Archive for the 'Current Events' Category

Terror, Truth and Torture

Last week was not the first time the United States was transfixed by an act of terror. In 1964, three civil rights workers in Philadelphia, Mississippi were (quoting Wikipedia) “threatened, intimidated, beaten, shot, and buried by members of the Mississippi White Knights of the Ku Klux Klan, the Neshoba County Sheriff’s Office and the Philadelphia Police Department.” It took 44 days and an FBI-initiated act of torture to locate their bodies.

The FBI, in a nod to the theory of comparative advantage, subcontracted the torture to the Mafia, more specifically to the Colombo family associate Gregory Scarpa. Here’s the story as relayed by Selwyn Raab, the New York Times investigative reporter who covered the Mafia for 25 years:

[Scarpa] went down to Mississippi for the FBI and kidnapped a KKK guy agents were sure was involved in disposing of the bodies. The guy had an appliance store. Scarpa bought a TV and came back to the store to pick it up just as he was closing. The guy helps him carry the TV to his car parked in the back of the store. Scarpa knocks him out with a bop to the head, takes him off to the woods, beats him up, sticks a gun down his throat and says “I’m going to blow your head off”. The KKK guy realized he was Mafia and wasn’t kidding and told him where to look for the bodies.

(Source: Raab’s book Five Families, which is fascinating throughout. Raab says the story has been verified by “former law enforcement officials who asked for anonymity and lawyers who are aware of the circumstances”.)

The moral of the story is that torture sometimes works. Other times it doesn’t, eliciting either no information, or false information, or whatever “information” the victim believes the inquisitor wants to hear. I am almost 100% ignorant, and hence virtually 100% agnostic, about the relative frequency of these outcomes in those cases where the torturer is both skilled in his art and genuinely interested in eliciting the truth. I will be very glad if any educated reader can shed light on this question. I doubt that we’re likely to learn of any controlled experiments, but I’ll settle for sketchy data or even well-chosen anecdotes. Failing that, I’ll settle for plausibility arguments.

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Censorship, Environmentalism and Steubenville

Note added on 4/5: Some readers missed the point of this post very badly, which means that it could have been written more clearly. Here is a brief attempt to clarify.


Here are three dilemmas about public policy:

Farnsworth McCrankypants just hates the idea that someone, somewhere might be looking at pornography. It’s not that he thinks porn causes bad behavior; it’s just the idea of other people’s viewing habits that causes him deep psychic distress. Ought Farnsworth’s preferences be weighed in the balance when we make public policy? In other words, is the psychic harm to Farnsworth an argument for discouraging pornography through, say, taxation or regulation?

Granola McMustardseed just hates the idea that someone, somewhere might be altering the natural state of a wilderness area. It’s not that Granola ever plans to visit that area or to derive any other direct benefits from it; it’s just the idea of wilderness desecration that causes her deep psychic distress. Ought Granola’s preferences be weighed in the balance when we make public policy? In other words, is the psychic harm to Granola an argument for discouraging, say, oil drilling in Alaska, either through taxes or regulation?

Let’s suppose that you, or I, or someone we love, or someone we care about from afar, is raped while unconscious in a way that causes no direct physical harm — no injury, no pregnancy, no disease transmission. (Note: The Steubenville rape victim, according to all the accounts I’ve read, was not even aware that she’d been sexually assaulted until she learned about it from the Internet some days later.) Despite the lack of physical damage, we are shocked, appalled and horrified at the thought of being treated in this way, and suffer deep trauma as a result. Ought the law discourage such acts of rape? Should they be illegal?

If your answers to questions 1, 2 and 3 were not all identical, what is the key difference among them?

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History Repeats Itself

Benjamin Franklin was against smallpox vaccination — until his own unvaccinated son died of smallpox, whereupon Franklin changed sides and began urging other parents to vaccinate their children.

This has always struck me as a bit of a black mark against Franklin’s rationality. He’d always known that smallpox kills; he’d always known that vaccinations (at least in the early 18th century) could also kill. As a parent, he’d weighed one risk against the other and used his best judgment about where to place his bets. In a world where smallpox deaths were commonplace, his own son’s death was just one more virtually insignificant data point. Could inoculation have been an unacceptable risk against a disease that killed 100,000 people a year, but a prudent precaution against a disease that killed 100,001?

