If only protectionists would put all that effort into improving themselves

Instead of doing like the rest of us and adapting their skill sets to the times, there are many who turn to the power of government to preserve their livelihoods:

Philly Plumbers Upset by Waterless Urinals

PHILADELPHIA (AP) - This city's hoped-for bragging rights as home of America's tallest environmentally friendly building could go down the toilet.

In a city where organized labor is a force to be reckoned with, the plumbers union has been raising a stink about a developer's plans to install 116 waterless, no-flush urinals in what will be Philadelphia's biggest skyscraper.

Developer Liberty Property Trust (LRY) says the urinals would save 1.6 million gallons of water a year at the 57-story Comcast Center, expected to open next year.

But the union put out the word it doesn't like the idea of waterless urinals - fewer pipes mean less work.

The city's licensing department, whose approval is needed for waterless urinals, has not yet rendered a decision.

The mayor's office has stepped in to try to save the urinals, which use a cartridge at the base to trap odors and sediment as waste passes through.

It is telling the plumbers that the city's building boom will provide plenty of work for them and that even waterless urinal systems need some plumbing connections, said Stephanie Naidoff, city commerce director.

Philadelphia's unions have periodically put the city in a difficult spot.

For years, convention groups were canceling bookings at the Pennsylvania Convention Center because of difficulties working with six unions. New rules were established in 2003 to allow convention groups to deal instead with a middleman, a labor supplier. A few months later, the electricians union temporarily shut off power and picketed the center in a dispute with the supplier.

In 2004, the MTV reality show "The Real World" briefly pulled up stakes after union workers, in a dispute over hiring practices, picketed the house the cast was to live in. The show's producers and labor leaders eventually negotiated a deal to bring the show back....

Bluntly, who cares if there's more, just as much, or far less work with the new piping? It is not the consumer's duty to provide work to anyone else. So by what right do these unions have to stand in the way of progress, to tell taxpayers that we are obligated? Even if there is no progress, by what right can they compel or coerce anyone to choose this product instead of another?

They have no right, but government has given them the power (that is to say, ability. Public officials, after all, don't have to be prudent about signing contracts with unions. It's not their money. And why do the officials, particularly elected ones that are supposedly directly subject to the people, so willing to sign contracts that allow unions to hold municipalities hostage? Simply, union campaign donations.

One can only imagine buggy manufacturers and whip-makers lobbying governments in the early 20th century, complaining that the automobile is putting them out of work. As we can see from Bastiat's The Law, protectionism has been around a long time:

The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.

Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it.

"The nature of law is to maintain justice," Bastiat said. My own humble observation is that the problem is not with the special interest groups, but with government assuming so much unconstitutional power. Were government strictly limited to the role of defending (not promoting) our rights to life, liberty and property, then special interest groups would become irrelevant. There would be no officials with the power to grant them what they want.

Sadly, though, voters in general are so bent on voting for the candidate who promises the most, even to the extent that the supposedly conservative New York Post endorsed Chuck Schumer's 2004 re-election bid. I've talked with my best friend about whether we should get our families and move to Texas' 14th Congressional District. What kind of people live there that they keep sending back a man like Ron Paul?

More on the true economics of illegal immigration

Previous:
When conservatives don't get it about illegal immigration
Price-setting and illegal immigration
The politics and economics of illegal immigration

The very purpose of labor unions is to protect their members from competition, particularly immigrants (legal and otherwise) who will do the same work for less. So as expected, the AFL-CIO today came out strongly against the "guest worker" program now working its way through Congress. It announced it would oppose such "reform" last month, which still did not dissuade certain Democrats from embracing "guest worker" status.

While we might think this spells trouble for Democrats, who depend on union money as much (if not more) than union voter turnout, unions really have little choice but to endure the strained marriage. In all likelihood, albeit reluctantly, they still will give money and votes to Democratic candidates. Who will they otherwise support, Republicans? Green Party candidates or other socialists with no hope of winning? It was a calculated move by the Democrats, and arguably a good one. Democrats know labor unions won't abandon them just for this, and meanwhile, advocating a "guest worker" program will secure much of the Hispanic vote (critical because "even" George W. Bush made large gains among Hispanic voters in the 2004 election). Especially to make a move in 2006 and 2008, Democrats can't take minority voters for granted. Hillary has now emphasized she's pro-immigrant, hoping Hispanics she started to alienate will forget her previous tough talk on securing the southern border.

But immigrants don't just do the jobs Americans won't do. They do the jobs Americans shouldn't do, as I explained in my entry on when conservatives don't get it about illegal immigration. Any economy, no matter how advanced, will have jobs that "somebody's gotta do." A household isn't as simplistic a representation as it might initially seem. Like the low-grade jobs in a sizeable economy that we'd prefer not to do, there are chores to be done like vacuuming carpets, cleaning bathrooms and yardwork. But why should a parent have a skilled son mow the lawn, when he could earn $10 an hour elsewhere, and an immigrant is willing to cut the grass for $5? It's win-win for everyone. So what opponents of immigrant labor are arguing is the most absurd facet of protectionism: that the hired worker "takes away" the son's low-grade job, when in fact the son could do so much better.

Immigrants, legal and not, tend to replace Americans in low-grade jobs. That means Americans no longer have to mow lawns, bus tables, mop floors, or do construction. Instead, we can go into drafting, IT, accounting/finance, and so on. In other words, immigrants easily fill the demand for low-grade labor, allowing more Americans to go into high-grade occupations. It's a rare case that white-collar professionals lose their jobs to illegal immigrants, but that's not the type of illegal immigrant that conservatives fear.

Michelle Malkin recently hailed a reader's comment as "E-mail of the day," which it was, but for an entirely different reason. It was a complete non sequitur. The person criticized Bush for using the "jobs Americans won't do" phrase, bringing up "West Virginia miners." Yes, and...? Are certain conservatives so desperate for anti-illegal immigration talking points that they'll seize upon any argument or example, no matter how illogical? Miners aren't an occupation commonly (if at all) "threatened" by illegal immigrant labor, so I fail to see any relevance here. If anything, Americans should want illegal immigrants to take those jobs, so that we can go into white-collar jobs with a greatly smaller risk of death.

One thing I have wondered is why construction workers are so protective of their jobs. Now, I admit the most physical labor I've ever done is carting several monitors around, back in my IT days. Still, I would think people would prefer to type on a keyboard inside an air-conditioned office, instead of sweating out in the sun and risking serious injury. If the construction workers aren't intelligent enough to improve themselves and get the better jobs, then that's direct evidence of their protectionism. They can't compete with others who will do the same work (perhaps better) for less, so they appeal to the power of government to make themselves artificially competitive. As I'll explain later, that infringes on my freedom to choose.

The substitution of illegal immigrant labor in low-grade jobs is no different than the controversy of "jobs exported overseas." China and India use their comparative advantage in labor to produce labor-intensive goods, which allows more American workers to move into jobs that produce capital-intensive goods. Americans shouldn't bother making inexpensive plastic or metal parts, or mass-producing semiconductors, not when we can produce Boeing jets, Caterpillars and high-level computer software. The Chinese and Indians could probably make whole aircraft, heavy construction machinery and computer software, but far less efficiently. I could possibly learn make my own shoes, too, but it's a better use of my time to buy them.

Also, as I explained in my previous entry, if federal laws forced Americans to replace illegal immigrants with "legal" domestic labor, certain goods and services would become sufficiently expensive that we wouldn't buy them. So by working for such low wages, illegal immigrants make it possible for middle-class Americans to hire landscapers and fence builders, and enjoy several pounds of strawberries instead of just one. Let's say I can hire a "day laborer" for $5 per hour to mow my lawn or repair a fence. A legal resident might want $20 per hour to do it, and at that price I might just do it myself. But the illegal immigrant makes it possible for me to spend $5 an hour and gain so much more by having free time. Meanwhile, nothing is preventing the legal laborer from seeking a job where he has a comparative advantage -- or is he so uncompetitive that he must use government to force me to pay him what he wants, like with minimum wages?

Briefly, a lot of conservatives like to complain that illegal immigrants don't pay taxes. That is true, but it's offset by the lower prices we pay. That's like complaining about Wal-Mart's everyday low prices because, per item, that means reduced sales tax revenue. Besides, what kind of sadistic person makes taxation an issue, especially a conservative who is supposed to follow the principles of limited government and low taxes? Or is immigrating to the United States like that "Night Court" episode? As a judge, Harry administered the oath of naturalization to a group of people. One was so excited and stuttered, "I'm a, I'm a," to which Harry replied, "Yes! You're a taxpayer."

I will say again that the fundamental issue with illegal immigrants is freedom, but not (at least primarily) about their coming to the United States. Ayn Rand would probably like how I examine it from a very self-centered perspective: I want the freedom to transact peacefully with whomever I choose, whether it's buying from a grocer whose Florida oranges were picked by "undocumented" migrant workers, or hiring a "day laborer" to move furniture. I want the state to stay out of my business when I and the other party are harming no one, instead of forcing me to choose among limited options. In fulfillment of Adam Smith's "invisible hand," I improve others' condition merely by seeking to improve my own, but ultimately it doesn't matter to me whether the person is legal or illegal, of Czech descent or Mexican. My first concern is maximizing my happiness for the least cost to me.

