“Don’t Listen to Her, She’s a Communist”

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  1. Avatar North
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    says:

    I suspect this is going to be an interesting comment thread.

    Out of curiosity in Alternate history one if she’d have said “we’re exporting our manufacturing jobs to the third world through free trade or conservative imposed austerity politics has crushed public spending in the last several years which has turned what would probably have been an average recovery into a rather slow one and here’re the numbers showing how public spending under Regan and Bush was not constrained like they were under Obama what would you have said?

    Or if she’d have asked what your explanation for it was what would you have told her?

    In alternative history 2 if she’d said perhaps more accurately that the 500 bucks is coming partially from taxpayers like you, partially from Medicare recipients who had a benefit rollback in ACA, partially from large corporations who got more taxes and partially from a recapture of money that was previously wasted would that have changed your position?

    Or if she’d have shrugged and said that Obamacare is not pretty but it’s better than what came before though she’d prefer a system like much of the rest of the west that gets better results for lower costs in healthcare what would you have said?

    I mean libertarians have a lot of excellent criticisms and a lot of neat theories (mostly theory though, libertarians are deficient or maybe blessed in that they haven’t had a country to try governing according to their principles yet) but I don’t think it does libertarianism much of a favor to aim it at low brow liberalism.Report

  2. Avatar Saul Degraw
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    says:

    The problem with economic debates is that they seem to revolve around a bunch of tautologies and axioms and each side has their own tautologies or axioms.

    One should be able to criticize Capitalism without being a Communist. I find it interesting and sad that the Tea Party can still use Socialism as a scare word.

    I am neither a full socialist or a full capitalist. I think that there are things that capitalism does very well especially in making former luxury products into mass consumer goods and there are other things that capitalism does not do very well like providing adequate health care to the entire citizenry of the country. I am not convinced that enacting every free market reform and libertarian wish will lead to healthcare for all. The best systems for universal healthcare are the ones of Western Social Democracy like Canada, the UK, Israel, Sweden, France, etc.

    Yet everyone seems to have their heels dug in and can’t make any concessions. I don’t see what is wrong with a mixed market approach that says “Capitalism is good for A,B, C and Socialism is good for X, Y, Z.”

    And I do think that income inequality is a growing problem and we are in a new gilded age. Yesterday I read a story about how the President of the City University of New York is given a free 18,000 a month apartment on top of his high six figure salary while a professor was admonished for wanting to take his students on a field trip by administrators. Pickerty has a point that many economists in the U.S. are co-opted by the current system and can make lucrative livings working for ideologically driven think tanks like Cato or as consultants for large banks and other corporations. This is not necessarily bad but economists are human too and just as prone to self-rationalization and justification. “Capitalism is great! I need to defend and justify my 500,000 dollar a year income. I know the hand that feeds me.”Report

  3. Avatar Fnord
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    says:

    How is this not the very model of a strawman? I mean, you literally decline to engage with a political opponent and then make up some arguments that you imagine they might make, and engage with those.Report

  4. Avatar Saul Degraw
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    says:

    There is always a general problem in the way that experts speak and see the world and the way that lay people see the world.

    Libertarians and sympathetic economists can come up with all sorts of theories and sophisticated model about why free trade and globalization are great and they lead to lower prices (for some goods especially consumer goods) but a person who lost their factory job in exchange for a low wage service job would probably rather pay higher prices and have their nice factory job with benefits back.

    There was a study that came out this week about how scarcity can lead to more tribalism and racism psychologically. I think well-paying jobs can easily be scarce as well as natural resources.Report

    • Avatar James Hanley in reply to Saul Degraw
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      says:

      Actually, Saul, more than theories and models; empirical data, too. What you are doing is comparing anecdotal individuals against aggregate data, which is easily and commonly done, but doesn’t actually weaken the data conclusions at all.

      I get the impression you think economists aren’t aware of the people who get hurt by job transfers, but they are quite aware of it. But is it right to beggar everyone else so those folks can keep their jobs? If your concern is fairness, why is it fair to tell me I can only buy or hire American, when doing so will cost me more?

      When we had temporary steel tariffs, the folks who git hurt where those in the steel using industries. Few people bothered to calculate their losses while we were trumpeting the jobs saved, but the net was negative. When we had restrictions on tire imports, it primarily affected low-cost tires, meaning the jobs that were saved came on the backs of poorer people. If higher prices deterred some buyers, and they drove on worn tires for longer, some of those jobs were surely saved at the cost of some people’s lives.

      These displaced workers you care about, I get it, but I don’t get why your concern stops with them and doesn’t extend to those who are harmed to save their jobs.Report

      • Avatar Saul Degraw in reply to James Hanley
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        says:

        I am not completely anti-globalization. I do realize and respect that opening up a garment factory in Bangladesh or any other developing country does increase the wealth of the poor in those countries.

        That being said, I do think that the U.S. is experiencing more and more off-shorting with decent paying jobs being replaced by low-level service jobs and this is starting to creep up into jobs that are for the higher education and used to be more recession proof. Notice how many legal jobs have been cut because of predictive coding software and off-shoring. The rise of contingent labor is also troubling and this easily extends to academia and other highly educated markets. There was a story in the NY Observer yesterday about how CUNY gives the President a 6 figure salary and free rent on an apartment that is nearly 20,000 a month in rent. Meanwhile an art professor got a smack down from admin for wanting to take his class on a field trip. This strikes me as highly problematic and not the free market at action and not anything your rent-seeking amendment can fix.

        I’m sorry I just don’t economics as the holy-grail cure-all that will solve all the woes in the world and lead us to utopia.Report

      • Avatar James Hanley in reply to James Hanley
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        says:

        I’m sorry I just don’t economics as the holy-grail cure-all that will solve all the woes in the world and lead us to utopia.

        Thank you for strawmanning.

        And thank you for completely ignoring the costs I tried to point out to you. The issue isn’t that the costs you’re pointing to aren’t real–the issue is that you are only looking at those, and not looking at the costs that occur on the protection side. But those folks are people, too, every bit as much as the people you’re concerned about. They should appear in your concerns and your calculations.Report

      • Avatar Kim in reply to James Hanley
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        says:

        Saul and James,
        i’m roughly on Krugman’s side in this. Let the prices drop, but build back the middle class (got more GDP? Funnel it toward helping the least of us).

        I think there ought to be a tax on wealth, if only because risk-aversion is an illness common to many, if not all heirs.

        (not saying either of you are actually against this. But saul is coming across more and more as a proponent of the American System [http://www.dailykos.com/story/2012/12/02/1165968/-The-American-System])Report

      • Avatar Saul Degraw in reply to James Hanley
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        says:

        @james-hanley

        I think we are seeing a rise of both right wing and left wing but mainly right-wing populism and people on both sides of the aisle are getting disenchanted and fed up with technocratic solutionism. Matt Y and Ezra Klein might love data and fixing things with policy solutions like the Earned Income Tax Credit but it seems to me that lots of people are pissed and looking for something direct. Cantor’s defeat and anti-immigration rhetoric are largely parts of right-wing populism because they blame the corporations and the other.

        I don’t think the policy wonks of the world know how to deal with the anger people are feeling, it is not in their training.

        Though right wing and left wing populism probably has different people they blame and solutions. Even when tea partiers try and convince liberals that they are on the side of the little guy, they tend to give examples that liberals don’t care about:

        http://www.nationaljournal.com/politics/elites-beware-eric-cantor-s-defeat-may-signal-a-populist-revolution-20140611Report

      • Avatar Will Truman in reply to James Hanley
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        says:

        I think @saul-degraw is actually on to something here, with a couple major caveats.

        What he’s talking about reminded me of Europe and I thought it was a pretty spot-on description? Here? Yes and no, maybe, in different ways. This is as a descriptive statement, though and not a normative one (the first caveat). Which is to say that the “technocrats” (which will be the second caveat) may actually be entirely right, or they may be wrong, but the action-response dynamic that Saul describes? I see it.

        I think where he goes a little off-key, though, is in his description of what they’re rebelling against. Technocrats may be one word for it, but I think “establishment” or “established interest” or “established consensus” may be better terms. Technocrats do make me sort of think of Klein and Yglesias… but Klein and Yglesias are nobodies.

        In the EU the established consensus revolves around the EU itself and its monetary management. In individual countries, maybe austerity. In others, socialist politicians. Here it’s somewhat different. Kind of amorphous and a bit harder to pin down. Defined differently, but I’d argue both relating back to the nexus of power that is perceived to be primarily taking care of its own interests. Which has comparatively little to do with “economists” except insofar as the nexus is using economists’ arguments to make their case, whether for stimulus or austerity.Report

      • Avatar Saul Degraw in reply to James Hanley
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        says:

        @will-truman

        I accept your caveats and changes. For some reason my mind goes to Matt Y and Klein because they are the guys out there on the web saying “globalization is great you guys, prices are going down.” They are the ones who bring hardcore economic wonkery to the forefront and get fluxomed when people don’t understand the benefits of free trade and globalization (at least on the left.)

        I’ve yet to meet a politician on either side who makes explicit “Globalization is great guys! You don’t understand! You should feel bad for wanting to protect your wages instead of increasing wealth in Bangladesh.” Left and right politicians might support globalization but they know damn well that they can’t make those kinds of arguments in an open mic or they will be out of office very quickly.Report

      • Avatar James Hanley in reply to James Hanley
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        says:

        Saul,
        I don’t really disagree. But that’s because it doesn’t address what I was talking about.

        Your continued focus on incomes here vs. incomes in Bangladesh suggests you’re missing my point about incomes here vs. incomes here, or just choosing not to address it. But that people are frustrated and don’t care about Bangladeshi incomes? Sure, but then I never suggested they weren’t.Report

      • Avatar LeeEsq in reply to James Hanley
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        says:

        @will-truman, the problem with the EU Is that the democratic bodies like the European Parliament and the European Commission have much less power than the bureaucratic bodies. This creates a perception that the European Union is governed by a class of elite civil servants that don’t care about what the people in various European countries want. There is a lot of truth to this perception. Europeans are naturally very angry about this because you elect anti-austerity politicians at the nation level and European Union bureaucrats are able to force austerity on your country anyway.

        This isn’t what we have in the United States because the democratic organs of the Federal government are much more powerful than our civil servants. We might talk about Presidential over reach but very few Americans complain about the bureaucracy ignoring the President, Congress, and Judiciary outright and doing what they want. Populist anti-technocratic feeling in the United States tends to happen within each party. Progressives against neo-liberals in the Democratic fold and Tea Party/Libertarian conservatives against the GOP establishment amongst Republicans.Report

      • Avatar Will Truman in reply to James Hanley
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        says:

        @leeesq [d]emocratic or no, our political system overwhelmingly favors the affluent over the middle and the middle over the poor. The biggest example of this is our complete lack of an anti-trade party, but it’s not limited to that. Princeton did a study that found that both political parties (though, ahem, one more than the other) were considerably more responsible to affluent voter preferences than middle class, and middle class to poor. I wish I could find it, but somewhere in my linky archives is a link to a post that actually looked at several issues and found disparities between what our politicians do, what people think (and I’m not talking about “More government, but less taxes!” fog), and how class plays into it.Report

      • Avatar LeeEsq in reply to James Hanley
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        says:

        I’m not debating that at all Will. For better or worse, our politicians are immune to most calls for economic populism regardless of whether they are Democratic or Republican. It doesn’t help or hurt that many of them are so rich and tend to come from the business or professional world rather than other careers. It looks like this sort of thing is happening in Europe to, especially in the UK. Luckily for American politicians, many American citizens accept capitalist policy.Report

      • Avatar Will Truman in reply to James Hanley
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        says:

        In some ways, Europe has a history of being less responsive to common sentiment than the US. At least, on certain issues. The Death Penalty was banned over there largely despite rather than because of popular sentiment. Over here, Clinton put a mentally handicapped person to death just so that he wouldn’t be seen as anything but resolutely in favor. Also, something something metric system.

        Economics are a bit of a different matter, of course. For a variety of reasons.Report

      • Avatar Gabriel Conroy in reply to James Hanley
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        says:

        @saul-degraw
        Re: contingent labor:

        The rise of contingent labor is also troubling and this easily extends to academia and other highly educated markets.

        As someone who works in the contingent labor market in a service portion of academia (i.e., a university library), I’m of two minds about that.

        On the one hand, it’s challenging not to have a “permanent” job (recognizing that no job is reliably “permanent”). My one-year contract is over in November, and it may or may not be renewed, and that a limbo I just have to deal with. I wish I had 3-year contracts instead of one-year ones, and I wish even more that I were hired on a more sustainable basis. To me–and I’m not joking–a more permanent job would be worth being paid even $10,000 less than t I get paid now: I make almost 40k and would be happy with almost 30k (but please don’t tell those who determine my salary).

        On the other hand, I might not even have my job if it weren’t for the contingent market. It has presented an opportunity to have the best job I’ve ever had. Without contingent jobs, there would be two tracks, civil service and tenure-track. They’re both hard to get into, and the latter track has the disadvantage of 1) requiring a certain degree I don’t have; 2) requiring publishing for the sake of publishing with maximal regard for where I get published and minimal regard for how well-done the published work is; and 3) coming with the uncertainty that after 7 years a group of people might not vote to accept me as “tenured.”

        Finally, my usual privilege disclosure: I have loans, and they’re hefty, but not onerous (so far). I have a spouse who makes a comfortable salary, and that’s one reason I’m in the position to see some of the advantages of the contingent market and to be more relaxed about the disadvantages. But none of that overrides the fact that I’m grateful for the opportunity.Report

      • Avatar Jonathan McLeod in reply to James Hanley
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        says:

        @saul-degraw

        I think if your argument has evolved so that it tars libertarians and technocrats with the same brush, you need to re-evaluate your argument.Report

      • Avatar Saul Degraw in reply to James Hanley
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        says:

        @gabriel-conroy

        I have no problem with probation periods and temp to perm contracts.

        I do have a problem with long term contingency and temp to perm contracts that never materialize.

        In many ways, I am in the same boat. I’ve been long-term temping since 2012 as a lawyer. In many ways, I am lucky and grateful for it but long-term temping is still very stress inducing because luck can run out and a job could end suddenly.Report

      • Avatar Gabriel Conroy in reply to James Hanley
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        says:

        @saul-degraw

        I guess it’s a glass half-empty/half-full sort of thing. I know nothing about the market for lawyers. But for what I’m currently doing, if there were fewer opportunities for contingent employment, I might not have the opportunity I enjoy right now, at least until November. For the record, my employer has made no representation that mine is a “temp to perm” position–in fact, they call it a “visiting” position, and “visiting” implies a visitor, and a “visitor” implies someone who will leave after a while–so I have no “right” to expect a permanent job from them.

        I’ve been thinking all day about my claim that I would be happy to do the same job for 10k less than I do now. And believe it or not, I stand by that claim. In large part, that’s because I’m in comfortable enough circumstances (and with few obligations) that I can do so. But it’s also that I like my job that much. Don’t get me wrong. It would be demoralizing to get such a pay cut, and it would lay heavily on what I can afford. And if my salary were cut, say, 15k and not 10k, it might be a different story. But I really like the job.Report

      • Avatar Gabriel Conroy in reply to James Hanley
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        says:

        Or….to put it in terms of self-interest. Would you have a permanent position if more were on offer. Or would you be one who wouldn’t have an opportunity (albeit a temp one) at all? I suspect, from what you’ve disclosed of your background and your career, you’d probably be more likely to get a permanent position than I in my field, mutatis mutandis. That’s not a knock against you. But I enjoy the opportunity.Report

  5. Avatar Kim
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    says:

    Walmart is dying, as rural America is dying.
    As the American middle class is dying as an economic entity.
    We have less and less “spare money” to spend on junk.
    And the quality of the food we buy declines by the hour.Report

  6. Avatar zic
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    says:

    I do not get the logic of minimum wage comparisons.

    The goal here would be that, working full time, one person would earn the minimum necessary to live above the poverty line. If you work full time, you should, in theory, not have to live in poverty and not qualify for pubic assistance. You should be able to cover basic necessities of life. So the whole argument of raising the minimum wage should hinge on how many people are working full time but still need tax-payer assistance to survive. The argument of raising it to $50/hour is just a strawman argument.Report

    • Avatar dhex in reply to zic
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      says:

      it is a strawman argument that a whole lot of people would initially go for because more money = good and everything else is something something something [insert someone else who is messing things up]. so while i found this less than amusing, the actual exchange is entirely believable.

      i also think he goes to my dentist. zed, is your dentist kinda racist? does he tell you stories about dead animals he’s found on his property? or that one time he had to kill a dog that was killing his dog and ended up killing both dogs?Report

    • Avatar Jim Heffman in reply to zic
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      says:

      ” If you work full time, you should, in theory, not have to live in poverty and not qualify for pubic assistance. ”

      The minimum wage *is* public assistance. It just cuts out the middleman and requires wage-payers to cover the public assistance directly, rather than through tax payments and welfare redistributions.Report

      • Avatar Kim in reply to Jim Heffman
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        says:

        Do your views on this change, Jim, with the assertion (factcheck NYTimes) that the rich continue to get richer,and that the middle class is disappearing in terms of buying power? That is to say, the rich are stacking the deck so that they get richer — wouldn’t one of those ways be that you and me, the middle class, pay for the poor, while they simply get rich?Report

      • Avatar Maribou in reply to Jim Heffman
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        says:

        So it’s a money-saving, government-reducing measure? Surprised more libertarians are not in favor ….Report

  7. Avatar Mike Schilling
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    says:

    It’s exactly like the time I talked to a libertarian who insisted that the only reason that Ayn Rand doesn’t win the Nobel Prize for Literature, Economics, and Peace every year is that the Swedes are all communists. Then he got into his Galt Anti-Gravity Train and flew away.Report

    • Avatar James Hanley in reply to Mike Schilling
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      says:

      Except, of course, that it’s not remotely like that. But making up world-class ridiculous analogies is easier than making a thoughtful substantive argument.Report

    • Avatar James Hanley in reply to Mike Schilling
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      says:

      It’s exactly like the time I talked to a libertarian who insisted that the only reason that Ayn Rand doesn’t win the Nobel Prize for Literature, Economics, and Peace every year

      Unlike the fact that there are people who actually do say what Zed hypothesized as a response, you can’t actually find a libertarian who would ever say this. Yes, there are “people who think that Ayn Rand has been excluded from the lists of great writers and political thinkers purely because people dislike her ideas, or have been propagandized into not taking them seriously.” But as dumb as it is, that is in fact what they actually say, not what you first suggested was an equivalent to Zed’s post.

