Asymmetrical Information

From the desk of Jane Galt:

Stop the madness

I've often fantasized about a Stuart-Smiley-Type programme for libertarians and several stripes of left-wing civil liberties types. In which I would give them a mirror into which they could look long and tenderly while saying to themselves "Our forefathers disagreed with me about a bunch of stuff--and that's okay."

Case in point: Kevin Drum wrote a rousing, honest piece in which he points out that the public perception that Democrats are rather more hostile towards religion than Republicans is not entirely the figment of attack-ad-addled campaign operatives. To which his first commenter replies:

You seem to have fallen lock, stocks, and gun-barrel-upside-the-head for the Radical meme that these actions are disrespectful to religion. Perhaps you might want to ask the Puritans why so many of them came to North America, eh? Plenty of people of different religions and sects were willing to support the separation of church and state in the writing of the Constitution because they had firsthand experience of what happens otherwise.

The puritans hanged hundreds for being witches. This about sums up their support for religious plurality:

Between about 1660 and 1664 in Massachusetts twenty-two Quakers had been banished on pain of death, three martyred, three had their right ear cut off, one had been burned in the hand with a letter H, three had been ordered by the court to be sent to Barbadoes as slaves, thirty-one had received six hundred and fifty stripes administered with extreme cruelty, £1044 of property had been taken, and another was martyred in 1661

Virginia had a state church. Religious plurality was written into the constitution for the same reason slavery was: it wouldn't have been possible to get all thirteen states to agree. Which is not to say that many of the Founding Fathers didn't favour religious liberalism; they did. But they derived it from their philosophical reading, not some upswelling in American culture of tolerance. If they could see the state of American religion today--no prayer in schools, blue laws stricken down left and right, nativity scenes banned from every public square--they would be horrified, not thrilled.

Update Commenters point out that I am way off on dead witches -- more like dozens than hundreds. The larger point stands.

From the desk of Jane Galt:

The lips that touch liquor shall never touch mine . . .

I find it funny that back in the days of widespread temperance campaigns, they didn't even bother to tell girls not to drink; rather, they used them as a club to beat the men into submission:

I think of that night, in the garden alone When whispering you told me your heart was my own That your love in the future should faithfully be Unshared by another, kept only for me.

Oh sweet to my soul is the memory still
Of the lips that met mine when they murmured "I will,"
But now to their pleasure no more I incline
For the lips that touch liquor must never touch mine.

O, John! How it crushed me when first in your face
The pen of the "Rum Fiend" had written "Disgrace,"
And turned me in silence and tears from that breath
All poisoned and foul from the chalice of death.

It shattered the hopes I had cherished to last
It darkened the future and clouded the past
It shattered my Idol and ruined the shrine
For the lips that touch liquor must never touch mine.

A little overblown? Not much more so than the radical abstinence preached by programmes like DARE, as Laura at 11D chronicles:

My 7 year old kid learned about drugs at school last week. Well, he mostly learned that mommy was going to die, because she pops open a beer at dinner time. So, we had to counteract the hysterics by teaching him about moderation. We talked about how one glass of wine a day has actually been shown to be good for your heart.

When Steve came home, I told him how he was going to get sick and die from his glass of microbrew. He said that Carrie Nation week was a one way ticket to binge drinking at 14.

When I was a kid, my Italian grandfather would give me a glass of water tinted red with wine at dinner time. That's what his family did back in Abruzzi. On the other hand, Papa didn't have a firm grasp of the whole moderation thing, so perhaps he isn't the best role model. Still, I think that moderation isn't such a tough concept, and it's one that more American kids should learn at an earlier age, rather than face down in a toilet freshman year in college.

Let's be honest: for many of us, our happiest college memories ended up face down in a toilet. But that's neither here nor there. DARE's job is to prevent drug addiction, not maximise the net amount of happiness in society. From what I know of the programme, it doesn't actually do either very well, or in fact, at all. But I misdoubt it would be any better if it preached moderation.

Kids binge drink because they are gigantic bundles of anxious energy, and drinking allows them to free their id from its neurotic chains for a while without social consequences. Well, I mean, there are social consequences, of course, but you can get away with setting cars on fire or sleeping with half the track team with surprisingly little social opprobrium.

We like to think we have outgrown these urges, but honestly, we're all too tired to do those things. Plus our thoughts have gotten much more interesting since we stopped thinking about ourselves every waking minute, except for the few seconds when we stopped to anxiously contemplate what others were thinking about us. So there's a higher cost to dulling them with alchohol. But let's not underestimate the impact of mortgages and acid reflux in keeping us sober.

So colour me sceptical that we could prevent binge drinking if we could only teach 18 year olds to drink like 35 year olds. We could also prevent a lot of road deaths if we could teach teenagers to drive like middle-aged accountants, but I think we've all recognized that's a lost damn cause. Why do we think it's somehow different with other risky and ridiculous behaviours?

The problem with DARE's strategy is that it is not honest. (Although at least they do not try to distinguish between alchohol and other highly potent intoxicants.) Most people can take or leave most things; and the things that one can take or leave vary by individual. I can count on the fingers of one thumb the number of times I have thought "I need a drink"; even "I want a drink" is not something I muse very frequently. I'm no teetotaller--I'm sure there are readers of this very blog who have seen me quaff four or five drinks in an evening. But if you told me that, starting now, I could never have another drink for the rest of my life, I wouldn't be terrifically discomfited.

On the other hand, if I let myself smoke a little, I will end up back on a-pack-and-a-half a day faster than you can say "emphysema". My behaviour towards caffeine is, if anything worse. It took me five years to quit smoking. And frankly, if I were diagnosed with a terminal disease today, the first damn thing I'd do is buy a pack of Camel Lights. Yet most of the people I know who did cocaine stopped on their own, some through never developing a habit, and others through getting tired of it.

So DARE's message is not honest. But what would be a good honest message to send? "Go try a bunch of these addictive substances, and learn which ones you can't walk away from. Then quit those, but it's okay to keep doing the others."

From the desk of Jane Galt:

Amen

I love civil liberties. I'm glad the American Civil Liberties Union exists. If I weren't an agnotheist¹, I'd bless their little hearts in my prayers every night. But I have to admit, more and more frequently, I find myself thinking "Don't they have anything better to do?" I mean, if nativity scenes on public squares are truly the greatest remaining threat to liberty in America, then hey, we might as well fold up the organisation and head home, because folks, we've won.

Becks at Unfogged blogs the latest "What the hell?" moment from the ACLU.

¹ What on earth is an agnotheist? I hear you cry. It's an agnostic who puts a very, very low--yet non-zero!--value on P(God).

From the desk of Jane Galt:

Greatest hits

Just came across this from my early days of blogging. Hope that will tide over readers while I bury myself in work.

From the desk of Jane Galt:

Inside looking out

So I'm in London for a project, the nature of which will be revealed shortly. And I'm jet-lagged. I took all my normal precautions: caught the red-eye, with a little something to help me sleep, and went straight to work from the plane. Unfortunately, I made the mistake of reading in my hotel room before dinner. Which then, of course, didn't happen, because I fell asleep around 6:30 and woke at 11, and now I have a circadian rhythm about like . . . the rhythm of the First Methodist Ladies Gospel and Blues Choir. Housekeeping thinks I'm a riot.

Yes, there I was, at 2 am this morning, wide awake, and knowing I had to go to work at eight. I had finished my new Dick Francis novel. (Sadly, he is not what he once was, but not enough unlike he once was to actually put me to sleep.) I had plowed through Homage to Catalonia for the second time. What else can one do at such an hour, when the bars are closed, the hotel internet connection costs £20 a day, and one's insomniac friends are all on the other side of the Atlantic? I watched Sky News, Britain's answer to CNN.

Watching Sky News is weird, because half the news is about America, and half of that is wrong. I mean, not factually wrong, but with a take on things that seems very strange to an American. For example, there was a very long piece on the "rising backlash" against George Bush on global warming. I care about global warming about as much as any quasi-libertarian, ever, I try to live a green(ish) lifestyle, and I follow the issue pretty closely. I had not noticed any rising backlash against anything except the rising gas prices preventing some Americans from taking long trips in their SUVs. Source of this "backlash"? Cities (and California) passing their own global warming ordinances.

This makes perfect sense from a British perspective, where about the only thing local councils are allowed to control is grotty public housing. But overlaying that worldview onto America has very strange results. Local governments can pass ordinances against global warming whenever they want; they can outlaw coveting your neighbour's wife, too, for all the good it will do. But in doing so, they don't strike a blow against the federal government; they are just making themselves part of the grand (classical) liberal experiment that is supposed to flower under federalism.

There was also a lot of talk about how all the extra American troops killed in Iraq will probably make Americans determined to bring the troops home. This is, indeed, what happens in Britain every time one of their soldiers is killed, but personally I hear a lot more complaints about the expense of the war, or the dead Iraqi civilians, than I do about dead American troops. Americans expected to lose soldiers in the war. What they didn't expect was to spend hundreds of billions of dollars igniting a low level (or, if you believe the Lancet, fast-and-furious) civil war.

So for a few moments I had the answer to Robert Burns' prayer: "Oh wad some power the giftie gie us to see oursels as others see us!" But while it was disconcerting, I don't feel like I've been freed "frae monie a blunder . . . An' foolish notion." Maybe tomorrow I'll take in some British actors doing bad impersonations of Americans.

From the desk of Jane Galt:

Good news for me, bad news for America

The blinding whiteness of my skin remains an asset:

Immigrants with the lightest complexions earned, on average, about 8 to 15 percent more than those with the darkest skin tone after controlling for race and country of origin as well as for other factors related to earnings, including occupation, education, language skills, work history, type of visa and whether they were married to a U.S. citizen.

I find this sadly unsurprising. The evidence of workplace discrimination is that resumes with recognizeably black names are less likely to be picked out of the pile; it's natural to assume that this winds its way up through the food chain, although in person presumably personal characteristics mitigate it somewhat. Also, in many countries, like India, those darker-skinned immigrants would have been discriminated against pretty openly in their homeland, which presumably stunts human capital formation. I don't know what should be done about this, but I think there's no question that skin discrimination exists.

What actually puzzles me is why it's so widespread, even outside European areas. I don't know of anywhere that the reverse is true, unless you count tanning. But it's not like I know a lot about the far corners of the earth.

From the desk of Jane Galt:

Bankruptcy, revisited

The Economist has an article today on America's bankruptcy reform, which has proved more effective than even its sponsors hoped (and its opponents feared):

Either way, the evidence so far suggests that the bill has succeeded tremendously. Until 2005, when consumers began rushing to file before the new laws came into force, personal bankruptcies had been hovering around 400,000 a quarter. In the first half of this year that number plummeted (see chart).

Unsurprisingly, how you feel about that depends on which side of the bankruptcy proceedings you are on. Consumer advocates say the higher costs of filing and of hiring lawyers are unreasonably deterring people from seeking bankruptcy. Lawyers have raised their fees to cover the cost of extra paperwork and to guard against stiff fines for signing off on a fraudulent bankruptcy filing. Bankers, on the other hand, praise the law for weeding out fraudulent or abusive filers, while still letting those in genuine need get relief from unpayable debts.

It is unclear, yet, who is right. Anecdotal evidence suggests that few who show up for (now-mandatory) credit counselling have any chance of repaying their debts. Most continue to go into Chapter 7, America’s uniquely generous bankruptcy provision, which allows them to discharge all their debts in exchange for liquidating all their assets. They can even protect important assets like houses from creditors to some extent, unless they are security for an unpaid loan.

But no one knows quite what has happened to those who have not shown up at the credit counsellor’s office. Some may simply have filed a little early: over 440,000 more people filed for bankruptcy in 2005 than did so the previous year. But this cannot be the whole explanation. The first half of 2006 shows a sharp decline compared with the same period in 2004. More recent weekly figures suggest that trend is being sustained. Although many bankruptcy professionals seem to expect that filings will gradually return to their old levels, as more consumers learn it is still possible to file for bankruptcy, nobody is sure of that.

. . . his provides a sort of natural experiment on the reform. If bankruptcy rates do not return to historical levels, it may indicate that many of the previous filings were opportunistic. But even this would not prove the new rules are worthwhile. There is considerable evidence that tougher bankruptcy laws inhibit would-be entrepreneurs, who often must personally guarantee business loans. Even if American consumers do not need quite as much bankruptcy protection as was once thought, America’s economy might.

Incidentally, for those who may not have realized it, The Economist has moved all of its web content out from behind the pay barrier. That means that you can read all the daily news articles for free.

From the desk of Jane Galt:

Why do the numbers of Iraqi dead matter?

Timothy Burke has some worthwhile thoughts.

From the desk of Jane Galt:

Illegitimate arguments about the Lancet study

Sorry I've been away from my computer lately. Life, y'know.

Anyway, I've been catching up on the Iraqi death count commentary. There are a lot of arguments out there on both sides, many of them bad. I thought I'd highlight some of the problems, starting with my own side:

• The study doesn't agree with the Iraq Body Count This is not by itself convincing. The Iraq body count is, +/- 50% to allow for reporting errors and double counting, the bottom bound of the number of dead civilians. I, and others, have argued that the ratio of alleged dead in the Lancet study to the number of dead people counted by the IBC is too high. But the number of dead is, in my opinion, almost certainly substantially higher than the number being recorded by the IBC.
• There is something wrong with the statistical method There doesn't seem to be much problem with the analysis. If there is a problem (and obviously I think there is) it's in the data collection.
• The death rate for pre-war Iraq is lower than that of the US or other developed countries. The median age of Iraqis is very young; half the population is under the age of 20. Young people who do not have access to drugs and cars die at a low rate. Infants don't, but infant mortality numbers are undoubtedly at least slightly depressed by counting births we would count as live births as stillbirths.
• The sample is too small. It doesn't seem particularly small to me. It would be nice if we could interview everyone in Iraq, but not practical. For many of the constituent death rates, the samples are too small--it's unlikely that we could really extrapolate, say, cancer deaths from the Lancet figures. But for the big causes--violent deaths, non-violent deaths, total deaths--the sample seems perfectly adequate.