That’s how I feel, too, about Senator Rob Portman’s turnabout on the issue of gay marriage after learning that his son is gay. Continue reading ‘History Repeats Itself’

Debt and Growth

Is the public debt a drag on economic growth? Economist Salim Furth reviews the evidence here and finds cause for alarm.

My own instincts are substantially less alarmist, but it should be noted that unlike me, Furth (and those he quotes) have spent substantial time thinking hard about this question.

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Romer on Minimum Wages

Christy Romer, writing in the New York Times, deems the Earned Income Tax Credit a more palatable alternative to the minimum wage. So do I. (So, I feel confident, do the great majority of economists). But there is almost no overlap between Romer’s reasons and mine. I believe her reasons are wrong.

First, Romer observes (correctly) that while the minimum wage tends to reduce employment (though perhaps not by very much), the EITC has the opposite effect. That’s because the minimum wage is essentially a tax on hiring unskilled labor, while the EITC is a subsidy. When you tax something you get less of it; when you subsidize something, you get more.

But, contra Romer, that’s no reason to prefer the EITC. Since when, after all, is it automatically better to have too much of something than too little? Underemployment and overemployment are both bad things. Indeed, if the minimum wage (for whatever reason) has very little effect on employment while the EITC increases it substantially past the efficient level, that’s a good reason to prefer the minimum wage.

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Deficit Attention Disorder

Imagine you’ve got a drinking problem. And imagine this conversation with your spouse:

Spouse: Dear, you’ve really got to do something about your drinking. You’ve been in three auto accidents this week, you’ve lost your job, and you’ve been trying to beat the children, though you keep passing out before you can get to them. I want to help you figure out how to get this under control.

You: You’ve got a fair point there. But let me point out that it would also be a good idea to redecorate the living room.

Spouse: Well, maybe so, and it’s something we can talk about at some point. But right now, I’d really like to focus on the drinking issue.

You: Doesn’t that strike you as imbalanced? Here we’ve got two issues on the table, and you want to focus 100% on one of them and 0% on the other. Why are you being so one-sided?

Spouse: Well, but I feel like there’s some urgency about the drinking thing, and I’d like to prioritize it.

You: Apparently, you’re fanatical on this issue. I don’t see how I can continue to take you seriously.

Spouse: Well, actually I’m trying to get you to focus on a very serious issue.

You: Yes, but by focusing exclusively on that issue, you’re betraying your fanaticism. Clearly, I’m the one who’s willing to address our problems, and you’re the one who’s just out to score debating points.

Spouse: Huh?

You: Not only that, but I’ve got a Nobel-prize winning economist who agrees with me!

How does that make you feel? I feel that way a lot when I read the news lately. Arguably, our country faces a spending crisis. The Republicans claim they want to deal with that crisis. (There’s some legitimate question about how sincere they are, but they at least say they want to deal with it.) The Democrats say: Okay, but let’s also talk about raising taxes. Maybe they’d also like to talk about redecorating the Rotunda; this seems roughly as pertinent. In other words, the Democrats attempt to deflect attention from the crisis (or the alleged crisis) by insisting that we talk about some other thing at the same time — and then they insist that the Republicans, by insisting that we focus on the issue at hand, are “betraying their fanaticism”. And they’ve managed to find a Nobel-prize winning economist willing to parrot this nonsense almost daily on the pages and webpages of the New York Times.

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Thoughts on the Minimum Wage

The usual case against the minimum wage has three components:

  1. Minimum wages reduce employment among unskilled workers.
  2. Therefore minimum wages are bad for unskilled workers.
  3. Therefore minimum wages are bad policy.

The problems with this case are that

  1. Minimum wages might not reduce employment very much.
  2. Even if they do, that doesn’t make them bad for unskilled workers.
  3. Therefore we cannot conclude (via this route) that minimum wages are bad policy.

Minimum wages are bad policy, though — but for entirely different reasons.

I’ll get to those reasons shortly, but first let’s examine the traditional argument a little more closely. I’ll number my paragraphs to make it easier for commenters to respond.

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Paul Krugman Hopes You’re Stupid

Paul Krugman, apparently relying on the stupidity of his readers, opens with this quote:

“At some point, Washington has to deal with its spending problem,” Speaker John A. Boehner of Ohio said Wednesday. “I’ve watched them kick this can down the road for 22 years since I’ve been here. I’ve had enough of it. It’s time to act.”