      You didn’t just mildly exaggerate, you went with an over-the-top ridiculous nobody-has-ever-actually-said-that fantasy. Which would be ok if you were just trying to be comic. But since you were trying to downplay Zed’s OP by saying it’s “exactly like” what he wrote, it doesn’t really work, either as humor or as argument.

      Face it, Mike, when it comes to libertarianism you get a bit deranged and both your comedic and analytical instincts regularly fail you.Report

      • Avatar Mike Schilling in reply to James Hanley
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        says:

        O course it was exaggerated: it wouldn’t be funny (or worth writing) otherwise. Have you really never noticed that
        “It’s exactly like” is one of my standard ways to introduce a parody?Report

      • Avatar North in reply to James Hanley
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        says:

        In fairness, and as a connoisseur of hyperbole, I must admit that I laughed out loud when the Libertarian straw man flew off on his antigravity Galt train. I am sorry Prof…Report

      • Avatar James Hanley in reply to James Hanley
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        says:

        It wasn’t really very funny anyway. You’re a lot better with one liners than when you try to go over the top. And it still looks to me like you were using it to undermine the OP, which, given how very much unlike the OP your joke was (that is, the OP wasn’t really very exaggerated at all), means it doesn’t really work.

        Honestly, Mike, you’ve never said anything about libertarianism that’s not just boilerplate reaction. You’re one of the guys I had in mind in my response to North, above, about only aiming at the low-brow. Good humor generally comes from having a decent understanding of something. It’s like Catholics telling the best Catholic jokes, or Jews telling the best Jewish jokes, or John Stewart telling the best liberal jokes. You can’t tell a good joke about something you don’t actually understand and have never really thought about seriously.

        You don’t actually understand, and you’ve never really thought about it seriously. It shows in all your comments about libertarianism, both serious and comedic.Report

      • Avatar James Hanley in reply to James Hanley
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        says:

        @north

        But did it in any way work as a refutation of the OP? Zed was trying to point out what he sees as some ridiculousness in liberal thought, but he stuck to real things that some liberals say, even if that particular liberal (or communist, but doubtful) didn’t say them. Schilling was trying to point out what he sees as some equivalent ridiculousness in libertarian thought, but he was apparently unable to stick to anything libertarians actually say, so he had to make up something ridiculous. And of course he could have found something ridiculous actual libertarians did say.

        I’d say point, Zed.Report

      • Avatar Patrick in reply to James Hanley
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        says:

        the OP wasn’t really very exaggerated at all

        It wasn’t?

        Me: “Hey, you know Seattle just raised the minimum wage to 15 dollars! What do you think of that?”

        I expect that would have been well-received.

        “How about making it 50 dollars? I bet you don’t make 50 dollars an hour. Would you like a 50 dollar minimum wage?”

        I mean, I don’t really have much of a dog in the minimum wage fight, but clearly “the minimum wage should be bigger than it is now” != “the minimum wage should be $50/hr”. You can argue about whether or not we should have a minimum wage due to efficiency reasons, but the normative claim behind the argument for the minimum wage is that there should be a default standard of living, it doesn’t really have anything to do with efficiency… which means, if you’re going to counter it, you should counter that there are more efficient ways to give a default standard of living than the minimum wage, or you should just flat out say, “I disagree that there should be a default standard of living”.

        or…

        “You mean taxpayers, like me. Basically, you got that 500 dollars from me.

        Which relies both on the common-on-the-antitax-side assumption that every increase in expenditures is offset by an increase in taxes (and that they’re the ones paying the taxes)… which is demonstrably untrue (particularly in the case of PPACA, which is regressive and not progressive taxation from a tax standpoint)

        … and it also relies on ignoring the principle that typically for things like Social Security and PPACA, you’re actually paying more at some points in your life and less in others. In a good number of cases, then, I’m not getting the $500 from Major Zed, I’m getting the $500 from future-or-past me, because, you know, those programs are essentially lifetime programs. Just like regular insurance, where you pay more than you get out of it when you’re younger, and less when you’re older.

        So, yeah. Maybe it wasn’t over-the-top, but it was certainly overly reductionist. I don’t think it was a bad post, but it’s clearly misunderstanding the liberal position. If willfully so, then the accusation of strawmanning is valid. If not, maybe coming to a better understanding of the liberal position might be in order.Report

      • Avatar James Hanley in reply to James Hanley
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        says:

        @patrick

        Zed’s making an assumption there that if he exaggerates the minimum wage enough, the liberal will not agree to to that amount. That’s using exaggeration in a reductio ad absurdum manner. (Whether he did so well or appropriately is a different question).

        But where did Zed attribute some completely outlandish and never-actually-heard-of response to liberals? The criticisms here are of what Zed is imagining himself saying. As to the other party, the responses he imagines from her are, I think, entirely plausible responses. That is, whatever you think of Zed’s own arguments, he’s actually being quite fair to the other side.

        The only outlandish comment/thought he attributes to her is one she actually said, about Wal Mart making $400 billion in profits last year.

        If you disagree, please demonstrate where he has unfairly hypothesized a completely ridiculous response from her.

        That’s what my criticism of Schilling is–his attributions are so utterly unlike Zed’s that’s they’re not even in the same ballpark.Report

      • Avatar Patrick in reply to James Hanley
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        says:

        Sorry, I’m jumping in the middle of a conversation you were having with Mike and that may color your impression of what I’m saying. This isn’t about what I think about what Mike said. It’s what I think about what Zed said, and what you said struck an observational chord.

        Zed’s making an assumption there that if he exaggerates the minimum wage enough, the liberal will not agree to to that amount.

        One would think that this is pretty obvious.

        This is like saying to your average center-right dude like Mike Dwyer (who is okay with some level of gun regulation), “Well, you just want private citizens to be able to own TANKS, then?!?” and thinking that’s some sort of interesting conversational point.

        The dispute, between the liberal and the libertarian, is typically that the liberal believes that some degree of wealth transfer is okay (whether or not the libertarian believes this, and to what extent, and what qualifies as a legitimate wealth transfer is a digression).

        To point out to the liberal that some other degree of wealth transfer is *not* okay is largely just illustrating the point that you don’t understand their normative principle. The response is, “so duh?”

        That’s using exaggeration in a reductio ad absurdum manner. (Whether he did so well or appropriately is a different question).

        Well, in this hypothetical land of a conversation that didn’t actually happen, it seems illustrative to me that his hypothetical response to a liberal question is a reducto.

        Reductos work, as a rhetorical practice, when the underlying normative principle is not actually held by the person you’re using the reducto against; they’re making an error in treating a practice as a principle (we’ve already established that you’re a whore, madam, now we’re just quibbling about price).

        If they’re not actually treating the practice as a principle, then a reducto isn’t a constructive argument. “Well, you may think that taking a penny out of the penny jar is okay, but that’s because you’re the sort of person that would just grab money out of the register!” That’s practically a non sequitur.

        If they’re not actually treating the practice as a principle, but you do, then a reducto is even worse, it’s just clouding the issue.

        But where did Zed attribute some completely outlandish and never-actually-heard-of response to liberals?

        Should I point you at a number of comments made by someone on this threat about he was really tired of liberals telling him what libertarians think? Of course he’s going to get pushback on that score. I mean, this is different, how?

        The criticisms here are of what Zed is imagining himself saying.

        Well, that’s why I wouldn’t put this post on the worst list, like Jesse. It’s not *really* a post about this particular liberal, or a post about a conversation with a liberal, it’s a post about an imagined conversation with a liberal from Zed’s perspective… from that viewpoint, it’s a post about Zed, not about libertarianism or liberalism.

        Which is fine.Report

      • Avatar James Hanley in reply to James Hanley
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        says:

        Patrick,

        Sure, actual criticisms of the post are wholly legitimate. I’m a bit hesitant on the ( quasi, I think) reductio, too. It is a bit of a “well, duh.” On the other hand, sometimes going out to “well, duh” territory does help us establish parameters from which we can begin to identify the implicit–often unrecognized–principles of what we’re discussing, as well bringing clarity to the dynamics of the policy preference (as I read Zed doing).

        So it’s not automatically bad. If someone says they’re a 2nd Amendment absolutist, it’s not necessarily wrong to ask them if every American has the right to own a battlefield tactical nuke, even if they react angrily with “of course I don’t mean that.”

        Does Zed use it reasonably here? That may be in the eye of the beholder. I don’t find it terrible, but I think the criticisms are fair.

        Should I point you at a number of comments made by someone on this threat about he was really tired of liberals telling him what libertarians think? Of course he’s going to get pushback on that score. I mean, this is different, how?

        I’m going to rephrase my question a bit. What thoughts does he attribute to the assisstant that you would object to? In the absence of any words or ideas, imputed to her that liberals actually find not unfairly misrepresentative, I don’t see that there’s actually any parralell. And so fsr I don’t see any such criticisms, but as I said, only criticisms of words/ideas Zed atrributes to a libertarian, himself. That’s just not the same thing at all.Report

      • Avatar Will Truman in reply to James Hanley
        Ignored
        says:

        @james-hanley A fictional conversation doesn’t have to have a strawman to be pretty rigged. This was an ongoing thing on The West Wing. You’d have an opposing character debating one of the protagonists, and the latter will lay down some sort of clever argument that Sorkin almost certainly believed was QED and the other person would leave or stammer as though he or she had never heard that before and had no response because there was no response.

        At no point were the opposing characters saying something that isn’t said, but they were jobbing and it they were there to lose. This post did sorta remind me of that (though I can accept Mark’s interpretation of it, too).Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        Sooooo, the writers of the West Wing used Plato as their model? 😉Report

  8. Avatar Kim
    Ignored
    says:

    So, nu, I have to ask. Was Dentist lying when he called her a communist?
    (Around here, Republicans hire communists and boast about it).Report

  9. Avatar clawback
    Ignored
    says:

    A similar imaginary conversation probably went through her mind. In it, libertarians all think a $50/hr minimum wage is exactly the same as a $10 one, and they all think of taxes as theft.Report

    • Avatar TrexPushups in reply to clawback
      Ignored
      says:

      Yes at some point a difference in scale becomes a difference in kind.

      For example drug X relieves pain effectively when given at 50mg but when you give the patient 500mg they die.

      And that is why the entire attempt to reductio the minimum wage is flawed from the beginning. It is like responding to a discussion about the best dosage with demanding that the medicine be banned entirely.Report

  10. Avatar j r
    Ignored
    says:

    Are we sure that Major Zed is not actually a Salon columnist?Report

  11. Avatar nevermoor
    Ignored
    says:

    “You mean taxpayers, like me. Basically, you got that 500 dollars from me.”

    This is significantly more false than true. Much of that savings comes from creating a group market to replace the individual markets pre-ACA, which creates stronger market-based price controls. Not as strong as a public option would have been, of course, but significantly stronger than before.

    Care to retract?Report

    • Avatar Gabriel Conroy in reply to nevermoor
      Ignored
      says:

      @nevermoor

      I’d say it’s more false than true, but in a different way. It’s not as if Zed got $500 taken from him and that whole $500 was given to the hygienist. It’s that he paid his taxes (and presumably the hygienist paid hers), a portion of which taxes, combined with a portion paid by a large number of others (both through taxes and through less visible mechanisms like the mandate, guaranteed issue, and local area pricing), created a benefit roughly equivalent to $500. At the same time, Zed likely benefits in some ways from tax appropriations taken from
      others.

      Some will benefit more, and redistribution happens, and it’s not always the ones we want to benefit. And for all I know, Zed is a net taxpayer. But it’s not all as simple as, horror of horrors!, he has been taken from and what’s been taken has been given this less than grateful liberal (who, I admit, is not really a straw man, but is only part of the picture), with nary anything in return except an empty pocketbook and, presumably, homelessness, starvation, and despair.

      Tl;dr: To say, “that money was taken for me and given to you” is an oversimplification.Report

      • Avatar Gabriel Conroy in reply to Gabriel Conroy
        Ignored
        says:

        There is a liberal (or at least liberal-friendly) counterpart to this, too. Consider the case for mandating that car riders wear seat belts. The argument is that third parties bear the costs of taking care of the injured (e.g., through emergency medical services). And that’s good as far as it goes. But to hear some (maybe a minority of proponents, and I exaggerate for effect) state it, their tax bill is just going up and up, all because these people don’t wear seat belts, and what we need is some regulation to save us all, when it’s really just a drop in the bucket.Report

      • Avatar Gabriel Conroy in reply to Gabriel Conroy
        Ignored
        says:

        I probably should’ve read Zed’s comment below before I wrote above. But I do find that phrasing a bit shrilly.Report

  12. Avatar Lowbrow Liberal
    Ignored
    says:

    At first I thought this might be one of those tongue in cheek double reverse “Stuff so freaky No True Libertarian would say it” things that Hanley is always yelling at me for suggesting.
    I mean, what are we to make of this-
    “So why is it OK for Obama to take [500 dollars] from me and give it to you?”

    Its funny- in every county of every state in America there is a coercive governmental apparatus that establishes a monopoly definition of property boundaries and rights; a massive structure of courts, judges, police and sheriffs interpret and enforce this system as well as its companion system of contract rights. Together, these confer a tremendous unearned benefit upon everyone here, including Major Zed.
    The State literally takes money out of my pocket, and gives it to property owners, in the form of protection and enforcement of contract.

    And everyone here, including Major Zed, seems to believe this is legitimate, an example of Legitimate Coercion.

    But when that same government takes money from his pocket and gives it to another person…damn, if that doesn’t stick in his craw!

    And its not the amount, mind you- its not like Zed is hungry, and being impoverished. No, its the principle of the thing, which is an outrage, an injustice!

    So what is going on here? How does Zed sort things out, into 2 piles, this one called Legitimate, and that one called Illegitimate?Report

    • Avatar Jaybird in reply to Lowbrow Liberal
      Ignored
      says:

      And everyone here, including Major Zed, seems to believe this is legitimate, an example of Legitimate Coercion.

      Eh. There are a handful of folks here who are more likely to link to news stories about police officers shooting dogs and discussion of whether law enforcement and its attendant prohibitions, imprisonment, probation, and disparate impact does more harm than good.Report

    • Avatar James Hanley in reply to Lowbrow Liberal
      Ignored
      says:

      The State literally takes money out of my pocket, and gives it to property owners, in the form of protection and enforcement of contract.

      You make it sound as though the state isn’t protecting your contractual and property rights as well as others.

      There is a distinction between things that are collective benefits and those that are private benefits. You can make an argument for public funding of each, but pretending one is like the other is analytically problematic.Report

      • Avatar nevermoor in reply to James Hanley
        Ignored
        says:

        Where are the edges of the two definitions?

        How does your answer to the first question survive Anatole France’s quote?Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        2nd question first, whatever the edge of the definitions, I think it survives France’s quote. His quote is about law not equalling justice (with which I agree). It’s not about collective vs. individual benefits.

        As to the edge of the two definitions, I assume you’re talking about boundary cases? I’m sure there are some. I always like to point out that the categories we devise reflect the real world, but are imposed on it to make things more orderly and understandable for us–the real world is never quite as perfectly distinct as our categories pretend. So I can’t shy away from that now.

        But in general, here’s the scheme I use to distinguish types of goods.* Public goods are clearly collective goods, common-pool resources are as well. Private goods, by definition, are not collective goods. What the graph calls “low congestion goods” (and which are more often called “toll goods” are examples of boundary cases in a way. Sometimes they work well when provided privately (like movie theaters), and sometimes they work well when provided collectively (like parks).

        I don’t think those are the only boundary cases. Some private goods have positive externalities. For example, the colors of my house–when I was repainting it (from two-tone gray and white to cream, green and tan), people actually took the time to stop when driving by to say how much they liked it. They got a benefit at my cost. To the extent a private good has positive externalities, we predict it will be undersupplied by the market, because the purchaser cannot capture the full value (I can’t stop people from looking at my house for free, can’t find an effective way to charge them for the pleasure they receive from my expenditures). So there is a certain aspect of collectiveness there, and so theoretically government subsidization of private goods with externalities is justified (in practice, it’s not easy to get the right amount of subsidies).

        I put education in the class of private goods with substantial externalities (although some argue it’s more of a public good), so I’d classify it as a boundary case.

        If paying for someone’s health care prevents negative externalities by reducing incidence of communicable diseases, then it’s a boundary case, too.

        If none of this is clear, or if it all missed the point of your question, I apologize and will try again.
        _______________
        *I don’t know how familiar you are with this approach. In that diagram, “excludable” means how easy it is to exclude someone (non-payers, particularly) from using the good. E.g., it’s easy to exclude someone from using your car, but harder to exclude someone from swimming in Lake Superior. This can be based on either technical issues (it’s theoretically possible to fence of Lake Superior, but it’d be very costly), or on legal requirements (it’d be easy to exclude anyone from public schools, but as a matter of law we make it hard).

        Rival and non-rival refers to whether your use of the good diminishes my use. A chair is rivalrous, since we can’t comfortably use it at the same time. A movie theater is mostly non-rivalrous, since my use won’t constrain your use (up to a point–congestion is possible at some level).

        Those two dimensions give us 4 categories that really do seem to cover all types of goods. But for my students I draw it with dashed lines instead of solid lines, to indicate that the boundaries aren’t quite so determinate–that some examples are not so wholly within one category as are some other examples.Report

      • Avatar clawback in reply to James Hanley
        Ignored
        says:

        Which one is the collective benefit? The one that only helps people involved in property or contract disputes? Or the one that only helps those in need of health insurance?

        And which one is the private benefit? The one available to everyone should they ever have a property or contract dispute? Or the one available to everyone in case they’re ever in need of health insurance?