And from the other side:

• It's entirely possible all these people are dying without death certificates, which is why there's no official record of them. The Lancet study alleges there were death certificates for 92% of the people it interviewed. So do other sources from Iraq, which say it's very hard to bury someone in a cemetary without a death certificate. In urban areas, people aren't just tossing Grandpa in the backyard and planting some ornamental hedges over the body.
• There is absolutely no passive count which is at all useful in checking this survey I just don't buy it. If 92% of responders produced death certificates, check the government figures. If the central government doesn't have them, the provincial government will, at least according to this Iraqi doctor:

And by the way, most cemeteries in Iraq would not accept a body without a death certificate, unless the bodies are buried in mass graves or backyards without reporting them to health authorities (look at this to understand why), which in this case the government would regard them as ‘missing.’ While working in hospitals and health centres in Iraq, it was sometimes my responsibility (when the late-night doctor was unavailable or, in some cases, sleeping) to oversee the checking in of corpses at the hospital and to issue a death certificate indicating the cause of the death. No certificate is issued without a body, and it is required that several copies are kept. IDs of dead people are shredded at the spot and their names are removed from their family’s food ration cards. The Ministry of Health should have access to certificates issued throughout the country over the last 3 years. And both the Defense and Interior ministries have their own counts. Now why isn’t any independent body looking into that information?

Even if the provincial government doesn't, check the cemetaries. And the hospitals and doctor's offices. If you can't get a good population for the hospital or cemetary (unlikely; this is not London, where you can't swing a cat without hitting a hospital), you can check the ratio of current deaths to pre-war ones, which should display roughly the same pattern as the study.

• None of the people questioning the Lancet study have made a serious question about the study; they're just using "gut check incredulity." This betrays the watcher's ignorance of what a "serious question" is. When an active study implies unrealistic levels of error in passive measures, that is a serious question. When someone asks how you could get a good sample if the country really is that chaotic, this is a serious question. When someone says that the numbers disagree with a study performed by the UNDP using similar cluster analysis, which found less than 1/4 the number of deaths as the Lancet surveys, that is a serious question. When someone asks how reliable a non-random sample can be, that is a serious question. For more serious questions see this post
  
• The official Iraqi death counts are wildly off; this has been known for a long time. Not according to the Iraq Body Count, whose data show that the central government's data is pretty close to dead on.
• The same methodology is used to estimate deaths in Darfur and the Congo. And your point is . . . ? Most of the people criticising the study, including me, have never cited death figures for the Congo or Darfur, and as with Iraq, I don't think such things can ever be known with any reasonable degree of precision. The eyewitness reports are enough to tell me that something very bad is going on, and the data collection may be useful to indicate the various kinds of bad things that are going on, but in a country with poor recordkeeping where a lot of people have been fleeing violence for a long time, statistics give false precision. Moreover, Congo and Darfur are both much, much, much poorer than Iraq--Sudan has about half the GDP per capita of Iraq, and Congo has about 20% of the per capita income. That means that even before the civil wars screwed everything up, the institutional structures for counting deaths, etc. probably weren't there. This is less of a problem in Iraq, which should make its death-counting apparatus more effective now, leaving a smaller gap between formal and informal counts. Interestingly, relatively wealthy Bosnia (per capita GDP $6,800) is cited by the authors as the exception to the rule that official counts understate deaths.
  
• Why are critics paying more attention to this than to the Darfur figures? For the same reason the commenters are so emotionally invested in refuting them, when they probably wouldn't bother reading a similar study about Darfur: the outcome of Iraq is politically important in America and Europe. The outcome of Darfur (sadly) isn't.
  
• The same methodology is used in polling Polls aren't very accurate, even though pollsters have much, much, much, much, much, much better data on the people they are calling than the Iraqi surveyors. Their saving grace is that we do a lot of them, so that the errors tend to cancel out overt time. Polls also tend to produce the answers that the pollsters would like, which is one of the many reasons that one never puts too much of a weight on any one poll. Perhaps most importantly, polls don't just extrapolate upwards from raw data and gross demographics of age and sex; they massage their raw data considerably using historical data, of which they have a lot. They also have an accurate passive measure--the actual vote--against which to check their predictions frequently, and refine their method. Obviously, the Iraqi surveyors have none of this.
  
• ". . . given all the attention that the study has received—much of it hostile, and much of it from people with agendas—the authors just don’t want to mess with what would happen if they started sharing their data with strangers just now. I certainly can’t blame them for wanting to keep a few things close to their chests for the time being." The idea that scientists are somehow immune from sharing their data because . . . there are a lot of people interested in seeing their data, and some of those people want to challenge their conclusions, is ludicrous. That's how science works.
  

From the desk of Jane Galt:

Full disclosure . . .

. . . I have used the words "full disclosure" in a post before. Kevin Drum wants me to stop.

Personally, I think the problem is that "full disclosre" isn't really full enough. How much better would it be if when you used that phrase, you actually had to reveal something interesting?

Full disclosure: two years ago at a conference, John Chapman and I had a little too much tequila and ended up shagging like minks for three glorious nights. I still get a little misty-eyed every time I walk into a new hotel room and see those little mints on the pillow. Neither my husband nor his wife were aware of this little interlude. I mean, until I announced it publicly here.

Full disclosure: I met Malcolm at Harvard, where I used to cheat off of him in calculus exams. Now I have to invite him to my annual Christmas party, have dinner with him and his appalling wife three times a year, and say nice things about all his books. Kids, let this be a lesson to you.

Full disclosure: Andrea was my boss at the Brookings Institution, and I've always had my eye on her husband. Frankly, now that their marriage is on the rocks, I'm hoping that he will come to me for consolation during the inevitable messy divorce.

Full disclosure: George Donaldson is the head of the alumni admissions committee for the Dalton School, where my little Katie will be applying next year.

Full disclosure: Having seen Jennifer Schaeffer vomit the remains of the Cato annual dinner out her nose at the after party, I've never been able to take her work seriously.

Full disclosure: Egon and I went to Yale together, where we were both members of the crew team. Every time I hear him talking about drugs, I flash back to the time we made the mistake of putting "Big E" in charge of the ganja fund. I ask you: how can a man claim to be an expert on the subject when the one time he was actually given responsibility for drug policy, he came back with three pounds of grass clippings laced with oregano?

Full disclosure: James is a man who doesn't take "no" for an answer. He asked me out 138 times when we were interns at the CSPI, even after I told him that I had to wash my hair, attend a funeral for my aunt's dog, and had taken a vow of celibacy. The only way I could find to get him to stop was to get engaged to a former Big 10 fullback. You can assume that he was similarly persistent in demanding that I introduce his speech.

Full disclosure: Emily is one of those people that I really want to like, but I can't get over the fact that she is prettier than me, and also, makes more money. I have channeled all of my poisonous envy into this interview.

Full disclosure: I am unable to remember my opening remarks because I am hypnotized by the excessively vibrant green-and-pink plaid of Madison's suit. I had no idea you could buy clothes made out of upholstery fabric.

Full disclosure: Andrew Heller is a vicious human being whose superficial charm fools only those who have never met him before, or heard about him from someone who has. After one junior journalist wrote that his work was "Interesting, but a little too shrill for my taste", Mr Heller spent three years ceaselessly campaigning for her destruction. She was found three weeks ago in her car with empty bottles of SoCo and Valium, and a note that just said "It's just not worth the hassle." I would rather have all my teeth extracted without anaesthesia than say something that might offend him.

Full disclosure: I am hoping some day to overthrow Ming Lee in a bloodless coup. The best way to do this is to be superficially loyal in all public venues until she lets her guard down.

Full disclosure: I had to call Hubert for a quote, because he is a senior fellow at the think tank where I am currently interviewing on the sly.

Full disclosure: Sometimes, late at night, I fantasize about what it would be like if Sarah dressed up like a cafeteria lady, only a naughty cafeteria lady who would come into my bedroom and make me eat all my peas.

Full disclosure: I am being excessively nice about Al's book in order to cover up my discomfort and guilt for finding him completely physically repulsive.

Full disclosure: though Gordon and I are ostensibly on the same side, I've decided that his book would make a good "Sister Souljah" moment for me to launch my career as a transgressive freethinker who can't be tied down by the received wisdom of her political peers.

Full disclosure: I've never really gotten over the fact that when we were at Georgetown Law together, Hilary borrowed $200 off of me for car repairs and then "forgot" to pay me back. Also, she cheats at golf.

Full disclosure: I am a credulous fool who is easily wowed by any book written by a PhD, government official, or journalist who dresses better than I do. And I shop at Today's Man.

From the desk of Jane Galt:

Legitimate questions on the Lancet survey

The good thing about the study is that people are having some very interesting discussions of the data. There are some good objections to it, and it makes interesting reading.

John Quiggin examines airstrikes, comparing them to the number of deaths by airstrike in the survey. His comments explode.

• One commenter says that Mr Quiggins' estimate of the deadliness of airstrikes is way overblown:

  In the recent Israel-Lebanon War, “The IAF flew some 15,500 sorties, including some 10,000 fighter sorties, and attacked a total of around 7,000 targets.” Since Israel killed about 1,000 people by all means, I conclude that on average it takes 10 air attacks to kill 1 person, and that John Quiggin’s figures are inflated by a factor of 100.

  On the other hand, if the strikes are happening at night, people won't really know whether they got hit by an insurgent mortar or a US plane. Still, it does give pause. Can any of my many militarily knowlegeable people comment?

• Others point out that while the numbers of deaths in the two studies (Lancet I and Lancet II) agree, the causes of death do not; the second study says that there's almost no excess mortality from non-violent causes. This is definitely disturbing. It's hard to confuse a stroke with getting blown up. Many of the commenters on Crooked Timber purport to believe that this does not matter. But the authors are claiming corroboration of Lancet I via Lancet II, when in fact the samples say something very, very different. Think of it as a survey of "excess violent deaths" in Iraq right after the invasion: Lancet I discovered approximately 60,000, while Lancet II discovered double that number, and no excess non-violent deaths.

  This is not agreement. Deaths from various causes like heart attack and stroke may vary randomly, because old people who die tend to have multiple problems; if one doesn't kill you, the other will. Also, the cause of death isn't always clear--did you die of the cancer, or the stroke it caused?--so there will be random variance just because doctors put deaths in different baskets. This is not true of "deaths by heart attack" and "deaths by gunshot", which strike different populations and thus are at best, weakly correlated, less so over longer periods of time. One expects random variance between, say, mortar and rpg deaths, but if a survey can't distinguish between "violently killed" and "natural causes", you've got a problem. To me this suggests a couple of things: either people's memories are failing them more than even critics think, or there is a substantial difference in the two samples, which is worrying.

• The Iraqi researchers broke randomness. At first blush, this seems most likely to have surpressed the body count downwards, since they probably tried to go to less dangerous areas. On the other hand, if they *really* broke randomness--by, say, asking the locals who wanted to talk to them--it could have gone the other way, since presumably the households with high body counts would swarm to the researchers with their stories. This would also explain the sudden decline in excess mortality from non-violent causes, since people are less likely to blame Grandpa's heart attack on the Americans.
• Interesting tidbit: one commenter alleges that if they hadn't thrown out the Fallujah sample from Lancet I, the first study would have shown something like 40% of the population of Fallujah dying in the attack. The problem with throwing out obviously erroneous outliers like this is, of course, that they may be pointing to a problem with your sample. They also may not, mind you; this is not some dispositive refutation, just an interesting item.
• At least some people report that Roberts et. al. will not release raw data, even scrubbed of identifying information. The same people defending the study (rightly) found this sort of behaviour very suspicious when John Lott did it; that's certainly why I no longer trust anything the man says. But if there are people who have succeeded in getting the raw data, please tell me. Also let me know if it truly is standard practice in public health never to share your deidentified data with anyone except collaborators. If that is true, can you explain why? That seems totally unscientific to me; no one would ever be able to replicate anyone's results or check sampling problems.
• Let me preface this by saying that I am completely, 100%, not in any way implying that Roberts et al. made the data up. But a commenter in John Quiggins' post asks "how could anyone tell if they just made it up?" My sense is that it's actually pretty easy to tell things like that; researchers get sloppy and tend to repeat patterns that you can pick up. That's how Steven Levitt caught teachers cheating on standardized assessment tests of their charges in Chicago. This is just a hypothetical, mind you, not any sort of accusation at all. I have absolutely no reason to believe they are making anything up, and if any one cites me in support of the proposition that they are, I will sue them. Or at least be very, very angry.

  A more interesting question is: could you tell if the Iraqi surveyors made stuff up? I find it much easier to imagine a survey team deciding that discretion was the better part of valor and faking entries rather than risk their lives. Hey, back when I was into political action, I saw people make up signatures on petitions so they could go get high. Again, I have no reason to think that this happened; I'm just curious whether it would be easier or harder to pick out researchers fudging the data.

• A knowlegable commenter with extensive survey research experience says this:

  . . . I’m also very worried about the fieldwork itself. I believe the reported refusal rate was 0.8% (I can’t find this in the report itself, so feel free to correct me). This is simply not believable. I have never conducted a survey with anything like a refusal rate that low, and before anyone talks about cultural differences, there are many non-cultural reasons for people to refuse to participate. If my survey was in a war-zone, I would expect refusal rates to be higher than normal.

  . . . I understand that each of the clusters (40 interviews) were conducted in one day (again, I don’t have a direct cite). The paper itself is ambiguous as to how many interviewers were deployed at each cluster, and whether they worked in pairs or solo. Assuming it means 4 interviewers each interviewing 10 people, that’s a very impressive work-rate in the context of the difficulties. See Appendix B of the report where they report being held up for hours at roadblocks and the extreme suspicion of initial respondents, requiring lengthy explanations. Apparently these “lengthy explanations” migrated quickly from household to household.

  If the interviewers worked in pairs (as one would have assumed – one male and one female) then the interview rates are unbelievable.)

  . . . The report states that in 92% of when it was requested, a death certificate was produced. I also find this difficult to believe, although cultural practices might come into play.

  I don’t attribute improper motives to the John Hopkins team. As I understand they remained in Jordan and relied on their intrepid field team. I find it difficult to believe that field team did what they say they did.