Larry Kudlow really pleased me by emphasizing freedom as the moral facet of the immigration issue. I was glad that a prominent conservative finally criticized the utter stupidity of some people (including members of Congress) who want to criminalize any assistance to illegal immigrants, including churches giving food and shelter. Really, what kind of country are we that, even just for a moment, we consider making it a crime to feed hungry people who came here in search of a better life, in search of freedom? There's a big statue just outside New York City you may have heard about, the one with an inscription about "tired," "poor" and "huddled masses yearning to breathe free." Is that just lip-service, or was there a cut-off date I didn't hear about? Is freedom a scarce commodity that we must hoard it for ourselves?

And one more time, if we're so worried about illegal immigrants costing us billions in government services, let's abolish the welfare state for everybody. Once we do, none of us will have to worry about our tax dollars paying for an illegal immigrant's children, or our neighbor's children either. The only people trying to come to the United States, then, will be those who want to work honestly and not live off others, and criminals. And we can deal with the criminals if we'd stop playing catch-and-release. Let's start meting out appropriately harsh punishments for violent crimes, regardless of who (citizens, legal residents or illegals) committed them.

How's this for perspective: while we're fretting about illegal immigrants costing us billions a year in social services, we're sitting on a ticking timebomb of our own creation that has future underfunded obligations of $70 trillion. Which is the greater threat? If the latter, then why aren't people taking to the streets in mass protests about the need to fix (I prefer "abolish") Social Security and Medicare?

When the War on Terror gets tough...Democrats still only talk tough

So now the Democrats "pledge" to "eliminate" Osama. What's next, they'll wave a magic wand and make things as good as God's kingdom on Earth?

Harry Reid, Nancy Pelosi and other Democrats behind this latest stunt have clearly never seen "The Great Escape" (perhaps the best war movie ever, even surpassing "The Dirty Dozen"). Maybe "The Mask of Zorro" is what they recently screened: "It's not just one man, damn it, it's Zorro!" Osama isn't Zorro, though, and he is just one man. It didn't matter that we didn't get him at Tora Bora, no matter how many times John Kerry protested during the debates. He's been neutralized since late 2001 ever since having to go into hiding, evidenced by his silence and Zarqawi and Zawahiri's increased prominence. So unless we want to waste manpower and time for pure revenge, let's not pay any heed to the Democrats' latest game of "pseudo-bravado for votes." I'm hardly a Republican (let alone a loyal one), but the Democrats really are the party of saying and doing anything.

If we did double our special forces and sent in more spies, all for just Osama, he'd laugh to cardiac failure at our stupidity. The whole purpose of "The Great Escape" was that, no matter whether Steve McQueen & Co. succeeded, they made the Nazis waste a lot of time and men looking for them -- resources that could have been used at the front. Increasing our presence will only detract from what is most critical, which, like it or not, is Iraq.

As Jon Henke pointed out a while back, "The Reality Based Community is promising faith-based foreign policy." It's a must-read every time we begin to think the Democrats might actually have a plan of substance. Howard Dean said:

First we will conclude the negotiations with the Chinese and the North Koreans to disarm North Korea. Secondly, under no circumstances will a Democratic Administration ever allow Iran to become a nuclear power. Three, we will kill or capture Osama bin Laden and four, the authority and the control of the ports of the United States must be retained by American companies.

Jon tore Dean's rubbish apart in detail, and I left a brief comment wondering about the magic wand the Democrats appear to have. It's like the young mouse's proposal to bell the cat, which everyone thought was a great idea...until the wise old mouse asked just how he proposed to do it. I guess like with the cat, dealing with North Korea, Iran and Osama will involve asking nicely. Have the Democrats really never advanced beyond Jimmy Carter's foreign policy?

Movie quote of the day

Rick: Don't you sometimes wonder if it's worth all this? I mean what you're fighting for.

Victor Laszlo: You might as well question why we breathe. If we stop breathing, we'll die. If we stop fighting our enemies, the world will die.

Rick: Well, what of it? It'll be out of its misery.

Victor Laszlo: You know how you sound, Mr. Blaine? Like a man who's trying to convince himself of something he doesn't believe in his heart.

Competing to be the party of big government

"Dems Lambast Prescription Drug Benefit" reads the headline. You'd think, considering how the Democrats are trying to reinvent themselves as "fiscal conservatives," that their criticism of the prescription drug behemoth is its size. But they're not criticizing that the program could grow to be the most expensive piece of legislation ever:

WASHINGTON Mar 25, 2006 (AP)— Seniors need another six months to sign up for the Medicare prescription drug benefit, a Democratic congressman who's also a pharmacist said Saturday.

Rep. Marion Berry of Arkansas also said the government needs to think long and hard about meaningful Medicare reform.

Berry said people eligible for the prescription benefit are confused by the various offerings, and some are even paying more for medicine now than they were before they joined the program.

"We need to extend the sign-up period by six months to give seniors more time to make sense of this benefit, and we need to eliminate the Bush administration's prescription drug tax," Berry said in the Democrats' weekly radio address....

"I will never forget one conversation I had with a pharmacist from DeWitt, Ark., who had given away $60,000 in free medications in just one week because he knew his customers might die if they did not receive their refill that day. Medicare Part D is the FEMA of health care," Berry said.

Medicare could bargain for lower drug prices to save money for the government and for the elderly, he said.

"Every American deserves the best health care we can provide. We do not have to accept a failed benefit and we do not have to tolerate a culture of corruption or leaders who are afraid to admit their mistakes. Democrats have the answer, and under a Democratic Congress, we will give seniors the prescription drug benefit they were promised years ago. Together we can do better," Berry said.

The Democrats aren't criticizing the Medicare bill because it's a waste of $700 billion over the first ten years. They're criticizing it because it doesn't go far enough! This is yet another manifestation of Democratic hypocrisy, particularly when Democrats can get all sorts of misleading headlines from sympathetic mainstream media. Once again, "we" must provide this and that, but just who's picking up the tab? Who will bell the cat?

The one thing Berry got right is equating "Medicare Part D" with FEMA: both should be abolished, and that can't happen too soon.

Berry gave a sob story about a pharmacist who gave customers "$60,000 in free medications in just one week." Don't believe it for a second. He simply distributed the drugs, knowing the federal government would later pay him -- by taking money from everyone else. Let's not kid ourselves: the pharmacist knew what he was doing, and he certainly knew he was doing no act of genuine charity. As a matter of economics, government again skews supply and demand curves, because it takes wealth from some people and gives it to others.

It's yet another fallacial notion about the pharmaceutical industry that a government can "bargain" to buy drugs at lower prices. Drug companies can only go so low, because if marginal revenue falls below marginal cost, they will stop selling. Even if marginal revenue still exceeds marginal cost, if it's not profitable enough, then the company will pursue another drug or possibly shift to different endeavors. Let's say that in the natural equilibrium of the free market, consumers might value life-prolonging drugs more than drugs to treat, for example, erectile dysfunction, and pharmaceutical companies are happy to offer the former because of higher profit. So when government makes it too expensive to make Lipitor, which cuts into profit margins because consumers aren't willing to pay the higher prices, then let's not be surprised when we have more Cialis.

If politicians were really serious about making drugs more affordable, they would eliminate all the FDA red tape (preferably abolish the FDA altogether) that drives up pharmaceutical companies' costs. Because of the studies and years required to obtain FDA approval, it costs an average of $800 million to bring a new drug to market. That $800 million used to come from individual customers, but now with the Medicare prescription drug bill, the federal government can pay it via the taxpayer's wallet. Am I the only one who sees the senselessness in government "bargaining" to reduce prices that it drove up in the first place? It's as senseless as the "War on Drugs," one of whose effects is making criminalized drugs more scarce, and hence a much more profitable and attractive business than before.

While environmental activists suggest we can find cures for cancer in the rain forests, it would be more effective to let pharmaceutical companies do the research without having to jump through all the bureaucratic hoops. And if a particular drug has certain dangers, whether it's a "clot-buster" for stroke victims or a drug that suppresses a transplant patient's immune system, then caveat emptor. Let the buyer beware and assume the risks, because someone might consider the possibility of death worth the chance at life. You, I and no one else -- and that includes government -- have no moral right to deny someone that choice.

It's going to be one of those weeks

Our database administrator and I have been trying to clean up some fields, and he pointed out what could be a big problem. He finished his e-mail, which got CC'd to his fellow admin and my manager, with, "What are we to do with all this?"

I said out that it's probably ok to do it as I suggested, and he replied, "OK." In hindsight, perhaps I should have written him back, "I find your lack of faith disturbing."

Whew, could I use a double Scotch right about now. Or a very cold St. Pauli Girl (regular, not dark) or Heineken.

The highlight of her day?

This morning I was getting breakfast in the cafeteria, as I do every morning at work. I said "good morning" to the cashier, who then just stared at me for a few seconds before catching herself. She has seen me many times before, but my fresh highlights apparently got her attention. They're rather different for me, it's true. I have my hair highlighted every three or four months, usually some shade of gold, perhaps flax, to complement my very black hair. The ones I got this weekend are, well, quite blond.

My usual stylist (Carol at C&C Unisex in the Danbury Fair Mall, worth making appointments for) knows my hair and always does a great job, but she can't do highlights. So when I want mine redone, Carol trims my hair a little, another stylist does the highlights, then Carol finishes cutting. For a long while, I had the same stylist do my hair, but then she moved. Since then, I've had several different people do my highlights, each one a little differently. The latest one suggested very light highlights, and I think the jury is still out. The color will darken, anyway, as I shampoo frequently, but I don't think I'll get them this light again.