        So confusing.Report

      • Avatar Jaybird in reply to James Hanley
        Ignored
        says:

        You mean like in Kelo vs. New London? Or in the affordable care act acting as a subsidy to big business?Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        Clawback,

        That the subsidy helps people based on circumstance, rather than status, does, I’d say, make it more of a collective good than it would otherwise be. To some extent, I agree, safety nets have aspects of collective good-ness.

        But the legal system surrounds and benefits us all even when we are unaware of it, by creating deterrence. So it’s more definitively collective goodish. You really can’t not benefit.

        LWA’s comment that, “these confer a tremendous unearned benefit upon everyone here, including Major Zed.
        The State literally takes money out of my pocket, and gives it to property owners, in the form of protection and enforcement of contract,” demonstrates a real lack of understanding. We all own property, even the homeless (who especially need the law to protect their property precisely because they have so little to spare), and anyone who has a cell phone, or pays someone to do a home repair, is in a contractual relationship, and benefits from the presence of the law.

        LWA’s attempt to characterize the legal system as a sort of special privilege is a really fundamental error.

        (And to the extent that our real-world legal system does in fact sometimes function as a system of privilege, that’s a deviation from what it is meant to be–I am not trying to claim it always works as it is supposed to.)Report

      • Avatar nevermoor in reply to James Hanley
        Ignored
        says:

        Got it. I was reading you a bit differently (contract enforcement is a common good because it protects everyone, oil subsidies are a private good because they directly benefit the few). Obviously, the step is from there to an argument that the ACA provides something more like a common good than a private one in that it is available to everyone, and everyone benefits from its existence whether or not they currently use exchanges for insurance (and the point of the France quote is that many facially “common” goods really only apply to rich people).

        It sounds like you are thinking about the distinction slightly differently, but I’m having a hard time coming up with a concrete example that doesn’t fit my mold.Report

      • Avatar Lowbrow Liberal in reply to James Hanley
        Ignored
        says:

        I do understand the difference between private goods and public goods- but why is so econometric a logic the preferred way of determining Legitimate versus Illegitimate uses of government power?

        I could just as easily assert that things which produce a more just society or things that promote the dignity of the human person (such as universal medical care), private or not, are the proper way of analyzing legitimacy.

        The argument that “property rights protect everyone” versus “health care only benefits those individuals” seems like a remarkably convenient way of socializing one thing, and privatizing another- as if that dental hygienist gained as much benefit from Obamacare as Bank of America does from property and contract protection., as if she is the one getting a free ride, not the bank.Report

    • Avatar James Hanley in reply to Lowbrow Liberal
      Ignored
      says:

      I do understand the difference between private goods and public goods- but why is so econometric a logic the preferred way of determining Legitimate versus Illegitimate uses of government power?

      To be clear, I didn’t make that argument. I only pointed out that your example shifted from one to the other without accounting for that shift, implicitly treating the two categories identically. When we have two categories, we may be able to treat them as identical for some purposes, but it requires that we justify doing do, that we explain why the distinction doesn’t matter in this case. Of course we have to do the same for treating them differently, because the difference may not matter in all cases.

      That tangent, in conjunction with my discussion of boundary cases, sets up my direct answer to your question.

      1. Public/collective goods are predicted to be undersupplied by the market, so if we want them (and presumably we do), government is the necessary source.

      2. Private goods are, by definition, not publicly beneficial. So as a beginning point they require a different, presumably moral, justification. (If the private good has sufficient positive externalities, that requirement may not fully hold, but that determination requires a case-by-case examination.)

      3. Moral theories cannot justify all public supply of private goods. None of us, I think, would argue that the public should be taxed to subsidize a new television show for the Kardashians should theirs fail. Many liberals agree with libertarians that public funding of sports stadiums to benefit billionaire sports team owners is not morally justified.

      4. Therefore, while public funding of public goods is automatically justified, we have to specially justify private goods as an exception to the class in order to justify publicly funding them.

      5. Moral justifications are the the source, but they are most often used carelessly, without sufficient moral reasoning. Good arguments can be made in some cases, but a) weak arguments are the norm, and b) even the good arguments can never be definitive, but are entirely dependant on the normative assumptions one brings to them (and being assumptions, they are not themselves subject to justification, but can only be more or less widely shared, a characteristic that is not in itself either a justification or disjustification for them).

      In summary, public funding of private goods is inherently more contingent on justifications of exceptional cases than public funding of public goods, and the nature of those justifications is inherently contingent as well. It can probably be done in some cases, but it always rests on an infirm and debateable foundation.Report

      • Avatar Lowbrow Liberal in reply to James Hanley
        Ignored
        says:

        Moral arguments depend on the normative assumptions? Of course- what doesn’t?

        Do you have some other justification for why property rights and contract rights justify legitimacy, that isn’t based somewhere on a moral premise?Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        Do you have some other justification for why property rights and contract rights justify legitimacy, that isn’t based somewhere on a moral premise?

        Depends if you consider utilitarianism a moral principle. I think it probably is, but I seem to remember you treating it as not being one (libertarians are utilitarians, libertarians are morally agnostic; wasn’t that your argument?). So, curiously, we each seem to be standing on ground the other would favor.

        But you dance around the main point, which is that collective goods–such as a legal system–require government in a way that private goods do not. That distinction is not based on normative judgements.Report

      • Avatar LWA in reply to James Hanley
        Ignored
        says:

        No, I completely agree with you that public goods require government much more than private goods, as you say, almost by definition.

        But private goods often DO require government, when it becomes clear that the purpose (such as assuring health care is easily and universally available) is not being achieved otherwise.

        And if you want to assert that your moral valuation is superior, I am fine with that as well. But lets call it what it is, a different valuation of moral priorities.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        But lets call it what it is, a different valuation of moral priorities.

        Yes, that’s what I said.

        But in theory, public goods do not require that clash of values (although in practice determining how much, and their exact parameters, can). Providing private goods creates that clash of values even in theory.

        That is, I can suggest we should provide a legal system without saying, “because my rights claim trumps your rights claim.” The moment I suggest providing private goods, I’m claiming my rights claim does trump yours.

        Noticeably, you have never developed a good moral argument for your claims. You often say, “thay’s just what society has decided are its values, and it’s a mystery how we get there.” But that’s not a good justificatory argument. It’s a position that equally would have justified slavery in the 19th century, and been a critique of abolitionist moral arguments. It’s a strength-in-numbers argument, not a moral one. And in this thread you seam to assert that some needy person has more right to marginal increments of Zed’s money than does Zed, but that’s a moral claim, not a moral argument that justifies that claim.

        My point there is that these moral arguments are difficult (not impossible) and contestable. The arguments for providing public goods are much less difficult and contestable. You asked, originally, how they were different–there’s your answer.Report

  13. Avatar Jesse Ewiak
    Ignored
    says:

    Well, this is in a strong race with Kowal’s “the liberals are meanies” post for worst post of the year awards on this blog. At least Kowal had actual examples, even if they were severely hyperbolic to point too.Report

    • Avatar James Hanley in reply to Jesse Ewiak
      Ignored
      says:

      To be fair, the requirement for nomination for Jesse’s worst post of the year award is only that a post must hint at a critique of liberals or liberalism. So it’s not a big honor to be considered.Report

      • Avatar Jesse Ewiak in reply to James Hanley
        Ignored
        says:

        Nah, I totally disagreed with Tod’s week of BSDI, but they weren’t bad posts. I totally disagreed with your Constitutional Amendment on Rent-Seeking, but it wasn’t a bad post. This was a bad post I’d expect to see in the comments of a National Review blog. But, I realize I’m a bad person because I still haven’t bought into any of the tenets of libertarianism, James.Report

      • Avatar Jesse Ewiak in reply to James Hanley
        Ignored
        says:

        I mean, I realize I’m can’t give out a big honor, as opposed to your “you didn’t point out every libertarian is a special snow flake, so you’re nothing but an ideologue for possibly treating libertarians as an actual movement” award, James, but us leftists do what we can.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        libertarian is a special snow flake

        The problem is, I haven’t yet decided if it’s because we’re all white or if it’s because of our ideological purity, so I haven’t actually been able to choose a winner yet.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        I realize I’m a bad person because I still haven’t bought into any of the tenets of libertarianism, James

        Really, Jesse, you think that’s why I don’t respect you? How then, to explain my respect for Chris, LeeEsq, Saul DeGraw, greginak, Zic, Patrick, Michelle, and others?

        Clearly, not buying into libertarianism isn’t the causal variable here.Report

    • Avatar clawback in reply to Jesse Ewiak
      Ignored
      says:

      At least Kowal had actual examples

      Well, this post had an actual example of a dental assistant using accounting terms incorrectly. So there’s that.Report

  14. Avatar trizzlor
    Ignored
    says:

    “You mean taxpayers, like me. Basically, you got that 500 dollars from me.”

    My neighbor had a fire recently and a firetruck came to put it out. We pay about the same in taxes to the city and I’ve never had a fire. Did my neighbor, basically, take money out of my pocket by making use of fire and police services?Report

    • Avatar Mike Schilling in reply to trizzlor
      Ignored
      says:

      You got screwed, You need to have a fire to get even.Report

    • Avatar Major Zed in reply to trizzlor
      Ignored
      says:

      My neighbor, too, had a fire some time ago, and boy was I glad to see the firetrucks come. I feel about fire and police protective services about the same way I do about insurance – you are paying into a risk pool, and the very best outcome is not needing it to pay off.

      Now, a more radical libertarian would argue that fire protection can, and should, and used to be provided privately. (I’m not well-versed in the history, but apparently there were coordination problems; Insco A’s trucks would not respond to an Insco B client, etc. Nowadays, with subrogation between insurers being so routine, I expect that would not be much of an issue.) But privatizing fire protection would be WAAAYY down on my libertopia wish list.

      But that doesn’t address your point. Maybe I’m not sure what your point was. Is it that someday it could be me needing help paying my health insurance premiums, that subsidies are a form of insurance, and I should react to them accordingly? Subsidies for insurance as meta-insurance?Report

      • Avatar James Hanley in reply to Major Zed
        Ignored
        says:

        Now, a more radical libertarian would argue that fire protection can, and should, and used to be provided privately.

        Yes, at least on the “used to be” part. The history shows that it can be done, despite what most people think. “Used to be” and “can” do not, of course, imply “should.”

        But privatizing fire protection would be WAAAYY down on my libertopia wish list.

        Exactly. Even if I cared enough to say we “should,” it would still be so far down on the priorities schedule that I wouldn’t put any effort into trying to make it so.Report

  15. Avatar Mark Thompson
    Ignored
    says:

    Is it possible that just about everyone is missing what this post was about? If this is intended as an ultimate argument for libertarianism and against liberalism, then yeah it falls pretty short. But I don’t think that’s what he’s trying to get at; instead, it’s a rumination on an experience – it seems to me that it’s really about regret for being scared of discussing political beliefs in the real world. It may even also be about assigning too much importance to politics, though I’m less certain of that.

    Regardless, the lines that are most prominent in this story are lines about our interlocutor’s fear of getting into these types of issues in a real life situation. And certainly the lines intended to be the most important of all are “Just then, Dr. L. walked in and said,

    “Don’t listen to her, she’s a communist.”

    And they proceeded to work on my teeth.”

    …with that very last sentence given the greatest importance.

    The dentist, for what it’s worth, is pretty obviously not saying that her assistant is actually a communist, but instead is clearly just teasing lightly. The main point of that line is that it shows that the dentist has had no problem discussing politics with her assistant and that she disagrees pretty strongly on those views. It sets up the final line “And they proceeded to work on my teeth,” which is an acknowledgment of how silly Major Zed’s initial fears were.

    Zed, for what it’s worth, is someone with a pretty good handle on the weaknesses in his own beliefs. He is, after all, the guy who wrote this: https://ordinary-times.com/blog/2012/12/12/lybertopia
    So I think the assumption that this is intended as some sort of crushing argument against liberalism and/or for libertarianism is woefully misplaced.Report

  16. Avatar zic
    Ignored
    says:

    So Wal-Mart made $16B in profits last year?

    Employees at each Wal-Mart supercenter takes in about $1m in public assistance, annually.

    Source: http://thinkprogress.org/economy/2013/06/07/2120711/walmarts-low-wages-cost-taxpayers-millions-each-year/

    There are, according to Statistics on the Brain, 4,253 Wal-Mart stores in the us; more then half of them are Super Centers. So not counting the smaller stores at all, we’re looking at something in the neighborhood of $2B to $4B taxpayer-funded safety net subsidies for Wal-Mart employees. So please explain to me why there’s any sort of issue with a minimum wage that’s closer to the poverty line while the company earns $16billion in profit.

    I’ll also point out that 70% of these employees are women. Most are refused full-time work, and they are ineligible for the company’s health-care insurance benefits, which are already overpriced.

    And MajorZed should know that people who work at medical offices are probably not eligible for ACA subsidies. Most medical offices offer employees insurance. You cannot purchase through the exchanges or get a subsidy to help offset the cost of insurance purchased through the exchanges if your employer offers insurance.

    Wal-Mart workers, on the other hand, who only work part time, probably have nearly all of their insurance costs subsidized.Report

    • Avatar Kolohe in reply to zic
      Ignored
      says:

      So let’s get rid of the safety net. That’ll teach the Waltons a lesson.Report

    • Avatar James Hanley in reply to zic
      Ignored
      says:

      I renew my objection to the claim that Wal Mart is costing the public money, or us being subsidized, through public assisstance. In the absence of those jobs, those employees would be eligible for even more public assisstance. If Wal Mart hired its workers full time, at higher wages, it would release a great number of its current part-time workers, who would require public assisstance.Report

      • Avatar zic in reply to James Hanley
        Ignored
        says:

        I’m skeptical.

        First, if Wal-Mart hadn’t driven most of the other regional retailers out of business, those workers would have other jobs.

        Second, you have to consider the job loss to to outsourcing, and Wal-Mart’s role in that. Now I’d be open to arguments about people lifted out of poverty in developing nations by this; but only if we recognize that this effort of globalization translates to transferred pollution and a lowering of the US standard of living for lower-income households closer to that of developing 3rd-world countries.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        First, if Wal-Mart hadn’t driven most of the other regional retailers out of business, those workers would have other jobs.

        I say that’s largely myth, but assuming it’s true, it’s a myth to believe all those jobs would have been full time high wage jobs?

        Second, you have to consider the job loss to to outsourcing, and Wal-Mart’s role in that.

        There is no net job loss from outsourcing, and it’s disingenuous to single out Wal Mart. With or without them, trade was going to increase. That type of outsourcing was driven by containerization and the relaxation of capital controls.

        Now I’d be open to arguments about people lifted out of poverty in developing nations by this; but only if we recognize that this effort of globalization translates to transferred pollution and a lowering of the US standard of living for lower-income households closer to that of developing 3rd-world countries.

        You make it sound as though free trade is a net impoverisher. It’s not an unmitigated good, certainly, but it does increase wealth. Self-sufficiency is the road to poverty.Report

      • Avatar Stillwater in reply to James Hanley
        Ignored
        says:

        There is no net job loss from outsourcing,

        Sure there is. Assume a hypothetical with 100% employment in a domestic economy in which the entire plastics sector outsources to a foreign country. Job loss, no? Of course, maybe you’re viewing this over a longer time frame in which the profits derived from outsourcing trickle into the economy resulting in the creation of new jobs over time. But that doesn’t mean that there weren’t, at time T, job losses. It also doesn’t mean that the newly created T2 jobs will pay as well as the lost T1 jobs.

        I want to add that I hope you don’t take what I wrote as a criticism of the type of economics (I think) you support. It’s actually just a description of that economics, no?Report

      • Avatar Jaybird in reply to James Hanley
        Ignored
        says:

        Perhaps he’s also looking at the employment of the unwashed hordes overseas as part of his count.Report

      • Avatar Stillwater in reply to James Hanley
        Ignored
        says:

        If that’s the case, Jaybird, then he isn’t engaging in a dialogue with zic, since she’s talking about domestic economy issues.

        I mean, that’s a good point. Of course. But a different one, yes?Report

      • Avatar Stillwater in reply to James Hanley
        Ignored
        says:

        By the way, you could have made the same point without throwing out a term like “the unwashed hordes” which I can’t help but interpret as mocking the views of folks you disagree with and certainly doesn’t encourage further dialogue about the issue.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        Stillwater,

        Yes, I should specify that I’m talking about across time, not at a slice in time. It’s what economists always mean when they talk about trade and jobs. Sorry that I assumed that without spelling it out.

        I’d also add that free trade doesn’t create jobs across time, either. It just changes the composition of jobs, while allowing for goods (and some services) to be produced more cheaply. (Krugman has an essay in one of his pop econ books from the ’90s, where he lambastes both sides kn the NAFTA debate, both those who claimed it would destroy jobs and those who claimed it would create jobs.)

        The key is that across time trade is a net win. We can help displaced employees through transitions, of course, but to reject trade because people get displaced is to make our future–and our future generations–poorer.Report

      • Avatar Jaybird in reply to James Hanley
        Ignored
        says:

        He did say “net”.

        This is one of those weird things where I can’t help but notice that liberals seem to very much dislike the idea of foreigners taking “our” jobs unless they happen to be taking jobs on American soil because they’re here illegally.

        Is it because the foreigners on American soil can be counted on to vote ‘D’ while those overseas can’t be?

        Otherwise, I don’t understand the dynamic.Report

      • Avatar trizzlor in reply to James Hanley
        Ignored
        says:

        Is it because the foreigners on American soil can be counted on to vote ‘D’ while those overseas can’t be?

        Illegal immigrants can’t vote. And I’m not aware of any liberals who “like” the illegal immigrant situation, are you?Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        Jaybird,

        OK, I should also have specified domestic, although you’re right that it’s true internationally as well. But it’s not merely a case of “foreign” job creation offsetting domestic job loss, but of two domestic job markets not being harmed–in the long run–by trade.