  Now that it is pointed out, I also find the response/not home rates rather unbelievable. Admittedly, phone surveys are easier to opt out of, Iraqis probably have more stay-at-home Moms, and Iraqis almost certainly don't go out much these days. But if Iraq really is that violent, people will be fleeing, which means they should have knocked on more doors where no one answered. As one blogger asked:
  

  
  Don’t heads of households and their spouses in urban Iraq have jobs? Don't they go out to meet friends? Do they never visit relatives in other neighbourhoods or towns? Do they not engage in any activities outside their homes? Are they never in the middle of a family meal and don’t want to be interrupted by unknown visitors asking intrusive personal questions? Never out shopping for groceries or passing the time of day at a local coffee shop or dropping off the family car at the mechanic’s? Do they just stay around the house all day every day? In short, do those folks living in urban Iraq have any semblance of normal lives?

  I realise that armed conflict would impel most people to huddle in their homes behind locked doors (in which case they would be unlikely to open the door to strangers), but that possibility doesn’t enter into it because the locations selected for interview were altered if they appeared unsafe.

  And 92% produced death certificates? Maybe households in poorer countries keep that stuff in a special place forever, where they can instantly put their hands on it . . . but I certainly wouldn't want to bet that my family of pack rats could immediately produce a death certificate when asked for any of my dead relatives, much less all of them. And the average household had six people, yet the interviews supposedly took only 15 minutes. Have you ever sat around with a family of Arabs--or for that matter any sort of family--talking about recent family history?

  "Hussein moved to Basra in November 2003."

  "No, Ali, it was 2002. It was a month after Aunt Maryam died. He used her suitcases."

  "Aunt Maryam died in 2001. Remember? She choked on a date at Noor's wedding, and at the funeral Grandma forgot where she was and tried to do the wedding dance." (To interviewer) "My grandmother hasn't been the same since Uncle Samir was taken by Saddam's police."

  "So you're saying Hussein moved to Basra in 2001? That's ridiculous! He was still in school. I have his diploma right here. June 18th, 2002." (To interviewer, fondly) "His math teacher said he was the best student she ever had."

  "I'm not saying he moved in 2001, I'm saying he didn't go a month after Aunt Maryam died."

  "You don't have to shout, Karim." (To interviewer) "We're all so tense with the new curfew rule. Karim hasn't been to the cafe in four days. Anyway, it couldn't have been 2003, because he drove down with Cousin Mohammed, and Cousin Mohammed fled to Amman before the bombing started. His mother should die of shame, he's such a coward."

  "Don't start that again. He's been very nice about sending money."

  "He's been very nice about sending money because he's in Amman sitting in cafes instead of home taking care of his mother where he ought to be."

  Fifteen minutes my Aunt Fanny.

• Given the description of the data collection methods--places where the researchers can walk to at least 40 houses in one day--the clusters selected are almost certainly fairly urban. Since that's where the violence is concentrated, that would bias the sample; something like 1/4-1/3 of Iraqis live in rural areas
• A commenter at Marginal Revolution points out that if the violence really was as bad as the Lancet studies say, there should be massive refugee flows outward, but the UNHCR numbers do not show this.
• At Blogcritics, David Nalle makes what seems to me like a good point, though he's rather more pugnacious than I think is wonted:

  With a population of 27 million people in Iraq and 50 data clusters, they allocate one cluster per 540,000 people. That's fine. The problem is that they then distribute the data clusters based on the governorates, which are political divisions and do not have evenly distributed populations. This means that when a governorate's population is not evenly divisible by 540,000 they round up or down to determine how many clusters to locate there.

  This creates an instant problem because the areas where they round down the number of clusters will be underrepresented and the areas where they round up will be overrepresented in the final numbers. As it works out, the most overrepresented governorates are two of the most violent and most populous, Diyala (+28%) and Anbar (+36%) and the most underrepresented are some of the most peaceful, Wassit (-45%), Qadissiya (-41%) and Tameem (-37%). The pattern is similar but less dramatic with the other governorates, plus two entire governorates in the more peaceful regions failed to return results at all. Only about 3 of the total of 20 regions are at all accurately represented. This leads to a cumulative effect of more violent areas likely being overrepresented by a rough figure of at least 20%.

  The math is off, but the point is valid: very violent areas were probably oversampled. Since their deaths (calculated as deaths per thousand people per year) were 5 or more times higher than those in the low-violence areas, and probably around twice that in the medium-violence areas, that would tend to skew things.

Posted by Jane Galt at 10:14 AM | Comments (16) | TrackBack

From the desk of Jane Galt:

Should you invest in the Blue Fund?

. . . asks a friend who wants to make money and support Democrats at the same time.

I took a look through their publicity materials, and according to them, if you throw out the companies with a 25 billion or greater market cap--Costco, Apple, Google, and so on--you get a 3% excess return over the S&P. Given that the time horizon is only 5 years, that's not a significant excess.

The real question is, how many of those big winners did they have? If there were five or six, then I would guess that most of the incredible excess returns are born of the fact that Google, an incredibly successful company, IPO'd after the stock market had begun to rebound. If those big companies are, say, half the sample, I'd be a lot more comfortable.

The other problem is that 5-year time horizon. I'm not accusing the guys of anything--5 years is a perfectly standard horizon to use. But it also leaves out the 2000 crash. If "Blue" companies are more volatile than average companies, then all the excess returns tell us is that volatile companies do better when the market is on the upswing. We already knew that. I'd like to see the ten year returns too.

That's not because Google or Apple aren't perfectly great companies; they are. But I wouldn't want to bet, based on a sample of two, that the next big success story is going to be "Blue" leaning.

Full disclosure: I went to the University of Chicago, which means I am legally barred from believing that mutual fund managers can beat the market over the long run. Lots of great market theories backtest well, and blow up in real time. And others are undone by the very fact of their discovery; if "Blue" companies really do outcompete "Red" or neutral ones, the returns will quickly be traded away as mutual fund managers become willing to pay a premium for "Blue" stocks.

At the very least, I don't think the average investor should be messing around in mutual funds; I think they should invest in very broad market index funds that track the S&P or the Russell. But if you are determined to waste your money on an actively managed fund, this one probably won't be all that much worse than any other fund--though I should also add that a long time ago, in a galaxy far, far away, the regressions I ran in statistics and finance classes indicated that SRI (Socially Responsible Investing) Funds underperformed their peers.

From the desk of Jane Galt:

Crikey

The editor of The Lancet isn't going to stand idly by while people sow doubts about his judgement in publishing the Iraq mortality study. He's going to go right out and sow some himself.

From the desk of Jane Galt:

Trust in oil?

Orin Kerr writes in favour of an oil trust for Iraq: effectively giving every Iraqi a stake in the oil proceeds, and then taxing back the revenue needed to run the government. This would assure Sunnis a stake in the oil proceeds, and limit opportunities for government corruption.

This sounds like just the sort of thing I'm generally in favour of: transparent, clean, and easy. So let's try to break that confirmation bias! What's wrong with this plan? Possible things I can think of:

1) There is no good record of who is an Iraqi, so people will flood across the border to get in on it

2) The financial infrastructure for distributing the proceeds doesn't exist, i.e. most Iraqis can't cash checks and cash tends to disappear.

3) The taxation infrastructure and culture for getting the necessary money to run the government doesn't exist, and the government will quickly run out of cash.

4) It will function as a giant welfare system, undermining civil society. There will be huge incentives to have extra babies.

Other suggestions?

From the desk of Jane Galt:

How dare you question the experts!

It's a reaction I get surprisingly frequently. And whenever I start to doubt myself, I imagine this conversation:

Executive: The new product is a failure. It may put the company out of business.

Market researcher: No, you're wrong. Our reasearch clearly shows that 90% of Americans prefer it to our old product, and our competitor.

Executive: But they aren't buying it.

Market Researcher: Who the hell do you think you are to question my scientific credentials! I have an advanced degree in statistical methods! I have 20 years of experience!

Executive: I'm not questioning your scientific credentials. I'm just saying no one is buying it.

Market Researcher: We did multiple studies using the most up-to-date methodology! It was the largest market research study ever performed! All the experts in the field agree with me. America loves it!

Executive: Then why are they boycotting it?

Market Researcher: Bow before my expertise, mortal! NEW COKE IS THE BEST PRODUCT OF ALL TIME!

¹

There are lots of fields where I don't question the experts. I don't try to tell physicists how to run their particle accelerators, and I don't give my mechanic advice about fixing my car.

But as it happens, I have some passing familiarity with data collection and analysis. And my first rule for any number is: check it against what you already know. That's how I had the timerity to question demographic experts on the causes of Ireland's fantastic growth. And that's where I found the deep inner courage to question the Lancet study.

I'm not doing something wacky and strange: I'm doing something that good experts do to themselves. For example, it would have been nice if the people conducting the Lancet study had, while they were in the area, dropped by the local death-certificate-issuing-authority to see if their records confirmed the death rates they were getting. This would have overcome the problem that Daniel Davies claims: local authorities issuing certificates but not sending them in.

Obviously, good experts generally come up with an explanation for why their numbers are different, since once you've spent a year or so doing a survey you have considerable emotional investment in that survey being right. But that's where other experts step in and take a hard look at the divergence. That's what Michael O'Hanlon of Brookings is basically saying--he has a PhD from a good university, if that makes you feel better: a tenfold excess over the passive counts is much too high.

Moreover, this isn't, as Malcolm Gladwell once said, "blogger v. expert"--there are plenty of experts who were less than enthusiastic about the survey. After parsing the experts, what I took away from the newspaper reports--and you are of course free to have your own reading--was the positive reviewers from the public health field saying "It was as good as it possibly could be, given the circumstances", and the negative reviewers from the same field saying "yes, but given the circumstances it was impossible to do an accurate study." This being approximately what I've been saying.

Of course, sometimes grossly outlying values are correct, and the earlier estimates are wrong. But more often, there is some systematic bias in the data collection that produced the error. In the case of New Coke, the problem is that drinking three ounces of something in a cup and then telling the researcher who's smiling brightly at you that you'd definitely buy it is a very different activity from actually putting a six-pack of the stuff in your shopping cart and rolling it up the aisle. The study design was the best you could possibly do under the circumstances. But it nearly put the company out of business, just the same.

¹ Yeah, you knew that was coming. I'm sorry--that story just never gets old for me.

From the desk of Jane Galt:

Yes, I've read the damn study. Have you, oh critic?

What is it with people who haven't read the Lancet study triumphantly demanding to know whether I've read the Lancet study? Yes, I've read it; it's not exactly heavy going, since it's eight pages long and surprisingly fuzzy. They don't break out the figures by individual province; the only clue is a map, on which Baghdad is in the basket marked "2-10 deaths per thousand per year". This does not inspire much confidence. And the reason it is not confidence inspiring is that the fuzziness prevents comparison with figures known to be relatively reliable, such as those from Baghdad's central morgue. Why isn't there a table showing the results for each cluster?

This is also not exactly inspiring:

insecurity during this survey could have introduced bias by restricting the size of teams, the number of supervisors, and the length of time that could be prudently spent in all locations, which in turn affected the size and nature of questionnaires. Further, calling back to households not available on the initial visit was felt to be too dangerous. Families, especially in households with combatants killed, could have hidden deaths. Under-reporting of infant deaths is a wide-spread concern in surveys of this type.29,30 Entire households could have been killed, leading to a survivor bias. The population data used for cluster selection were at least 2 years old, and if populations subsequently migrated from areas of high mortality to those with low mortality, the sample might have over-represented the high-mortality areas. The miscommunication that resulted in no clusters being interviewed in Duhuk and Muthanna resulted in our assuming that no excess deaths occurred in those provinces (with 5% of the population), which probably resulted in an underestimate of total deaths. Families could have reported deaths that did not occur, although this seems unlikely, since most reported deaths could be corroborated with a certificate. However, certificates might not be issued for young children, and in some places death certificates had stopped being issued; our 92% confirmation rate was therefore deemed to be reasonable.

The public health guys who endorsed the study in the newspapers were basically saying "I couldn't have designed a better one", which is probably true. The problem is, garbage in, garbage out; if you can't take a good sample, which these guys pretty clearly couldn't, it doesn't matter how faithfully you run the regressions on the crap you managed to collect.

Should we make do with crap because it's all we have? It seems to me that when you don't know the answer, the correct answer is "I don't know", not "here's my wild-assed guess".

From the desk of Jane Galt:

Daniel Davies throws down.

It's possible that the Lancet study is right. Hell, it's possible that hte upper bound is right, and 4% of the population of Iraq has been killed in the past 3 years. I just don't think it's likely.

Any single study can be wrong. Especially a survey where, as the authors testify, the survey takers are afraid of getting shot. Obviously, the fact that they are afraid of getting shot testifies that all is not well in Iraq. But when you have a survey like this, it makes sense to check it by comparing it to other, relatively well known figures. How does the alleged mortality check against other civil wars? Against civilian deaths in other wars? Against military deaths in other wars?

Another way to check is against the passive statistics, like death certificates. Daniel Davies says these are wrong, because hospitals don't send them in to the central government. Perhaps they don't. But we can also check the figures for Baghdad, which has, everyone agrees, about a quarter of the population of Iraq, and also the worst violence. It is also where the central government is, and my understanding is that the morgue, at the medico-legal institute, is the one that issues and collects the death certificates. Undoubtedly some deaths in Baghdad are missed, but those statistics should be (for Iraq) pretty accurate. They are unlikely to be off by a factor of four or more.

In August, according to UNAMI, there were 73 violent deaths per day in Baghdad. In July, there were 93. Extrapolating this evenly across the remaining 75% of the population would give us approximately 125,000 deaths per year in the entire country, which is still below the lower bound of the Lancet study. But we also know that the other regions of Iraq aren't equally violent. The 10% of the population that is Kurdish lives in a basically stable area. So it's really 65% of the country, or another 16.5 million people that would have a similar violence rate. That gives me roughly 110,000 total. However, we also know that the country is, on average, safer than Baghdad, though some places, like Fallujah may be more dangerous. So that number needs to be revised downwards substantially. How substantially? No idea. Finally, we also know that the violence against civilians has been getting worse; even if the collection of death certificates is shoddy, the direction of the trend is clear. So earlier years would have fewer than 116,000 deaths even if the rest of the country were just as violent (on average) as Baghdad. Call it an upper bound of 300,000, being very charitable. That's a high number. But that's the top of the range, not the most likely number. What is the most likely number? No idea, and I'm not going to join the Lancet doctors in giving a false impression of precision. But it's less than a third of the Lancet study's upper bound.

