could increase the number of things people are allowed to deduct, like child care, education, home mortgages, etc, or the amount of each "targeted" deduction. Clear so far?
[There's actually a third type of tax cut you could have - a cut in the capital gains rate. But neither party was proposing one, so I'm not going to go into it.]
Now, there are tradeoffs involved in decisions to save or work: every dollar saved is a dollar you can't consume now. And every hour worked is an hour of leisure lost.
When people are making tradeoffs between two goods, economists analyze it from the point of view of two effects: the income effect, which is the effect on your demand for a good of a change in your income, and the substitution effect, which is the effect on your demand for a good in the change of the relative prices of the good and it's substitutes.
Breathe deeply. The bleeding from the ears stops after a little while.
Seriously, it's not that hard to understand. Think of a good -- say Ramen Noodles. The income effect on this good is negative: as your income goes up, your demand for Ramen goes down.
The substitution effect is also easy to understand: if McD's is having a 99 cent Big Mac special, you shelf the cup o' noodles and head out for some mystery meat.
Got it? Great. So let's look at the two types of tax cuts.
First, a cut in marginal rates.
Is there an effect on savings? The income effect is good -- richer people tend to save more of their income. But the substition effect is very complicated, as it depends on things like how permanent people think the tax cut is -- if they think it's temporary, they'll save more than if they think it's permanent, because people like to smooth their consumption over a long period of time, and saving lets them push some of their current consumption into the future. However, the difference in the savings produced by marginal rate cuts and deductions probably isn't large, so if it's all the same to you, we'll just look at the effect on labor, rather than capital.
Well, the cut in marginal rates effectively increases your income. The income effect on demand for leisure v. work is unambiguous: as they feel richer, people want to work less and play more.
The substitution effect is also easy to comprehend. The tax cut just effectively raised your hourly rate. Leisure is therefore more expensive. Say you were taking home $10 an hour, but now you're getting $12. Every extra hour you decide to play instead of work is costing you more money. The marginal hours, the ones you spent watching shows you don't really like on Saturday afternoon, or arguing with your boyfriend about whose turn it was to get the car washed, might have been worth $10 but just aren't worth $12. So you work more.
The entire argument about the effect of marginal tax cuts on the economy thus hinges on a debate over whether the income effect or the substitution effect is larger. That debate is still raging, and it's a post for another day. Suffice it to say that Bush's economists think that the substitution effect outweighs the income effect, so that cutting marginal rates will grow the economy.
[Righties -- this is why simply cutting marginal tax cuts is not an unambiguous boon to the economy. Lefties -- this is why marginal rate cuts are not just "giving money to the rich"]
Now, let's look at Al Gore's tax cut.
The income effect is just as clear: people get more money, so they stay home more.
The substitution effect is. . . hey! Where's the substitution effect? Answer: there is none. There's no incentive to work more; you get the targeted tax cut for doing something non-wealth producing, like buying a house, having children, going to college, etc.
[Isn't education wealth producing? -- ed. You think so? What did you learn in school that is helping you produce wealth today? For engineers and such, yes, but for most people, education is an elaborate signalling tool that tells employers you were smart enough to make it through a tough admissions process -- or at least not to drool on yourself during history class. But it just serves to reallocate existing jobs, not improve them or create new ones.]
Actually, deductions hurt the economy in a third way: they're distortionary. For example, the mortgage tax credit doesn't seem to boost home ownership, but it does create a hugely volatile housing market in tight spaces like Manhattan, while encouraging people elsewhere to occupy larger houses than they otherwise would. There's no reason to divert resources to larger homes when people might prefer to have something other than a big house, in the absence of the tax credit. Education credits just mean that more people will be getting useless degrees; if there were a demand for their degree in the marketplace, it would already pay them to get it. MBA's, lawyers, and doctors have no trouble getting private loans instead of government ones for their education; it's the comparitive folk dancing students who need the help.
[Are you saying degrees in Folk studies are useless? -- ed. Not exactly; I'm saying that I don't want to pay people to get one.]