        I have to say, though, that I think you’re being unfair to liberals. An awful lot of conservatives (those who aren’t beholden to business, largely) hate foreigners “taking” “our” jobs. There are even a small number of libertarians whose libertariainism is wholly internally focused and oppose outsourcing because fish furriners.Report

      • Avatar Jesse Ewiak in reply to James Hanley
        Ignored
        says:

        Well @jaybird foreigner’s only vote D because R’s have been xenophobic idiots for the past twenty years or so. For instance, the Canadian Conservative party has built a strong bench of voters that consist of immigrants and their children. So has the UK Conservative Party. Hell, the Asian populace largely voted for Republican’s until the early to mid 90’s.Report

      • Avatar Jaybird in reply to James Hanley
        Ignored
        says:

        Sure they can’t.

        And I’m not aware of any liberals who “like” the illegal immigrant situation, are you?

        Well, other than Obama, I don’t know of any liberals who argue that immigrants who are here illegally ought to be deported.

        (I understand the liberal argument about immigration to be of the form “we should make it easier for those here already to become citizens rather than deport them.” Am I wrong on that one?)Report

      • Avatar trizzlor in reply to James Hanley
        Ignored
        says:

        So liberals don’t like it when legal domestic workers get screwed by outsourcing, and they want to incorporate illegal domestic workers that have taken up roots so they don’t get screwed by illegal employers. And you see hypocrisy?

        It seems like you’re starting from an assumption that liberals don’t like foreigners and then criticizing liberals for not being consistent in hating on foreigners. Perhaps a more generous explanation is that liberals like domestic workers?Report

      • Avatar Jaybird in reply to James Hanley
        Ignored
        says:

        An awful lot of conservatives (those who aren’t beholden to business, largely) hate foreigners “taking” “our” jobs.

        Of course they do. I was taking that as a given. I figured that that was the general conservative position. (Perhaps with a bit of “if you want an American job, become a citizen first” mixed in, depending on how much they believe in pulling the ladder up after themselves.)

        There are even a small number of libertarians whose libertariainism is wholly internally focused and oppose outsourcing because fish furriners.

        I admit that I don’t understand the position that Liberty means telling other people where they can move and under what circumstances. But, sure. I’ve met a handful of those too. Most libertarians I know, however, have the attitude of “people who want to move here are the people that we want to move here”.

        And, more to the point, they tend to be against deportation and supportive of even illegal immigrants trading their labor… but they’re also supportive of foreign trade so that strikes me as less interesting where this particular dynamic is concerned.Report

      • Avatar Jaybird in reply to James Hanley
        Ignored
        says:

        And you see hypocrisy?

        No, I see a dynamic that I don’t understand.

        Imagine, if you will, hundreds of millions (perhaps even more than a billion!) of Asians being pulled out of fourth-world “dollar a day” lifestyles into something approaching modernity due to such things as international trade and, yes, outsourcing in a handful of generations (even living memory for some!).

        The Neoliberal response to this dynamic makes a lot of sense to me. Overlooking this dynamic does not make sense to me.Report

      • Avatar Jesse Ewiak in reply to James Hanley
        Ignored
        says:

        @jaybird …all that and two bucks will buy the former union tool & die manufacturer a cup a coffee during his 10 minute unpaid break at Wal-Mart.Report

      • Avatar Patrick in reply to James Hanley
        Ignored
        says:

        You’re not enough of a tree-hugger, and you’re forgetting how the Wal-mart folks siphon off all the profit.

        Pollution and Anti-corporatism.Report

      • Avatar trizzlor in reply to James Hanley
        Ignored
        says:

        Imagine, if you will, hundreds of millions (perhaps even more than a billion!) of Asians being pulled out of fourth-world “dollar a day” lifestyles into something approaching modernity due to such things as international trade and, yes, outsourcing in a handful of generations (even living memory for some!).

        I’m going to be honest, if someone were to ask me what mechanisms are effective in developing the third-world, the answer “just have Wal Mart come in and set up shop however they want” isn’t going to be at the top of my list. If that also implies lost jobs here it doesn’t make the option any more attractive.

        Still, I’m sure there are plenty of liberals that value domestic jobs over third-world development, and would balk at any kind of outsourcing even if it were effective for the latter. But their simultaneous support for paths to citizenship is direct evidence that this is about domestic labor protectionism and not about some kind of fear of “unwashed hordes”.Report

      • Avatar Will Truman in reply to James Hanley
        Ignored
        says:

        I find it interesting when views on immigration and trade differ dramatically. I can understand rationales for it, though people who feel strongly will often make contradictory arguments (either between the two issues specifically or between what they’re saying on this issue and what they would say on another with similar implications).

        I tend to favor both trade and immigration, up to a point. The distinctions I make, to the extent that I make them, usually result in differences in my appraisal to the answer to the question of “Is this good or bad for Americans?”

        Since that’s the primary question, I can’t really claim that I support free trade because it is great for undeveloped countries that are picking up a manufacturing sector, which I think it is and is definitely an added benefit in my mind. Likewise, talking about how great it is that people from undeveloped countries can become Americans… well, same deal. It’s great and I like doing it, but I can’t really claim that’s why I tend to be supportive of immigration. Because, if we ever approach the post-work economy, my support for immigration falls through the floor.

        Of course, putting American interests first is rejected by a lot of folks, including folks who oppose outsourcing vociferously. But even that can be logically worked with, if they reject the economic models involved (which then becomes the source of disagreement).Report

      • Avatar Saul DeGraw in reply to James Hanley
        Ignored
        says:

        @james-hanley

        I’m also skeptical. How many WM employees used to work in better paying manufacturing that was outsourced? Or for local businesses? Wal-Mart can come in and shut down local merchants.Report

      • Avatar Road Scholar in reply to James Hanley
        Ignored
        says:

        @james-hanley : Self-sufficiency is the road to poverty.

        Which is why you’re doing all your own home-remodeling work instead of hiring a contractor.

        Oh, wait…Report

      • Avatar Road Scholar in reply to James Hanley
        Ignored
        says:

        @jaybird : This is one of those weird things where I can’t help but notice that liberals seem to very much dislike the idea of foreigners taking “our” jobs unless they happen to be taking jobs on American soil because they’re here illegally.

        Is it because the foreigners on American soil can be counted on to vote ‘D’ while those overseas can’t be?

        You disappoint me, JB. That’s precisely the sort of cynical supposition that I would expect from political animals of the other stripe.

        I won’t claim to speak for anyone other than myself here, but I figure that immigrants, whether legal or illegal, not only claim jobs but also consume goods and services that are provided by others in the economy. So a million immigrants will roughly consume as much in goods and services as they produce, which have to be provided by others in the economy. In effect, immigrants create their own jobs by increasing aggregate demand. Even non-working family members increase aggregate demand since they still have to eat, even if they’re on public assistance.

        That same dynamic doesn’t work for outsourcing unless trade is balanced. Which it isn’t and hasn’t been since 1975.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        I’m also skeptical. How many WM employees used to work in better paying manufacturing that was outsourced? (/em>

        Probably not many. If you want to claim so, show me the evidence.

        Or for local businesses?

        Local businesses usually don’t pay their employees much.

        Wal-Mart can come in and shut down local merchants.

        No, they can come in and compete. And if customers prefer them to the local business, then why should we get all romantic about local businesses that did an inferior job of meeting people’s needs? And why do we single out Wal Mart? Why not K-Mart, Target, Kohls, Meijer? Why not Walgreens and CVS, as local pharmacies dwindle?Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        @road-scholar

        Heh, yeah, I asked for that.

        But it doesn’t actually undermine the claim. Part of the answer is that through my labor I’m buying satisfaction. Another part of the answer is just that economic fundamental of having limited resources and having to make tradeoffs–I don’t do everything myself, only certain things,mand some of the things I do “myself” I actually do as an on-going labor exchange with a friend; not paying a professional in cash doesn’t mean I’m not paying someone to do some of the work for me.

        And of course I’m not cutting my own timber, sawing my own lumber, mining my own ore and coal so I can refine my own steel so I can make my own nails, drills, drill, bits hammers, and saws, nor am I trying to make my own roofing materials. I’m more “final assembly” than self-sufficient.

        And of course because I work more slowly, and with somewhat lower quality, than professionals, the value of my house is less than it otherwise would be at this point, and my family lives in something less nice than they otherwise would.

        I’m fully aware that my preference for doing things myself does in fact have these wealth costs. I make no pretence otherwise.Report

      • Avatar zic in reply to James Hanley
        Ignored
        says:

        To understand the impact of Wal-Mart on local economies, you have to consider several things.

        First, the loss of other retail options. Wal-Mart (and other larger retailers) will come into a town, open to big fanfare with extremely low prices, and run the store at a loss until the local competitors have closed. Then there’s some price creep.

        Second, is the outsourcing of manufacturing jobs. And this is the place where there’s a huge amount of ignorance going down in this thread. Supplying a large retailer is a numbers game. Jobs weren’t just outsourced because it was cheaper to make stuff in China, they were outsourced because of the quantity of stuff needing to be made to feed Wal-Mart’s shelves. Think of it as free-market centralization. But what happened put small and mid-sized manufacturers out of business because they couldn’t make enough for Wal-Mart and at the same time, lost their local retail outlets. Yes, the internet has helped, but it didn’t help fast enough for many regional industries. There are fewer jobs and for many types of products, fewer competing options today; particularly for products made in the US. I read yesterday that 80% of Wal-Mart’s products are imported from China. I won’t even get into quality issues, but much of what’s sold in Wal-Mart is only good for a few uses, and rises to the level of fraud imo.

        I live in a place that has traditionally done small-scale wood manufacturing, and all but a handful of mills (which once numbering in the thousands) are closed, the jobs displaced to China. When this was happening, I interviewed one mill owner who’d just returned from a trip there. He told me that he realized his industry was doomed here in the US, because the Chinese were not only making the wood products, but they were also beginning to make the milling equipment necessary to make the wood products.

        Now at the time, his company faced not only foreign competition, but health-insurance price increases; and it was the one-two punch that put most of these businesses under.

        So not only are the jobs gone, but here, we face the problems of decaying unused mills (and there are some significant environmental problems with them), but lower-quality replacement products, people who are marginally able to afford to survive, and the loss of an important part of our cultural heritage.

        You cannot make an argument about domestic politics on the one hand, and then when domestic problems due to free trade arise, dismiss them out of hand on the other. Politics are local, and the fallout from much of free trade creates local political conundrums. My neighbor does not really care that someone in China is benefitting from the job he used to do; but he’s pretty grateful he can now purchase insurance for his family and that it doesn’t cost over half his annual income.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        Wal-Mart (and other larger retailers) will come into a town, open to big fanfare with extremely low prices, and run the store at a loss until the local competitors have closed.

        That’s the claim, but where’s the evidence? Does anyone really believe that Wal Mart and the others sees their main competition as Mom ‘n Pop’s Haberdashery? They’re focused on each other.

        And even were it true, you’re ignoring consumers. They benefit from price competition.

        And it’s faulty to assume consumers had more retail options in the old days. There may have been an absolutely greater number of stores, but there was a lower absolute number of types of goods available to them.

        Second, is the outsourcing of manufacturing jobs. And this is the place where there’s a huge amount of ignorance going down in this thread. Supplying a large retailer is a numbers game. Jobs weren’t just outsourced because it was cheaper to make stuff in China, they were outsourced because of the quantity of stuff needing to be made to feed Wal-Mart’s shelves. Think of it as free-market centralization. But what happened put small and mid-sized manufacturers out of business because they couldn’t make enough for Wal-Mart and at the same time, lost their local retail outlets.

        You need to be careful about accusing others of ignorance when you’re going to say something inaccurate. The idea that American manufacturing couldn’t produce enough goods is non-sense. What they couldn’t do is make enough goods at a competitive value. If it was simply about making “enough” goods, Asian countries would have just been overflow producers, they wouldn’t have taken it all. The real key is that Wal Mart’s core business is in goods that don’t require highly skilled labor, so that countries with inexpensive labor had an absolute advantage. (And, again, containerization–it is the true driving force in this, through reducing shipping costs by 90% and more.)

        I won’t even get into quality issues, but much of what’s sold in Wal-Mart is only good for a few uses, and rises to the level of fraud imo.

        Some of their items are crappy, yes. But not all of their stuff. And I really get incensed when relatively well-off people snark about price/quality at Wal Mart, because you’re showing your disdain and lack of concern for people who can’t afford to spend on good quality. Yes, sometimes it’s worthwhile to save up and do so, but sometimes less well off people just need something now. A used Chevy Malibu isn’t the quality of a new Mercedes, but it’s a better value for poorer people.

        This is especially the case for children’s clothes, when kids outgrow them so quickly.

        I live in a place that has traditionally done small-scale wood manufacturing, and all but a handful of mills …. are closed, the jobs displaced to China. …So not only are the jobs gone, but here, we face the problems of decaying unused mills… people who are marginally able to afford to survive, and the loss of an important part of our cultural heritage.

        Nobody is denying the transition costs. But basically you are arguing that everyone else ought to be forced to pay more for goods, they ought to be forced to have less, so that your place can keep what it always had. (As well, as, of course, the implicit unconcern for the desire of people in other countries to have better lives, too.)

        You cannot make an argument about domestic politics on the one hand, and then when domestic problems due to free trade arise, dismiss them out of hand on the other.

        I have never done this. I have always acknowledged that a) these transition difficulties are real and painful, and b) that they influence people’s beliefs and political responses. At no point have I “dismissed” them. What I have said is that economically, and on net, trade makes a country wealthier. Don’t confuse what I say about economics as a lack of recognition about the politics of the issue.

        Politics are local, and the fallout from much of free trade creates local political conundrums.

        Absolutely. I have always said so. Free trade is a hard sell precisely because of the visibility of its downside. Economically, the upside more than offsets the downside, but it’s not as visible. So naturally people are more politically responsive to the downsides. It’s like crime–violent crime is down, but that’s not as exciting as news of killings, so the media report, and the public focuses on, the killings, rather than the decline in crime. Likewise, the media focus heavily on cases of outsourcing, but rarely report cases of insourcing or companies bringing jobs back when the outsourcing didn’t pay off well. It doesn’t bleed, so it doesn’t lead. It’s frustrating, for those who really understand the dynamic of trade, but it’s natural. It’s inevitable that those directly affected are going to focus on how much they’ve been directly affected, and it’s inevitable that others are going to notice that more than they notice those concentrated losses more than they notice the distributed benefits. I fully understand and accept that, and know I’m fighting an uphill battle to get people to see the bigger picture.

        My neighbor does not really care that someone in China is benefitting from the job he used to do;

        Of course he doesn’t. But neither does the person in China care about your neighbor. And as for me, I don’t care about either one more than the other.

        But that’s not an economic argument. I’m arguing that free trade is a net benefit for the country as a whole. Pointing to your neighbor as the downside of that says absolutely nothing about the validity of the economic argument. She’s an anecodote, a single data point in a huge mass of data. It’s no different than the threads last election when our one commenter said he knew Romney was going to win because he knew a bunch of people who were going to vote for Romney.

        but he’s pretty grateful he can now purchase insurance for his family and that it doesn’t cost over half his annual income.

        Yay. But that has nothing to do with whether trade makes the country wealthier or not.

        All in all, I think you are mixing up political and economic arguments. You are making political arguments–and I fully agree with you about how displaced workers are affected and how people respond to that, there is no disagreement between us on that count–but you then seem to think that political argument works as a rebuttal of the economic argument. It doesn’t.Report

      • Avatar Jaybird in reply to James Hanley
        Ignored
        says:

        That same dynamic doesn’t work for outsourcing unless trade is balanced. Which it isn’t and hasn’t been since 1975.

        I can’t help but notice that pretty much everybody is better off than they were in 1975, unless they are the stereotypical cis-gender white heterosexual male. If you are anything but a cis-gender white heterosexual male, it seems to me that 2015 will be a much better world for you than 1975.

        And, hell, for a good chunk of those white dudes too, 2015 will be better for them than 1975 was.

        When I put the “better offs” on the one side of the scale and the “worse offs” on the other, I even notice that it’s not a zero sum game. Not by a damn sight.

        And I don’t even have to put non-Americans on there to reach that conclusion. If I go so far as to put Asia on there, the scale *TOPPLES*.

        I honestly don’t understand why the 70’s were seen as so freakin awesome for Americans.

        Other than the music, of course. The music was great.Report

      • Avatar Kim in reply to James Hanley
        Ignored
        says:

        James,
        “And it’s faulty to assume consumers had more retail options in the old days. There may have been an absolutely greater number of stores, but there was a lower absolute number of types of goods available to them.”

        Depends on the good. Handcrafted goods are “each a good” (yes, you can have fifty tables, but they’re each a different table) — people will pay extra to be “special”. Likewise, monocultures (Square Apples!) dramatically reduced the biodiversity at a market. (it was easy enough for a small-time farmer to grow Empires and Macs and half a dozen others).

        Also: How much are you actually getting different goods? Are you measuring by labels? By brands? I saw some Wegman’s honey labeled “clover” that was a deep brown (that is not clover honey, whatever the brand).

        Three brands of flour selling Commodity Grade X Hard Winter Wheat Flour are not selling three different things, just three different perceptions (and, possibly, better inspections/packaging).Report

      • Avatar Kim in reply to James Hanley
        Ignored
        says:

        Jay,
        you go ahead and tell the black man with his double digit unemployment rate (more if he’s been imprisoned, naturally) that he’s better off than in the seventies.Report

      • Avatar LeeEsq in reply to James Hanley
        Ignored
        says:

        I’m kind of with James on this one, self-sufficiency is the road to poverty. There are some countries like the United States, Canada, Brazil, Russia, and China that are large enough in area and population and rich enough in resources that can have a mainly internal economy. China managed to have one of the highest living standards in the world for thousands of years with relatively little in the way of external trade but with very commercialized internal trade. It was only in the early 19th century when China’s standard of living began to decrease. Most countries aren’t populous enough, large enough, or resource rich enough to pull this trick off. They need to specialize what they are good at and trade in order to be wealthy countries. Even for the countries that can have a mainly internal economy, trade makes them better off.