On the other hand, to be fair, the death certificates undoubtedly miss a lot of people. After all, even in the US, we miss a few people--a fair number of missing persons probably fell into the river, got eaten by a bear or killed by a serial killer, or whatever. So we have to adjust that number upwards again by some unknown quantity. Anyone got any idea how easy it is to hide a body in Baghdad?

The upshot is that I have no idea whether the Lancet study is right or wrong. And neither does anyone else, including the authors. I do know that it implies an improbably large multiple over other known statistics, and that its error band is bigger than the lower bound, which always makes me feel kinda uncomfortable.

That doesn't mean Iraq was right, or wrong. All it means is that we're better off relying on qualitative data, not quantitative data, because the quantitative data is highly questionable. The emotional reaction of conservatives saying "That can't be right" is silly--and so is the sudden emotional attachement of liberals to the figure of 600K.

From the desk of Jane Galt:

The numbers are too big

One of my favourite blogging moments is when the now-retired left-wing scienceblogger Chris Murtaugh wrote to his co-ideologists regarding race and IQ: "The universe is not here to please you." Facts are not to be denied simply because you find them inconvenient.

The same is true for those of us who supported the Iraq war regarding the Lancet study. The universe is not here to please us; the fact that we would like there not to have been massive civilian casualties does not mean that there were, in fact, no such casualties.

Indeed, I would be surprised if there weren't. Wars disrupt things, like food shipments and water. THat makes people die.

This does not mean that we should never go to war. If you take a group of cancer patients and split them into two groups, one of which gets surgery and the other of which does not, you will see sharply increased deaths among the surgery patients during and after the surgery. But over ten years, it may be a very different story.

However, when assessing the benefits of surgery, you do have to consider the cost. Sometimes--perhaps even often--the benefit is not worth the added risk.

Kieran Healy takes on the right-wing reaction:

The Lancet paper by Burnham et al. study estimates about 655,000 excess deaths in Iraq for the period of March 2003 to July of 2006, of which about 600,000 are directly attributable to violence—an appalling number. Right-wing reaction has been, understandably, that the 600,000 estimate is unbelievably high. (Tim Lambert gives a roundup.) Convincing those critics who see this number and declare “that can’t possibly be right,” or “my gut says no” or “this doesn’t even pass the smell test” is difficult. This is partly because some will just think that any estimate that sounds bad must be false, and take refuge in old saws about lies, damned lies, and what have you. But it’s also partly because six hundred thousand violent deaths since the war began seems huge—and, frankly, it is. As this typical guy says, that’s equivalent to 3 to 10 Hiroshima atomic blasts, 6 to 20 Nagasaki atomic blasts or 10 Dresden bombing campaigns. Yes, that’s right. Those events happened in a single day or over a very short period. The present estimate is for a large country of twenty six million people over three and a half years. Sadly, this means it’s quite achievable. As Juan Cole points out, you just have to believe that for our five people a day are being shot or otherwise killed in each of Iraq’s major towns outside of Baghdad.

I agree that there are a lot of deaths. But I don't think that there are as many as the Lancet study makes out. Not because I am comparing them to one-time events like Nagasaki, which I agree is silly. But even comparing them to other long term wartime figures makes it look to big.

Germany, with a prewar population of just about 80 million, suffered 1.8 million civilian deaths during six years of invasion, concentrated aerial bombing of civilian targets, and occupying forces that in the case of the English and Americans, frankly didn't give a [expletive deleted] what happened to the Krauts, and in the case of the Russians, took great pleasure in terrorising, raping and killing the local populace in revenge for their own dead. How likely is it that Iraq has lost a higher percentage of its civilian population in three years--especially given the vast advances in medical care, field treatment for water supply issues and famine, and GDP? With my admittedly limited knowlege of World War II, I find it very difficult to believe that the insurgents are worse than the Russians were, not to mention the Allied Air Command.

The Netherlands lost 30,000 people out of a population of roughly 9 million during six months of famine, during which the average calorie consumption dropped well below 1,000 per day. There was also a total famine of medical and other supplies, which could not pass through the battle lines. How likely is it that there is a larger humanitarian crisis in Iraq than there was in a country getting no food or supplies whatsoever?

Or to compare it to another civil war, this is more deaths than America's civilian and military deaths combined (union and confederate) during 4 years of brutal civil war with no medical care worth having, Sherman's march to the sea, and the tragic mistake of using massed formations against repeating rifles and modern artillery.

The average report is of about 30 civilian casualties a day--a horrifying number that should sting the consciences of those who advocated war. I'm sure that there are more whose deaths go unreported. But assuming that violence is the major cause of death, how likely is it that the newspapers are all consistently underestimating the number of violent civilian deaths by a factor of five or more? Okay, maybe they're all happening outside of Baghdad. Except outside of Baghdad includes the Kurdish north, where 10% of the population is mostly not getting shot by insurgents. And a lot of Iraq's other towns outside of Baghdad aren't that big. Bayji, a major oil centre, has 60,000 inhabitants. As anyone from a town that size can tell you, it wouldn't go unnoticed if it was losing 1,600 people a year to murder.

The Lancet study is arguing that in the space of 3 years, Iraq has lost 2.5% of its population in extra deaths. That doesn't sound like much, but it's an enormous figure, as these things go. It's even more enormous if you exclude the Kurdish areas, which are pretty stable, and have about 2.5 million people in them; the various stable places in the Shiite south, and the roughly 5% of the population that, according to the Atlantic Monthly, has fled the country. That suggests that Iraq is losing more than 1% of its remaining population a year to violence--as if 3 million Americans a year were getting shot in the streets.

I find it unlikely--not impossible, but unlikely. Certainly, in a country like Iraq, which as war zones go is pretty well organized and supplied (don't look at me like that, anti-war people: read some history, for heaven's sake. Or go check out the Congo) it's much bigger than we should expect, even with horrible sectarian violence.

Update One of Mr Healy's commenters points out something that makes the figure even more unlikely:

One point on the 470 per day explanation proferred by Cole.

The original study published in October 2004 went with 100,000 excess deaths as the confidence interval mid-point. This was for the period Mar 2003 – Sep 2004. The new study has revised upwards the figure for this period to 112,000. This means that for the 22 month period Oct 2004 to Jul 2006, the study finds 543,000 excess deaths (655,000 – 112,000). This breaks down to an average of 822 excess deaths every day for the 670 or so days between Oct 2004 and July 2006. Given we’re talking an average of 822, this means that >1,000 daily excess deaths must be commonplace.

Update II Anyone want to calculate the odds that the Lancet's habit of publishing these studies right before American elections is a product of chance? As I say, I think that conservatives are protesting too much . . . but the other side also seems to be way too emotionally attached to the idea of heavy casualties. Neither makes me willing to trust the results, and the fairly obviously political timing of these studies makes me suspicious. As Medpundit says:

I admit, this headline caught my eye. 655,000 dead in Iraq is an impressive number. Then I read the first sentence and saw that the number was gathered by public health researchers and it lost some credibility. The American public health community has a decidedly left leaning cast to it.¹ It is more politically homogenous than any other medical specialty. How homogenous are they? Well, you won't find statements like this on the website of any other medical speciality. One is obliged to assume that the researchers started with a bias.

Then I read that it was published in The Lancet and I lost all interest. This is the journal that gave us the infamous MMR-causes-autism study and that published a similarly discredited tally of Iraqi casualities before the last American election. In the ranks of medical journals, I place them on a par with The Guardian.

Obviously, the fact that the researchers are likely to be left-wing doesn't invalidate the study. But observer bias does matter, especially in survey studies. My personal feeling is that given the difficulties of doing research in a war zone, any study, whether it bolsters or refutes my opinions, is likely to be crap. We'll know how many excess deaths there were when Iraq calms down, the refugees return, and they get a decent census; not before.

As Medpundit points out, this stuff may be bog-standard for public health work, but public health work is not exactly known for its outstanding statistical methodology:

And sorry, but the defense that it's as soundly designed as can be expected for these kinds of public health surveys is a weak one. Retrospective, interview-based studies like this are poor designs. It may be the standard way of gathering data in the public health field, but that doesn't make it the best methodology, and it certainly doesn't make its statistics sound. For too long the field of public health has relied on these types of shotty shoddy numbers to influence public policy, whether it's the number of people who die from second hand smoke or the number who die from eating the wrong kinds of cooking oils.

Hello, cancer clusters!

From the desk of Jane Galt:

Why are there so many chains these days?

One thing I did not do last week is dispute the notion that restaurant chains are taking over from independent outfits. I assume that this is true; it certainly seems true to me from anecdotal experience (even in New York, Starbucks and Jamba Juice are killing, though outside of the beverage category, chains haven't made much of an inroads.) If readers have evidence to the contrary, please provide.

Assuming it is true, the question is why? Why are they replacing Mom and Pop establishments?

1) Labour productivity: the kind of together entrepreneurs who could successfully start a low-end restaurant (i.e. not a twee artisanal muffin shop in Nantucket, of which there are, if anything, too many) have better opportunities than spending all day cooking.

2) Costs: Large chains, with bulk buying and large distribution systems, can price well below a comparable Mom-and-Pop operation, which makes it nearly impossible to make a profit.

3) Labour pipeline: Most restaurants rely on illegal immigrants to keep labour costs down. Illegal immigrants are unlikely to go onto own a restaurant, for many reasons: they don't speak English well enough, they can't legally own anything here, they send all their wages back to their home country, they are likely to go home themselves after a few years, and they don't get paid well enough to accumulate American-sized capital.

4) Savings rates: Americans don't save enough, and when they do save it is increasingly likely to be in tax-free vehicles that can't be tapped to found a restaurant.

5) Search costs: Americans are more mobile than they used to be, in their local area as well as between areas. Chains attract customers because the customers then do not need to spend time figuring out which of the local restaurants are worth eating in.

6) Volatility: Chain restaurants, almost by definition, do not produce great meals; too much of their food is pre-cooked, cut, or processed. But they also do not produce very bad meals. If you cast your mind back to the long car journeys of your childhood, you'll remember just how bad a meal in a Mom-and-Pop restaurant could be. The problem was especially bad in small towns and on interstates, where the customers were essentially captive. Americans are culinarily risk averse; they are willing to trade expected value for volatility reduction.

7) Labour intensity: Owning any retail business is an unbelievable amount of work. It's like having a kid; if you want to leave town for a day, you have to first figure out who's minding the store. If you don't work longer hours than any of your employees, they will figure out how to steal from you and otherwise run your business into the ground. Owning a restaurant is even worse, particularly the kinds of places that have been replaced by chains: up at 4 am to get ready for breakfast, and home at midnight when you've finished dinner and cleaned the kitchen. This gets less true as you get more established, but the first few years are sheer hell and you never get away from it entirely. Americans are not willing to work this hard, which is why most 7-11's, gas stations, and so forth are now owned and staffed by immigrants--and the only good, cheap, local restaurants are generally immigrant owned and run.

8) Labour cost: Related but not exactly the same as the point above. Food is a minor cost for most restaurants, even cheap ones; the real cost is labour and real estate. Moderately priced restaurants that succeed generally do so because the owners family provides free labour in work conditions that would not survive scrutiny under the labour laws. Americans no longer have families big enough to do this--and American teenagers are generally not willing to spend sixty or so hours a week working for free.

9) Risk: Most restaurants close in a very short time, taking all the owner's capital with them. Most Americans are not desperate enough to try it, which is again why immigrants tend to own these sorts of businesses where they exist at all.

10) Americans don't care what they put in their mouths. This is the explanation favoured by my European friends, who then struggle to explain the popularity of McDonalds in France.

Hopefully Tyler Cowen will comment.

From the desk of Jane Galt:

Free to choose?

"The Bear" has a long meditation on choice, food, and chains that references my radio appearance last week.

From the desk of Jane Galt:

Social security sleight of hand

Talking about social security is like attending a cocktail party full of accountants: everyone spends the whole time doing disgusting things to innocent numbers.

Okay, that wasn't a very good metaphor. We all make mistakes, all right? Let's move on. Let the dead past bury its errors.

As I was saying, the accounting shenanigans committed by people trying to sell their preferred social security programme would make Al Capone's tax lawyer blush. Take this post from Open University, which complains about Steven Pinker saying:

Whose Freedom? shows no trace of the empirical lessons of the past three decades, such as the economic and humanitarian disaster of massively planned economies, or the impending failure of social insurance programs that ignore demographic arithmetic

He quotes Brad Setser as to why this is such a dreadfully stupid thing to say:

Why is 2045 more important than 2007?

. . . True, projections show a deficit of something like 1.5% of US GDP in Social Security starting around 2045....

However, I don't get why a 1.5% of GDP deficit after 2045 is a bigger problem than the current 3.5% of GDP gap ... between the revenues of the government (excluding social security) and its current spending (excluding social security). The current on-budget deficit came even with more revenues from the tax on corporate profits than at any time since the 1970s.

If you are worried about the difference between the government's intake and its outlays, then using the "trust fund" accounting is, to quote my co-blogger, as mad as a box of mittens. Will the money that we pay retirees somehow magically not add to the future deficits because it is recorded as interest rather than a transfer payment to retirees? The difference is semantic; it will make absolutely no difference to the taxpayers who have to foot the bill, nor the foreign bankers we have to borrow from.

To them, the amount by which social security payments increase the budget deficit is the increase in the difference between social security's revenues and its outlays. On median assumptions, that figure is roughly 2.5% in 2050, not 1.5%. More importantly, it doesn't start in 2045; as I have tiresomely pointed out before, it starts in approximately 2017, when the outlays exceed the income. By 2025, that will be 2.38% of taxable payroll--which doesn't sound like much, but is bigger, in percentage terms, than the current surplus. I don't know about you, but 2017 isn't sounding so comfortably far away to me any more.

But that isn't even the point. Mr Setser asks "Why is 2007 more important than 2045" . . . and then proceeds to move a huge hunk of the 2045 into the present, as if we were experiencing the future Social Security deficits now.