So, since Larry Summers, who everyone respects as an economist, had been on the stump for these "targeted tax cuts" that are the bane of economists, you knew it was going to be bloody. And indeed, one of my favorite professors grilled him mercilessly.
But Summers had an answer. Ultimately, he said, it's a value judgement. Sure, these tax cuts were going to hurt GDP. But he thought the amount of the hurt would be sufficiently small to merit helping groups he favored, and because most people are economically completely illiterate, getting the targeted tax cuts passed was the only way to help them. That's why I respect him so much -- he gave an honest answer, rather than trying to fudge up data to support his desires, as do many, many figures on both the left and the right. (Of course, a friend points out that he was hardly going to get away with fudging up data in a room full of Chicago economists, but he's subsequently kept impressing me. So there.)
That's why I do get angry when people make disingenuous arguments. For example, there was a guy here a while back who was arguing against privatizing social security. Now, I'm in favor of doing so, with some safeguards, but I can be convinced otherwise, provided you can show me some real data about how we think privatization would end up looking worse than the current system. (There are reasons, having to do with demand and earnings growth and the demographic effect on the economy, that I can conceive it might). Unfortunately, many lefty type economists, who don't want social security touched because it's currently a prime vehicle of income redistribution, haven't gone that route. They also haven't gone the route of saying "I don't want social security touched because it's currently a prime vehicle of income redistribution". They've gone the route of saying ridiculous things that they couldn't possibly believe to support their desire to keep social security intact.
This chap was arguing that there was no crisis because when social security starts running a deficit, they'll just start rolling over the bonds, and the net debt of the United States won't change until 2040 or some such.
This is ridiculous. Let me show you why:
It is one of the most basic identities of economics that government spending must equal taxes plus borrowing plus net foreign income (what foreigners give us, minus what we give them -- for the US, it's a trivial figure)
S = T + B + NFI
This chap was arguing that spending overall could rise -- that we would be increasing social security payments, without decreasing any other spending. Yet at the same time, he was also arguing that neither taxes nore borrowing would be going up. Unless he's found a large pool of foreign donors, this simply isn't possible -- the money has to come from somewhere.
[They could print it -- ed. Yes, they could print it. But that wouldn't help. What we're worried about is not having a sufficient supply of little green pieces of paper; it's about making enough stuff to support everyone in the style to which they've become accustomed. Inflating the currency just hurts the pensioners -- ask the Russians.]
I could also have refuted his argument more directly; he was using the strange structure of government accounts to obscure the cash flow issues. But here's the problem: that argument is very, very complicated, probably beyond my poor powers to simplify for popular consumption. To most of y'all, I'm just a talking head. He's another talking head. We're having an argument about something we understand and you don't. He can BS you guys, and I can stand here screaming "He's lying", which is true, but you don't know that. Those readers who desperately want to believe that social security is just fine as is will simply choose the talking head they like better. That's why journalists so often get things wrong -- they don't understand what they're talking about, so they just choose the expert who validates their beliefs. That's how you get articles on guns that only present the VPC side.
But there are people who ought to know better. When I make a statement about something like economics, I do my best to define my terms, show you my reasoning, and make sure you can follow along with me. When I make a judgement call, I tell you so -- for example, my opinion that drug price controls would effectively end pharmaceutical research, which I believe is right, but not empirically proveable without resorting to price controls. I don't always get it right, but when I miss, I do my best not to fudge, but to admit I erred. And frankly, I'm getting too old to debate people who want to use arguments to obscure the truth, rather than jointly determine what the truth is. It's too tiring, and frankly, if all you're looking for is some rationale for your political views, you're going to take their word over mine no matter how compelling my logical argument. I'm very interested in debate with people who are airing important questions. But not with people who are trying to snow readers who can't tell the difference.
Incidentally, here's an interesting dilemma -- Lincoln Chafee is clearly thinking of switching parties if the Dems lose a seat. Personally, I think if he's thinking about it, he should be a man and let his voters know that he's running on the other ticket, but no matter.
Here's the interesting question -- I think some of the Democratic presidential hopefuls are from states with Republican governors, or may be after the election. Chafee (if he switches) and Jeffords' worst nightmare is the Republicans ever getting back control of the Senate, because they can look forward to living out their days as the most junior man on the Indian Affairs decorating sub-committee. So does Chafee want to bet that the guy who drops out to run for President either won't be from the Senate -- or won't be from a state that has a Republican governor?