        At the same time, free trade alone isn’t going to do the trick. Business people want to be rich rather than make the world a wealthy place. Without some regulation and redistribution, the benefits of free trade are not going to be as wide spread as its advocates wants. I really don’t trust business people and corporations to protect the environment either. Many of them have raider type personalities and hope to die before the damage becomes too apparent. Government is necessary to temper the worst aspects of capitalism and free trade and make it work for everybody rather than a few people. Labor unions are needed to protect the rights and needs of workers because the tendency will be towards exploitation.Report

      • Avatar Jaybird in reply to James Hanley
        Ignored
        says:

        Kim, having checked the BLS (http://data.bls.gov if you want to do the same), it seems like the best time to have been anything at all was in either Clinton’s second term or in Bush’s.

        But looking at the numbers, I feel comfortable saying that it’s better to be African-American in the US in 2015 than in 1975 and would be interested in seeing the opinions of those who actually remember 1975 what year they’d rather be in.Report

      • Avatar Kim in reply to James Hanley
        Ignored
        says:

        James,
        you say consumers benefit from Walmart.
        Once and twice and again, I say no they do not.
        Once, because they spend more on gas to get to stores they used to be able to walk to.
        Twice, because the overall quality of goods decreases — not because Walmart is a jackass, but because we simply can’t afford them. The middle class as a whole is vanishing as an economic entity (see what the NYT said). Unless you’re one of the richy rich, you’re going to be buying “poor food” like the rest of the shmucks. And poor food has “quality issues.” I won’t mourn organic foods, but a lot of folks around here sure will.
        And Thrice, as Walmart flees these communities, looking for more money elsewhere — the communities have lost their resilience, don’t really have room for “what used to be”, even if folks were willing to gamble their savings on a rural place. As Walmart leaves, rural america will blow away.Report

      • Avatar Kolohe in reply to James Hanley
        Ignored
        says:

        “Once, because they spend more on gas to get to stores they used to be able to walk to.”

        The parking meter is 30 years older than the second Walmart ever built.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        That same dynamic doesn’t work for outsourcing unless trade is balanced.

        This is bad pop economics. “Balanced trade” has an intuitive appeal, which is why it’s such a common media mantra, but its use betrays a misunderstanding of the actual dynamics of trade.

        1. If trade is not balanced between nation 1 and nation 2, that doesn’t mean trade is imbalanced over all, because there are nations 3, 4…..n that have to be considered as well. When we focus on the “trade deficit with China!” we overlook that more complex dynamic in favor of a simplistic one, one that’s easier to grasp and easier to write about by journalists with little real economics education.

        2. Our measures of trade are incomplete, as they focus on goods and generally don’t count services. The U.S. is a net exporter of services.

        3. Focusing on the balance of trade overlooks the other side of the equation, capital flows. If we’re sending more dollars to China for goods than they are sending Yuan to the U.S. for goods, what do they do with the extra dollars? Ultimately it comes back around, if not as goods then as investment. Direct foreign investment is generally a good thing,* and it balances out the imbalance of trade in goods. That is, a trade deficit indicates a capital account surplus, and a trade surplus indicates a capital account deficit.
        ____________________________
        *Much of China’s direct foreign investment in the U.S. has been the purchase of U.S. securities. From one perspective this is a good thing, because it gives China a stake in the U.S. remaining a prosperous and stable country, so they can be sure of repayment. From another perspective, it’s helping feed our budget deficits addiction. But that’s a consequence of our policy choices, not anything China is doing to us.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        @leeesq

        There are some countries like the United States, Canada, Brazil, Russia, and China that are large enough in area and population and rich enough in resources that can have a mainly internal economy.

        Lee, that’s a good point. I may have left the impression I think the U.S. might be impoverished without free trade, but that’s not so, for the reason you note.

        It’s all about the size of the market, including the markets for labor and resources. The more expansive they are, the better. That’s why an isolationist U.S. would be much wealthier than an isolationist Haiti, but why the U.S. would be still wealthier with trade than in isolation.

        That’s why the Framers of the U.S. Constitution created the world’s first free trade zone, via the Interstate Commerce Clause, and it was crucial to the economic flourishing of the U.S.

        I like to ask why, if free trade between countries is so bad, why is free trade between U.S. states–many of which are as large or larger (in population, territory, and size of economy) than many countries–good? If the U.S. would be wealthier by limiting trade, wouldn’t Vermont be wealthier by limiting trade with other states? And wouldn’t each other state likewise become wealthier that way? So wouldn’t the U.S. really reach maximal wealth by eliminating the Interstate Commerce Clause and letting each state set up trade barriers against each other?

        And why stop there? If limiting trade is so good, shouldn’t Northern California and Southern California set up trade barriers against each other? And since L.A. itself is larger than some countries, wouldn’t it be better off setting up trade barriers against the rest of California?

        Obviously, that’s a reductio ad absurdum, but the serious question remains, economically speaking, what is the difference between trade between U.S. states and trade between international states?

        At the same time, free trade alone isn’t going to do the trick…Without some regulation and redistribution, the benefits of free trade are not going to be as wide spread as its advocates wants. I really don’t trust business people and corporations to protect the environment either.

        Sure. On the environment, that’s a problem of negative externalities, so we can’t expect the market to solve it directly. The market does seem to solve it indirectly, by creating demand for environmental protection as wealth increases. As for distribution, economists always note that the creation of wealth and the distribution of wealth are two different problems. But of course the problem of distribution is a “good” problem, in the sense that it means you have achieved significant levels of wealth–you have to get wealth before there’s any to redistribute. Not having wealth in the first place, that’s the bad problem.Report

      • Avatar Chris in reply to James Hanley
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        says:

        Outsourcing may not lead to a net loss of jobs in the long term, but it places a pretty large burden on society. There’s a chicken plant closing in East Texas as we type, staffed primarily by people who’ve worked their for years and years, and may never have had any other job. The only skills they have are those relevant to the chicken processing industry, which are pretty specific and non-transferable. As a result of the closing, a large number of them are being dumped into the job market in an area that’s already somewhat economically depressed because outsourcing has taken a lot of the other jobs and revenue sources as well. So these people will have to be trained, either by future employers, or more likely, by the state (using mostly federal funds, because almost all job programs at the state level are funded by the federal government), while on unemployment. Many of them will have to relocate to other areas of the state, or out of state (they’re near enough to Louisiana and Arkansas that many of them will end up there, after receiving money from the state’s unemployment insurance fund, SNAP, and state and federal training funding). A small number of them will drop out of the labor market entirely, either retiring early or just becoming dependent on the state. And all of this will take months, even years, while further depressing the local economy. But in the long run, most of them will be reemployed in another industry, probably making about what they’re making now eventually (though on average they will start at a salary lower than the one they left), perhaps even more if the training the state provides gives them better opportunities, and in the long run the net job loss will be minimal. So yeah, outsourcing doesn’t reduce the number of jobs that much, long term.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        @chris

        Yes, it can be a painful process. But would it be any less painful if that plant closed because it was moving to Mississippi? Less painful if it closed because the owners made bad business decisions? Less painful if it closed because consumers started eating tofu instead of chicken?

        Is loss of job through international outsourcing fundamentally different than losing your job these other ways? Is the social cost worse because of the mechanism by which the jobs were lost?Report

      • Avatar Patrick in reply to James Hanley
        Ignored
        says:

        Is loss of job through international outsourcing fundamentally different than losing your job these other ways?

        Depends upon what level of abstraction you’re talking about. From a justice standpoint, some poor schmuck in *stan getting a job that enables him to build a well… that’s probably a suitable humanity tradeoff than some poor schmuck in the U.S. who can walk down and collect unemployment.

        Probably not so good for the U.S. national economy, though.

        Is the social cost worse because of the mechanism by which the jobs were lost?

        In this particular case (outsourcing), I think a legitimate argument can be made that there are four main inputs into the economic engine: energy, raw materials, labor, capital.

        Internationally, right now…

        Raw materials are very, very fluid. Energy is very, very fluid. Capital is very, very fluid. Labor is very, very restricted.

        Labor is already restricted by its nature (training time, job skills), but it is further constrained relative to the other three because labor is hard to relocate also by its nature, but it’s furthermore forbidden to do so.

        That leads to some pretty serious subdomain problems, when the capital, raw material, and energy can go anywhere to maximize profit and the labor can’t. Given that we will probably never be able to have labor be anywhere near as fluid than the other three (by nature, even if we had open borders, which we won’t), I think this is a pretty legitimate problem.Report

      • Avatar Kim in reply to James Hanley
        Ignored
        says:

        James,
        yes, of course it is different. Let me count the ways.
        One: Transferring a job to Mississippi means you can probably go along with it. Is it expensive? sure. Might you want to look for other alternatives? Sure.

        Two: Outsourcing is different from “owner made bad decisions” — yes, because if that was all that was wrong, it’s possible for the workers to buy the plant (or someone else, if they can make a decent arg). Outsourcing is saying “these jobs shouldn’t be here”

        Outsourcing is a real punch in the gut to morale.
        Is that an earthshatteringly huge difference? nnnope. but it’s still there.Report

      • Avatar LeeEsq in reply to James Hanley
        Ignored
        says:

        James Hanley, when most people use the term free trade they are seeing as trade between countries. People do not see internal commerce as an example of free trade for the most part. This kind of makes sense because even in federalized countries, the national government isn’t going to allow the states to set up trade barriers within the country. Since interior trade is naturally free in a way that external trade is not, people don’t see it as a free trade.Report

      • Avatar Chris in reply to James Hanley
        Ignored
        says:

        @james-hanley , yes, in most cases it is significantly less of a burden on society to move the jobs to another town or state than to another country. Now, it has the potential to damage the local community just as much, but one of the reasons companies outsource jobs to other countries is because labor and other overhead is so cheap in those countries that they can essentially build a staff from scratch, training people who may know absolutely nothing about processing chicken, or building cars, or assembling widgets, or whatever. If the chicken processing plant moves from East Texas to Mississippi, the company will not be able to afford to do that because wages are too high there to cover the loss in productivity associated with building a workforce from scratch, so they’ll offer a bunch of the people in the closing factory the opportunity to transfer, and likely pay a substantial portion of the costs to do so. Then they’ll immediately open up the rest of the positions to jobs here, meaning that anyone who might currently be on public assistance or taking money out of the UI trust fund of Mississippi (or Louisiana, or Tennessee, or Alabama, or Arkansas, or even Texas, as the labor force between those states can move between them with relative ease) can immediately begin to earn wages.

        So yeah, it’s still painful, and in terms of the impact on the specific community, it’s painful for the same reasons and perhaps to the same degree, but it’s not as painful overall, and its burden is more limited geographically and economically.Report

      • Avatar zic in reply to James Hanley
        Ignored
        says:

        @james-hanley

        The arguments of scale is very much an economic argument, and mostly, it has to do with too much growth required too fast. I’ve talked to companies over and over who faced this; it’s one of the most difficult business decisions they face. Depending on the industry, there are several things that come into play:

        1) All new equipment lines needed, massive investment, typically only justifiable from a cost perspective if done in a developing nation;

        2) Maintaining contracts with WalMart meant giving up other contracts; so if WalMart for some reason drops you (and it does, often) you’re screwed;

        3) Not growing in this way might mean you’re doomed anyway, because often, the smaller retailers are failing;

        4) decreasing quality to such a degree that it damages your brand.

        There’s more, but I’ve had a long day, and I’m tired.

        And yes, there’s a lot of research on the impact of large big-box retailers; here’s a summary of some:

        http://www.ilsr.org/key-studies-walmart-and-bigbox-retail/Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        @zic

        There’s also this.

        And this.

        And this.

        And this.

        The story isn’t really that simple and straightforward.Report

      • Avatar Road Scholar in reply to James Hanley
        Ignored
        says:

        @james-hanley : This is bad pop economics.

        Thanks for the sorta subtle ad hominem. I was studying economics in college when you were in junior high and my econ profs wanted me to change majors from engineering. I’m not basing this on “pop” economics but solid Keynesian theory.

        “Balanced trade” has an intuitive appeal, which is why it’s such a common media mantra, but its use betrays a misunderstanding of the actual dynamics of trade.

        Also, solid theoretical appeal. Which is why it was instituted as formal policy worldwide between central banks from shortly after the close of WWII until Nixon dismantled it in 1973.

        1. If trade is not balanced between nation 1 and nation 2, that doesn’t mean trade is imbalanced over all, because there are nations 3, 4…..n that have to be considered as well. When we focus on the “trade deficit with China!” we overlook that more complex dynamic in favor of a simplistic one, one that’s easier to grasp and easier to write about by journalists with little real economics education.

        I’m sure some are making that argument, but I’m not and never have. Furthermore, when we’ve had these discussions before I’ve made that very clear but you keep throwing it at me as if I actually said that. IOW, Quit Strawmanning Me!

        2. Our measures of trade are incomplete, as they focus on goods and generally don’t count services. The U.S. is a net exporter of services.

        You give me $10 and I’ll give you $1. Balanced, right? No? Yes, we’re a net exporter of services but our trade surplus in services is only about 10% of our deficit in goods. I’m sure you know this and I’m also sure you know that ten is larger than one. So how is this an argument against the fact that we’re running a net trade deficit? Perhaps it’s not as large as some sources report — and those sources should be more careful and accurate just as a general practice — but still, so?

        3. Focusing on the balance of trade overlooks the other side of the equation, capital flows. If we’re sending more dollars to China for goods than they are sending Yuan to the U.S. for goods, what do they do with the extra dollars? Ultimately it comes back around, if not as goods then as investment. Direct foreign investment is generally a good thing,* and it balances out the imbalance of trade in goods. That is, a trade deficit indicates a capital account surplus, and a trade surplus indicates a capital account deficit.

        Yeah, this is straightforward accounting identity that has to be true by definition. But that doesn’t mean there are no consequences. By these same definitions this is the same as saying your credit card balance doesn’t have consequences because the amount you owe is considered an asset — a form of investment — by the bank holding your account. You seem to treat the word “investment” as a kind of magic talisman, where as long as anyone on any side of a situation can use that word to describe what they’re doing then it must all be good.
        ____________________________
        *Much of China’s direct foreign investment in the U.S. has been the purchase of U.S. securities. From one perspective this is a good thing, because it gives China a stake in the U.S. remaining a prosperous and stable country, so they can be sure of repayment. From another perspective, it’s helping feed our budget deficits addiction. But that’s a consequence of our policy choices, not anything China is doing to us.

        First, I don’t particularly care about China one way or the other. They’re not really the problem, just an exemplar that’s easy to point toward.

        As to policy choices, I would ask you to carefully consider the sequence of events starting with the close of the Vietnam War and the “Nixon shock” of taking us off the (sorta*) gold standard associated with the Bretton Woods accords, the resultant stagflation that characterized the second half of the ’70s and then the resolution of that by Volker and the ’82 recession. Reagan oversaw a tripling of the federal debt during his two terms in office. Now why the hell would a good conservative do something like that? Why would the champion of conservative values declare that deficits no longer matter? And why did the Fed loosen the rules on banks so they started sending everybody credit cards resulting in an explosion of personal debt? And later, why did Greenspan and Bernanke constantly fuel bubbles with loose credit policies, policies which ultimately led to the meltdown of 2008?

        I distinctly recall you saying before that you’re basically a monetarist, so I’m asking you to think like a monetarist for a minute. You’re a champion of Public Choice Theory, so I’m asking you to look at the make-up of the Fed governance, how it’s structured, where they draw their directors from, and apply PC theory to this problem. Hell, man, I’m making my arguments entirely on your own damn turf with the sole exception of a bit of macro theory on why deflation is a Bad Thing.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        @road-scholar
        I was studying economics in college when you were in junior high

        Just out of curiosity, are you really in your late ’50s?

        More substantively, first, you cannot use government commitment to a particular policy as evidence of strength of the underlying theory unless you are willing to accept current government policy as evidence of the strength of the underlying theory. And since we shifted from your favored approach to our current approach, I don’t think that’s a commitment you want to make. And since you asked me to think as a public choice theorist, well, what public choice theorist is going to agree that “government did it, so it must be theoretically sound” is a good argument?

        Second, you want a monetarist view of the trade deficit? We’re getting actual goods, and all we’re giving in exchange is pieces of paper. Here’s Friedman’s view of the balance of trade.

        California is a splendid example. If balance of payments figures were available for California alone, they would show that California has experienced a steady stream of deficits for decades on end just as the U.S. on a whole did in the last half of the nineteenth century. California has grown far more rapidly than most of the rest of the country. If California enterprises had been forced to rely on the savings of California citizens alone, it could never have financed its rapid growth. That was possible because capital was moving from the East to the West to benefit from the higher rates of return that were attainable in California. It was possible because California was experiencing large payments deficits.

        And here:

        In the international trade area, the language is almost always about how we must export, and what’s really good is an industry that produces exports. And if we buy from abroad and import, that’s bad. But surely that’s upside-down. What we send abroad we can’t eat, we can’t wear, we can’t use for our houses. The goods and services we send abroad, are goods and services not available to us. On the other hand, the goods and services we import, they provide us with TV sets we can watch, automobiles we can drive, with all sorts of nice things for us to use. The gain from foreign trade is what we import. What we export is the cost of getting those imports. And the proper objective for a nation as Adam Smith put it, is to arrange things, so we get as large a volume of imports as possible, for as small a volume of exports as possible.

        This carries over to the terminology we use. When people talk about a favorable balance of trade, what is that term taken to mean? It’s taken to mean that we export more than we import. But from the point of view of our well-being, that’s an unfavorable balance. That means we’re sending out more goods and getting fewer in. Each of you in your private household would know better than that. You don’t regard it as a favorable balance when you have to send out more goods to get less coming in. It’s favorable when you can get more by sending out less.

        So, yes, I understand the monetarist position on trade.

        Let’s look now at a Keynsian, Paul Krugman who won his Nobel Prize for trade theory, his specialty. He’s talking about balance of trade in an explanation of Ricardo’s theory of comparative advantage. The emphasis is mine.

        there are, I believe, at least three implicit assumptions that underlie the most basic Ricardian model, assumptions that are justified by the whole fabric of economic understanding but are not at all obvious to non-economists….