The reason Brad Setser et. al. worry about the current budget deficit is generally twofold: the "twin deficits" hypothesis, which posits that increases in the budget deficit drive increases in the current account deficit; and the "crowding out" thesis, which states that government borrowing in domestic markets raises interest rates and lowers growth because it sucks up money that productive enterprises would otherwise use for investment.

People who say that the social security income is masking a really gargantuan budget deficit are using Social Security's total income to calculate massive "off budget" deficits. But that income is composed of two things: contributions, and income on the government bonds the SSA already owns. That "interest" is an accounting entry; it doesn't cause the government to need to borrow a single extra dollar. So that part of the supposed deficit can have no economic effect except as it represents an accrual of social security's future liabilities. And while I believe that capital markets are very efficient, I do not believe that they are so efficient that the government's pension burden 20 years hence factors significantly into the current cost of capital.

The cash social security surplus, which is much smaller (about $60 billion, give or take), actually reduces the government's need to borrow, making us better off right now, and worse off in 2045. Of course, we should be putting that money into private accounts, but we aren't, and AFAIK, legally once the government has taken that money in, it isn't allowed to do anything but lend it to itself; Congress can't take a flyer in the bond market. At any rate, the actual cash surplus is fairly neglible--about 0.5% of GDP, according to the SSA, which is not nothing, but is also not going to save social security and/or drive our economy into the ground.

You could argue that it is a proxy for accruing the Social Security liability. But it isn't a very good proxy. And if you want to do accrual accounting, you have to do accrual accounting, with depreciation and pension streams and all the rest of it. You can't just accrue the three things you like and leave everything else on a cash basis; hybrid systems are generally attempts to scam the public.

Besides if that is your argument, there is certainly no reason to include the larger interest figure, since we can't retroactively go back and invest that money; it's been spent. If it makes you happier to think of it as being invested, pretend the SSA trustees sunk it all into jackalope ranches.

So the answer to the question "Why is 2045 more important than 2007" is "We have a problem in 2045, and not in 2007." And the answer to the Open University blogger is that things can be a disaster even when the accounting shows they're fine. Just ask the employees of Enron.

From the desk of Jane Galt:

Not again . . .

A plane just hit a building on East 72nd Street. It looks like it was a small private plane or a helicopter, and it hit a residential building, so it's unlikely to be terrorism, other than the freelance madman variety. Still, when I heard the words, my heart leaped into my teeth. And I can hear the fire engines converging on the East side from everywhere.

From the desk of Jane Galt:

Addendum

The president announced today that the projected budget deficit for htis fiscal year is now $248 billion, or slightly less than 2% of GDP. If the trend in rising tax revenues continues (and it well may not, because the economy is slowing down), next year's budget deficit will be, as a percentage of GDP, basically negligible.

All of which is meaningless, because we're still accruing massive liabilities for feeding and providing health care to future senior citizens, including (gulp!) me. But I thought it was worth noting.

From the desk of Jane Galt:

How well will divided government work?

Many libertarians who, like me, are planning to vote Democratic this mid-term are rubbing their hands at the prospect of divided government. Personally, I'm not counting on it. Those libertarians are looking at the good results of divided government during the Clinton years; but R/D ≠ D/R. Congress is the one that appropriates the money, not the president; if congress is against him, all the president can do is veto. And Bush isnt much of a veto-er

Are Republicans such bad spenders that it doesn't even matter whether the Dems get in? Colour me sceptical. The Democrats have opposed most of the major Republican (non-defense) initiatives on the grounds that they didn't spend enough money. They're also raring to go after high-profile private firms like Wal-Mart. I'm voting Democrat out of disgust, not hope. Of course, I get to do things like that, because I live in a state that would go Democratic if it was Jesus Christ (R) against Josef Stalin (D). Your mileage may vary. I'm just saying, don't get your hopes up.

From the desk of Jane Galt:

What does it mean to be a conservative?

I'm not one, really; I'm a kind of fuzzy soft-communitarianish libertarian. But let me take a hack at it anyway:

1. Conservatives believe that people should take responsibility for their actions.
2. Conservatives believe in equality of opportunity, not in equality of result. Conservatives do not want to punish people for the crime of being successful.
3. Conservatives believe in protecting the lives of the helpless, even when their lives inconvenience other people.
4. Conservatives believe that the government should treat everyone equally, regardless of their race or gender.
5. Conservatives believe that people should be allowed to express their faith, and their views on other controversial topics, even when those views make others uncomfortable.
6. Conservatives believe that each individual is unique and special, and cannot be treated simply as a member of a group. Individuals are only available individually.
7. Conservatives believe that well intentioned changes often have unintended consequences.
8. Conservatives believe that people respond to incentives.
9. Conservatives believe that America is a special nation, not perfect, but with a proud history. People who come to America should feel that that history is theirs, and celebrate their citizenship. They should not have loyalties to foreign powers.
10. Conservatives believe that victims of crime are more worthy of our concern than the criminals who prey on them.

How does that work for you? Good?

If you're a liberal, no doubt you're shaking your head. What a lot of loaded bullshit. This list amounts to saying "Conservatives are in favour of good things", with the resulting implication that liberals aren't.

And, if you're a regular blog reader, you've no doubt recognized that this list is written in response to Geoffrey Stone's recent op-ed on what liberals stand for.

The problem with both lists is that they are full of incredibly broad generalities, statements that are, as social scientists like to say, "True but not useful." Take #8 on his list: "Liberals believe courts have a special responsibility to protect individual liberties." Unlike conservatives, those freedom-hating, individual hating bastards. This is why in Kelo, conservative justices voted to let New London steal houses from powerless people to give to Pfizer, while liberal justices . . . ummmm . . . never mind.

Obviously, your agreement with this depends on how you define "individual liberties". If you think that getting born is an individual liberty, then conservatives win. If you think that having an abortion is an individual liberty, not so much.

Such lists are either a good-faith attempt to draw a broad tent that everyone agrees with . . . in which case they generally fail because they degenerate into useless platitudes that no one could possibly disagree with, and therefore do nothing at all to set you apart from your opponents. . . or they are a tendentious attempt to claim the moral high ground for your side through semantic chicanery. In which case they fail because no one is that stupid. No moderate-but-Republican-leaning voter is going to read Geoffrey Stone's list and say "ooh, I think people should care about civic issues--I must be a liberal!!!" (#2, Liberals believe "Liberals believe individuals have a right and a responsibility to participate in public debate.). Unfortunately, when it comes time to vote on an actual issue, they will also hear from your opponents, who will not oblige you by coming out against peoples' right to vote or otherwise participate in public debate.

Update A friend emails to point out another leetle issue with Mr Stone's list: some of it just ain't so. "Didn't you do a spit take when you saw Stone claim that liberals support "limits on partisan gerrymandering; campaign-finance reform; and a more vibrant freedom of speech". Indeed I did, and should have noted it: the last two items are, to my mind, not compatible; and as for supporting limits on partisan gerrymandering, liberals have done nothing of the sort. They have supported limits on partisan gerrymandering that benefits Republicans, while wholeheartedly supporting gerrymandering that benefits Democrats (see: California ballot initiative). This is hardly a noble blow for democratic process.

From the desk of Jane Galt:

Economic freedom is a civil liberty

In the comments, MarkM argues:

Threats to economic liberties are in general a greater threat to freedom than a government power to "make you disappear". If the government can arbitrarily take your property and bar you from working at your profession, they can make you and your family starve. It's a more subtle threat than waterboarding and concentration camps, but just as effective, and it is much less likely to lead to public outcry. It's much easier to first take away economic freedoms - and then the government can intimidate most of those likely to protest when they start arresting enemies of the state.

Though I'll have to chew on it for a while to decide exactly how much I agree with this, it is a good point. Working in technology in the 1990's, I had a fair number of friends and colleagues from the former Soviet Union. One of the things that surprised me was the way they described living under totalitarianism in the 1970's and 1980's. To them, the risk you took in joining the wrong group or saying the wrong thing was not, as it had been under Stalin, the risk of the KGB showing up one misty night to make you "disappear". It wasn't even going to the (horrible and often deadly) Soviet jails. The risk was that you would lose your job, or your apartment, or both. This was a very, very effective deterrant to any sort of dissidence.

I think this emphasizes something that I was saying in an earlier post: political culture matters. A lot. The government currently has the right to take your house if it wants to, and in local cases often does so to benefit politically connected insiders. But the government does not take your house because you said nasty things about the Governor, because our political and legal culture restrain this power.

This is either a reason for optimism, or a refusal to take threats to civil liberties seriously, depending on what you already think of me.

From the desk of Jane Galt:

Radley Balko takes me to task . . .

. . . for saying economic freedoms matter more than civil liberties.

I think I've been misunderstood. I wasn't saying that they don't matter, or even that they don't matter more than economic liberty. I was responding to Democrats who say that we shouldn't care about economic freedoms at all because of what Bush is doing or that we should somehow align ourselves over the long term with the Democrats because the Democrats care about the only liberties that really matter.

Obviously, I am disgusted enough by what Bush is doing, on both economic and non-economic fronts, that I am raring to vote out his enablers in Congress. But I still care about economic freedoms. I care about Kelo, and IRS abuses, and arresting Rush Limbaugh for taking big wads of cash out of his bank account. Forgive me while I maunder a little about how I care about these things.

Much of the horror of what the Bush administration is that you can lock up someone with a half-assed terror plot against the US government, deprive him of his liberty, and refuse to try him. But in some ways, that is the same horror of tax laws, cash laws, eminent domain: if you don't obey, the government will send men with guns to seize your person and lock you in the pokey. In many ways, detaining suspected terrorists without trial is more horrifying because the sacred thing about the American system is the process . . . the government can't just lock you up because it feels like it. That protects us from stupid, malicious, or merely mistaken prosecutors.

But on the other hand, the economic stuff is more horrifying, because at least I agree that terrorism is a crime. Taking cash out of your bank account is not in any moral sense a crime. Nor is having a house where some developer would like to build a shopping mall. Or owning a tree where a woodpecker likes to nest. The fact that people can be put in jail for these non-crimes horrifies me to the depth of my soul.

(I am in favour of protecting endangered species . . . but if we want the collective benefit of having 'em, then we should man up and pay the cost collectively, too.)

I don't think the government should be able to do many of the things the Bush administration wants it to be able to do. That too, horrifies me to the depths of my soul.

I'm not sure I'm making much sense here. But I'll plow on anyway.

I think that a lot of libertarians think that the next step is a police state. And that's not necessarily, or even probably, true. Governments in Europe have quite a lot more freedom to spy on and detain their citizens, and they manage not to have police states. Democratic traditions and social constraints . . . especially ones as longstanding as ours . . . do matter a lot, even where the legal traditions do not provide as firm a check as we would like on state power. Which doesn't mean that we shouldn't worry about these things. We should, because they're wrong. But the arguments against them have to stand on their own, not on the premise that if we permit the Bush administration to waterboard suspected terrorists, in a few short years the Thought Police will be knocking at our doors in the middle of the night. We could do these things, and they could be used against a tiny fraction of the population, most of whom are not citizens, and it could go no further. Britain pulled all sorts of unsavoury legal manoeuvres against the IRA, and it didn't spread to terrorising journalists.

I'm having trouble writing this because it sounds like I'm saying that warrantless wiretaps don't matter. They do matter, a lot. But they matter because they are bad in principle, not because it is at all likely that if we allow them, the Bush administration, or any successive administration, will shortly start making inconvenient persons "disappear".

To take an example I've been harping on recently, there are all sorts of appalling violations of power by local police and prosecutors, as Radley Balko has recently exposed with his superb work on the Cory Maye case. Many prisoners endure such brutalization that if I had to choose between going to a high-security prison and being interrogated by the Bush administration's favoured methods, I'd pick the waterboarding. This is a stain on our national honour, an outrage, an abomination. But does it mean that our society is not worth living in? Are we not free? Have we no liberty? Do we live in a police state because some peoples' liberties are thusly threatened? Are we close to a police state? Were we under the Democrats, when such abuses were equally likely to occur?

The other problem with the Democrats is that not all of their liberties abuses are economic. My understanding is that many of the abuses of the WOT result from expanding the Clinton's innovations in the execrable War on Drugs to terror suspects. It was, after all, the Clinton administration that sent tanks and SWAT teams in to deal with what were, at least allegedly, child custody disputes. Likewise, the innovations pushed by Democrats to shake more tax revenue out of the rich . . . like retroactive prosecution, special opaque courts for tax cases, spying on people's cash flows, asset seizure laws, and so forth . . . strike me as major civil liberties violations by any standard, which have trickled down the food chain quite rapidly. Democrats are pushing card check, which strikes me as a license for union organisers to terrorise uncooperative workers. They favour "hate crimes" legislation, which is the closest thing to a thought crime our society has. I could go on, but you're already asleep, aren't you?

My biggest worry is that the Bush administration is basically responding to two things:

1) The incentives of the office There are huge penalties for failure. People who spend all their time thinking about a problem (whether it be economics professors on demographics, or CIA analysts on terror groups) tend to lose a sense of proportion about the importance of the problem. And knowing that there are bad people doing bad things, that you can't legally catch, is unbelievably frustrating. Plus, you're trying to get power for you, and you know you won't abuse it . . .

2) The political will of the American people. They want progress on terrorism. They aren't particularly worried about civil liberties, because most people don't care if the NSA listens to them complaining about their mother-in-law. They are prepared to slaughter any politician at the polls who happens to be in charge when a terrorist attack happens.

If these things, rather than ideology, dominate the Republican response, then the Democrats won't be any better in power. Hell, they won't even give us a carbon tax, which they totally could if they actually cared about the environment, and also if they didn't care about getting re-elected, the bastards.

I'm still voting Democrat, because hey, they couldn't be worse. But that doesn't mean I think they'd be better. The only reason I'm voting at all, really, is that one has to do something.

From the desk of Jane Galt:

Question of the day

Does the North Korean nuke help the Republicans at midterms, by putting security back on the map, or hurt them, because people will blame Bush for letting it happen on his watch?