Mark also seems to think that I believe that the Wagner Act is a regulatory taking. No, I don't think so -- but I think ordering companies to stay open when they were losing money by doing so, might be. After all, what you're doing is telling them that they have to run down the assets of their shareholders -- no less a regulatory taking than telling someone they can't build on land they own.
Mark Kleiman has a response to the post below, as does Max Sawicky. Mark seems to be a little put off by the fact that I want the Wagner act repealed, but gosh, that's just the beginning of what would happen If Jane Were King. Repeal the corporate tax! Normalize treatment between income and capital gains! Negative income tax to really End Welfare As We Know It! Free health care for children under eighteen! End the student loan programs! And much, much more! If you'll just elect me king, I'll have things ship-shape and economically efficient in no time flat.
But seriously, I wasn't actually arguing that the government should have intervened -- only that if it did intervene, there was no sense in intervening on the side of the union (forcing the companies to pay them for not working), since that wouldn't cost the economy much less than the lockdown is costing. Remember, the result of forcing the companies to continue paying these guys is not just that the companies lose money, it's that the cargo still doesn't move. Why bother? Because dockworkers are cute?
More broadly, the biggest problem with labor law is that if you try to help the workers at all, you end up giving them too much power. Power between unions and companies is asymmetrical in our labor system; a union worker can decline to work for a company, but a company can't look outside the union for labor. At the same time, the way the system is set up, unions who want to play havoc with it can quickly make a company unprofitable. There is something really odd about the government giving the dockworkers union the power to essentially shut down a port, which is what a slowdown is. At least when the owners do this, they lose money, which gives them an incentive to minimize such actions; when the union stops the cargo from moving, they continue to get paid. They have zero vested interest in moving the cargo -- what are the shippers going to do, send it back? The labor system, in deliberately dis-aligning the incentives of workers and employers in key areas, created this mess.
Personally, I think they should have let it work itself out. The economy was losing $1 billion a day, which is a lot -- and those who are supporting the union are not allowed to complain about the cost of the war in Iraq any more, since the slowdown you're supporting chewed through the entire cost of the invasion in 2 weeks. But it's not that much in the grand scheme of things; about 3% of GDP, if it lasted a year. Which it wouldn't. Either the shippers or the dockworkers would have gotten hungry and gone back to the table. But unlike Max and Mark, I don't much care which it was. I don't think that companies are wonderful humanitarian value maximizers -- and I don't think unions are either. I don't think that either group is entitled to my help.
On a side note, Max says that dockworkers don't get paid as much as everyone's saying. Well, he's calculating 50 40-hour workweeks, off of their hourly wages, to get a lower number (still more than I make!!!) But here he has stumbled on one of my areas of indisputable expertise -- union payrolls!
It doesn't work that way. First of all, he doesn't know what their collective bargaining agreements look like; many unions get time-and-a-half after seven hours. (At least, I'd be surprised if he did read them, first because they're confidential, and second, because they're incomprehensibly long) Second of all, ports are staffed 24/7. There are night differentials, shift differentials, equipment bonuses, hazard bonuses, paid holidays, double or often triple time on Sundays, time and a half all day on Saturday, (double or triple time after eight hours), and a zillion other special rules for calculating what they actually get paid. And unlike you and I, whose overtime gets calculated on a weekly basis (anything over 40 hours), the overtime clock starts ticking for a union worker if he stays one minute after his straight time. It is an unusual worker indeed who does not rack up some nice overtime over the course of a year. Say you're on a crane, in the middle of moving a load. Does your boss tell you to get off the crane when the clock ticks over? No, you pick up half an hour or an hour, depending on what the calculation unit is.
It only gets more sweet when you become a foreman. Often there is an extra (all overtime) hour every day, just for being you. You pick up OT, because you're officially on the job until the last guy from your crew goes home, even if you left before him. There are all sorts of bonuses that make it totally inappropriate to just take their hourly rate and multiply it by 2000. And unlike you and I, who get the same amount of health insurance and such no matter how much overtime we work, these guys often have their bennies multiplied by the same factor as their overtime.