        The balance of payments is not a problem: The standard textbook presentation of the Ricardian model assumes balanced trade… Yet the news is full of stories about the balance of payments, of complaints about trade surpluses and deficits. Why are these absent from the story?

        Again, economists have good reasons for thinking that it is a good approximation to separate balance of payments from real international trade issues. In Ricardo’s case, the essential ingredient was the argument by David Hume that trade imbalances are self-correcting: a surplus country will acquire specie, leading to rising prices that price its goods out of world markets, while a deficit country will correspondingly find its goods increasingly competitively priced. In the modern world, again, the channels involve less Invisible Hand and more government intervention: when monetary policies target the unemployment rate, exchange rates do the adjusting. Economists are also aware that even persistent trade imbalances are not necessarily a problem, and certainly that surpluses are not a sure sign of health or deficits one of weakness. Trade may be balanced in Chapter 2; but Chapter 13 explains that the trade balance is equal to the difference between savings and investment, and that a country may justifiably run persistent deficits if it is an attractive site for foreign investment.

        For some empirical data, Russ Roberts has a nice series of charts looking at the data of trade deficits and jobs.

        It’s true some economists are more cautious, such as Mark Thoma:

        A country that runs a current account deficit is borrowing money from the rest of the world. As with any loan, that money will need to be paid back at some point in the future.

        The cost of these loans is the interest that must be paid, and any vulnerabilities to speculative attacks that come with them. But so long the benefits from the investment of the borrowed money exceed the costs, then there is no reason to be concerned about running a deficit. The profits from the loans will be more than sufficient to pay back the interest and principle.

        There is another reason a country might want to run a current account deficit. For example, if there is a recession…a country may wish to borrow from foreigners in order to smooth output and avoid a large drop in consumption….

        Thus, it should be clear that trade deficits, at least on a temporary basis, are justified in many instances. Insisting that trade is balanced at all points in time would give up the opportunity to pursue profitable investment and to stabilise the economy during bad times.

        However, although current conditions may justify a deficit, conditions can change rapidly…and when they do it can be difficult to adjust the current account quickly enough to avoid problems. This is why governments tend to avoid large and persistent current account deficits.

        For one, large and persistent deficits may signal that a government has not been careful to invest the money it borrowed wisely. If the loans are used to fund extravagant spending by the powerful within the country and do nothing to raise productive capacity, then it will be difficult for the country to repay the money it has borrowed…

        What about large and persistent surpluses, are they safe? If the money is invested wisely, yes, but it can put a substantial fraction of a county’s wealth at risk. If those who borrowed from you don’t pay off, the wealth could be lost. … However, for the most part a surplus is more acceptable than a deficit.

        Note that Thomas isn’t anti-trade deficit, though. He’s concerned about what we do with the capital account surplus. As long as we’re investing it well, it’s not a problem. But that’s a policy issue that is distinct from the issue of the trade surplus itself.

        Note also that Thoma’s analysis is incomplete in one area. Not all of the capital accounts surplus is actually borrowing. Securities are, yes. But when the Japanese bought Rockefeller Center, with their trade surplus money, that was not borrowing. In fact they bought at a time of high property values and sold during a time of low property values, so it was a net gain for the US. Subaru, Toyota, Hyundai, and Honda have all invested money in U.S. factories with trade surplus bucks, and that’s not borrowing, either. Nothing has to be paid back.

        So, sorry if I sounded condescending, Rod, but I didn’t just take a couple classes back in the late ’70s. I read incomparably more economics than I do political science, despite my official credentialing, and two of my courses are cross-listed in our economics department, at the request of our college’s (lone!) economist. I do know what economists are saying about this stuff. Above I’ve referenced a monetarist, a Keynesian, and an Austrian (and whatever Thoma is, I haven’t looked that closely). I have not cherry-picked one limited subset of economists to support my view. I do hope you will take that into consideration.Report

      • Avatar Road Scholar in reply to James Hanley
        Ignored
        says:

        @james-hanley , Just out of curiosity, are you really in your late ’50s?

        Well, close anyway. I turn 54 next weekend. I graduated hs in ’78 and college in ’83. And I apologize for taking that tone in my comment but you pissed me off with your strawman attack in point 1.

        More substantively, first, you cannot use government commitment to a particular policy as evidence of strength of the underlying theory unless you are willing to accept current government policy as evidence of the strength of the underlying theory. And since we shifted from your favored approach to our current approach, I don’t think that’s a commitment you want to make.

        I’m not really. I was just pointing out that it’s hardly “pop economics” to tout theories that had been advanced by Nobel Prize winning economists and widely accepted not that terribly long ago. Just because you don’t favor Keynesianism doesn’t make it silly.

        Second, you want a monetarist view of the trade deficit? We’re getting actual goods, and all we’re giving in exchange is pieces of paper. Here’s Friedman’s view of the balance of trade.

        California is a splendid example. If balance of payments figures were available for California alone …[snip]

        Not really. There’s a good reason those figures aren’t available. California is embedded within the larger U.S. economy and drawing a line around what is and isn’t the California economy is a lot more complicated than just looking at the way goods and money cross the physical borders. I find it interesting that he says “If balance of payments of figures were available…” and then proceeds to make judgements based on those non-existent figures…

        … they would show that California has experienced a steady stream of deficits for decades on end just as the U.S. on a whole did in the last half of the nineteenth century. California has grown far more rapidly than most of the rest of the country. If California enterprises had been forced to rely on the savings of California citizens alone, it could never have financed its rapid growth. That was possible because capital was moving from the East to the West to benefit from the higher rates of return that were attainable in California. It was possible because California was experiencing large payments deficits.

        Sigh… these arguments so often have a moving-goalpost quality to them. Investment capital flows aren’t the same as payments for goods and services so conflating the two is obfuscatory.

        In the international trade area, the language is almost always about how we must export, and what’s really good is an industry that produces exports. And if we buy from abroad and import, that’s bad. But surely that’s upside-down. What we send abroad we can’t eat, we can’t wear, we can’t use for our houses. The goods and services we send abroad, are goods and services not available to us. On the other hand, the goods and services we import, they provide us with TV sets we can watch, automobiles we can drive, with all sorts of nice things for us to use. The gain from foreign trade is what we import. What we export is the cost of getting those imports. And the proper objective for a nation as Adam Smith put it, is to arrange things, so we get as large a volume of imports as possible, for as small a volume of exports as possible.

        Adam Smith had what we would now consider a very idiosyncratic conception of money. To Smith, we didn’t use gold as money, but rather money was gold, pure and simple. So to Smith, trading money for furniture (for example) wasn’t just the equivalent of trading say, wheat, for furniture. It was exactly the same kind of thing. IOW, Smith didn’t have a representative conception of money, but rather it was just a good like any other. To the extent he even had a conception of fiat currency, he denied it as a fiction. He seems rather unsophisticated in that regard to modern ears but it wasn’t wholly unreasonable for his time, I suppose. And that makes a difference, because in Smith’s conception it wasn’t really possible to have a trade imbalance because all transactions were essentially settled at the POS.

        This carries over to the terminology we use. When people talk about a favorable balance of trade, what is that term taken to mean? It’s taken to mean that we export more than we import. But from the point of view of our well-being, that’s an unfavorable balance. That means we’re sending out more goods and getting fewer in. Each of you in your private household would know better than that. You don’t regard it as a favorable balance when you have to send out more goods to get less coming in. It’s favorable when you can get more by sending out less.

        But are we really? Are we really getting more for less? Consider how this works out over time. We send them dollars and they send us… stuff. So how much is all that stuff we bought in the ’80s worth right now? How much are those dollars we sent them worth right now? A whole lot of the former is now in the landfill. While the dollars have depreciated some due to inflation, they also have been earning interest so that’s close to a wash. So who’s getting wealthy?

        Look, I could go on, but frankly I need to get on the road and don’t really have the time to answer the rest of the post. But just as a general rule I consider arguments from authority to be especially weak in the area of economics. There are just too many conflicting schools of thought, even among Nobel-level people, for any such argument to be dispositive.Report

  17. Avatar Major Zed
    Ignored
    says:

    Thank you everybody. This post was motivated by the frustration churning in my head when I came home from the dentist. After having re-read a lot of Rand (yes, you could have told me that was a bad idea) it was startling to have the opportunity for a spirited debate and then – disputatio interruptus! I knew I could count on my colleagues at OT to provide responses that Sue could not dream of, to properly challenge me. Because I do, truly, want to engage in critical thinking, check my premises, etc. So thank you all for rising to the occasion.

    North – thank you for leading off with a tone of civility and taking me seriously.

    “if she’d have said ‘we’re exporting our manufacturing jobs to the third world…'” First, I would have been absolutely flabbergasted. Second, the impact of globalization and what to do about it would have made for an interesting discussion. “Crushed public spending” doesn’t seem to fly as an explanation however; see the discussion here: what was crushed between 1990 and 2000 was defense spending and interest payments, two things we might agree were for the good. After that, everything is trending back up.

    My explanation? It is clear that business dynamism has been falling for some time, but one can only speculate as to the causes. My speculation is that it is just getting harder and harder to start a new business, and a lot of that is due to (can you guess what I’m about to say?) the ever increasing load of regulations imposed on business.

    As to the 500 bucks. I will allow as to the possibility that not all or maybe even none of it come from me (by which I mean individual taxpayers), but unless it is the removal of a $500 subsidy she was previously paying out (pretty unlikely), it’s a subsidy to her, and it came from somewhere. And the question remains, why is she entitled to it?

    “Or if she’d have shrugged” Is that a pun? “and said …she’d prefer a system like much of the rest of the west…” I’d have said Hope you like waiting.

    James – thank you for defending my honor. I have nothing to add to your many great comments. Except about the minimum wage – see below.

    Fnord – Sorry if this came off as a strawman attack. I was hoping for good counterarguments from you all, and I got some.

    Will – thank you for bringing up monetary management. I was surprised to read that U.S. government debt is about equal to the world’s privately held wealth. Something’s gotta give.

    The minimum wage argument is not a strawman. First, one shows that dQ/dP<0 somewhere on the labor demand curve ($50), and then second one asks why would it not be negative everywhere else? The same mechanisms are at play. (Especially effective on those who are fond of the linear hypothesis in radiation studies.) If dQ/dP<0 at the point where the minimum wage is raised, then there will be winners and losers, and the losers will not be the rich. Not that this is an argument an Objectivist cares about – it's liberals who should care.

    My dentist is a joker, motorcycle rider, wood-worker and an all-around nice guy.

    I wish I had an antigravity train. (At first I read it as "antigravy train," and had this weird image of dogs flying around a feed bag.)

    Patrick – your point about SS and PPACA being life-cycle programs would have more traction with me if (1) they were actually funded rather than paygo, and (2) they were voluntary.

    Nevermoor – "Much of that savings comes from creating a group market… which creates stronger market-based price controls." So the $500 is coming out of profits? I doubt it.

    Yes, LWA/LWC/Lowbrow Liberal – we libertarians believe that the proper function of government is securing individual rights, full stop. It is every individual's opportunity to make the most of that service they can. How you slice and dice the taxes to pay for it is up to the political process, but in Lybertopia, the total cost is small enough that it isn't worth forking over millions of dollars to the politicians in order to tilt the trough in one's direction. And… what James said.

    Mark Thompson – Ding! Ding! Ding!

    Zic – so you are saying she probably did not get a subsidy, but simply got an opportunity to buy a less expensive plan, an opportunity she did not have prior to ACA. If that is true, I apologize for accusing her of receiving an unearned subsidy and lament the sorry state of our current health insurance system (something no libertarians want to defend).Report

    • Avatar Patrick in reply to Major Zed
      Ignored
      says:

      Patrick – your point about SS and PPACA being life-cycle programs would have more traction with me if (1) they were actually funded rather than paygo, and (2) they were voluntary.

      (1) is a fair counter (and lest I come across as defending PPACA on its merits, a reminder that I don’t like it is in order).

      (2) -> out of curiosity, how do you solve the free rider problem if it is voluntary? Back when Roger and I were going around the maypole I threw out the idea of mandatory additional tax burden for people who opt out of insurance and then get injured or need health care outside their means. That’s problematic on several scores, but I don’t see a better solution to allowing people to opt out. Is this acceptable?

      Keep in mind, the practical effect of this sort of thing would be, in practice, wage slavery to the IRS for anyone who is dumb enough to not get insurance who then needs catastrophic care.Report

    • Avatar trizzlor in reply to Major Zed
      Ignored
      says:

      … it’s a subsidy to her, and it came from somewhere. And the question remains, why is she entitled to it?

      This is something I have a hard time understanding. It’s a subsidy to anyone at her income level, including you if such an occasion were to arise. I’m not trying to be glib, but this really does seem like arguing that someone who makes use of the police or fire departments is stealing your money.

      Why she’s entitled to it is going to depend very strongly on her finances and individual situation. But broadly speaking, it’s because the voters decided that (among other reforms) certain income levels should be protected from (what was deemed) severe medical costs. And again, that medical safety-net is a service available to you as well should you need it.Report

    • Avatar nevermoor in reply to Major Zed
      Ignored
      says:

      I did some rudimentary math, and it looks like your initial argument is fairer than I expected. According to these CBO estimates, there is expected to be $1.197T in “Exchange Subsidies and Related Spending” (Table B-1) between 2015 and 2024. That number covers 230M people years (“Insurance exchanges” row in B-2). Simple math makes that $434/month. The CBO also breaks out an “Average Exchange Subsidy per Subsidized Enrollee” in Table B-3, which increases from $392/month this year to $698 in 2024.

      That said, there are certainly major savings coming by reducing profits. The Kaiser Family Foundation’s math, for example, shows $2.1B in consumer savings caused by increasing the loss ratio on individual market loans in 2012.

      So that point is more mixed than I expected. That said, the actual funding mechanisms are extremely differently targeted than your posited theft-of-cash. And that is not irrelevant to assessing the fairness of a deficit-reducing piece of legislation. And, of course, I heartily endorse trizzlor’s point above. You benefit from the ACA’s existence even when you aren’t using it because (1) you could be fired; (2) your employer could stop offering affordable insurance; (3) you could be job-locked by a pre-existing condition; etc.Report

    • Avatar North in reply to Major Zed
      Ignored
      says:

      Major Zed, I disagree with your numbers.

      Employment can be roughly divided up between the public and private sector.
      My understanding is that during the recoveries under the previous Administrations public sector employment rose significantly. Coupled with rising private sector employment this produces a more robust and brisk recovery.

      Under Obama (and more importantly under his gridlocked and austerity obsessed GOP congress) public sector spending has been in decline, not ascent. This produces a significant drag on the pace of the recovery because private sector job growth is being pulled back by public sector job declines.

      The numbers and handy charts are available here: http://www.calculatedriskblog.com/2013/11/public-and-private-sector-payroll-jobs.html

      While I am certainly no fan of regulation and agree that it could produce a drag (and while I’m very grateful you didn’t try and drag out the business confidence canard) I think that this difference in public and private sector job recovery very obviously is the primary culprit in the sluggishness of the recovery. The fact that in Europe where not just gridlock but active austerity policies were put into place they actually were tipped back into full on recession further illustrates this point.

      Which, for a liberal, adds the infuriating point that the GOP is a significant cause of the sluggish recovery for which they lambast Obama. It’s also why I relish Cantor’s being devoured by his base so much since he was one of the primary architects of the GOP’s total opposition tactic vis a vis Obama.Report

      • Avatar Road Scholar in reply to North
        Ignored
        says:

        This, exactly. It should also be noted that if you overlay graphs of unemployment for the last four recessions starting with the big one for Reagan in ’82, each one has been deeper with a slower recovery than the last.Report

    • Avatar clawback in reply to Major Zed
      Ignored
      says:

      Your minimum wage argument is incoherent. Of course dQ/dP<0 in most labor markets; this is just the demand curve. This says nothing about at which price profit is maximized for the supplier (which in this case is the workers). A minimum wage functions just like any other market in which the supplier has some market power; it's possible that market power can be exploited to extract profit at the expense of the buyer.Report

      • Avatar Major Zed in reply to clawback
        Ignored
        says:

        “…at which price profit is maximized for the supplier (which in this case is the workers)”

        In aggregate. Tell that to the person who lost her job. Will the ones who kept them share their wealth with her?Report

      • Avatar clawback in reply to clawback
        Ignored
        says:

        Whether minimum wage workers are willing to accept some minimal risk of losing their job in exchange for a higher wage is easily determined: just ask them. Political support among minimum wage workers for a higher minimum wage is strong, so you have your answer.

        Or I guess we could allow you to speak for them.Report

      • Avatar Patrick in reply to clawback
        Ignored
        says:

        Hold on a second… if it’s okay to lose jobs in a local economy because the employers have packed up and outsourced (because people can retrain and we have a social safety net to cover people while they do that), why is it not okay to lose jobs in a local economy because you have a minimum wage?

        Arguably, a minimum wage is going to probably cause not as many full relocations, and instead a drop in the number of jobs.

        You run a hotel, you need maids. If you can hire N maids at no minimum wage Y, and N-M maids at some X minimum wage, and you can’t hire any maids at some Z minimum wage, then you have:

        Z = job loss of N, company closes
        X = job loss of M, which is certainly less than N, and places a burden S on the social safety net/retraining facilities
        Y = N people employed.

        Presuming that the wages are within reasonable deltas of each other, it’s unlikely that a minimum wage will have much impact at all. Probably, in the real world, you’ll lose a couple of jobs, and the people who keep their jobs get paid more money.Report

      • Avatar Kim in reply to clawback
        Ignored
        says:

        all,
        The assumption that the minimum wage will actually be followed by all employers is really starting to aggravate me.

        We ought to be asking a FAR more involved question, factoring in the underground economy as well.