Then Krugman comments as follows:

22 years, huh? Indeed, Boehner was elected in 1990, and entered the House at the beginning of 1991. So what kind of can-kicking was going on during his first, say, decade in office? Here’s the picture:

Hmm — it sort of looks as if the US was sharply reducing its debt during the presidency of a guy named, I don’t know, Bill something or other.

See what he did there? Boehner says something about spending; Krugman responds with an irrelevant chart depicting debt, and hopes you won’t notice he’s completely changed the subject.

Continue reading ‘Paul Krugman Hopes You’re Stupid’

The Ricardian Model

With Richard III much in the news lately, I’ve been inspired to reread Paul Murray Kendall’s excellent biography of the king (Kindle edition here). Here’s a little tidbit I learned from that book:

In early 1464, with Lancastrian rebellions breaking out all over England, King Edward IV found it prudent to raise an army. He therefore dispatched “commisions of array” to the twenty-two counties of southern England, each charged with rounding up the able-bodied men of the county and turning them into an army. In most cases, the county commission consisted of a half dozen or more men, including one great magnate. But Richard, Edward’s brother, inspired so much trust that he was appointed sole commissioner for nine counties — everything from Shropshire and Warwickshire through Somerset to Devon and Cornwall. Richard, in other words, was solely responsible for levying troops from a quarter of the realm. He was not yet twelve years old.

This makes me believe that my seventeen-year-old stepdaughter has too few chores.

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Why The Debt Ceiling Matters

A number of commenters (at least one here and several elsewhere) have asked why we need a debt ceiling. If the Congress wants to spend less, why don’t they just go ahead and spend less?

The answer is that different spending programs command different majorities. Snip and Snap vote to fund rabbit hospitals; Snap and Snurr vote to fund trapeze subsidies; Snurr and Snip vote to fund lava lamp research. Plausibly, they’d all prefer to eliminate all these programs. Even if Snap thinks rabbit hospitals and trapeze subsidies are both great bargains, he might not be so happy about getting two for the price of three.

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I Don’t Get It

The frequently brilliant David Henderson seems to me to have fallen off a cliff in his (limited) defense of the recent tax bill. David thinks it’s a (relatively) good thing that under the new bill, income taxes rise only for those making over $400,000 and the estate tax is locked in only for estates over $5 million. (Relative, that is, to an across-the-board increase.)

David, in other words, seems to be saying that it’s a good thing that the tax code just got more progressive, and that a very small number of people are now going to bear a significantly greater share of the burden. I disagree.

Taxes are too high because spending is too high. But taking the path of spending as given (and David is right when he says that the delay of the sequester bodes very ill for that path), the question is not “how high should taxes be?”; that question is settled. Over time, taxes will be high enough to cover the spending. The only question is “how should the tax burden be distributed?”. The answer the politicians have agreed on is “a whole lot less equally”. They’re taking less now than they might have, but they’ll have to take more in the future, and when that time comes, they’ll have set a precedent that the rich should bear a greater fraction of the burden than they did a month ago.

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Why Do I Feel Like I Fell Off a Cliff?

The fiscal cliff deal that passed the Senate last night is appalling.

It raises marginal tax rates at the top (allegedly to “Clinton era levels” but actually higher once you account for the phaseouts of personal exemptions and itemized deductions), but not for anyone else, nibbling away at the rewards for productivity, and placing an ever-greater share of the tax burden on an ever-smaller fraction of the population.

Edited to add: Greg Mankiw has pointed out to me that the phaseouts were present in the Clinton years as well, so my remark about today’s rates being “higher once you account for the phaseouts” is wrong. On the other hand, as Greg also points out, with the increase in Medicare taxes pursuant to Obamacare, total tax rates are in fact higher than they were under Clinton. Greg points to this link for clarification.

Worse yet, it increases the rates on dividends, capital gains and inheritances, encouraging wealthy people to save less, consume more, and demand a greater share of the world’s resources.

The AMT, one of the few bright spots in the tax code, is permanently “fixed”, which is to say that almost nobody will pay it now.