From the desk of Winterspeak:

"We don't need no political interests"

I enjoyed this Slate piece on the possible consequences of WalMart informing its employees on what politicians in local races were saying about the store. As the article notes, WalMart employees are disproportionately poor, black, and female, live in the Sunbelt and the South, and it assumes, will vote Democrat if encouraged to vote.

Now, if Wal-Mart's workers all suffer from false consciousness and, a la Thomas Frank's Kansans, reliably vote against their own economic interests, then Wal-Mart's efforts to get them to the polls could help Republicans. But if the African-American, female, and low-wage workers who toil at Wal-Mart tend to vote the way other African-American, female, and low-wage workers who toil elsewhere tend to vote, then Wal-Mart's efforts will be a boon to Democrats.

Since the Democrats are focused on putting WalMart out of business, or at least require it to lay some people off and/or substitute them with machines, I struggle to see how voting to get yourself fired is in your own economic interest. One thing I do agree with the article on, though, is that there is plenty of false conciousness floating around.

From the desk of Jane Galt:

Fact of the day

If you take just two cross country and two overseas trips a year . . . not a big number for today's more mobile young adults . . . you're consuming as much carbon as you would by driving a huge gas-guzzling SUV 12,000 miles a year.

From the desk of Jane Galt:

Yes, Virginia, there are tradeoffs

At last night's debate, I was facing a very nice woman who spent most of her time arguing that the alleged tradeoff between liberty and security is a false paradigm. In essence she was saying that in some metaphysical sense, life is not worth living in a country where the NSA can conduct warrantless wiretaps.

I have no doubt that she feels this way . . . although I somehow doubt she would actually commit suicide if it became clear that warrantless wiretaps were here to stay. I am sympathetic to this view; my heart thrills to the Ben Franklin aphorism that "Those who sacrifice liberty for security will get--and deserve--neither." But ultimately it falls into the same category as "Torture doesn't work anyway", "cutting taxes increases tax revenues", and "that miniskirt isn't too young for you" . . . things that I ardently wish were true, but know that I will be punished by reality for actually believing.

Am I really no safer because the police have the ability to put violent criminals in jail? This is, in my opinion, a gross violation of their human rights . . . and also necessary to protect society. That is not to say that I think the Bush administration is right; mostly, I think they are asking us to give up substantial liberties for trivial increases in security. But in order to make this argument, I have to accept that there are tradeoffs. Denying them is more comfortable, of course, since who likes to argue for hard choices? But when dealing with the majority of the human race that does not regard liberty as a value so omnipotent that it trumps even survival, it is bound to fail as a strategy.

We are all tempted to take refuge in this sort of willful ignorance. Mark Thoma offers what I think is the most common version on the Democratic side:

First, the main argument is that switching to a single-payer system would stifle innovation. But I'm not convinced the case has been made that it is the difference in health care systems that has caused the agglomeration of research facilities in the U.S. Even if the U.S. were a single-payer system, drug companies, etc. would still do research and it is likely that much of it would be carried out in the U.S. just as it is now. In addition, as noted in the article, much of the research that is done here is funded directly or indirectly by the government. Second, given that European countries can free ride on this research, comparing the amount spent in the two countries may not accurately reflect European willingness to fund health care research since the two figures may not be independent. If the U.S. spent less, European countries might be induced to spend more. Third, Tyler says "The American government could use its size ... to bargain down health care prices... In the short run, this would save money but in the longer run it would cost lives." I understand less spending would cost lives, but I'm not sure I see why driving prices down toward marginal cost is necessarily inefficient from the free market perspective taken in the article, particularly if drug companies, etc. have market power.

In other words, we'll still get just as many good drugs under single-payer as we do with the free market.

When confronted with the question of single-payer health care, Democratic economists often seem to suddenly act as if all the normal rules they take for granted about markets had been repealed. Pharmaceutical companies apparently do not respond to incentives, and so will continue to invent drugs even if we drive down the price to the marginal cost of producing the pills. Also, unlike other markets, competition between different providers is bad: we should have just one pill for every condition. And the government does an excellent job of identifying and filling consumer needs, so that its success at funding basic research will translate directly into inventing good drugs¹. Also, apparently there are never any suboptimal equilibria in monopsony markets, so that if the US decreases its funding for research, the French will altruistically pick up the slack. This even though the lack of new drugs will not be politically traceable to the decision to force pharmaceutical companies to price at marginal cost.

There is a not-terrible case to be made for single-payer in the US despite the effect on innovation: you can stand up like a man and say "I know that this will mean fewer cures for sick people in the future, but I am willing to sacrifice their welfare to help people who are uninsured now." But that's an unhappy argument to make--wouldn't it be so much nicer if there were no effect on innovation!

Incidentally, torture works. I'm against it anyway.

¹To me, this is like believing that because the government has given us excellent research into thermodynamics, it will also build us a good car.

From the desk of Jane Galt:

Why libertarians and Democrats will have to agree to disagree

And now I will alienate a large chunk of my readership by announcing that aside from the New York State races for governor and attorney general, I will probably vote the straight Democratic ticket come November 7th. However, I will do so because our feckless, spendthrift Republican congress deserves to lose, not because I think the Democrats deserve to win. My vote won't matter anyway . . . the Democrats will pretty much sweep the board in New York State regardless of my vote . . . but it might put a little of the fear of God into Republican politicians, in a way that voting the straight libertarian ticket, as I might otherwise be tempted to do, will not.

The rising number of these protest votes has brought back Markos Moulitsas' push for the idea of "Libertarian Democrats". As the party is currently constituted, this strikes me as the equivalent of "Feline Dogs". Mark Thoma doesn't go quite that far, but he does try to argue for the Democrats as the real party of smaller government, at least where it matters:

I'm astounded at those who tolerate so many intrusions into their personal lives or the lives of others, intrusions that have grown in recent years, just because their incomes are higher due to tax cuts. The power to tax is but one power the government has, and to me it's far from the most worrisome one. I want government to lend a helping hand where it's needed, to regulate markets and overcome market failures, to provide law and order, to protect us from enemies, etc., and I believe that, for the most part, the people in government are well-intentioned and dedicated. But I have no desire for a government that is constantly looking over my shoulder and setting bounds on what I can do, or a government that is any larger than is absolutely necessary. I know most on the libertarian side share that sentiment, but it sure is hard to detect it in today's political environment.

As I said at the debate I was in last night: who does the average American fear more--the FBI or the IRS? The local zoning board, or the NSA? What does he fear more: the ten commandments on the wall of his child's school, or having the new addition to the house disallowed by the zoning board, the EPA, or the Americans with Disabilities act? On what does he spend more time: preparing his taxes, earning the money to pay for them, and arguing with the various tax authorities about what he owes . . . or checking for roving wiretaps?

Let's face it: one of the biggest problems civil libertarians are battling in the war against warrantless wiretaps, and so forth, is that 99% of the citizenry (correctly) believes that the government is not planning to use such measures against them. I'm on the side of the civil libertarians, mind you, but I recognize that this is why all the cries about America descending into a dark night of fascism, and Bush being the worst president ever on civil liberties (which even a light perusal of history reveals as silly), are falling on deaf ears.

For most people, the economic areas of life dominate their contact with the government. And the powers granted to the tax authorities are broader and more abusive than any other civil authority that deals with US citizens. They have their own special, and opaque, court system in which their cases are tried. The rules for criminal acts are, by and large, clear and commonsensical; most people have a pretty good idea of what constitutes assault with a deadly weapon, murder, burglary, criminal trespass, and so forth. People may be falsely accused of being involved in a terror plot, but at least they have a solid notion of what "conspiracy to commit terrorist acts" means. Tax law, on the other hand, is incomprehensibly complex, and the courts tend to make their decisions based less upon what is just than upon what maximises revenue collection for the government. Securities law, environmental law, zoning questions, building codes, and so forth, are similarly flawed.

Democrats say: but look at all the goodies we get! And that's a fair argument--but not a convincing one to libertarians, who want to maximise freedom of action and minimise interference of government, not maximise security and minimise white collar crime. That's why they tend to vote Republican: they disagree with the Republicans on many issues, but if you want to minimise the power of the state, you need to hack deep into the apparatus limiting economic freedoms, because that is where there is the most state to minimise. The Democrats will, I expect, get a fair number of libertarian votes this election, including mine. But it will be a vote of protest against the various sins of the Republican party, not a conversion to the notion that sexual freedoms are the only ones that really matter.

From the desk of Jane Galt:

I think I'm doing the math wrong

Joseph Stiglitz wrote an op-ed in the

New York Times

urging America to fix the current account deficit by (and I know that this will surprise you) raising taxes on the wealthy while cutting them for lower-income households. This will be hard to do, because lower-income households pay almost no federal income tax (they pay a lot of Social Security, but politically this is untouchable). And like Greg Mankiw, I don't quite understand why this is supposed to help. But fine, say we do this. Say we erase the budget deficit. What then?

Mark Thoma says that Menzie Chin says that for every 10% decrease in the budget deficit, we should see a 4% decrease in the current account deficit. That wasn't quite how I read it, but then, I am stupid.

The Congressional Budget office currently projects a budget deficit for this year of $260 billion, or 2% of GDP. The current account deficit is running about $800 billion. So for every $26 billion reduction in the budget deficit, we get a $32 billion reduction in the current account deficit. Free money!

Once we have totally eliminated the budget deficit, we will be left with a $480 billion current account deficit, or approximately 3.5% of GDP. I don't see how the driving story can not be foreigners lending us more money than we need . . . though we could argue about whether that is because we are greedy and profligate, or they are engaged in a nefarious plot to steal our future happiness.

What am I missing? I'm sure (and I'm not being disingenuous here) that it must be something big. I'm not embarassed to admit when I can't figure something out; luckily, many of my readers are smarter than I am. So what am I missing?

From the desk of Jane Galt:

Media appearances

I'll be on Radio Open Source tonight around 7 or 7:30, talking about "The End of Free Will". Then tomorrow, I'll be down at Barnes and Noble discussing "The Greatest Threat to Liberty". Be there or be square . . .

Update: For those who asked, and did not bother to click through the link (naughty, naughty!) it's the B&N on 18th and Fifth Avenue, at 6:30 this evening (Thursday the 5th).

From the desk of Jane Galt:

Yes, Hastert should resign

. . . especially if the Republicans would like to maintain some slim chance of holding onto Congress come November. I don't know why I am expected to post on the obvious, but to judge from my emails, I am. So there you are: Hastert should resign, and Mark Foley should be tarred and feathered in the press, if not the flesh, not least because he has so far attempted to blame his behaviour on alchohol and prior abuse, neither of which is relevant.

My only other comment is that I wish people would stop referring to his behaviour as pedophilia. The pages are in their teens. Many heterosexual men are attracted to hot teenage girls, and no one thinks of them as pedophiles. His behaviour is reprehensible because grown men in positions of authority should not hit on teenagers. But it is not the same thing as molesting an eight-year-old, and if he were heterosexual, people would recognize that.

From the desk of Jane Galt:

Pro choice and proud

As long-time readers know, I'm a conflicted pro-choicer who thanks God every day that she never had to make that kind of decision.

Apparently, Ms Magazine is planning to feature women who had an abortion and aren't ashamed. Which is as it should be, in the sense that you shouldn't do anything you're ashamed of.

But as is usual when people start talking about abortion, the language some of the women use is distinctly strange.

Another signatory, Debbie Findling of San Francisco, described her difficult decision last year to have an abortion after tests showed that she would bear a son with Down syndrome.

“I felt it was my right to make the decision, but having that right doesn’t make the decision any easier,” she said. “It was the hardest decision I’ve ever made.”

Findling, 42, is married, with a 5-year-old daughter, and has been trying to get pregnant again while pursuing her career as a philanthropic foundation executive.

She says too many of her allies in the abortion-rights movement tend to minimize, at least publicly, the psychological impact of abortion.

“It’s emotionally devastating,” she said in a phone interview. “I don’t regret my decision — but I regret having been put in the position to have to make that choice. It’s something I’ll live with for the rest of my life.”

Huh? Her birth control didn't fail; she was trying to get pregnant. Who, exactly, "put" her in the position "to have to make that choice" . . . the baby? It's like we've gotten so used to hearing someone blamed for abortions . . . usually the sexually repressive watchdogs who are stealing all our birth control . . . that even when there is no plausible person to blame, we still feel most comfortable talking about an unwanted pregnancy as something that was done to a woman, instead of something she participates in.

Pro-choice means taking responsibility for your choices. She decided to have a baby at the age of 42; and when she found out it had Down's syndrome, she decided not to. She wasn't "put in" the situation; she caused it. Why is a woman who signed the Ms petition trying to hard to dodge that central fact.

From the desk of Jane Galt:

Waiting for willpower

All right, so I google myself. I do it fairly often. I'm not ashamed, either. If you can't proudly google yourself, you're not really emotionally mature enough to google someone else.

Anyway, while I was engaged in . . . er . . . this form of self-love, I came across this rather angry commentary on my work:

I get pretty pissed when I see that people like the Queen of Dumb, Megan McAardle and others arrogantly insist that anyone can lose weight, and do it easily and that those of us who weigh too much are morally corrupt.

Let's see - I am a productive citizen, I pay my taxes, I am a home owner and mother and a wife. I have a very good job, and my clients absolutely love me. I am smarter than the average bear, and my genetics are aparently closely related to said bear. (I was adopted, so I have no idea what my genetic forebears look like).

I rarely get sick. I have never been hospitalized in my 53 years except to give birth - so I'm NOT using more than my fair share of medical stuff. I am creative, and sometimes even kinda funny.

But some people condemn me because I'm a size 18, not a size 8.

When I found this, I was all, "Whoah, Nellie!" because I didn't recall having condemned anyone for being a size 18. I don't think being overweight makes you a bad person, although it does seem to be awfully hard on your knees.

What I said was this:

As far as I am aware, only a few studies have attempted to correlate what people say they eat with what they actually eat, and those studies have all found that people were consuming 500 calories or more in excess of their reported consumption. The implication is not only that some people lie about what they eat, but also that many more people are simply unaware of the extra calories they consume . . . the handful of M&Ms or the canapes at cocktail hour get stuck into some different mental basket and don't get added to the daily total.