        I don’t know that we have numbers for “how does minimum wage effect the underground economy”…Report

      • Avatar Chris in reply to clawback
        Ignored
        says:

        In Europe, where unions tend to be stronger, labor is more well represented, and the welfare state is more expansive, minimum wage laws are not as necessary. Here, where labor is poorly represented, unions are weak and in many industries non-existent, and the welfare state is relatively limited, minimum wage laws are more important.Report

      • Avatar morat20 in reply to clawback
        Ignored
        says:

        Probably, in the real world, you’ll lose a couple of jobs, and the people who keep their jobs get paid more money.
        That’s what the CBO says would happen, and since states can set higher minimum wages than the federal one — you can run easy comparisons and see the effect.

        The sky does not fall. Some people lose their jobs, a lot more earn a much better wage and, you know, spend it.

        *shrug*. We’re running into a wall here in the US, labor’s share of the wealth is rapidly declining and that’s gonna screw business as much as labor in the end. Other economies might be developing, but they don’t seem to be making a robust, consumption driven middle class.

        Of course, without unions to push ALL business in an industry to raise wages, nobody really can without risking losing market share to companies that don’t. If, saw, the UAW pushes every car maker for higher wages they’re all on a roughly even foot cost wise.

        Minimum wage is a pretty crap substitute for giving labor bargaining power, but I’m not sure what else there is. Nor, frankly, any other path that seems to lead anywhere but dwindling wages.

        And without wages, they can’t buy products. And if they’re not buying, why make them? You can offshore and drive down prices and squeeze Bangladesh workers to the bone, so that Americans can still buy — but there’s a limit there (as Walmart appears to occasionally bounce off of).

        There might be a lot of economic theories that say workers can counteract the advantages of capital to leverage wages, but I’m not seeing them work in practice. The closest is whatever skill-set is currently being actively head-hunted (which tends to be IT, mostly.)Report

      • Avatar James Hanley in reply to clawback
        Ignored
        says:

        Other economies might be developing, but they don’t seem to be making a robust, consumption driven middle class.

        Wrong. That’s exactly what happened in ROC and ROK, and it’s what’s happening as we write in the PRC. The story little told by our media (it’s not wildly interesting to most Americans, so why should they?) is that China’s economy is shifting away from an export focus to a domestic focus, precisely because domestic consumer demand us growing. And because their local demand is growing, and wages increasing, much of the low wage labor is shifting to other countries, Malaysia, Vietnam, etc., but potentially beginning to move to sub-Saharan Africa, too.Report

      • Avatar Kim in reply to clawback
        Ignored
        says:

        Morat,
        James is right. However, he elides a different part of the story (perhaps from ignorance? I do not mean to impugn or offend either way.) — that American companies increasingly do not want to sell to the American Middle Class — they’d rather sell to China.Report

      • Avatar Kim in reply to clawback
        Ignored
        says:

        On the plus side, we’ll get that metric system yet!Report

      • Avatar James Hanley in reply to clawback
        Ignored
        says:

        God, Kimmie, the nonsense you spew. Sometimes I’m persuaded you’re just an AI program that’s failing the Turing test.Report

      • Avatar Kim in reply to clawback
        Ignored
        says:

        James,
        Wot, you wanna talk about Big Yam washing machines? Any corporation can see a growing market.
        http://en.wikipedia.org/wiki/Whirlpool_CorporationReport

      • Avatar morat20 in reply to clawback
        Ignored
        says:

        I wouldn’t bank on China, they’re bubbled worse than we were on real estate.

        I won’t even get into the economic mischief they’re play — everything from trade imbalances to currency fun. Short version is: Their middle class isn’t self-sustaining. They’re big enough to do it — certainly big enough to have a self-sufficient internal market — but right now it’s more governmental fiat and currency manipulation keeping them afloat, as American dollars pour in.

        Maybe they’ll get lucky — I understand they’re having outsourcing problems of their own.

        But that still gets back to America: The rich can’t buy enough stuff and the poor don’t have enough for anything beyond necessities, and the middle class — the consumption engine that fueled the bulk of economic exchanges (buying, selling, working, recycling money round and round) is sliding towards ‘poor’.

        We had an anemic, credit-fueled recovery in the 2000s which led to a massive slump — and demand’s never sprung back. There’s plenty of cash to prime the pump, but not in the hands of people who can spend it. The rich can’t spend enough, the poor have too little — and the middle class is still paying down debt (college, credit, mortgage, what have you) and by the time they’re out the other side, well — stagnant wages and higher unemployment will cut their contribution some, eh?Report

      • Avatar Kim in reply to clawback
        Ignored
        says:

        Morat,
        you’re right that China’s bubbly. And is having its own offshoring issues.
        Eh, time will tell, won’t it?Report

      • Avatar James Hanley in reply to clawback
        Ignored
        says:

        Morat,

        Oh, yeah, China’s got a huge problem and a lot of debt that’s going to go south because it was obtained fraudulently. And that could fish the global economy hard. But that doesn’t change the point, which is that they are developing a domestic-demand driven economy, ad Taiwan and Korea did before them. India is, too, although they’re further behind in the game. It takes time, so for all the other countries that are developing it’s much too early to claim they aren’t doing so.Report

      • Avatar morat20 in reply to clawback
        Ignored
        says:

        It takes time, so for all the other countries that are developing it’s much too early to claim they aren’t doing so.
        I think “thriving middle class” is the important part.

        Because poor people barely make ends meet, buying the bare minimum. You can sustain an economy on them but you’re not going to really grow. Demand will stay relatively flat, only growing with population. Decent churn with money, but not much money and only in a handful of markets (food, energy, etc).

        Rich spend willy nilly, but there are always very few of them — and they simply can’t buy enough per person to do more than sustain a luxuries market that gets more and more niche.Lots of money, low churn. It mostly sits — in investments or whatnot.

        Middle class, though — that’s the sweet spot. An economy can afford to have large numbers of them, and they have enough excess money to buy more than the bare necessities of life. They can kick the economy into growth — lots of churn, good amount of money spread over all industries.

        You don’t need a middle class for growth, even solid growth. But I can’t imagine sustainable growth without them. You’ve got to have a driver, which means you need buyers and sellers. Poor people don’t buy enough, there aren’t enough rich people — small or non-existant middle class seems a recipe for stagnation, with big growth only coming if you get lucky on the export lottery. (other people’s well-heeled middle class buying your stuff or coming to you for vacations).Report

      • Avatar James Hanley in reply to clawback
        Ignored
        says:

        Kim, Whirlpool is your example of companies that don’t want to sell to the American middle class? Are you sure?Report

      • Avatar James Hanley in reply to clawback
        Ignored
        says:

        @kim,
        Thanks for the Big Yam reference. it supports my point about China developing its domestic middle class consumer economy.

        @morat20,
        You’re making a lot of arguments that are an aside to my point. Nothing in there demonstrates that these countries aren’t on their way to developing a solid middle class. Look at the figures on people in China who’ve been lifted from poverty. Again, it takes time. That a country hasn’t fully accomplished it within a generation of getting serious about development means little.Report

      • Avatar Kim in reply to clawback
        Ignored
        says:

        James,
        yeah, check the link. 2013, they just bought into the Chinese market. And Haier is selling more washing machines than they are.

        It’s not exactly that they’re going to stop selling to America — so much as that they’re going to design machines for china, and we aren’t going to have enough buying power to get all the gee-wizz gegaws that we currently expect (for a number of reasons, not the least of which is that the GeeWiz GeeGaws we want are unpredictable, and thus waste a lot of washing machine (or other appliance) production).

        Like Walmart, Whirlpool is fundamentally retooling itself for a new economic reality (I think they feel a bit behind Haier).Report

      • Avatar zic in reply to clawback
        Ignored
        says:

        @morat20 says:

        We had an anemic, credit-fueled recovery in the 2000s which led to a massive slump — and demand’s never sprung back. There’s plenty of cash to prime the pump, but not in the hands of people who can spend it. The rich can’t spend enough, the poor have too little — and the middle class is still paying down debt (college, credit, mortgage, what have you) and by the time they’re out the other side, well — stagnant wages and higher unemployment will cut their contribution some, eh?

        I’d add one other thing: this really matters when it comes to stable revenue streams for funding local, state, and federal government. We’ve either got to tax a lot of people moderately (a large middle class) or a few people extravagantly (a small wealthy class). The first choice is pretty stable. The second? It will fluctuate wildly from year to year, it creates problems of capital formation, and, most importantly, places the heaviest burden on the people most able to shirk the burden; so it leads to deficit spending. That’s a large part of what happened in the 2000’s.Report

  18. Avatar LWA
    Ignored
    says:

    Re: offshoring.

    This argument ,that offshoring benefits impoverished 3rd Worlders and therefore resistance to it unjustly perpetuates their msery deserves a bit of attention.

    I think there is merit to it, assuming we wave away for the moment the moral aspect of ignoring the benefit of group loyalty to our nation, in favor of others. But lets leave that aside.

    So I would ask the same question that I also pose to my fellow liberals- are we really, sincerely agitating on behalf of the 3rd worlders? And not merely using them as a convenient prop for our own ends?

    If so, wouldn’t it be necessary to first, invite them to participate in a discussion, and honestly look at their stated needs and desires?

    Do they really just want open trade, an unfettered marketplace? Or do they have a framework and moral sense of a just society that should be promoted as well? Do they want nothing more than to scramble for material opportunity as individuals, or do they have concepts about the role of worker and property owner that come into play?

    Of course they do. What is going on in Bangladesh and China isn’t so different than here- a struggle to both create wealth, and also satisfy the natural and legitimate longings for a civil, ordered, and just society that promotes the well being of the human spirit, however defined.Report

    • Avatar James Hanley in reply to LWA
      Ignored
      says:

      are we really, sincerely agitating on behalf of the 3rd worlders?

      Yes, I am.

      “the moral aspect of ignoring the benefit of group loyalty to our nation, in favor of others”

      This is a bad phrasing. It’s not “in favor of others,” but “viewing others equally.” Are they not equally human? Do they not have equal intrinsic value (“intrinsic value” was a favored phrase of the founder of my college, who was an anti-abolitionist).

      Where should we draw the line in this group loyalty? Should Californians be loyal to California, and not care about Oregon, and vice versa? Should Los Angelenos say “we don’t care if San Franciscans have jobs as long as we do”? Should I be indifferent to my neighbor’s job loss, as long as my family is employed?

      Didn’t Jesus say “love your neighbor as yourself,” and “as you have done to the least of these, so you have done to me,” and didn’t he tell the Good Samaritan story as praise for not letting tribal differences deter us from caring about others?

      Give me a clear explanation of a moral principle here that overrides viewing each human in the world as equally deserving. Especially when the vast majority of displaced workers here in the U.S. are still better of than the vast majority of people in developing countries.

      If so, wouldn’t it be necessary to first, invite them to participate in a discussion, and honestly look at their stated needs and desires?

      They are in the discussion, through their actions. The Taliban in Afghanistan? They don’t seem to want these things as much. Poor people in Malaysia? They flock to the jobs and eagerly buy western-style goods. They have demonstrated they want economic development.

      I had a professor once, a left-winger who was very skeptical about globalization and development through trade. She once spent 6 months, maybe more, in a small village in India. This was a place where the women had to walk a few miles to get fresh water, and she spent the time just living as the women there lived. She told us that she tried to tell them life in the developed world wasn’t all it was cracked up to be, that we’d lost a lot of value in our development, and that the life they had was actually very special, and they shouldn’t be eager to exchange it for what the West has. And they just laughed at her and said, “you’ve had your opportunity, why don’t we get ours?”

      Why did South Korea go from a pre-industrial society to one of the world’s most technologically advanced countries in two generations? Because the people embraced it, they wanted it.

      They don’t want all aspects of westernization, and they maintain those aspects of their own culture that they want to keep. But the material well-being development brings? Most of them want that.

      These people are in the conversation, daily. We just have to listen to them.

      Do they really just want open trade, an unfettered marketplace?

      They’re much like us, really. They’d prefer others open their borders while they keep theirs limited, and so they play some of the same protectionist games we do. And they don’t want a completely unfettered marketplace anymore than we do–and neither we nor they do have an unfettered marketplace. We fetter it to achieve certain goals we value, and they fetter it to achieve certain goals they value. But overall, do they want to actually have a market economy, with whatever constraints they prefer to adorn it? Yes, mostly they do.

      Or do they have a framework and moral sense of a just society that should be promoted as well?

      Yes, and so do we. You’re strawmanning here by pretending that the free trade argument means societies will be forbidden from also pursuing non-market social goals.

      o they want nothing more than to scramble for material opportunity as individuals, or do they have concepts about the role of worker and property owner that come into play?

      Yes, just like we do. This is a stawman to pretend that anyone’s saying “scramble for material opportunity” is all there will be in a free trade system.Report

      • Avatar Kim in reply to James Hanley
        Ignored
        says:

        Fair Warning: I’m headed off on a bit of a tangent.

        “Give me a clear explanation of a moral principle here that overrides viewing each human in the world as equally deserving. Especially when the vast majority of displaced workers here in the U.S. are still better of than the vast majority of people in developing countries.”

        There are two arguments when it comes to resource allocation which speak to this.
        1) How much does the additional expenditure of resources actually help? (in rare cases, expending additional resources has actually killed people)
        2) Are the resources being allocated efficiently? (This boils down to Equality versus Opportunity — with the argument that if we can find the smartest folks, that resources allocated towards them will benefit everyone more than equal resources to all).Report

      • Avatar Jaybird in reply to James Hanley
        Ignored
        says:

        If you see groups as a collective rather than a “bunch of semi-aligned individuals”, it may help to see his POV. Once I stopped seeing “people” as “persons”, it was a lot easier to prefer “my people” to “those people”.

        I did have a bit of a problem figuring out how to calibrate it to the point where I stopped at the water’s edge, though.Report

      • Avatar Lowbrow Liberal in reply to James Hanley
        Ignored
        says:

        The Christian principle of loving others equally does NOT prefvent us from protecting the interests of our family and kin and tribe.
        This is the difference between Joseph, husband of Mary, and John the Baptist.
        Joseph rightly tended to the recourses of his family, and although righteously gave to charity, did not abandon completely the needs of his family by donating all he had to the poor.
        It is completely within Christian principles to first tend to the needs of one’s nation, then look after the interest of the world.

        But about the 3rd Worlders, and their needs.
        Yes, so they want marketplace economy, but they also agitate for environmental protections, labor unions, consumer protections, and all the same list of things we do here.

        So when our leaders and politicians engineer the laws and regulations that govern international trade, shouldn’t they also include provisions for labor and the environment?
        There exists a global organization to resolve trade disputes and unfair competition, a group that endeavors to make the global marketplace free;

        What if there was a global minimum wage? What if there was a global EPA, with the same powers to levy fines and assess punishment? What if there was a global tax on wealth?Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        But about the 3rd Worlders, and their needs.
        Yes, so they want marketplace economy, but they also agitate for environmental protections, labor unions, consumer protections, and all the same list of things we do here.

        Yes. This isn’t any kind of point against anything I’ve said.

        So when our leaders and politicians engineer the laws and regulations that govern international trade, shouldn’t they also include provisions for labor and the environment?

        I don’t think you’re familiar with the history of trade negotiations and disputes. The U.S. has been the one pushing to allow environmental protections and developing countries that have been challenging them. See the turtle and dolphin disputes. The argument of the country challenging the U.S. is that we were using environmental protection as a cover for discrimination against their exports.

        But the purpose of the trade agreements was just to reduce trade barriers, leaving environmental and labor issues to the individual nations. Countries are allowed to engineer those for themselves. So I’m not sure what your complaint is here.

        But today there’s increasing pressure from NGOs to add environmental and other issues into agreements, so negotiating countries are increasingly responding to that. CAFTA, for example, addresses environmental issues.

        So I really don’t get your point, whether you think trade agreements prevent or prohibit addressing such issues, or whether you think it’s never happening, or what. Whatever it is, it suggests an unfamiliarity with what’s going on.

        What if there was a global minimum wage? What if there was a global EPA, with the same powers to levy fines and assess punishment? What if there was a global tax on wealth?

        What if? It would require nations negotiating and signing onto a treaty creating those institutions. Doesn’t seem likely in the near term, but sometime in the future it might happen. I just don’t get what point you’re trying to make here.

        The Christian principle of loving others equally does NOT prefvent us from protecting the interests of our family and kin and tribe.

        Depends on the interests, right? Defending your tribe’s interests in being vastly wealthier than another, impoverished, tribe? If your tribe has 1,000 gold pieces, and another tribe has 100, you are justified as Christians in creating rules that keep that distribution and prevent a shift to a distribution where your tribe has 800 gold pieces and the other tribe has 300? Give me some textual support for that, because I don’t see Christ being real approving of that. He’s the one who said “sell all you have and give to the poor” and praised the widow for giving more than the wealthier tithers.Report

      • Avatar Lowbrow Liberal in reply to James Hanley
        Ignored
        says:

        “But the purpose of the trade agreements was just to reduce trade barriers, leaving environmental and labor issues to the individual nations. ”

        Yeah, exactly.

        The point is that while it is considered eminently feasible to engineer the entire global economy to reduce barriers to the flow of capital and goods, there hasn’t been an equal drive to create a level playing field of environmental and labor regulation.

        So the cry of sympathy for the impoverished 3rd worlders falls flat, when we press one and turn a blind eye to the other.

        I just don’t see free trade advocates making the case for a social safety net in the 3rd World- its almost as if they enjoy the disparity between 1st world purchasing power here, and 3rd world wages there.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        The point is that while it is considered eminently feasible to engineer the entire global economy to reduce barriers to the flow of capital and goods,

        Eh, this demonstrates a fundamental misunderstanding. Trade is the natural, unengineered state. It’s hard for us to recognize this because of the negotiations it takes to create these agreements. But free trade–people buying from whomever else they want–is what exists in the absence of political engineering of the economy. Before we had governments that could set restraints on trade, people traded across social/national boundaries. It’s the setting of rules to constrain trade that is the engineering, because it’s an effort to change the natural state of affairs.

        Think of a river. If we put a dam on the river we are engineering it. If we remove the dam, we are trying to return the river to the pre-engineered state.

        there hasn’t been an equal drive to create a level playing field of environmental and labor regulation. So the cry of sympathy for the impoverished 3rd worlders falls flat, when we press one and turn a blind eye to the other.