My cold was bad enough on Thursday and Friday, but I had so much to do at work and couldn't dream of taking time off. Despite getting a lot of sleep starting Thursday night, my cold and fatigue got worse. I would have stayed in bed all weekend, but I extricated myself to get a haircut, and besides, no medical condition short of a coma will stop a man on a quest for good brew. A co-worker recommended I try Saison Dupont, and at the same time I picked up a six-pack of McEwan's Scotch Ale.

Saison Dupont is quite good, and fascinating (to me) because of its background as a "Belgian farmhouse ale." I still prefer Chimay, though. Maybe Chimay Grande Réserve has spoiled me with its rich and dark character. Maybe I became prejudiced because my initial reaction to Saison Dupont, when uncorking the bottle and pouring, was that the nose and color were like a common pilsner. Maybe I was just too congested, which would be a true pity. I sighed to my co-worker this morning that I've had perhaps a third of the 750 mL bottle, and since Saison Dupont doesn't keep well after opening, I'll have to drink the rest tonight (tomorrow at the latest).

My co-worker was very right about not chilling the Saison Dupont too much. It does taste better when only a little cold, so don't frost your mug. I had it in the refrigerator for a good while, and the taste definitely improved after I let my glass sit out for a bit.

"Pushing cars after Katrina": the ease of depending on government

"The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else." - Frédéric Bastiat, 1848.

"Pushing cars after Katrina." - Perry Eidelbus, 2006. (I'll explain this at the end. Star Trek reference.)

The aftermath of Hurricane Katrina has demonstrated the tremendous ease of dependency on government...because other people pay for it. It's been several decades since Americans really got accustomed to losing part of their right to property, in the name of helping others: FDR's New Deal sparked the real growth of paternalist government, necessarily meaning that people no longer have the right to keep their earnings, because big government would tax them heavily and give to others. We are not willing, but we have become accustomed to it.

For background, these are my previous entries regarding the rebuilding. Compared to what New Orleans is doing to the federal government, the billions that Saddam skimmed from Oil-for-Food is small potatoes. When there are so many individual recipients, it's easy for them to take advantage, and hard for the rest of us to notice just how much must be taken from the rest of us:

The finest government other people's money will buy
The finest government other people's money will buy, part II
The finest city other people's money will buy
Ray Nagin, New Orleans' non-racist racist

Some of you may have read about Donna Fenton, who was profiled a few weeks ago in the New York Times. It's a typical Times "human interest" sob story: someone is trying to rebuild her life, and it's a Times article, meaning she's doing it via other people's coerced money. Then the woman had the nerve to complain that there wasn't enough money and that it wasn't coming fast enough! How about her loan application to the Small Business Administration, when she had just barely arrived in New York "with a change of clothes and a tapped-out bank account"? What was her business plan, or was she looking to spend the money on herself? I see in the picture that she sports a leather jacket in excellent condition, she appears more than well-fed, and she's "shopping." You'd think that since she's not being given money to live like a king, she'd exercise some discretion in spending. But no, she's not shopping for food: look closely, and it's some sort of knick-knack store. With such fiscal discipline, the woman ought to run for Congress!

Then in the sixth paragraph is a small mention of her "job that pays about as well as the one she held managing two restaurants in Biloxi," and her husband's part-time job. But wait a minute: in the first part of the article, she had complained about having to call government agencies "start[ing] in the morning...sometimes until 3 o'clock the next morning." Is this for we're giving money to Katrina "victims" for, so they can have jobs on the side, then burn through our money buying non-essential items? We shouldn't be surprised. In one infamous case revealed last year, the federal government had given millions of our dollars, "victim compensation money," to a 9/11 widow and daughter. The two then blew through almost all of it by enlarging their Long Island home, traveling the globe, staying up late to buy designer handbags over the Internet, and fund boob jobs for friends and even strangers.

In Fenton's case, are we giving her money so she can insult our intelligence by downplaying her job, then claiming she makes calls to government agencies until 3 a.m.? Think about it for a second: just how many different numbers could she call, so how many times could she call in a day and not waste time? She said she knows them all by heart, including which ones are not helpful, so a rational and honest person would only bother calling the numbers that lead somewhere. Did we give her a check for $1565 so she could all but throw it back in our faces? What gall must someone have to say "That doesn't go far"? It reminds me of the guy who rides the subway, peddling a newspaper, claiming to be a vet and that "the government doesn't give me enough."

Coincidentally, $1565 doesn't seem to go that far for me. Maybe because I pay taxes on it first, or maybe it's because I'm actually working for my checks and am dismayed how much is taken from me to support others that ought to be working -- or work and still demand the rest of us "help"! While Fenton wants "enough money to move into a new apartment in New York, so she can begin anew the life that Katrina ripped apart," what about the rest of us who work honestly and do not live off the coerced sweat of others? Ronald Reagan, rest his soul, no doubt turned in his grave at the emergence of the 21st century welfare queen.

Incredibly, Fenton's story doesn't end there. The Times had to issue a correction (appended to the end of the article) once she was arrested and charged with welfare fraud and grand larceny. She allegedly never even lived in Biloxi, Mississippi, nor was she another "Katrina refugee." She's allegedly (and I keep using that word lest she somehow weasel out of the charges and look for people to sue for libel) committed another of uncountable Katrina scams, ripping off taxpayers all across the country. And The Times got duped because it was so eager to advance its agenda of redistribution of wealth. Like Dan Rather, will it maintain that the story was "fake, but accurate" because of "Katrina victims" genuinely in need?

For every scammer, there are those from the Gulf Coast who unquestionably were in genuine need after losing their homes (if not everything they had). They are not fools. Now that they're dependent on government, now that they know we the taxpayers are a golden goose (they know not to kill us, though, unlike the fable), they'd rather take the easy way out. In recent weeks, "Katrina victims" have complained that FEMA is cutting off the funding for their hotel rooms. By what right can they complain when no one is taking money from them? They are merely being denied easy access to taxpayers' money, but no one is denying them the ability to find a job.

New Orleans homeowners are even complaining that until the release of new federal maps of flood-prone areas, they won't know how much flood insurance they'll need to rebuild. Notwithstanding no part of the U.S. Constitution makes the federal government responsible for that (or any other purely state matter), since when must the government be responsible for determining such information? What does it matter, anyway, if the federal government designates an area as a flood plain?

Well, it matters who pays for it. Insurance companies' actuaries traditionally determined risk, but they cost money to hire, which gets passed on to the insured in the form of higher premiums. However, if insurers can get government to create the maps, they might save enough overall that it won't matter if government is wrong. (See my recent entry on how markets work with imperfect information.) Naturally, the insured just love this because their premiums will be lower -- at everyone else's expense. And even if the federal maps are wrong, well, the federal government has set a new precedent in how much it will take from the many to give to the few (the few who knew they lived in flood plains but expect the rest of us to bail them out). George W. Bush's willingness to act like a 1980s Democrat has proven that Katrina marked the latest age in the Era of Big Government.

There are even New Orleans residents who complain that nobody is removing the cars that were destroyed by flooding. Why don't the people on a block band together and hire a junkyard driver to take them away? I'll give them a free clue: if the cars haven't been claimed by now, they never will, or they won't be claimed for so long that it's not worth keeping them. Then again, we're dealing with "the state," the monstrosity of which Bastiat warned. These people want the government to clean up the cars in their driveways, not just the ones on the street, which means the expense is borne by everyone else. And since everyone else is responsible for storing the junk cars that nobody wants, they don't have to worry about the expense.

"Darmok" is one of my favorite Trek episodes, and admittedly it's very odd because of how the Tamarians speak in metaphors. Someday, perhaps "Pushing cars after Katrina" will be our own metaphor for forcing taxpayers to bear your own burdens.

I think all the late nights finally caught up with me

I've been very ill and very tired today. I should have called in sick this morning, but there's so much to do at work that I can't even think about taking tomorrow off.

There were a few things I wanted to blog about tonight, but I just don't have the strength, and the Nyquil is starting to take effect anyway. So I'll leave you with today's 9 Chickweed Lane comic, which I find very thought-provoking.

In fulfillment of Ayn Rand

Texas is now conducting sting operations of the stupidest sort imaginable: agents of the Texas Alcoholic Beverage Commission are going undercover to arrest people for public intoxication.

From Atlas Shrugged: "There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws."

"Public intoxication" is, by itself, another of those victimless crimes that's a waste to apprehend for, prosecute and punish. For one, bartenders aren't supposed to serve alcohol to someone they suspect or know is intoxicated, so I wonder if these sting operations have the hidden purpose of catching the bars too, which can then be fined heavily. Now, if some drunk harasses me or injures me, or merely relieves himself in public, what would it matter if he's drunk or sober? Punish him for the real crime, not his physical condition. And if he hasn't done anything but had one too many drinks, why is it such a good idea to throw him in jail with real criminals?

Could he injure himself? Certainly, but that is strictly his own concern. As Jefferson said, and this is worth quoting as often as needed:

The care of every man's soul belongs to himself. But what if he neglect the care of it? Well what if he neglect the care of his health or his estate, which would more nearly relate to the State. Will the magistrate make a law that he not be poor or sick? Laws provide against injury from others; but not from ourselves. God himself will not save men against their wills.