Both Max and Mark point out that some of these guys won't work a full year. Some won't. But even in construction, a lot of guys work on stable crews -- it's the screw ups who drift from team to team. A port, which is steadier, operates more like a factory -- most of the workers are going to be fairly permanent, with helpers coming on at peak times. And to the employer it doesn't matter whether they're paying the rough annualized salary to one guy, or seven -- they pay a certain average amount of salary for every body they have on a shift. If that's getting split up among seven transient guys, that doesn't save the employer money; seems to me, that indicates that the union is admitting too many people. But anyway, $80K doesn't seem at all outlandish for a dockworker, who makes about what our laborers do.
Both Max and Mark seem to think there's something vaguely sinister about shippers negotiating in a group -- monopoly power! Actually, it's for the benefit of the workers. Workers do move around as demand changes, and it'd be an awful pain in the ass to have to figure out a different set of rules every time you move. Also, if the union had to sit down with all the hundreds of small companies that do business with them, they'd never get anything done. It's not like autos or steel, with 3 or 4 companies to negotiate with. Nor would workers like to have varying dates, rates, and differentials for their various employers -- they'd never know where they were.
I think that often those who voice fairly unconditional support for unions are those who are comfortably removed from dealing with them. It is really, really hard to spend a year or so dealing with union labor and not see how many ways that unions produce a truly dysfunctional workforce. I don't fault the unions for doing what they do; it's what I would do in their place. But I don't think that they're some unique repository of virtue against the cold, hard, corporate masters; mostly what unions do is look for ways to use as many people as possible to do as little as they can possibly get away with. I don't see this as a winning model for growing the economy.
Max argues that all the unions want is to make sure that the new jobs using improved technology are union, and that this is just an argument about who gets a bigger share of the profits from shipping. Umm. . . no. The union doesn't just want to make sure that the new jobs are union -- it wants to make sure that there are as many jobs using the new technology as there were doing it by hand. That sort of defeats the purpose of implementing the technology. And it isn't a fight over safeguarding current workers; it's about making sure there's a steady stream of new workers, using exactly the same number of people to move cargo as have always been used. I'm not really sure why we have an economist arguing that we shouldn't want labor to be any more productive than it has ever been.
On one level, Max is right -- this is an argument about divvying up the rents from shipping. But on another level, that's hopelessly simplistic. First of all, for the economy as a whole, it is not a good thing to be using more people to do work than is necessary. On a very basic level, the economy has two inputs -- capital and labor. Our output is the product of those two resources, multiplied by teh productivity of the resources. Using more people to do a job than you have to makes the overall labor input less productive, which shrinks the size of the pie we have to divide. Second of all, when a union has a government conferred monopoly, it does just what any other monopolist does -- maximizes its revenue at a lower level of production than would be achieved in a competitive marketplace. So the union guys get higher wages. Some of that comes out of the shippers' pockets, but some of it comes out of the customer's pockets (mostly out of the customers, I would guess, in this case, since shipping has only weak substitutes currently available). Stuff that's getting shipped from Asia isn't, by and large, high-margin stuff; a lot of it is going to be stuff where raising shipping rates will make the difference between profit and loss. That stuff won't get shipped there. Assuming for the minute that American retailers and manufacturers are buying the stuff from Asia because it's cheaper, not because it's fun, that means that GDP will drop.
It's kind of like taxes -- there are good reasons, moral and otherwise, to be against higher taxes. But believing that lowering taxes somehow raises revenue is not one of them. Similarly, it is possible to simply favor unions because you like them, or think that they deserve what they get, or what have you. But it's foolish to argue that the unions will not maximize their self interest at the expense of the company and the economy, because they manifestly do. I think that companies do the same, when they're given the incentive to do so. I think in general, however, that the market does a good job of aligning the company's incentives with those of us who would like a snazzy, productive economy. I don't think that the union's incentives are so aligned. And I have seen no evidence, empirical or statistical, that would cause me to change my mind.