        A little reading comprehension would go a long way. It’s the first world, the developed nations, particularly through their NGOs, that are pushing for environmental protection. It’s the developing countries that are more resistant, because they are concerned that strict environmental protections will limit their abilitu to develop. Some even see it as a smokescreen by developed countries to restrict their growth.

        I just don’t see free trade advocates making the case for a social safety net in the 3rd World-

        Because that’s a domestic issue. It doesn’t require any international agreement, it doesn’t need the developed world to do anything. This is a red herring argument.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        its almost as if they enjoy the disparity between 1st world purchasing power here, and 3rd world wages there.

        Holy cow. I’m flabbergasted.

        You’re the one arguing that we should keep wages high here even if it keeps wages low there.

        Free trade advocates are the ones arguing that even if trade reduces wages here it’s increasing wages over there, and that’s good.

        And you think they’re the ones enjoying the disparity? How perverse a conclusion is that?Report

      • Avatar Kim in reply to James Hanley
        Ignored
        says:

        James,
        “Because that’s a domestic issue. It doesn’t require any international agreement, it doesn’t need the developed world to do anything. This is a red herring argument.”

        Multinational Corporations in Mexico routinely break Mexican laws about pensions/wages/etc. I think multinational corporations are an international issue, as in some cases they can be strong enough to warp governments and markets.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        Bad governance? That’s primarily a domestic problem.

        Of course if we consider it an international problem, we could try for some regime change.Report

      • Avatar Kim in reply to James Hanley
        Ignored
        says:

        James,
        Touche, sir, and good point.Report

      • Avatar Lowbrow Liberal in reply to James Hanley
        Ignored
        says:

        I am not arguing to a restriction on trade per se- that isn’t possible, and I do agree that trade generally makes both parties better.

        What I am saying is that the current framework of free trade is a version of eating our cake and having it too.

        We want to live in a 1st world environment, with all its attendant luxuries and niceties- a civil society, decent wages, a sound legal and physical infrastructure; Yet we want to go shopping in the 3rd world, and take advantage of the disparity in living standards.
        Its a version of the 20th century ideal of wanting to earn a living in the bustling city, yet live in the peaceful bucolic countryside.

        These things are possible, for small numbers of people during short windows in time- yet they aren’t sustainable, because they warp and distort both sides.

        Eventually there is a settling of accounts, when wages drop in one place, and rise enough in the other- in fact, I would be surprised is libertarians weren’t the first ones to point this out.
        Yet in that gap of time, a lot of injustice and disruption occurs and that’s what we are seeing right now. Spontaneous order rarely meets justice.

        We can’t turn back the clock and live in isolated nations- but championing free trade as the solution to their misery is just arguing a false dilemma- as if there is no other choice between low wages or no wages.

        Again, anything less than championing a better standard of living and social safety net for all workers is insincere.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        Eventually there is a settling of accounts, when wages drop in one place, and rise enough in the other- in fact, I would be surprised is libertarians weren’t the first ones to point this out.

        Well, most economists are libertarian about trade, and they’ve been saying that since long before you were born. And this is the good outcome. As wages equalize and firms can’t go out and look for cheap labor, labor will benefit.

        Yet in that gap of time, a lot of injustice and disruption occurs and that’s what we are seeing right now.

        As though we don’t see injustice in countries that restrict their economies. Growing economic wealth undermines injustice. Look at the history of England, Taiwan, or S. Korea.

        Spontaneous order rarely meets justice.

        Nonsense. You’re using words you don’t really understand.

        but championing free trade as the solution to their misery is just arguing a false dilemma- as if there is no other choice between low wages or no wages.

        Nobody’s arguing that at all. You don’t understand what’s actually being argued.

        Again, anything less than championing a better standard of living and social safety net for all workers is insincere.

        Well, then you’ve just condemned yourself as well.Report

      • Avatar James Hanley in reply to James Hanley
        Ignored
        says:

        I think it’s time to wrap up this discussion. You’re not really making an argument that hangs together as a coherent thought piece. It’s a set of random moral concerns, none very well thought through, presented in an ad hoc manner, and with no evidence that you really understand the dynamics of trade or the dynamics of politics in which they hang out.

        For example, in your last comment you said it’s not possible to restrict trade. But of course it is–every country in the world is still doing it, sometimes in the ways they carefully sough to allow in the free trade agreements, sometimes in clear violation of their agreements.

        You suggested we’re blocking the environmental concerns of developing countries, clearly not aware that it’s actually been first worlders (like you) pushing for environmental protection, and third worlders wanting to first get wealthy enough to afford them, and often complaining about first world environmental standards.

        And your “moral” argument for preferring Americans over others–when what that means in practice is keeping a third worlder from rising out of poverty so that a first worlder’s middle class status doesn’t diminish from middle-middle to lower-middle–is undeveloped and never comes close to being justified as a moral position.

        You are clearly talking somewhat at random about things you “feel” about, but things that you haven’t taken the time to learn about. What you read in the popular media isn’t going to educate you on the topic. The vast majority of journalists don’t understand this, have never given any serious study to the economics of trade, but only report on the human interest and “if it bleeds, it leads” aspects of it. I recommend reading Krugman’s pop econ books. His Nobel Prize was in trade theory; it’s his specialty. And you’ll know you’re not getting an evil conservative/libertarian/Chicago School perspective.

        I’ll leave the last word to you.Report

    • Avatar Kim in reply to LWA
      Ignored
      says:

      In Mexico, Multinationals are constantly in trouble for not following mexican laws. Not that mexico can do anything about it, really.Report

    • Avatar Saul Degraw in reply to LWA
      Ignored
      says:

      I think some neo-liberals and libertarians are sincerely fighting for raising wealth among the poorest of the developing world but they are probably a bit too provocative in using the charge of “racism” for people who complain that decent paying manufacturing jobs are being replaced with low-paying service jobs in the West.

      Though I will really believe that neo-liberals are sincere when they support Bangladeshi efforts to unionize and fight for better workplace safety and conditions. It was highly revealing when the factory collapsed in Bangladesh last year and Matt Y wrote “Different countries have different safety standards and that’s okay.” Ooof.

      I think there is a balance. Yes Bangladeshis are being lifted out of poverty and that is good but you can still care about the labor demobilization in the United States. The problem here is that economics looks at wealth in a really complicated way that no layperson would ever do and I am sympathetic to the layperson way of looking at wealth. Suppose a factory worker used to make 20 dollars an hour plus health insurance and vacation. His or her factory job gets off-shored and then the replacement job is minimum wage at Wal-Mart or some similar service job without vacation or health insurance. Said factory worker is going to feel worse off even if the price of certain or many goods decrease. I don’t think they are wrong for feeling this way even if “economics is the holy grail” types jump up and down and come up with all sorts of complicated models about why they are better off. The price of other things like mortgages, rents, college tuition, does not decrease. Just the price of televisions and clothing.

      I see the craft economy and sharing economy as returns to sustenance economies and that is not good.Report

      • Avatar Kim in reply to Saul Degraw
        Ignored
        says:

        Lol. Support. Ha.
        How about Organize?
        Global Strikes provide an excellent forum for testing a wide range of communication structures. They ought to be performed more often.

        (n.b. what happened in Tennessee is a “global strike” situation, just
        with one where the workers have more institutionalized power).Report

      • Avatar North in reply to Saul Degraw
        Ignored
        says:

        I think you’re madly off base about the sharing economy Saul. What we see there, at least, is improved information technology allowing fallow assets (empty spare rooms in apartments that we don’t have people living in, cars sitting around when we’re not driving them) to be employed to produce value. That is pure win and certainly no sign of a return to subsistence economy. I also have no doubt that if the great recession had not happened things like AirBnb or Uber would still be taking root and taking off. If anything they’d probably be growing faster.Report

      • Avatar Lowbrow Liberal in reply to Saul Degraw
        Ignored
        says:

        I think its been pointed out elsewhere that the “sharing” economy is nothing more than a high tech version of poor women taking in laundry, or letting out rooms for rent as a way to make ends meet.

        Nothing wrong with that per se, but lets not let the bizarre marketing term of “sharing” convince us its somehow anything more ennobling than that.Report

      • Avatar Saul Degraw in reply to Saul Degraw
        Ignored
        says:

        @north

        I’ve seen Air BnB promote how their service is helping people pay the rent and seen people say that they now need Air BnB to help pay the rent.

        There have always been roommates and always will be roommates but if people need more than roommates or live in family/partners to help pay the rent in a post crash economy then it really is a return to a sustenance and poorer society.

        http://www.slate.com/blogs/moneybox/2014/06/13/hysteresis_will_the_world_ever_fully_recover_from_the_recession.htmlReport

      • Avatar Saul Degraw in reply to Saul Degraw
        Ignored
        says:

        @north

        I concur with @lowbrow-liberal and his analysis of the sharing economy.Report

      • Avatar North in reply to Saul Degraw
        Ignored
        says:

        Fair enough, I just don’t see it as a sign of some return to subsistence economy so much as an expansion of options for people. If they automate cars, for instance, automated taxis will quite likely become so ubiquitous and cheap that people will begin forgoing car ownership en mass. I don’t think that will be a sign that people are abandoning ownership society but rather that they’re taking advantage of more options.

        LL: I wouldn’t call the new sharing economy ennobling, maybe more efficient. If it allows people who’re inclined to share out time on their car or in their homes when they wish to where before the information system wasn’t there for them to do so I still don’t consider it immiseration. As you note letting out rooms is as old as owning rooms. I reject the idea that the sharing economy is some sign of the oncoming poverty society.

        Saul: I can’t/don’t claim to have the total answers but from where I sit the slow recovery is more a factor of it being a financial crash and active GOP malevolence in policy (see my response to Major Zed regarding public payroll). It feels to me like you’re looking at some short term trend lines and are drawing them out to impending doom. I don’t share that level of pessimism. Many big developing nations are proceeding up the development path quite nicely and in time (long term) they will become great importers of services and goods that’re made in America. I am confident that the economy will recover just as I’m confident that there’ll be people pining for an imaginary halcyon past right up until the next recession.Report

      • Avatar Kolohe in reply to Saul Degraw
        Ignored
        says:

        Somewhere, an aging hippie is crying, and does not know why.Report

  19. Avatar Damon
    Ignored
    says:

    Yeah well serves you right for trying to discuss politics, economics, or national policy with someone who really isn’t doing any critical though. I stopped engaging most folks in those topics years ago when I realized it was generally pointless. I do usually find one or two people who are willing to think about different ponts of view. One guy, a while back, was very smart and a good critical thinker and we had many conversations about wide ranging topics. We generally disagreed on most things but he was at least willing to hear my comments and respond directly to them and not spout platitudes, political sound bites, or such. I do miss him. Now, the people I run encounter are more like my “theatre chick” friend, who, when confronted with ideas they don’t want to think about or that run counter to their opinions, just raise their voice to shout over me saying “we are not talking about this!”….

    Whatever…..now I just resort to throwing out the occasional quip that I hope gets people to think, but if they don’t….meh.Report

  20. Avatar DRS
    Ignored
    says:

    You know what the real problem with libertarianism is? It’s boring. Paint drying on the wall boring. Sidewalks moving under pressure of continental drift boring. Watching trees growing boring. Nothing but quibbling over terminology over and over again. Never a suggestion of a policy solution to any problem.

    Now look at Radley Balko: a libertarian who does stuff that really matters, writes books and articles that real people actually read and he got a guy off death row who shouldn’t have been there. That’s a libertarian.

    Have a nice weekend.Report

  21. Avatar James Hanley
    Ignored
    says:

    @road-scholar

    Hey, down here!

    I’m sorry I was offensive. I called it bad pop economics because I see the balance of trade argument in the media all the time, always treated as “trade deficit is destroying the American economy!” They have no idea what they’re talking about, but it has become a generalized belief among the public that a trade deficit signals economic weakness, and that’s simply not true (among other things, a strong economy often means a strong currency, which makes it cheap to buy other country’s goods and expensive for them to buy your country’s goods).

    I was just pointing out that it’s hardly “pop economics” to tout theories that had been advanced by Nobel Prize winning economists and widely accepted not that terribly long ago. … as a general rule I consider arguments from authority to be especially weak in the area of economics

    OK, then, as long as we’re not doing that. 😉

    Just because you don’t favor Keynesianism doesn’t make it silly.

    I did cite Krugman, yes? But keep in mind that leading economists did not see balance of trade as crucial prior to Keynes, nor do they for the most part see it as crucial nowadays. I think it’s best to see that particular aspect of Keyenes’ thought an anomaly in the history of economic thought. I could be off-base, but given when you were taking your econ classes, it seems plausible that your profs were of that generation trained in that school of thought.

    Honestly, I don’t find a lot of criticism among contemporary economists about trade deficits in general, just about how we finance them and how we use the capital account surplus. They’re related issues, yes, but not identical ones, and it’s necessary to distinguish between them.

    California is embedded within the larger U.S. economy and drawing a line around what is and isn’t the California economy is a lot more complicated than just looking at the way goods and money cross the physical borders.

    That’s an observation, not an argument. The U.S. is embedded within a larger economy as well, and figuring out what is and isn’t the U.S. economy is a lot more complicated then just looking at the way goods and money cross the borders. Here’s Hal Varian talking about how the trade deficit is poorly calculated.

    According to research by Ken Kraemer at UC Irvine, the component parts of the iPad are imported to China from South Korea, Japan, Taiwan, the European Union, the US and other places for final assembly. None of the component parts are made in China: it’s only role is assembly.

    The value added by the final assembly in China is about $10. Nevertheless, each iPad exported from China to the US increases the US trade deficit with China by $275.

    The same misleading accounting holds for other products. If China buys steel, aluminum, and machine tools from Australia and uses these parts to build a ship which they then export to the US, the total value of the ship is counted as an export for China.

    Now it is true that California’s currency is just the same currency as the rest of the states (and whether or not Friedman’s right about California as an example, let’s just assume it—or some other state—fits that model, for the sake of argument), but it still has an issue of whether more money is flowing out than in, right? In fact it could have even more trouble because it could not adjust its money supply to fight the imbalance, and the currency would not necessarily come back to it, since it could so easily go to another state (there’s no money market for trading USD for USD, obviously), so a trade imbalance should, I think, hit a U.S. state even worse than an independent country with its own currency. (Although to be fair, at least the state doesn’t have to worry about a speculative attack on its currency.)

    Are we really getting more for less? Consider how this works out over time. We send them dollars and they send us… stuff. So how much is all that stuff we bought in the ’80s worth right now?

    Not a well-framed question, I’d say. The question is what this stuff did for our quality of life, what the lower costs did for our ability to afford more stuff.

    Look, I’m on board with the idea that the good life involves less stuff. I’m growing weary of stuff (except for tools!), and once the kids move out, and especially after I retire, I’m likely to dramatically reduce the amount of stuff I have—I’ll become one of those irritating proselytizing downsizers. But as a general rule, people want stuff, and the ability to be able to afford stuff is one of the indicators of growing wealth.

    And what is that money? It’s not much. I’m monetarist enough to say we can always print more (within reason—I don’t advocate high, or even hyper—inflation). And we get that money back and can put it to investment use, so we get to use our money twice. Assuming, that is, that we use the money for purposes that create economic growth, but again, that’s partly a policy decision.

    So who’s getting wealthy?
    It’s not a zero sum game, where only one side can get wealthy. It’s a symbiotic relationship—we’re both getting wealthy.

    I need to get on the road

    And as always, I wish you safe travels. I have a good friend who used to be a long-haul trucker, and I have no idea how you guys do it. I’ve done my share of long-haul driving over the years, and every trip leaves me physically and mentally exhausted.Report

    • Avatar Road Scholar in reply to James Hanley
      Ignored
      says:

      @james-hanley , I’m going to respond with just a few general comments because this thread is a bit too specific for the OP and it’s all going to very soon roll off the front page anyway.

      First, I’m not a mainstream pundit, I’m not parroting their arguments — which I agree are often terrible and ignorant. Likewise, I’m not channeling Keynes or any other professional economists and I eschew “arguments” along the lines of “Smith said X so what do you think of that, huh?” I neither offer them nor am I impressed by them as rejoinders. Arguments need to stand or fall on their own merits and, for better or worse, my thoughts expressed here are totally my own (while of course acknowledging the influence and inspiration of subject matter experts).

      In particular, I’m not concerned with what a trade deficit “signifies” about the strength of our economy. In fact, I agree that it signals a strong economy in general and a strong currency in particular. In the latter case, too strong in fact. Rather, my concern centers around the consequences of a large and persistent deficit. And not particularly on growth or “strength” per se (however that’s defined), but on employment, wages, and (I’ll wait while you wrap duct tape around your head) income inequality.

      My thesis is really more about accounting than economic and it’s pretty simple. A trade deficit means that we’re, as a nation, consuming more than we produce. Consequently, consumers, who are also the workers, simply don’t earn enough to pay for their consumption. They can’t; it’s mathematically impossible. The result is no different than when you do the same personally. Ever increasing debt. Personal debt, governmental debt, corporate debt, have all risen dramatically over the last forty years. And make no mistake, this has been deliberately engineered by our friends on Wall Street at the Fed — Volker, Greenspan, and Bernanke — in conjunction with Congress, particularly Republicans. Why? Because there’s people at the top making impressive piles of cash off the situation at our expense, you and me.

      And that investment you like to point to is only investment from the perspective of the foreign entities. From our perspective it’s simply debt, and gobs of it. Somehow you’ve been convinced that going deeper and deeper into debt is the key to getting rich. Weird.Report

      • Avatar James Hanley in reply to Road Scholar
        Ignored
        says:

        And that investment you like to point to is only investment from the perspective of the foreign entities.

        Well, I have a hard time wrapping my mind around the idea that Honda building an auto plant in Tennessee is only good for Japan. Or that borrowing money for capital investment only benefits the country we borrowed the money from.

        I’m with you up to a point. I agree that the way we finance our deficits and the way we use them are problematic, and if we weren’t financing them and spending them as we do, they would be smaller. But that means the size is really a symptom, not the problem itself. And I can’t agree with you on the comment quoted above.Report

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