The government is not our nanny, that its purpose is to prevent us from harming ourselves. It becomes a different matter when someone else is harmed, but it makes no practical difference if the one who caused the harm is drunk or sober. He should be punished regardless, and the victim (or victim's family) can sue for damages. Texas' state government, though, thinks it can engage in preventative measures, but they never work for situations like this.

I'm sure Texans feel much safer now. Instead of resources being used to hire enough patrolmen to pull over all dangerous drivers (not just drunks), ABC agents are scouring bars for possible drunks who may not be driving anyway. They can't hope to police every bar, and they might also miss the quiet drunk under their noses (he seems to be nursing the same Scotch for the last hour, but it's actually his seventh, and he talks so little that you don't guess he's inebrated). I can't help but think of Texas' effort as like examining each toothpick in a new box, in case one has a splinter. Yes, there's certainly a possibility of harm, but the time involved is not worth reducing (never eliminating completely) the risk.

Hot for teacher

This ABC News article asks if there is pro-woman bias in two different cases where teachers had sex with young teenage students.

I wouldn't call it "bias," but I think there is a big difference between a female teacher having sex with a male student and a male teacher having sex with a female student. Of course, it was completely improper for Debra LaFave and Dang Van Dinh to have sex with their students, and for that being fired was just a start. Now regarding the legal side, the students were young enough that criminal charges were certainly warranted in both cases, but my personal reaction is that Van Dinh committed a far greater violation.

Is there a rational explanation why our culture could perceive that boy as a young stud who lived a lot of teenage boys' fantasy, but virtually everyone would regard the girl as a poor victim? A young male must be sufficiently "interested" to participate (assuming it's normal intercourse), whereas a young female doesn't need to be as "willing" as much as coerced and pressured. So I for one am not really shocked about what LaFave did (though he was only 14, and she should be punished somehow), but I am outraged that Van Dinh took advantage of a girl who was just 15. In LaFave's case, she seduced someone who then had to, um, "give." Van Dinh seduced someone who didn't have to do much to "take."

About the very attractive LaFave, Jay Leno apparently said things along the lines of, "Where were these teachers when I was in school?" Well, I had such a teacher for first grade. I have a couple of snapshots from what I think was my 7th birthday festivities at school, and alas, that little Perry was too young to appreciate the beautiful woman. Or was he? In one of them, I had quite a grin going and an arm around her waist.

More markets in everything: uh, what's that again?

LED Message bra

Via Country Store. I was going to say only "No comment," but I can't help but wonder out loud what this could do for, how can I put it delicately, certain establishments that feature female ecdysiasts.

Markets in everything: jeans for Muslims

Leave it to the Italians to seize upon an entrepreneurial opportunity in fashion. And they're specifically designed with storage and comfort while praying. Green seams, even.

As long as the transactions are peaceful, like "Beurger King" in France, why not? However, considering last fall, I wouldn't be surprised if Muslims started torching cars again until the French government agreed to order stores to stock these jeans.

Tyrants disguise their actions by distracting the people

Here's another thing I've wanted to blog about but haven't had time. By convincing the poor that they're victims in a new "class struggle," China's leaders hope to distract them from the real issues.

China Premier Vows Protection for Farmers

Mar 14, 2006, BEIJING - China's premier pledged on Tuesday to crack down on seizures of farmland for redevelopment, a source of rising rural anger, but stopped short of saying whether the communist government might allow farmers to own land.

The comments by Premier Wen Jiabao came as the parliament endorsed a five-year plan to close the growing and volatile gap between rich and poor.

Chinese leaders are trying to defuse increasingly violent rural protests over complaints that local officials are seizing land to build shopping malls, factories and other projects and are failing to adequately compensate for the loss in farmland....

The five-year plan endorsed by the ceremonial parliament calls for billions of dollars of new spending this year on rural schools, health care, roads and aid to farmers....

Of course, Beijing will never make any real promises regarding their style of "eminent domain." I would say that government officials can seize land as they desire, as the people have no Constitution as we do, but our Fifth Amendment didn't seem to help us much, did it. Government officials will delay as much as possible, then make only the most vague and hedged statements. One wonders about this chicken-or-the-egg puzzle: did they learn this tactic from Ted Kennedy, or is it vice-versa?

Meanwhile, the leaders will continually speak of "the growing gap between rich and poor," which is a natural progression as a society grows wealthier, and not a bad thing at all. Read my explanation of how wealth does "trickle down" in an economy, meaning if my neighbor grows far wealthier than I do, then that's more money he can spend on goods and services I provide, or more money for him to invest in my business.

After fomenting strife between the classes, China's leaders then engage in massive social spending, hoping it will pacify and distract most people so that they won't perceive the tyranny over them. Why wouldn't it work on the Chinese, when it works so well on Americans who have a tradition of freedom?

"Is life so dear or peace so sweet as to be purchased at the price of chains and slavery? Forbid it, Almighty God!" Patrick Henry's cry rings true for all people, and he would be sad to see today how even Americans largely prefer life and peace at the very high cost of subservience to despotic government. The chains may be light, and they may be invisible, but they are still chains. The subservience may not be a regional governor ordering you into a particular job, or deciding what your food rations will contain, but it is still subservience when most of your life is influenced to some degree by laws and regulations. Are you really free when you must seek government's permission to build or even raze your own home? What about the FDA determining how much blood you can donate, whether a life-saving medical operation is too dangerous for you, or if a new inhalable form of insulin is safe for you to use?

Our friend Josh Hendrickson expressed how "dissatisfied" he is with Republicans, who since 1994 have become the enemy they once assailed. However, to paraphrase the Bard, though their actions seem madness, yet there is method in them. They regained control of Congress by inciting a lot of proper anger against the Democratic machine, but that won't work after a couple of election cycles. Republicans realized they had to win votes by bragging at re-election time how they did this and that for their constituents, just like Democrats did.

Why else did the GOP-leaning New York Post endorse Charles Schumer in 2004? Because, the editorial said, he was doing so much for New York -- bringing home the bacon. Why else did President Bush push so hard for the prescription drug boondoggle, but to convince enough seniors that if they voted? Not only that, he was especially trying to win seniors' votes in Florida, a critical battleground he nearly lost in 2000.

So how can we stop "politics as usual"? Jefferson's advice was, "In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution." But when courts ignore or completely misread the Constitution, how can we use it to restrain government? We have bad courts because the bad justices were appointed by bad elected politicians, who were likely elected for promising things to the voters. We the people must learn, all over again, the immorality of big government: that all the nice-sounding programs are paid for by others' coerced taxes.

Until then, we get the government we deserve. The Chinese have no tradition of freedom like Americans do, let alone any arms with which to revolt. So what's Americans' excuse when we vote for most of our leaders?

When conservatives don't get it about government subsidies

Some conservatives believe in government subsidies. Even Ronald Reagan, so he could win the 1980 Republican nomination for president, said he didn't know about farm subsidies; it was a half-reversal from his anti-subsidy position that cost him the nomination in 1976. If conservatives thought about it, they'd realize that the problem with subsidies isn't just that they're a mechanism of big government (and special interests' way of manipulating government to their advantage at everyone else's expense). Subsidies are actually contradictory.

If a new industry needs "help" because it competes against an older one that is supposedly so entrenched, the only reason the latter is entrenched is by government. If a business does not have government's special favor, like a charter or a true monopoly (which is not merely market power and in fact requires government for enforcement), then it must succumb to competition. And if it sells at cutthroat prices to keep competitors out of the market, how does that harm me, the consumer, who merely wishes to get the most for my money?

All those months ago, I had tried to explain to that particular pseudo-conservative that if Americans en masse switched to ethanol, then its price would suddenly spike while gasoline's would plummet. It's simple supply and demand. Well, I was right, but we didn't need the media to confirm that:

Ethanol Industry Braces for Growing Pains

WASHINGTON Mar 20, 2006 (AP)— After a spurt of good fortune, the fledgling U.S. ethanol industry is anticipating some growing pains that could bring it unwanted attention this summer.

Ethanol's public profile rose significantly for the better last July when Congress passed an energy bill that mandates the doubling of biofuels output by 2012. In January, President Bush gave the industry a further boost with a strong endorsement in his State of the Union speech. And with the imminent phaseout of a petrochemical added to gasoline to reduce tailpipe emissions, more U.S. motorists will depend on the corn-derived fuel than ever before.

But there's trouble looming: The ethanol industry might not be ready to satisfy the expected summertime jump in demand. And by crimping the overall supply of motor fuel, this could contribute to a spike in gasoline pump prices at the start of the country's peak driving season.

According to all the ethanol cheerleaders (including those who blindly insist it's cheaper than gasoline even without subsidies), I'm so focused on Hayek and theory that I don't see the real world. Yet these stooges of the ethanol lobbyists are the ones who earned another economics "DUH!" award.

The fact always remained that there's just not enough corn in the U.S. to fuel its economy, and growing more corn means taking land away from rice, sugar, wheat and grazing (meaning the prices of other crops and meat will go up from reduced supply). The jury is still out on whether Brazil is actually doing well with its new emphasis on ethanol (not just the expense of converting sugar cane but ethanol's lower fuel economy). And as I noted last October when discussing the Democrats' new myth of "energy dependence," the shift to ethanol has already pushed global sugar prices higher.