That said, I also assume that people who struggle with their weight have some different, stronger signals in their brain telling them to eat than I have. Aside from the occasional holiday gorge, I find overeating unpleasant, and actively seek to avoid it by cooking small portions, or pushing my plate away when I've had enough, so that I can't pick at it. And too many heavy meals in a row kill my appetite. Social conditioning or biology? No idea. But I don't assume that what is easy for me is easy for everyone--after all, most of my friends can smoke socially, while every time I've broken down and had a cigarette, I've ended up right back on a pack-and-a-half habit within a week. Unfortunately, my friends who struggle with their weight can't just go cold turkey, the way I did.

When you think about it, it's really pretty much a miracle that we don't all weigh 800 pounds, or die of starvation. The reason we don't is that our appetites regulate what we eat pretty precisely, so that most of us come very close to taking in in calories what we expend in energy, give or take a couple of hundred calories.

I think some people, however, have appetites that are programmed, whether by genetics or environment, to demand more calories than they need. Those people gain weight more easily. I get sick if I overeat, and if I've gained a few pounds, a family dinner binge results in several days of declining appetite until I've got some calorie balance back. Obviously, this doesn't happen to everyone.

The hunger signal is as basic and irresistible as the pain signal. If you've ever been really hungry, you'll know that after a while hunger seems to overwhelm everything else, even cold and pain; all you can think about is getting food. Heck, I get crabby and distracted if I skip breakfast.

Sure, some people can train themselves to resist their body's primal scream for food, just as some supermen never break under even the worst torture. Most of us, however, eventually have to give in. Then thin people, who have never felt that sort of relentless demand for more food! diagnose the problem as a lack of willpower.

Ron Bailey puts it more scientifically:

. . . science is here confirming something we all know--being fat indicates that people really like to eat.

As someone with a body mass index of 26.7, I know I eat because it feels really good. Now some of my more puritanical colleagues will suggest that it just takes willpower to overcome this kind of addiction. Some of us with a more naturalistic bent translate "willpower" into having the executive circuits in our pre-frontal cortices capable of overriding the desire for immediate pleasure demanded by our dopamine reward systems. Fortunately, 22 years and 4 months ago, my fear of death managed to activate my prefrontal cortex enough to get me to drop my 3 to 4 pack a day cigarette habit. The pleasure of good food and drink is much harder for me to give up.

The difference between quitting smoking and quitting overeating is twofold: one, the desire to smoke is not hardwired at the same fundamental level as the desire to eat; and two, one can quit smoking, so that eventually the brain gets tired of fruitlessly demanding its dopamine treat. It is much easier for an addict to quit something entirely than it is for them to cut down, which is why I haven't had a cigarette in almost eight years.

From the desk of Jane Galt:

Ouch!

Greg Mankiw is always sweet and polite, even to those he disagrees with. Yet he manages to make this sting--quite a bit, I imagine:

A reader calls this sentence from The New Republic to my attention:

Mankiw...left his post as chair of the Council of Economic Advisors after publicly supporting offshoring.

The sentence is true in the same sense that this sentence is true:

Japan bombed Pearl Harbor after Thomas Jefferson completed the Lousiana Purchase.

Both sentences get the chronology right, but they mislead the reader by compressing the time line of events and insinuating a cause-and-effect that is absent in the historical record. In the first case, the correct statement would be:

Mankiw got into political hot water by making positive comments about offshoring. Twelve months later, with the presidential election over and the furor over offshoring having largely subsided, his two-year leave of absence from Harvard came to an end, and he returned to his tenured chair as had been planned all along.

I bring this up not because I am defensive. (Well, maybe I am, a little.) Rather, I think this sentence illustrates, in a small way, how journalists twist the truth to suit their own ends.
One of the basic principles of economics is that people respond to incentives. Remember that journalists are people too. They are rewarded for compelling and interesting stories. Unfortunately, the truth is often boring. Journalists are incentivized to make the truth sound more exciting than it really is. (I highly recommend the movie Shattered Glass for a more extreme case of how journalists respond to incentives. Like the above sentence, it also involves the New Republic.)

From the desk of Jane Galt:

Cry, the beloved country

Yes, that's a cheap title for a post about Zimbabwe. But it's impossible to discuss the country's current state without wanting to weep. In 1998, Zimbabwe had a per-capita GDP of roughly $2,300 (PPP). . . not lavish, but very comfortable for its neighbourhood. More importantly, that was growing every year. This year, the Economist Intelligence Unit expects GDP to clock in around $1,600 . . . and shrinking fast.

Timothy Burke expects things to get much worse:

’m often asked, “What’s going to happen next in Zimbabwe? Are things going to get better?” To which I often say, “No, not really: they’re probably going to get worse”. This surprises some people, because they figure it’s already as bad as it can be. What I think they don’t realize is that Zimbabwe is falling from a relatively high point. The Zimbabwean economy in 1988 was actually relatively strong, with a lot of capacity and potential. There’s a lot of things to wreck and destroy, and even a party with the prodigious ability to demolish their own society is going to take a while to thoroughly mess up everything they can put their hands on.

If you read Cross’ entry, you’ll see just how breathtaking the destruction is, however, and how lethal a cocktail of incompetence, malice, and authoritarian sadism is involved. It will not improve magically on the death of Robert Mugabe, assuming that ever actually happens. There are too many other hands with blood on them, too many other petty tyrants. And it’s gone too far at this point for some ZANU-PF member with a secret desire for reform in his heart to emerge smoothly during a transition and pull the country back from the brink. Too much has already been ruined that either cannot be fixed, or can only be repaired through a generation’s labor.

I suspect it will take more than a generation. Zimbabwe has destroyed most of its human capital, which was held by the whites who have fled or been killed. They will not return, even if a better government is put in place.

Human capital is a surprisingly powerful thing. Germany in 1945 was probably poorer than India, certainly than Mexico; its cities lay in ruins, and death, disease and poverty stalked its citizenry daily. By 1955, it was much richer than either country, and the gap was growing wider every day. Ditto Japan. The Marshall Plan was not much more than a pretty band-aid. The real reason that Germany and Japan were able to quickly regain, and then exceed, their economic might, while India and Mexico languished, lay in human capital. And no, not in the glories of whiter skin or superior Teutonic values. Even with her factories in ruins, Germany still had people who knew how to build factories, and run them. It had networks of people who were used to trading with each other. It had bankers who knew how to evaluate loan candidates and calculate interest. It had a citizenry with strong capitalist habits . . . savings and investment, trusting strangers enough to buy from them, a belief and insistence upon the rule of law. These deeply ingrained habits formed the foundation upon which the factories could easily be rebuilt.

Building that kind of human capital is a slow and arduous task, which is why not everyone is as rich as we are. If you look at per-capita GDP around the world, you can see that economic growth disperses rather directly from four points of infection: England, America, Australia, and Japan. The closer you are to one of these countries, the higher your standard of living is likely to be.

Luckily that kind of human capital is hard to destroy; it took the communists almost half a century to do it in Eastern Europe. Unfortunately, the other lesson of Eastern Europe is that it can be destroyed, if you work hard enough. And it is most fragile in former colonial countries, where the European rulers strove to make sure that as little of this capital as possible rubbed off on the subject peoples. so that when the Europeans left, all the sophisticated economic machinery collapsed.

The Zimbabwean government has made things bad by chasing off all the rich people who owned things, and making it unlikely they will ever return; now it is busy making them worse, by chasing all the other capital out of the country, and slowly destroying the habits of interpersonal trust, and planning (what sort of lunatic plans for the future when inflation is in the quadruple digits?) that support economic growth. Those sorts of habits are not an easy cultural equilibrium to get to (what sort of lunatic buys things from a perfect stranger 1,000 miles away?); once destroyed, they seem just as difficult to regain as they were to build in the first place.

Economically, Viscount Grey's famous quote applies better to modern-day Africa than war-torn Europe: once the lights go out all over Zimbabwe, we may well not see them lit again in our lifetime.

From the desk of Jane Galt:

In which I apologise to Ezra Klein, and urge us all to stop dwelling on the past so much

In response to my post on the Marxist Fallacy, Ezra Klein emails:

It's certainly true, btw, that I have some pro-statist ideas you'd be relatively horrified by. But that post wasn't one of them, and I'm surprised to see you characterize it as a "horrified" reaction, or group it anywhere near folks calling you a bitch. I thought it was a pretty honest and good-faith addition to the discussion, and I'm unsettled that you took it so differently.

Which indicates that we've gone off the rails somewhere. I like Ezra Klein . . . I read him daily. He's a very good blogger, who you should also read daily, because ideas you disagree with are healthy for you. Go on, get that heart-rate up!

His post was very sensible . . . in fact, let me excerpt it for you:

Since 1993, the number of native-born Americans with coverage has ranged between 86.3% and 88.1%, with 2005 seeing 86.6%. As for the number of foreign-born Americans, their coverage numbers have remained between 65.5 percent and 67.7 percent, with 2005 ending at 66.4%. Which is to say the percentage covered among both groups has remained relative stable.

What did happen is that the foreign-born population increased from 22 million to 35 million over that period: a far more rapid expansion than the native population saw during the same timespan. Indeed, while in 1993, 32 million native-born Americans were uninsured and 7 million foreign-born Americans lacked coverage, in 2005, 35 million native-born Americans were uninsured while 12 million foreign-born Americans went without protection. While the uninsured of each population remained approximately the same, the foreign-born population exhibited a great absolute increase. None of which really changes the basic narrative: 35 million uninsured natives, 12 million uninsured foreigners, 47 million uninsured total. Nothing to be proud of.

Now, I might quarrel with this on several grounds: first, that if we had more health care for immigrants, we'd almost certainly get fewer immigrants, since cost pressures would force politicians to set stricter limits on legal immigration. That's a big cost, to us and especially to the immigrants, who tend to be much poorer than even uninsured Americans, and probably get worse health care back in their own countries than whatever they get here. So perhaps it is something to be proud of. And I could drag out my arguments about a relatively free market being the genesis of both uninsurance, and innovation, and how I see no reason to privilege those who currently have diseases we can cure, over the much larger group who now have, or will in the future have, diseases for which we currently have no treatment, but one day will. And Ezra could retort, and we could go round and round, and it would be hours of fun for the entire family.

But that's a good argument to be having. Should things be the way they are, or should they be different?

What it is not good to be doing is arguing about things that really aren't disputable: on almost anything we can measure, things have gotten better for average and poor Americans over the last thirty years, as well as rich ones. We could argue about whether intangible social values like cohesiveness and civility have eroded, but the tangible things that we can count and quantify have indisputably improved. The question is "how much" not "whether". And unless you are an economist who needs to learn how to correctly measure things in the past, so that he can better measure things in the future, the correct answer to "how much" is "who cares?" It is a waste of time to quibble about fine technical distinctions in measuring the past, when what you really care about is shaping the future.

No one is seriously proposing a return to the economy of 1973: heavy industry (and heavy pollution), women at home, wage and price controls, strong unions, low immigration, trade restrictions, and all the rest of it. Lots of people want some piece of fit, but no one wants the whole shebang . . . and the whole shebang is what created the economy of 1973. Strong unions, for example, were strongly aided by keeping women, immigrants, and foreign workers (through trade) out of the workforce; even if you magically increased unionisation levels, the sheer size of the modern labour supply would defeat many of your plans for boosting labour's bargaining power.

Since we are not planning on trading in the Nissan Altima for a Chrysler Cordoba and cruising back to The Good Old Days, it is futile to spend emotional energy on discussing how much better (or worse) everything was back then. It kinda reminds me of one of my favourite lines from "The Dilbert Principle", in which Scott Adams points out how salesmen whose products suck often fall back on ridiculous comparisons:

"Sure, 48 mph isn't a very good top speed for a sports car, but you have to compare that to hopping!"

Libertarian policies are no more vindicated by the fact that growth has occurred than liberal policies would be if they had not; the important question is whether our lives are as good as they could be. Mr Klein has very sensibly opted to debate whether an 86% insurance rate for native-born Americans constitutes a job well done, or a terrible failure, rather than how it compares to 1820's Birmingham, or the the modern-day Ibo of Nigeria.

A couple of his commenters, however, thought that the truth was better served by making fun of me:

Why do bloggers, yourself included, even give "Galt" the time of day? Her comments section reads like LGF with tweed elbow patches.

She is a perfect emblem of cheap-shot Republicans masquerading under the banner of Libertarianism. No solutions, only wise cracks, and the annoying tendancy to use facts in the same way whores use lampposts: not for illumination, but for support.

They were the ones I was referring to, not Mr Klein, whose post was a shining example to us all of the joys of reasoned debate.

From the desk of Jane Galt:

Just how bad is our fiscal position?

In the comments to my previous post, Mark E. Hoffer asks:

And, now that you're back on this stupid topic, How can you continue to avoid the Trillions we are now in the hole v. 30 years ago??

I am confronted with this interrogatory frequently, in some form or another. Often they boil down to "Why haven't you commented on the appalling fiscal position the Bush administration has left us in, you Republican shill, you?"

Not that I'm in favour of the budget deficit; I'm not. There is no reason that we should be running deficits at this point in the business cycle, except that our yet-to-be-born grandchildren can't vote. This is not a good reason, either, if you ask me. And don't get me started on the prescription drug benefit, or farm subsidies, or the TSA, or . . . God almighty, where did I put that valium?

But let's get a little perspective. Here is a table showing the national debt of various governments as a percentage of GDP. I use %GDP because it is obviously silly to compare the absolute level of our debt to, say, Mexico's--just as it is silly to say that I am better off than my friend the hedge fund manager because look! He's got $400K in mortgage debt, while Jane just has $20K or so worth of student loans. Here is what our position looks like compared to that of other nations in the OECD:

Time period	2000	2001	2002	2003	2004	2005
Luxembourg	3	3	3	2	1	1
Australia	12	10	9	8	7	7
Norway	19	18	19	22	19	18
Iceland	34	40	36	34	29	20
Mexico	23	22	24	24	23	22
New Zealand	33	30	29	27	24	23
Czech Republic	13	15	16	19	21	24
Ireland	35	31	28	27	25	24
Switzerland	26	25	28	28	28	29
Korea (Republic of)	17	18	19	22	25	30
Canada	41	40	38	36	32	30
Slovak Republic	24	36	35	36	39	34
Spain	50	46	44	41	39	37
United States	34	33	34	35	36	37
Finland	48	45	42	44	43	39
Denmark	55	52	52	49	47	39
Germany	34	35	36	38	39	40
Netherlands	44	41	41	43	44	43
Poland	36	36	41	45	44	45
United Kingdom	43	40	40	40	42	46
Sweden	58	50	48	49	48	48
France	47	48	50	52	53	54
Hungary	54	51	55	57	57	58
Austria	60	60	60	60	61	61
Turkey	51	100	87	79	74	68
Portugal	54	56	59	61	64	69
Belgium	100	99	98	96	94	93
Italy	104	103	100	97	96	98
Greece	119	121	119	117	119	119
Japan	106	124	137	141	157	..