This deal does absolutely nothing to control entitlement spending, which means it’s 100% fiscally irresponsible. Let’s be clear about this. When you’re overspending, the fiscally responsible thing is to spend less, not to cover the difference by visiting the ATM and depleting your assets. Wealthy taxpayers are the government’s ATM; the assets the government takes today won’t be there when they need more tomorrow. Let’s say it one more time: After all the talk about “fiscal responsibility”, there is nothing fiscally responsible about this deal.

Continue reading ‘Why Do I Feel Like I Fell Off a Cliff?’

Over the Cliff

Re the fiscal cliff, I’ve tried hard to keep my head in the sand, figuring I can always go back to watching the news in 2016. So I’m not completely up to date on all this stuff, and I might be missing something important. But here are a few last-minute observations:

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Robert Bork, RIP

Robert Bork will be remembered for many things, but the most important, and the reason we are so fortunate to have had him with us, is his eloquent and influential insistence that antitrust law is there to protect consumers, not to protect inefficient firms. The Supreme Court eventually agreed. He was, in my opinion, wrong about a lot of things, but he left the world better than he found it.

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How High Should Taxes Be?

How high should taxes be? High enough to cover expected outlays going forward — but no higher.

That’s because any additional revenue would be used to pay down the federal debt, which is a bad idea. It was almost surely a mistake to run up this much debt in the first place, but now that we’ve got it, the best thing to do is to keep it forever.

Here’s why:

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Can A Million Puppets All Be Wrong?

The million-puppet march on Washington is advertised as a demonstration in favor of public broadcasting, but of course that’s not exactly what it is.

What it is, exactly, is a demonstration in favor of the current level of funding for public broadcasting.

Now: Just how many of those puppets — or how many of their human fellow marchers — do you imagine would be able to tell you what the current level of funding for public broadcasting is?

And insofar as these humans are out there marching and chanting without pausing to inquire into what they’re marching and supporting — well, I guess that explains their affinity for puppets.

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Your President Hopes You’re Stupid

Joe Biden says that Mitt Romney has lied about Jeep and outsourcing; Romney intimates that President Obama has lied about Libya. I presume there’s been substantial truth-stretching on both sides and about many issues. Truth-stretching (or lying) relies on the ignorance of voters. There’s plenty of ignorance to go around, which is why truth-stretching works.

Treating voters as ignorant is one thing; treating them as stupid is quite another. You rely on ignorance when you cite “facts” that are hard for people to check — as, for example, when the President presents himself as sympathetic to immigrants and hopes you don’t know about the record number of deportations on his watch. You rely on stupidity when you blithely contradict yourself, hoping nobody will notice. The latter seems far more cynical.

I’m sure both candidates have been guilty of treating voters as both ignorant and stupid, and I called attention to several instances (on both sides) in my commentary on Debates One, Two and Three. But it does seem to me that it’s the President who is banking most heavily on voter stupidity.

A few examples:

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Sandy and the Ants

I was asked in another thread to refute the notion that Hurricane Sandy is “good for the economy” because at least it will create a lot of construction jobs.

I — and so many others — have so thoroughly debunked this notion in so many venues over the years that I fear I can find nothing new to say, so I’ll leave you with this:

If you find yourself in an argument about this, ask your opponent whether it’s “good for the ants” when you put a stick down their anthill, wiggle it around and destroy their infrastructure. Go ahead and acknowledge that this can sure put a lot of ants to work.

Or, for that matter….

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The Mourdock Platform

Richard Mourdock, Indiana Senate candidate, has announced his opposition to interference with God’s revealed intent. I presume, then, that he’ll be taking a principled stand against firefighting, medical intervention, federal debt reduction, and unseating incumbent Presidents.

Update: Mourdock now clarifies his position by saying that “God does not want rape”. I’d thought he was saying that if a pregnancy occurs, God must have wanted it, which would seem to be an instance of the general principle that if anything occurs, God must have wanted it. Now we’re told that there is no such general principle — from which I am left to conclude that the only way to tell what God wants is to ask Richard Mourdock. This is a logically consistent criterion, but what if, for example, Mourdock happens to be indisposed at the moment when, say, terrorists attack the White House? How will we know whether it’s okay to resist?

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Debate Number Three

Limited commentary this time, partly because I am no expert on foreign policy so there’s no reason you should care about most of my opinions. On the other hand, the candidates had an exceptionally broad definition of foreign policy, which included trade, deficits, unemployment, education, etc. Commentary also limited by the fact that my attention wandered from time to time.