Physics teaches us that no perfect machine exists, that any motion necessarily loses some energy. When government pushes somewhere, it necessarily pulls elsewhere, and at best, this unnecessary motion loses economic energy (lost to expenses like bureaucratic overhead). Will subsidy cheerleaders everlearn that the best and ultimately only solution is to let the free market work without restrictions or fetters? Don Boudreaux of Cafe Hayek explained last Friday that "let the free market work" is hardly a simplistic answer:

To recommend the market, in fact, is to recommend letting millions of creative people, each with different perspectives and different bits of knowledge and insights, each voluntarily contribute his own ideas and efforts toward dealing with the problem. It is to recommend not a single solution but, instead, a decentralized process that calls forth many competing experiments and, then, discovers the solutions that work best under the circumstances....

In brief, to advise "Let the market handle it" is a shorthand way of saying, "I have no simplistic plan for dealing with this problem; indeed, I reject all simplistic plans. Only a competitive, decentralized institution interlaced with dependable feedback loops -- the market -- can be relied upon to discover and implement a sufficiently detailed way to handle the problem in question."

None of this is to say that getting the government out of the way is sufficient to create peace and prosperity. Markets require a rule of law to ensure that, among other blessings, property rights are secure and exchangeable. At their best, governments can help to protect our rights. Markets also require a culture in which commerce flourishes.

Words were rarely so wise. Hayek, especially in his "The Use of Knowledge in Society" essay, explained that knowledge is distributed throughout society. No subset of the population can possess total knowledge, even and especially bureaucrats. Knowledge is not just of scientific facts and other things which tend to remain constant. Knowledge is also of time and place, and that knowledge is very specialized from person to person. It's just as important (if not more so) to an economy's smooth function as a chemist's knowledge of how gasoline additives affect gas mileage.

Part of markets' tendency to approach equilibrium is that information travels much faster than through the highly viscous ether of government. Bureaucrats collect information in aggregate and then take their time to reach consensus, not to mention being influenced by special interests. Individuals, however, seek to make transactions with the greatest efficiency of their time because it's their time at stake. People can respond to changes in conditions, whether the price of gasoline at the local station or the global market price of ethanol, far more quickly than government can ever hope to do.

Lest some ethanol cheerleader accuse me of dealing only in theory and the abstract, I'll apply it to the real world. When I see gasoline's price relative to ethanol and weigh their respective fuel efficiencies, I can make my own value judgments far faster than government can for me. The same applies to when people shift to ethanol, driving its price up and bringing down gasoline's price. Market forces will approach a balance all on their own as people determine for themselves what are optimal levels of consumption, and both buyers and sellers would compensate for supply and demand shifts with greater speed and efficiency than any central planner.

The EU would do better to eliminate all its protectionism, not just that within itself

Background reading:
Do government subsidies really help the economy?
The error of protectionist economics

I'm a bit late in noting this news from last Wednesday, which I haven't seen on the major blogs that I try to keep up with. The President of the European Commission "said the EU executive would take action against countries that pursued protectionist policies." That sounds great, except when we find that Barroso is calling for the elimination of protectionism only between EU members. So protectionism is fine between the EU and the rest of the world?

It is beneficial for the several States of the United States to do nothing to inhibit free commerce between their residents. So if free trade is good between South Dakotans and Georgians, or Californians and Pennsylvanians, then why not between any U.S. residents and Japan, or China? Then why does Barroso push for free trade between, say, Spain and Finland, as a good thing, but he won't emphasize the importance of free trade between any EU member and the rest of the world?

The EU must do more than just striking down trade barriers between its members, but the special interest groups, particularly those in agriculture (where the Third World is most competitive), always step in. Oxfam for years has tried to get the EU to cease its farmer subsidies and protective tariffs, particularly on sugar. Oxfam is correct to say that this impoverishes poor nations that need exports to earn income, but it is incorrect to think that Europeans benefit themselves by protectionism.

Protectionism, as I explained in the two posts listed at the top, only benefits special interests. How do Europeans benefit from sugar tariffs when they are paying three times the global market price? Even if sugar were subsidized to below the world market price, that's still not a bargain, because they must pay taxes to pay the farmers so they can sell sugar at low prices. That's the current situation with ethanol in the U.S., which is heavily subsidized -- just don't expect certain pseudo-free-market advocates to admit it.

And when European special interests don't get their way, they get violent. At least that's what they do in France. Never mind the current student riots, or last fall's Muslim riots. Have we forgotten the French winemaker terrorists from only a year ago, who bombed government offices? All because they're overproducing wine, and the government isn't paying them what they say is enough to turn it into industrial alcohol.

Songs that evoke memories

I love a good song, especially if it has great lyrics. Sometimes I'll forever associate a particular song with someone. I used to love "The Promise" by When in Rome, which plays at the very end of "Napoleon Dynamite" (which I saw tonight for the first time, a very strange movie).

If you need a friend, don't look to a stranger
You know in the end, I'll always be there
And when you're in doubt, and when you're in danger
Take a look all around, and I'll be there

I'm sorry, but I'm just thinking of the right words to say (I promise)
I know they don't sound the way I planned them to be (I promise)
But if you wait around a while, I'll make you fall for me
I promise, I promise you I will

Coincidentally, I had been thinking of it last week. From the first time I heard it, I always loved its every facet: the introduction, the beat and synth (80s synthpop is one of my favorite genres), and especially the lyrics. The one day, it became a permanent reminder of someone who also loved that song. She even called it "our song"...including on the day she hurt me with the greatest cruelty imaginable. After that, I couldn't listen to the song without the taste of bile filling my mouth. I've just listened to it several times, though, and apparently enough time has passed that I can tolerate it.

Economic misconceptions to beware of

I was performing the search engine queries by which people found my blog, and I came across this thread at Wal-Mart Watch. There are a lot of comments, but the first few dozen illustrate the moonbat mentality at its finest. There's also at least one obvious troll by a Wal-Mart basher who tries to look like a Wal-Mart supporter.

The Wal-Mart-bashers have so many economic misconceptions, like the nature of trade deficits, and how the higher wages they advocate would actually raise Wal-Mart prices out of reach of the poor that the Wal-Mart-bashers claim to want to help. But what always makes my shake my head is their belief that Wal-Mart "forces" people:

What they don't seem to understand is that Wal-mart forced suppliers that also supply to Target and the others to relocate to China to keep Wal-mart's business. Target and the others have no choice but to get their stock from China thanks to Wal-mart.

Forced? Forced? Wal-Mart didn't force anybody. There are only two ways by which anyone can force me to give him my business: physical coercion or a government charter (i.e. monopoly). Since Wal-Mart does not have people dragging me to their nearest store or at least threatening me with bodily harm if I don't shop there, how can it be forcing me? And that thread alone proves that Wal-Mart is far from a monopoly. If someone is willing to spend $40 more at a small store because he doesn't like Wal-Mart, that's fine. It's his purely voluntary choice.

When competition is unfettered, there's no such thing as "force." There's persuasion, but it's not force. Suppliers shifted their operations to China whether they sell to me, Wal-Mart or Bo Diddly. By taking advantage of lower operational costs in China, they could offer lower wholesale prices, gaining Wal-Mart's business because they wanted to, not because they had to supply things at no higher than what Wal-Mart demands.

I question whether any of these people ever helped run a business (I have), because they'd otherwise know this: if a customer won't pay more than x, but you can't sell it to him at x and make enough profit to stay solvent (or if you can sell another product more profitably, whether to him or someone else), then no matter what your customer demands, you just won't do it. No business is going to accept reduced profit just to sell to Wal-Mart, but it will sell at a lower profit per unit to Wal-Mart if the larger volume means higher net profit.

Frankly, it's idiotic to think that because Wal-Mart said, "We'll pay only $x for y of z," that it "forced" the supplier to find a cheaper way of making the product. If the supplier realized it could move operations overseas and sell for less, it would do so regardless of who its customers are. Again, it would do so to gain Wal-Mart's business, competing with others for a piece of the pie, but not because it's "forced."

In another example of a misunderstanding of what "force" is, my best friend at work rails against "dollar hegemony" (which I think is a stupid term) and claims other nations are "forced" to invest in dollar-denominated assets (especially U.S. Treasury securities). But who is "forcing" other nations and their central banks? The U.S. is criticized for sending its military around the globe, but I've yet to see our Marines storm the Bundesbank or the Bank of Japan, demanding they hold a minimum percentage of dollars. Since it's impossible (so far, without a single world government body that can enforce this) for a nation to have a monopoly on currency, and since there is no threat of military action, the U.S. is simply not forcing other nations.

Other nations invest in dollar-denominated assets because they acquire more dollars than they can spend. If they don't want those dollars, then it's very simple: they have the freedom of choice to stop acquiring them. If they don't want dollars, then they can demand to be paid in their own currency, or they can sell fewer goods and services to Americans that are paid for in dollars. But it turns out that many foreigners are the complete opposite of "forced." They accept dollars in payment because they want to invest in dollar-denominated assets.

The subsequent question isn't as obvious to some: why do foreigners want to invest so much in the United States? It's for the same reason I think Henry Liu's "dollar hegemony" is a stupid term based on a jealous fear of the American economy. The United States is the economic backbone of the world, and other than two short downturns in 1991-1992 and 2001, it's had uninterrupted growth for well over two decades. They know that U.S. stocks, corporate bonds and real estate are, in general, great additions to an investment portfolio. And should they invest in Treasury bonds, they know they're effectively a can't-lose thing. They're the safest in the world, because the American economy is so strong that the government can count on tax revenues.

