Monthly Archive for December, 2014

The Egomaniac in Chief

So President Obama finds it remarkable that he’s been mistaken for a valet driver and a waiter.

I have some questions for my readers:

  1. Is there anyone who hasn’t been mistaken for a driver, a Home Depot associate or something of the sort?
  2. When this has happened to you, have you felt terribly insulted by it?
  3. Do you feel that casual strangers owe you more respect than they owe to a valet driver or a waiter?
  4. Do you feel that your social or occupational status is so great that it should be immediately visible to casual strangers that you are not employed as a valet driver or a waiter?
  5. If you answered yes to the previous question, have you sought professional help?

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Trey Gowdy Thinks You’re Stupid

Here we have six and a half minutes of Representative Trey Gowdy badgering Jonathan Gruber while studiously avoiding any form of substance.

There’s a lot Gowdy could have asked, like “So, is it actually the case that a tax on insurers is equivalent to a tax on the insured?” or “Can you explain why those taxes are equivalent?” or “Are there any important ways in which the two policies are not equivalent?” or “Why do you think a tax on `Cadillac plans` was good policy in the first place?”

Instead, all he can think of to ask — over and over and over and over and over and over and over again — is, “Why did you call the American people stupid?”, as if there were anything useful to be learned from the answer.

I see one possible explanation here. Apparently Gowdy believes his constituents prefer mindless bullying to policy enlightenment. In other words, he acts on the assumption that the American voters are fundamentally stupid. Maybe someone should spend six and a half minutes asking him why.

Edited to add: I said this in a comment, but want to add it to the post. It either is or is not important to determine the truth of the matter regarding the issues on which Gruber spoke deceptively — e.g. in what sense are these two taxes equivalent, etc. If these questions are not important, why are we having this hearing in the first place? If these questions are important, then why is Gowdy so uninterested in them?

Edited to add further: I said this also in a comment, but want to add it here. Gruber is lying. Gowdy has a chance to question him. Gowdy can use that chance either to chant the equivalent of “Liar, liar, pants on fire” or to pin him down on the substance of what he’s lying about, e.g. “Do you or do you not stand by the statement that a tax on insurers is equivalent to a tax on the insured?”. I assure you that Gruber prefers the former, and that’s what Gowdy is giving him. Presumably that’s because he thinks voters are too stupid to appreciate the latter.

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Corrections

In yesterday’s post about Eric Garner, I wrote:

Suppose you are a typical street vendor of an illegal product, such as, oh, say, untaxed cigarettes.

Suppose the police make a habit of harassing such vendors, by confiscating their products, smacking them around, hauling them off to jail, and perhaps occasionally killing a few.

I have good news: The police can’t hurt you.

Here’s why: Street vending can never be substantially more rewarding than, say, carwashing. If it were, car washers would become street vendors, driving down profits until the rewards are equalized. If car washers were happier than street vendors, we’d see the same process in reverse. (The key observation here is that it’s very easy to move back and forth between street vending and other occupations that require little in the way of special training or special skills.)

Because police harassment of street vendors has no effect on the happiness of car washers, and because street vendors are always just as happy as car washers, it follows that police harassment has no effect on the happiness of street vendors.

So if you’re a street vendor, the police can’t hurt you. On the other hand, when the police go around putting people in deadly chokeholds, they’re clearly hurting someone. So the question is: Who?

Answer: Not the vendors, but their customers. Fewer vendors means higher prices. That hurts consumers, and the sum total of that harm adds up to the harm that we see in the viral videos.

Several commenters jumped in to question the claims that:

  1. If you’re a street vendor, the police can’t hurt you.
  2. The costs of police harassment ultimately fall on consumers.

I’d like to thank those commenters — particularly David Sloan, Keshav Srinivasan and Eric — for keeping me honest and for persisting when I was initially too quick to dismiss their questions.

With regard to the first point, what I actually should have said was:

  • If you’re a street vendor, the police can’t hurt you more than an eentsy weentsy bit.

That’s because harassment causes street vendors to move into a great many other occupations, one of which is car washing. For every displaced street vendor we get, say, 1/2000 of an extra car washer — bringing wages ever so slightly down in the car washing industry and therefore making both car washers and street vendors ever so slightly worse off.

I do not consider this a significant correction.

With regard to the second point, it would have been more accurate to say this:

  • The greater the harassment, the more of its burden falls on consumers in the harassed industry.

More precisely, if we consider the harassment equivalent to a tax of T, then the burden on producers tends to grow linearly in T while the burden on consumers in the harassed industry tends to grow quadratically in T.

However, here are two points I now realize I’d overlooked:

  1. The linear/quadratic thing is at least partially misleading, because there is a limit on how big T can be — if T grows beyond a certain point, then the first industry disappears entirely. So we’re not looking at arbitrarily large T’s here, making “growth rates for large T” less relevant. Thus workers collectively can in fact — and in contrast to what I said yesterday — bear a substantial burden of the cost.
  2. While consumer surplus in the first industry shrinks quadratically in T, consumer surplus in the other industries grows quadratically in T, and in fact, the total consumer surplus across all industries can increase as a result of the street harassment. Thus it’s possible for workers to bear more than the entire burden of the harassment!

Here’s an explicit model:

Continue reading ‘Corrections’

Three Short Essays on Eric Garner

I.

If you asked me to make the best possible argument in favor of the police action that led to the death of Eric Garner, it would go like this:

  1. Cigarettes are taxed.
  2. You can’t have taxes without enforcement. In this case, the enforcers are the police.
  3. Where there are enforcers, there will be confrontations.
  4. When sellers refuse to cooperate, the enforcers have only two options: Walk away, or resort to violence.
  5. Enforcers who walk away soon lose their credibility and their effectiveness. This is more than doubly important for a police officer, who needs that credibility when he confronts far more dangerous criminals.
  6. Therefore, we cannot fault the police for resorting to violence.
  7. Violence is sometimes catastrophic. That’s sad, but it’s not news.

If you asked me to make the best possible counterargument, it would go like this:

  1. You could say exactly the same thing about a protection racket.

That is, every protection racket needs an enforcer. When shopowners don’t pay up, the enforcer has only two options: Walk away or resort to violence. To walk away would sacrifice credibility. Therefore we cannot fault the enforcer for resorting to violence. Sometimes violence gets pretty messy. So it goes.

The force of that reductio ad absurdum depends on the analogy between taxation of cigarettes and the demand for protection money. I think that reasonable people can disagree about the depth of that analogy.

But the lesson remains that every law must occasionally be enforced through potentially catastrophic violence, or, to put this more succinctly, all legislation is deadly. Violence is part of the cost of making laws, and it’s a cost the makers of new laws would be well advised to contemplate.

Continue reading ‘Three Short Essays on Eric Garner’