That said, here are my comments, typed in real time, unedited, not carefully thought through, perhaps in some cases ill-advised:

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Second Debate

My wife, who really ought to have her own blog, heard only the few minutes dealing with immigration and then China and summed up the candidates’ shared position as “We sure love immigrants, but we sure hate foreigners”.

I, by contrast, slogged through the entire thing. Here are my own less brilliant comments, typed in real time while watching the debate; not edited and perhaps in some cases not sufficiently thought through:

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Kidney Failure

So Alvin Roth wins the Nobel Prize for, among other things, figuring out the best way to allocate kidneys subject to the constraint that you’re too damned dumb to use the price system.

Next up: A Nobel prize in medicine for figuring out the best way to prolong your life while repeatedly shooting yourself in the head.

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Krugman — So Right and So Wrong

Paul Krugman offers a nice thought experiment to illustrate why government debt, in and of itself, does not make the country as a whole any poorer:

Suppose that … President Santorum passes a constitutional amendment requiring that from now on, each American whose name begins with the letters A through K will receive $5,000 a year from the federal government, with the money to be raised through extra taxes. Does this make America as a whole poorer?

The obvious answer is not, at least not in any direct sense. We’re just making a transfer from one group (the L through Zs) to another; total income isn’t changed. Now, you could argue that there are indirect costs because raising taxes distorts incentives. But that’s a very different story.

OK, you can see what’s coming: a debt inherited from the past is, in effect, simply a rule requiring that one group of people — the people who didn’t inherit bonds from their parents — make a transfer to another group, the people who did. It has distributional effects, but it does not in any direct sense make the country poorer.

Two comments:

Continue reading ‘Krugman — So Right and So Wrong’

Stopped Clocks

Paul Krugman gets this one exactly right; among the 47% of Americans who pay no federal income tax in a given year, most do pay federal income tax at some point in their lives — and thus have at least some stake in the tax system.

But even putting that aside, what’s particularly distressing about Mitt Romney’s “47%” speech is the failure to recognize at least one of the following two propositions:

a) Even people who never pay federal income tax have a substantial personal stake in a healthy, thriving economy, and therefore have a stake in federal tax policy. In particular, wages are determined by productivity, and productivity depends to a substantial extent on the accumulation of capital, which can be directly influenced by tax policy.

b) It is possible for a skilled candidate to explain the above, and to sell pro-growth tax policies as pro-wage-earner tax policies.

Yes, the candidate who tries to make such a reasoned case will be the victim of a certain amount of demagoguery about “trickle-down economics”, but the candidate who allows himself to be paralyzed by such threats should not be running for president.

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Playing the Dunce

This morning I heard President Obama call for universities to lower their tuition rates so that “everybody in America can go to college”.

I am virtually certain that the President is not stupid enough to think that if tuition rates fell to zero, there would magically be enough room in the colleges for everybody in America. So I’ve got to believe that he’s purposely saying stupid things in order to appeal to stupid voters — the sort of voters, in other words, who probably don’t belong in college.

To believe what the President wants you to believe, you’d have to be not just stupid but badly misinformed. At the University where I teach, we do not lack for applicants. The reason we don’t have more students is not that they can’t afford us; it’s that we don’t have room for them.

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The Final Night

— Thank God for the hurricane; I don’t think I could have taken four nights of this.

— Off to a weak start tonight with Connie Mack mouthing platitudes and the Gingriches not adding much.

— Jeb Bush should have been the nominee. In fact, he should have been the nominee back in 2000. He was great tonight.

— It is heartening to see Bush, Condi Rice and others pushing education to the forefront. Rice called it the civil rights issue of our time. Me, I’d rank it second after immigration.

— Too damned many musical interludes.

— I feel like it’s my job to be cynical about the tearjerker stories, but I have to admit they were very effective.

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I Brag and Chant (and Complain a Bit) of Ryan, Ryan, Ryan, Ryan

Notes from the second night of the convention:

— What follows will be in more or less chronological order, except that I want to say upfront that Condi Rice gave one of the greatest political speeches in American history, and if you didn’t see it, you should scroll most of the way down this post and watch the video right now. (And no, that does not mean I agree with everything she said.)

— It took Cathy McMorris Rodgers less than 30 seconds to segue from “We will send every American to college” to “We will shrink the role of government”. This is the kind of thing that makes people hold Republicans in well-deserved contempt.