Our friend Josh Hendrickson recently noted how the media isn't reporting on the good news of the American economy. I had some comments, agreeing with it. Last fall I briefly touched on how when the media does report on good news, it always follows with a caveat. Usually that high GDP growth will lead to inflation, and that the Fed will then have to raise interest rates (causing stocks to decline), which are Keynesian baloney.

After all, the first verb to learn in French is "to surrender"

Previous entries on France:
Hardly something France should be proud of
Nice unemployment if you can get it
French winemaker terrorists
What would Bastiat say? Part II

I haven't yet blogged about the latest riots in France (what a sad state of affairs that one uses "latest" to describe those violent "protests"!), one of many stories I've wanted to discuss but just haven't had time for. I've again been getting extremely fatigued and have been needing increased amounts of rest.

The latest news is that French police used water cannons and tear gas to subdue the latest episode of the riots. Young French, afraid of a new labor law, have been rioting for a couple of weeks now. Such "protests," regardless of who and why, will continue until French authorities learn that they must subdue rioters immediately and without mercy. The regular strikes (especially by public workers) are one thing, but French police are not reacting quickly and effectively enough to quell real violence. Whoever riots next will know that they can do more than block streets, and that they can largely get away with it. They can torch cars and shops for a few days while police think of what to do, and they can barricade themselves in the Sorbonne and merely be "chased" out. Perhaps "react" in French has the implication of verbal condemnation for the first several days, before you actually do something. To be fair, though, I was critical of the LAPD's slow response to crack down on "Rodney King" rioters, who even then-mayor Tom Bradley described as opportunistic hoods.

Instead of reinforcing that the right to protest does not include the right to destroy others' property, will the French government give in and promise more social programs, like it did after last fall's Muslim protests? Such capitulation will merely perpetuate France's economic and social stagnation. Or, to apply some Austrian economic thought, should France be recognized as an economic failure? Permitting it to die, then, would not be a bad thing. Liquidating much of France's government, and selling it to private investors who could set the country straight, would go a long way.

And why are the students rioting? They fear the new labor law that will make it easier for employers to fire people younger than 26. Unless the government again surrenders by withdrawing the proposed law, then possibly as soon as April, French law will finally recognize the employer's right to fire someone they don't want to keep, for any reason. Young employees' first two years will be a kind of probationary period, meaning they will actually have to work their fesses off to keep their jobs. Is there any wonder why French unemployment is still around 10%? As the article notes, which was obvious to anyone who understands real economics, French employers are afraid to hire. But I think it's not just fear of hiring young people who turn out to be bad workers, but employers' lack of confidence in France's future.

Take a half-kilo of Gallic reliance on social services, throw in a clove of government-enforced "job security" and other labor laws, then add just a dash of government capitulation after every riot. Until last year, you could use a pinch of the government-mandated 35-hour work week. The beauty of this dish is that it also adds its own synergetic flavoring: all the seasonings interact to create a new one, economic stagnation. The recipe used to call for letting the mixture sit and turn rancid, but in recent years, it's been heated by Muslims who burn synagogues (long before last fall's riots).

Alex Tabarrok was too kind in his analysis at Marginal Revolution, though he did give a great quote: "In my opinion, the Sorbonne students need a little less Foucault and a little more Bastiat." Actually, all of France could use more Bastiat, and a heavy dose at that. Who knows, some of these students, since they're destroying stores as well as cars, might think their actions will boost the economy. I suggested last November that Krugman could write about the economic boom that would result from France's riots last fall -- after all, he's the one who talked about an economic boom from rebuilding after 9/11. My slight twist of his words, which do not at all alter what he originally said, hold true for the latest events:

It seems almost in bad taste to talk about dollars and cents, or in this case, euros, after an act of mass rioting. Nonetheless, we must ask about the economic aftershocks from the last several days' horror.

These aftershocks need not be major. Ghastly as it may seem to say this, the rioting -- like the original one in 1968, which brought an end to France's illusions about its society -- could even do some economic good. But there are already ominous indications that some will see this tragedy not as an occasion for politican reform, but as an opportunity for political profiteering in the name of national unity. About the direct economic impact: France's productive base has not been seriously damaged. Its economy is sufficiently large that the scenes of destruction, awesome as they appear in news photos, are hardly a pinprick. Nobody has a euro figure for the damage yet, but I would be surprised if the loss is even a calculable fraction of a percent of France's annual economic output, let alone wealth -- hardly comparable to the material effects of a major earthquake or hurricane, such as we've seen this year.

It's not easy being so hard on France, but at least for me it's genetic. Through my father's parents, I am one-fourth French and one-fourth German. I like to joke that, every so often, part of me likes to beat up one of my other quarters.

St. Patrick's Day fashions

It's my favorite holiday because of the pure celebratory nature, and in recent years I've liked getting into the spirit of things. I wore a green tie (just a little lighter than emerald, with a subdued pattern) with matching handkerchief, and cufflinks made from a jade-like Colombian stone. Green doesn't really look good on me, I never thought, so I wear it only on St. Patrick's Day. However, the tie and handkerchief go so well with a black suit that I'll have to do it again.

For minor office decorations, I displayed a 7" high leprechaun candle and a stainless steel Jameson cocktail shaker. Capitalism is a remarkable thing. I, of Franco-Germanic-Filipino descent, bought it at the local Hallmark store, run by someone I would guess is from India. It's safe to say he has not a drop more of Irish blood than I, yet that did not prevent us from engaging in peaceful commerce regarding traditions to which neither of us has ties by heritage. Would a central planner, determining and dictating which people were to have what resourcces, have ever dreamt of this?

Not many men wore visible green today, but quite a few women wore green sweaters. One of my co-workers is very Irish, with a face and name to fit. Today she wore a form-fitting green sweater, a black skirt not quite to her knees, and black shoes. It's a very flattering look on her that reminded me of "Riverdance."

Happy St. Patrick's Day!

As I wrote last year, Beannachtam na Feile Padraig! (Check last year's entry for a cute poem about St. Paddy, and for my family's Irish coffee recipe.)

My Metro-North train was late coming into the city. We stopped somewhere for a while because of "congestion," meaning two trains on different lines were coming onto the main track at the same time. So I thought I would take a cab instead of the subway, which normally saves a bit of time.

Wouldn't you know it: the NYPD had blocked off multiple intersections along Madison Avenue. Yes, yes, we have the parade this morning (it actually just started a little while ago), but for crying out loud, you'd think that the police could do more than stand around with their hands in their pockets. Their barriers preventing cars from crossing Madison were bad enough, but I still don't see the point of barriers across Madison that turned it into a one-lane road.

Then the uniforms did nothing to help direct the traffic that they made even more congested. Nor did they do anything to stop the multiple jerks who turned right on red lights (illegal in the city). The NYPD, incompetent as usual. Or had they been hitting the Jameson's already?

When conservatives don't get it about illegal immigration

Conservatives, whether "big government" Republicans or old-fashioned Reaganites, sometimes should stick to pure politics and refrain from discussing any economics. Take Rich Lowry's March 14th column as an example, which I read in today's New York Post. Instead of attacking illegal immigration from a legal standpoint, he brought up economics -- and showed he doesn't really understand that aspect of illegal immigration.

Like Michelle Malkin, Lowry brought up a myth by which anti-immigration pundits create irrational fear. In fact, he started off with it:

A core element of the American creed has always been a belief in the dignity of labor — at least until now. Supporters of a guest-worker program for Mexican laborers say that "there are jobs that no Americans will do." This is an argument that is a step away from suggesting that there are jobs that Americans shouldn't do.

Actually, and this is not being racist in the least, there are jobs Americans shouldn't do. As I wrote in my entry on price-setting and illegal immigration, Americans have incredibly high opportunity costs. Even without taxpayer-funded social safety nets, it's not worth our time to pick strawberries for $2 per hour, or do a lot of dangerous construction at low wages. Americans should be thankful that there are so many immigrants, legal and illegal, who can only do the most meneal of jobs because they lack education and/or English proficiency.

Even in the absence of minimum wages and other forms of government coercion regarding labor, a little unemployment is unavoidable. The reason is simple: imperfect information, which I wrote about last night. The unemployment rate depends on how quickly information spreads through an economy, and how much it costs. The unemployment rate is not just because of lag time from when a position opens and an applicant is hired. A bit of unemployment will result from search costs for both sides. An employer might not find the right person because the costs of advertising, time spent on interviews, etc., are too high for what the job is worth. Similarly, someone wanting that job might have to spend more than it's worth to get it. We have social safety nets (which I am only mentioning, not extolling) and very high wealth, so most Americans aren't desperate to take a job, any job. The wealth is in the form of personal savings that people fall back on, assistance from family and friends, and the ability to borrow. Credit lines are an indicator of wealth, because they reflect the borrower's expectations of his ability to repay, but more importantly, the lender's expectations too.

What does that paragraph have to do with illegal immigration? Everything. Americans have such high opportunity costs that we don't look as hard for work as illegal immigrants do -- and illegal immigrants have extremely low opportunity costs by comparison. They're the ones willing to "pound the pavement," going from shop to shop asking if there's any work to do, like Americans once did when we weren't as wealthy as today. Illegal immigrants are the ones willing to take jobs that, yes, Americans won't do, not at those wages.