Yes, my friends, that's right . . . in five years of fiscal mismanagement, the Bush administration has driven us from debt at German levels to a national debt that is . . . 3% of GDP less than Germany's. Wait, that's not right. He's driven us from 13th place in the OECD debt rankings to . . . 15th place. Okay, but look what that means! We've gone from a national debt that was a sane, manageable 34% of GDP, to an unsustainable . . . 37% of GDP.

One could argue, of course, that it is moving in the wrong direction, unlike, say, Ireland or Finland. But lots of countries are moving in the wrong direction: France, the UK, Germany, and Japan, to name just a few, have all seen increases in national debt bigger than ours as a percentage of GDP. That's partly fiscal profligacy, and partly the fact that a smartly growing economy, such as we've enjoyed, makes the debt of previous years relatively smaller. Thus the Bush administration has only seen national debt grow by a small amount on its watch, despite running annual budget deficits in the 2-4% range. Yet somehow it is only ever the American budget deficit which is about to bring the national economy to a crashing halt.

That is why it doesn't make much sense to me to ask about the "trillions worth of debt" we have accumulated. I mean, I've accumulated a substantial amount of debt since I was 4. This doesn't mean I was richer when my income was 25 cents a week. According to the Office of Management and Budget, the amount of debt held by the public has gone from 26% in 1973 to roughly 40% of GDP in 2005--a big increase, but not as big as that implied by "trillions and trillions!"

The possibly more relevant figure, however, is "net interest", which is to say what percentage of GDP our government pays its creditors. In 1973, that figure was 1.3%; by 2005 it had soared to a whopping . . . 1.5%.

America's fiscal problems right now just aren't very big. Of course, they're going to get big in the not-all-that-distant future. Social security will be manageable under reasonable assumptions. For example, if you repealed all of the Bush tax cuts, tax revenues would increase by something over 1% of GDP. In 2050, the Congressional Budget Office predicts that Social Security outlays will be 6.5% of GDP, versus 4.2% of GDP in 2005, meaning that we could finance more than half the Social Security budget gap by repealing the Bush tax cuts.

Of course, not all the Bush tax cuts went to the rich--according to the left-leaning Center for Tax Justice the top fifth of earners got about 70% of the tax cuts. If you left the 30% of tax cuts that didn't go to "the rich" intact, you'd end up with something a little less than 1% of GDP worth of new revenue. So you'd have to find another 1.3% of GDP somewhere else.

If you think that the Bush tax cuts were a gargantuan bonanza to America's wealthy, it's a little disquieting to realize that closing the Social Security gap would require an additional tax increase on the top fifth of earners that would be 30% bigger than the Bush tax cuts.

And that's if you assume that a hefty tax increase wouldn't cause a single person to work less. I'm no supply-sider, but I accept that there is a decent amount of deadweight loss from taxation. When you raise taxes, some people work less, or arrange to have more of their income in tax advantaged forms (like capital gains, or tax free benefits), or they disappear into the "gray market" of all-cash work. With a tax increase of that size, I'd expect that such losses would reduce the projected revenue increase by somewhere in the neighbourhood of 10-20% . . . meaning that the tax increase required to actually cover Social Security benefits would have to be bigger still.

Of course, we still have this persistent budget deficit of about 2% of GDP. So if you want a solvent Social Security system and a balanced budget, we'll need another couple of bush-tax-cut-sized increases. Nor will it help you to pay down debt today in preparation; by 2050, our economy will, assuming 2.5% real growth and a 2% rate of inflation, have reached roughly $100 trillion annually, and the interest on our current $4.7 trillion worth of publicly held obligations will be a rounding error.

That's just social security. And social security is our manageable problem. During the same time period, using very conservative assumptions (lifespans don't increase dramatically; the growth of health care costs relative to GDP declines, suddenly and for no apparent reason, to less than half of its historical rate), the cost of these two programmes is predicted to roughly triple, at which time they will consume 12% of GDP.

In other words, for our non-math-majors, we will need a tax increase approximately five times the size of the Bush tax cuts to fund our Medicare/Medicaid budget gap. Even I suspect that at that point, we will start running into the ugly end of the Laffer Curve, particularly if we try to load the entire burden onto "the rich". And since those programmes are already socialised, we can't count on the fabulous savings from government administrative efficiencies that Paul Krugman keeps promising.

But does this mean we're worse off than we were in 1973? Hell no! I'm worried about this stuff because I have a reasonable expectation of making it to within spitting distance of my centennial anniversary; my counterpart in 1973 couldn't be sure she'd make it to the head of the gasoline line in her Chrysler Cordoba. And we're only in this hole because benefits are so generous, and getting more so all the time, thanks to CPI bias. Even if Social Security benefits are slashed by 1/4 when the money runs out, it will still provide a higher standard of living than that enjoyed by a retiree in 1973. The entitlement problem is a disaster (though, just as with our national debt, less of a disaster than the one looming almost everywhere else in the world.) But it's a disaster born of prosperity, not despair.

From the desk of Jane Galt:

Department of Questionable Statistics

I often do posts titled "Department of Awful Statistics" for people who egregiously abuse statistical method, or use statistics that have obviously originated in the fertile brain of some activist somewhere. But even statistics that come out of relatively well designed studies need to be taken with a grain of salt.

The Fat Acceptance Movement often touts studies showing that being underweight, or having a low BMI, is riskier than being overweight--Feminist blogger Ampersand often points to such. A post by Randall Parker indicates why this is so problematic:

Alzheimer's Disease Causes Weight Loss Before Diagnosis

Here's another reason to be skeptical of claims that obesity doesn't increase mortality risks. . . .

When you read claims that being overweight is not correlated with shorter lifespans keep in mind that a number of illnesses cause weight loss before the illnesses are diagnosed. Cancer can cause weight loss. Unexpected weight loss is sometimes the reason people with undiagnosed cancer go to a doctor and end up with a cancer diagnosis. But cancer is not the only major disease common in old age that causes weight loss. As reported above, even Alzheimer's causes weight loss before diagnosis.

Botton line: People who keep their weight down as a conscious choice are mixed in with people who have lost weight due to illness. So reports which show similar risk of death in the overweight and regular weight are misleading unless they are carefully crafted to control for illness as a cause of weight loss.

A couple of recent studies did attempt to control for illness as a cause of weight loss. They used weight of their subjects before the subjects reached old age. This allowed them to reduce the bias caused by weight loss due to undiagnosed illnesses. They found that being overweight really does shorten life expectancy. See my post Two Studies Find Being Overweight Shortens Life Expectancy for the details.

Rats. And I just bought fifteen pounds of pasta at Costco . . .

From the desk of Jane Galt:

The Marxist Fallacy

No, it is not "From each according to his ability, to each according to his need". If you define "need" rather narrowly, we're almost there, even without the state withering away. I'm thinking of another fallacy: the belief that to justify making things better, they must first have gotten worse.

Most Americans have only the haziest notion of Marx's writings. Marxism in their minds is a sort of amorphous cloud of muddle-minded sentimental claptrap, from which a few stock phrases, such as the one above, appear at regular intervals to give classical liberals something to sneer at. But though the economic system of Marx has been largely discredited, many of his ideas are still with us: of historical progress, of class as a defining category, of class struggle as an agent of history. We've simply filed off the serial numbers and pretended they came from somewhere else.

Many parlor critics of collectivism have rather thoroughly misunderstood the appeal of Marx to Marxists. They think that Marxists were naive morons, too fluffy-headed to understand the incentive problem inherent in Marxism--that people work harder for themselves than for others. The Marxists understood it (or at least some of them did), but they thought they could overcome it, through the scientific efficiency of central planning, and revolutionary social structures that would provide non-monetary incentives for co-operation. It may sound stupid to you, but this was an era when centralized efforts, particularly in public health, were producing enormous--and highly visible--improvements in human life. Meanwhile, because urban poverty is more visible, and less picturesque, than rural poverty (not to mention accompanied by rather more social dysfunction), the private sector seemed to be good largely for generating immense riches to be enjoyed by a few, and mind-boggling squalour for everyone else.

The left wing of the 19th, and the first half of the 20th, century had no Hayek to explain that the problem of aggregating information about supply and demand is insurmountable without prices, i.e. private property. Don't laugh too hard unless you are perfectly confident that none of your current ideas will strike your grandchildren as risible.

But as I was saying, the really great thunderous appeal of Marxism was that it was the philosophy of the future! Marx claimed to have discovered unstoppable historical forces which would eventually sweep the world into socialism, and from there into the hazily drawn paradise of communism, which resembled nothing so much as heaven without the scratchy robes and the hymns. Socialism was, you see, inevitable, because everything was going to get worse, and worse, and worse for the workingman, and eventually his misery would become so unbearable that he would unite with his fellow proletarians to seize the means of production.

Oops.

But just as with some of his more penetrating ideas, the legacy of this is still kicking around on the left, and in some places on the right. I got a horrified reaction from left wing commenters on my blog and others, as well as a few left wing bloggers, for saying that things have gotten better for the average person since 1973. Now, I actually enjoy a certain amount of this, particularly when the commenters are spectacularly wrong about my personal habits, history, and motivations. (Not to mention the facts: Alicublog's commenters are full of supposed "facts" that simply aren't true, like the fellow who said people are obviously worse off because it's so much harder for the average family to purchase a car and a home than it was in 1973, which is strange because given that both home and car ownership rates are at record highs, either he's wrong or households have gotten a lot better at overcoming difficulties in the last 30 years.) Anyway it's good that I feel this way, because as you'll see if you google the words "Jane Galt" and "stupid bitch", there are a lot of people who enjoy Galt-bashing.

But in this case it made me a little wistful, because all of the commenters seemed to have misunderstood me. I was interested in a rather technical economic question--does the change we have measured in median wages and incomes over 30 years accurately reflect the actual experience of Americans during that time? It seems to me, by the evidence of my thought experiment that the answer is "no"--if nothing else, anyone who investigated the medical techniques available in 1973 would quickly conclude that achieving a higher economic status relative to others in 1973 was not worth the risk to his life. Anecdotally, obviously, there will always be some people whose lives were better in 1973. Air traffic controllers and autoworkers come immediately to mind. But the average working American has better health care, a longer life, more and better housing, more clothing, more leisure--yes, you read that right, and if you don't believe me ask liberal economist Jason Furman--than they did in 1973.

My critics reacted to this assertion very emotionally. But why? It's a factual question; either Americans are living longer, more comfortable lives, or they are not. There are only two metrics on which I might convincingly even try to argue that they are not: income volatility, and women working, which has drastically reduced their leisure opportunities. The data on the former is too tenative, I think, to fully assess yet, and as for the latter . . . well, I enjoy working a lot more than playing bridge with my neighbours. On the other hand, perhaps most women don't, since they have to go to boring jobs like "payroll supervisor" instead of exciting jobs like "international economics journalist". But women working has been accompanied by an enormous increase in autonomy, which inclines me very strongly to put it in the plus column.

All the other statistics are pretty inarguably rosy.

My interlocutors, it seems to me, are evincing a deep emotional need for things to be getting worse in order to justify their political beliefs--so deep that the mere suggestion that we are mostly better off than we were 30 years ago comes across as an attack on the welfare state, rather than a fairly dry technical debate.

But this is all wrong, and it is one of the things that thoroughly discredited Marx. (The main thing, of course, was the unmistakeable tendency for Marxist governments to begin devouring their citizenry very shortly after birth.) Just because things are getting better does not mean that they could not get better still. And richer societies can afford to do more. One of the (to me) more compelling arguments in favour of new welfare programmes is that we are so rich, as a society, that we can afford to waste relatively large sums on government incompetence and deadweight loss in order to produce even small improvements in the lives of the truly unfortunate. And if the number of needy shrinks, we can do more for the ones who remain.

When Marxist predictions began to diverge from the evident facts of 20th century capitalist life, Marxists waged war on the facts. Historically, this was not a winning strategy. It is certainly not an error the left should repeat. Can't we spend less time arguing about the shape of the present, and more time competing over our visions of the future?

Update A couple of readers have pointed out that googling "Jane Galt" and "stupid bitch" no longer returns the fulminating hatred it once did. But I swear, it once did. Sigh. What has the web come to?

From the desk of Piers:

Tailback

I see now that Arnold Kling was writing about a long tail of politics a year ago, so let me apologise for missing that first time round, and pull in here a bit of what he said then:

How can people with diverse interests and ideologies live together? The traditional two-party solution consists of coalition and compromise. As an individual, you attach yourself to either the Democratic or Republican coalition, and you accept whatever compromises are worked out within and between these major coalitions.

My sense is that the Long Tail is losing its patience with coalition and compromise. We are tired of fiscal irresponsibility. We are tired of religious issues being debated in the political arena. We are tired of trying to reconcile socialism and paternalism with libertarianism. We are tired of being stuck with the same set of entrenched political oligarchs election after election.

Instead of coalition and compromise, the solution may be to splinter and separate. Allow people to live in any political jurisdiction they choose. Let socialists self-select to live with other socialists. Let libertarians self-select to live with other libertarians. Accommodate the Long Tail by allowing people to choose their political jurisdiction, rather than have it dictated by geography. That is what I mean by "virtual Federalism."

The key to virtual Federalism is to break the link between physical location and political jurisdiction. A Ralph Nader supporter who happens to live in Texas could form a virtual state with like-minded individuals in Massachusetts and Oregon. A libertarian in San Francisco could join a state with ideological allies in Orange County and New Hampshire.

This strikes me as entirely logical. And totally crazy.