— Rand Paul lived up to my almost impossibly high expectations. He was superb:

— Rob Portman was good, on both substance and presentation. He did commit the sin of defending free trade as a boon to producers, as if consumers were nothing more than potted plants, but that’s only a sin of omission, and I don’t think it’s fair to expect too much depth in a ten minute convention speech. What he did say was spot on:

— There were far far too many musical interludes.

— Did I mention far too many musical interludes?

— Unlike Paul and Portman, Tim Pawlenty relies almost entirely on substance-free one-liners. He leaves me feeling dirty.

— Mike Huckabee, like Pawlenty, starts off largely substance-free and often negative, but pulls it off better because he’s more likable. Then he moves on to big themes, hits them well, and comes off lofty. He’s one of the best orators in American politics:

— I keep hearing, from speaker after speaker, that if you’ve been successful through study, hard work and risk-taking, then “you built it”, and therefore deserve your success. Okay. But it’s also true that if you’ve been successful through study, hard work and risk-taking, you probably had the good fortune of being born into a family that encouraged study, hard work and risk-taking. Not everyone has that good fortune, and it would be nice to hear that acknowledged.

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Report Card

Here, for what it’s worth (and I’m sure it’s not worth much) are the grades I assigned to last night’s speakers. These are primarily for presentation, not content. They’re mostly quite high, which is unsurprising because of course these people were chosen largely for their skill as presenters. I’m sure that some of them would have gotten different grades if they’d spoken a half hour earlier or later, when I was worse or better fed. I am not prepared to defend these grades terribly vigorously, but maybe they’ll provoke some interesting discussion:

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In the Matter of Todd Akin

So there I was, putting together a long post on the fabric of the Universe, when Todd Akin came along and seemed to demand at least some brief commentary. A few remarks on that, and I’ll get back to the rest of the Universe in a day or two:

1) The exact quote, in response to a question about pregnancies resulting from rape, is: ““It seems to me, from what I understand from doctors, that’s really rare. If it’s a legitimate rape, the female body has ways to try to shut that whole thing down. But let’s assume that maybe that didn’t work or something: I think there should be some punishment, but the punishment ought to be of the rapist, and not attacking the child.”

2) It seems to me, from what I understand from news sources, that the female body does not in fact have ways of recognizing rape and preventing conception. I have absolutely no expertise in this matter; therefore my understanding might be wrong. Nevertheless, I’m happy to pass that understanding along.

3) It also seems to me that the phrase “from what I understand from doctors” says, in effect, “I am not an expert, so this might be wrong, but here’s what I’ve heard”. It is not unreasonable for people to make statements like this. In fact, I did it myself, just one paragraph back.

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Paging Diogenes

Chapter 8 of The Big Questions is called “Diogenes’s Nightmare” and argues that: 1) In a world of honest truthseekers, there would be no disagreements about matters of fact; 2) In the world we inhabit, disagreements about matters of fact are ubiquitious; therefore 3) in the world we inhabit, there must be precious few honest truthseekers.

If you’re looking to ferret out one of those rare creatures, your best candidate might be a man who argues with eloquence and passion against subsidies for the industry where he makes his living. Meet David Bergeron.

David is the founder and president of Sundanzer, which supplies solar powered refrigerators worldwide, based on technology developed by David under contract to NASA. He also really really really understands why subsidizing solar technology is a terrible idea. And when I met him last week, he impressed me so much that I invited him to make a rare guest post here at The Big Questions. So without further ado:

Solar Subsidies: Misdirecting Industry and Consumers

A Guest Post


David Bergeron

In a recent Economist on-line debate, the affirmative motion “This house believes that subsidizing renewable energy is a good way to wean the world off fossil fuels” was surprisingly defeated.

In his closing remarks, the moderator softened his strident opposition to the negative case, even admitting that “subsidizing renewable energy, is wasteful and perhaps inadequate to address climate-change concerns.”

Beyond the Climate Debate

The debate, indeed, reopened the question whether anthropogenic greenhouse-gas forcing was a serious planetary environmental concern. But such focus short-changed what I think is the more important question for the Economist. Not only are the renewable-energy subsidies (such as for solar) wasteful and potentially insufficient, they are outright diabolical if indeed there is a looming environmental crisis.

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