I once lived in Brewster, New York, where Central American immigrants regularly hang out in the center of town. Exceedingly few are looking to cause trouble: nearly all of them are simply waiting to be hired. Employers looking for such "day labor" know where to look, so it's like a reverse taxi stand. For $8 or $10 an hour, they'll do the most backbreaking work that no American construction worker would do for less than $20. Does that take away jobs from Americans? Damned right. Do I care about an American losing work because of that? I'll be damned if I ever do. It only means some American is by definition uncompetitive by wanting more than what someone else is willing to accept. Meanwhile, the rest of us do benefit by getting immigrant-produced goods and services at lower prices.

Like any good consumer, my concern is getting the best value at the lowest possible cost, whether or not the guy is an American. Did it make a difference that the taxi driver this morning was Middle Eastern? Not a bit. When we talked about how he likes his job and makes a good living, did I even think for a nanosecond, "Oh, an American could be doing his job!" Not on your life. I didn't care about his physiognomy, accent, haircut, style of dress, religion or even immigration status. I only cared about whether he could safely convey me from Grand Central to work with speed and efficiency.

If it's such a good thing to restrict jobs to "legal labor," because citizens and legal residents can get paid better wages, then why don't we just command higher wages in the first place? Why not push the minimum wage to $20 per hour, or $100, or $1 million? I'm sure Lowry is familiar with the fallacy of minimum wages, but the same principle applies when government prevents illegal immigrants from working. A section of the population is perfectly willing to work for less, but they can't because that's been made illegal. Meanwhile, the rest of us pay in the form of higher prices for those same goods and services.

Laborers in the 18th and 19th centuries, particularly in France, feared foreign trade as much as (perhaps more than) industrialization. Many Americans today make the same appeal to government, and along with the usual lobbying efforts for tariffs and quotas, they demand protection from competitive immigrants (meaning immigrants who are willing to give the rest of us more value for our money). Such erroneous protectionist economics benefits them, but it harms everyone else.

Lowry might have had a point had some of his assertions been factual and from the real world. As McQ at QandO observed last December, after the crackdowns on illegal immigration, farmers in California and Arizona can't get enough legal labor, even offering $8.50 per hour! It's not necessarily that Americans are lazy; it's just that we place a much higher value on our non-work time. Our opportunity cost was not as high during the Great Depression, when it was so low that people would accept a dime an hour to pick cherries. American society has grown much wealthier since.

Lowry also said:

We are supposed to believe, however, that the work ethic does stop [at the Rio Grande] — it is only south of it that people can be found who are willing to work in construction, landscaping and agricultural jobs. So, without importing those people into our labor market, these jobs would go unfilled, disrupting the economy (and creating an epidemic of unkempt lawns in Southern California).

This is sheer nonsense. According to a new survey by the Pew Hispanic Center, illegals make up 24 percent of workers in agriculture, 17 percent in cleaning, 14 percent in construction, and 12 percent in food production. So 86 percent of construction workers, for instance, are either legal immigrants or Americans, despite the fact that this is one of the alleged categories of untouchable jobs.

This is a strawman. Nobody ever said that those industries function only or even mostly on immigrant labor (legal or illegal). His example of construction workers is laughable at best, because what's the stereotype? A middle-aged, hairy Caucasian male. If anything, an illegal immigrant may not necessarily work harder, but he has more incentive to. He's very replaceable, and his employer can turn him over to the INS at any moment, so he'll do everything to keep his job. An American citizen, however, is more likely to join a union that will give him job security and allow him to be a little more lax.

Now, there are significant percentages of those industries that are made possible by the low wages that illegal immigrants accept. Any industry would be devastated if it suddenly lost 24% of its workforce, or even 12%. Talk to a store manager who oversees 100 people, and ask him how the business would do if he lost 12 people and had to hire replacements for twice or three times the pay. Who would end up covering the higher wage costs? We, the consumers, would. The store would have to raise its prices to cover the higher costs, and if the higher prices are more than what consumers are willing to pay, then we simply won't have the items we wanted and otherwise would have had. Either way, we lose.

What's actually sheer nonsense is Lowry's other strawman assertion that anybody claimed there would be unkempt lawns without illegal immigrants. Instead of paying $5 per hour to illegals, people would have to pay, say, $10 or $15 to local teenagers. Since income is finite, people could afford to hire the teenagers only half or a third as often as illegal immigrants. The same money has been spent, but there has been a loss in value: the people have lost the full enjoyment of what should have been better-maintained lawns. They could do some of it themselves, but they lose there, too, because it cuts into their free time.

Oddly, the people who warn that without millions of cheap, unskilled Mexican laborers, this country would face economic disaster are pro-business libertarians. They believe in the power of the market to handle anything — except a slightly tighter labor market for unskilled workers. But the free market would inevitably adjust, with higher wages or technological innovation.

I guess he's talking about me, a "pro-business libertarian." I would sooner accept that than call myself an "anti-competition, pro-government-regulation conservative."

And since when did any libertarian economist claim the market could "handle" all that "except a slightly tighter labor market for unskilled workers"? Yes, the free market will adjust, as I explained in the two paragraphs above. It will adjust by higher wages that mean consumers must pay higher prices, or that consumers will no longer get those items because they've become too expensive. Now that is how the free market adjusts. Fulfilling what Bastiat said of bad economists, Lowry is only considering half of the story. He's looking only at what is seen, not at what is not seen.

Take agriculture. Phillip Martin, an economist at the University of California, Davis, has demolished the argument that a crackdown on illegals would ruin it, or be a hardship to consumers. Most farming — livestock, grains, etc. — doesn't heavily rely on hired workers. Only about 20 percent of the farm sector does, chiefly those areas involving fresh fruit and vegetables.

The average "consumer unit" in the U.S. spends $7 a week on fresh fruit and vegetables, less than is spent on alcohol, according to Martin. On a $1 head of lettuce, the farm worker gets about 6 or 7 cents, roughly 1/15th of the retail price. Even a big run-up in the cost of labor can't hit the consumer very hard.

If Martin really said this, he's a terrible economist simply because he considered only retail prices. A labor cost increase of 6 or 7 cents will have significant effect on what a deli or restaurant pays to wholesalers. Here are farmer's market prices from North Caroline. Let's assume the maximum price for head lettuce, 24 heads for $25, which will be about 48 pounds for $25, or 52 cents per pound. And while 6 or 7 cents may not do too much to the price per head of lettuce in a grocery store, it will impact prepared foods that use lettuce, like sandwiches in the deli section and pre-packaged salads. The latter is now a fast-growing business in the United States; bags of pre-cut iceberg or romaine are affordable by middle-class families who can now save time like only the very wealthy once could. Eliminating illegal immigrant labor means that a lot of those middle-class families will effectively find themselves poorer. Either they'll have to pay more for conveniently pre-packaged lettuce, or they'll have less free time because they must cut up lettuce themselves.

A dollar more per pound of strawberries may not seem like much, but what will it do to the price of ice cream, shortcake and anything else that uses strawberries? Their price will go up too, and if high enough, people will start buying substitutes. Instead of strawberry-based products, they'll buy chocolate chip ice cream, apple pie and bananas. But the strawberry farmers can adjust, right? After all, I'm the first one to say that people should adapt to changing market conditions. But they shouldn't have to adapt here. It's a government policy (namely a crackdown on illegal immigration) that changed the conditions, not natural shifts in the economy, so people adapting to new industries is a complete waste of resources.

Update: I was thinking this morning that, even if it's only $10 more per year that I spend on groceries, will Lowry personally reimburse me and everyone else? As far as I'm concerned, that's $10 that his government policies stole from my pocket. Do I not have the right to transact peacefully and voluntarily with whomever I choose? According to Lowry, no, and it does not matter that I harm him nor anyone. And what is the basis of his claim that the government should deny me that freedom? "Saving American jobs," which we have already debunked. So there must be another reason besides that tiresome, xenophobic excuse. Is Lowry really that afraid of super-competitive labor from people whose skin tone is darker than his, people who will work 12-hour days in the sun for $2 an hour because even that's better than the conditions back home??

Martin recalls that the end of the bracero guest-worker program in the mid-1960s caused a one-year 40 percent wage increase for the United Farm Workers Union. A similar wage increase for legal farm workers today would work out to about a 10-dollar-a-year increase in the average family's bill for fruit and vegetables. Another thing happened with the end of the bracero program: The processed-tomato industry, which was heavily dependent on guest workers and was supposed to be devastated by their absence, learned how to mechanize and became more productive.

This is just like President Bush's failed steel tariffs. The claim was that they would add just a few dollars to the retail price of a refrigerator, and perhaps $25 to the retail price of a car. What they actually did was destroy a lot of jobs that involved cheaper foreign steel, because a few dollars here and there became significant. As I noted here, one study calculated that over 200,000 Americans lost their jobs because of the steel tariffs. And why? Just like with lettuce and strawberries, the tariff advocates forgot about all the businesses that turned the base commodity into finished products. They forgot, or unscrupulously ignored, that the price increase is far more drastic on the wholesale level.

Lowry's claim that a government policy can force an increase in productivity is among the most absurd things I ever heard a conservative utter. It's so interventionist that, once upon a time, only a liberal (if not an avowed socialist) would claim such a thing. When will modern conservatives learn that when government intervenes, when it refuses to let the free market work unhindered, it only makes things less efficient? If the technological progress were such a good thing, it would have already taken place before government forced it. An entrepreneur would have seized upon the opportunity to deliver more goods to his customers at cheaper prices.

So the market will manage with fewer illegal aliens. In agriculture, Martin speculates that will mean technological innovation in some sectors (peaches), and perhaps a shifting to production abroad in others (strawberries). There is indeed a niche for low-skill labor in America. The question is simply whether it should be filled by illegal or temporary Mexicans workers, or instead by legal immigrants and Americans, who can command slightly higher wages. The guest-worker lobby prefers the former option.

Of course the market will manage. As I said, it will by higher prices or consumers being able to afford less. You can't have your cake and eat it too: you can't eliminate illegal immigrant labor and expect Americans to have the same standard of living, not when illegal immigrants provide so many of our least expensive food and services. And again, Lowry ignores the facts, particularly that California and Arizona farmers can't hire enough legal labor, at least not for wages that permit them to sell enough of their products to remain in business.

I'll state my position again: because of 9/11 and Muslim terrorists trying to sneak in through our southern border, I believe the U.S. must regulate immigration. But it should make it fairly easy for non-criminal immigrants to get approval, meaning anyone trying to cross anywhere but at checkpoints will be up to no good. And if we eliminate the welfare state, then conservatives will no longer have to worry about illegal immigrants costing the states billions in school and hospital expenses. With those changes, the only immigrants coming will be those who just want to work hard and honestly. Who could possibly object to that?

If this debate is presented clearly, there is little doubt what most conservatives — and the public — would prefer. In his second term, President Bush has become a master of the reverse-wedge issue — hot-button issues that divide his political base and get it to feast on itself with charges of sexism, xenophobia and racism. The first was Harriet Miers; then there was the Dubai ports deal; and now comes his guest-worker proposal, making for a trifecta of political self-immolation.

There is still time for Bush to make an escape from this latest budding political disaster, but it has to begin with the affirmation that there are no jobs Americans won't do.

And Lowry ended with the myth with which he began. He had better be careful about invoking what "the public" prefers. Which presidential candidate did they prefer in 1992 and 1996? What "the public" wants can often be wrong, especially when their tendency is to vote for the guy who promises them the most government services on someone else's dime.

Carnival of Liberty XXXVI

It's up at our friend Brad's blog, check it out! Yours truly submitted his post on how the federal government is threatening the blood supply.

How markets work with imperfect information

Our friend Quincy left a comment a while back that I didn't get around to: "The thing I don't get is the argument that, if the market depends on imperfect information to function, why it then follows that introducing more imperfect information, which benefits neither party no less, can be a good idea."

Well, markets have a great deal of imperfect information, but that doesn't mean, nor was I trying to imply, that they require imperfect information to function. Nevertheless, we all make a lot of economic calculations and decisions based on imperfect information (still correct but incomplete), and things turn out just fine. In fact, imperfect information can be cheaper overall. We often don't try to acquire complete information before making a decision, because of search costs. Time and emotional impacts can make a purchase more expensive than the monetary price would indicate. By the time we determine we can spend $x less by buying the item elsewhere, we might have spent more than $x in time.

Last September, I wrote about people who put up with long lines to save 30 cents per gallon of gasoline. Even if my car's 12.5-gallon tank were completely empty, I'd save only $3.75. I already dislike standing in line, and I get very aggravated waiting in my car in line. I'm willing to pay more elsewhere to save time, and because of my income versus limited free time, what I'm willing to pay is more than what my father was when he was retired (fixed income, lots of free time). Last New Year's Eve, I paid 20 more cents per gallon, knowing it would be cheaper down the street. That station was right off the Saw Mill Parkway, and since I was in a rush, its higher prices were worth the convenience. I'd never really considered the economic value of time until taught by my undergraduate microeconomics professor Dr. Ikeda, who as I've said is an Austrian economist's Austrian economist.

Here's another example of imperfect information and a willing acceptance of it. I bought a new raincoat last night. I spent 80% more than I originally intended, but by definition I did not spend 80% more than what I was willing to pay -- that is, for the coat I bought in the end. I wouldn't have paid what I did for the coats I initially considered, but I was willing to pay it for a much nicer coat of which I was previously unaware. The moment my preference changed, I moved to a completely different demand curve, and so instead of Calvin Klein, I came home with a Joseph Abboud coat. Remember, as I explained in my entry on how markets clear, markets are always in a state of flux, with supply and demand curves constantly shifting because of changes in information. Such changes include discovering something you were previously unaware of, something that, upon discovery, you prefer to what you originally planned to buy.

Is it possible I could have gone to another department store and paid less? Certainly possible. Might I have found a less expensive coat that may have been an inferior substitute, but whose lesser quality I would deem worth the reduced monetary cost? Also certainly possible, but again, how high would the search costs be? It was already well past 7 o'clock, and I wanted to get home with a new coat. So like consumers often do, I committed to the purchase then and there, because I judged that spending less money would not be worth rushing to another store. Also, my action demonstrated that I preferred the uncertainty of getting the best price to the risk of paying more elsewhere (because I'd get there, see the higher price, and pay it anyway instead of going back), or the risk of going home empty-handed. Another store might not have that coat at a sufficiently lower price, or even a coat I liked.

A third good example of imperfect information is something Alex Tabarrok noted a few weeks ago on Marginal Revolution. Two professors, John Morgan of Berkeley and Tanjim Hossain of the Hong Kong University of Science and Technology, held 80 auctions of their own on eBay. "[Their] findings suggest consumers pay less attention or even completely overlook shipping costs when making bids..." Bidders were attracted to lower prices and didn't seem to consider shipping costs as carefully as we'd think. Shipping costs were high enough that consumers could have spent less overall in other auctions, whose items sold for a higher price but had lower shipping costs (and less in the end).

I'm not surprised at the results. In fact, I maintain that Austrian economic thought would disagree with the professors that, "In theory, dividing a price into these two pieces should have little effect on overall demand for a good..." That theory has the big assumption of a perfectly informed consumer, and Austrian economics' theory of market forces is based on information being imperfect (not necessarily wrong, just incomplete). Consumers act upon the information at hand and what they perceive, not absolute truth. Besides, we again encounter the high cost of searching, even on something like eBay with lots of search tools. Someone might bid on 20 things he likes, unaware that the 21st item would be his best deal, but he might have to do something in real life that is more important than saving $5 or $10 -- especially if the potential savings is marginally insignificant to him. That brings me to a small problem I have with the experiment. I'm not saying at all that it isn't valuable empirically, but it's results are only with relatively low values. As prices increase, people tend to take greater care about their total spending.

And if anything, there's an entrepreneurial opportunity here: sellers can advertise "zero shipping charges" and tout that as a selling point. "Don't be fooled by low prices with high shipping charges!" I don't do eBay, so I don't know how many sellers actually do that. If there aren't many, I'd say it's because the sellers judge that the increased sales (especially because information is imperfect and bidders may be unaware) are not certain enough to offset the lower profit. One shopkeeper could always undercut his nearest competitor by selling for 10% less, but he could also make hardly anything (or even go broke) doing that. There are limits to how much you can compete. The cost of increased advertisement is also a factor. So sometimes a seller will closely "follow the crowd" and adopt similar patterns, because he'd rather count on a share of the market than undertake the uncertainty of competition.

In Austrian thought, the fundamental role of the entrepreneur is to improve information. Because no single person can have complete information (which Hayek set forth in his essay "The Use of Knowledge in Society"), markets will have imperfections. The entrepreneur, in the course of calculating and bearing risk, and performing arbitrage, has a very real economic incentive to correct those imperfections: profit. By introducing better information, he will be more competitive than others and, in the absence of coercion (i.e. government regulations), be more successful. Should his information happen to be imperfect (like Coca-Cola's expectations of New Coke), then unless he commits coercion or gets others (like government) to do it for him, he will eventually fail. Failure is the free market's self-correcting "Darwinian" mechanism, which is why Austrian economics doesn't see recessions as inherently bad. They're necessary corrections as supply and demand curves realign, specifically because government policies skewed them from their natural tendency to gravitate toward equilibrium via entrepreneurs' actions.

I haven't read Morgan and Hossain's paper itself, so I can only go by the writeup in offering a couple of thoughts. "Morgan and his colleagues found that pricing on the Internet varies dramatically, contrary to predictions that the vast wealth of price information online would eat away at profit margins and result in one low price for consumers." But if consumers aren't saving that much by buying online, why are they so irrational to do it? It's because buying online still reduces their costs, just not always monetarily. They save time. One small example (both as an example and physically) is a small squeeze toy that I couldn't resist buying for my best friend. It cost $3 online and $5 to ship it directly to her. For me, it was like buying it for a fraction of the total price to buy it in person. I'd have spent so much time, not to mention on gas and wear on my car.

Morgan "compared auctions on eBay and rival Yahoo! with UC Berkeley Department of Agricultural & Resource Economics graduate student Jennifer Brown. After auctioning off identical Morgan Silver Dollars on both sites, they found that eBay auctions averaged almost 60 percent more bidders than Yahoo! and 30 percent higher sales prices on identical items." This shouldn't be surprising, either. eBay's larger population of bidders naturally means higher sale prices because there are more people to outbid each other, and eBay will have more bidders because of reputation. When eBay is mentioned, people immediately think "online auctions." When Yahoo is mentioned, people think "search engine" and "information portal." Both buyers and sellers will tend to use a marketplace that's popular for a specific service more than a general marketplace that offers the service but isn't well-known for it. I don't know if Morgan and Hossain examined it like I have (in their paper or elsewhere), but I think it's pretty evident with not much thought, even if it's not based in Austrian economics.