Economics Foreign Policy Philosophy

Unintended consequences

You don’t have to be long around Republicans before they teach you the “law of unintended consequences”–the principle that, sometimes, things don’t go according to plan and sometimes they have the opposite effect of the one you intended. In a discussion of public policy, once your opponent resorts to the “law of unintended consequences” you know you’ve won the argument. You can interpret this to mean

1. Your idea seems like a good one.

2. She can’t think of any reason it won’t work, but…

3. It might not work.

Which, of course, is true about every good idea, ever. It even applies to the idea of doing less. The idea of reducing regulations is equally subject to the law of unintended consequences. For example, deregulation of media and telecommunications in 1996 has been, generally, a disaster with terrible unforeseen repercussions including ruining music, hampering the internet and giving money a louder voice in politics.

But still, the “law of unintended consequences” is preached to and by Republicans and Libertarians every day. To avoid “unintended consequences,” conservatives prefer to make their mainstay ideas which are manifest bullshit from the beginning. If I can’t rule out that a policy will give different results than the ones I intended, the best policy, they seem to argue, is to pursue nonsensical or even Machievellian goals, hoping to stumble into good results.

But in Republican minds, the law of unintended consequences doesn’t apply to things like privatizing social security or defunding the EPA, and it especially does not apply to foreign policy (arming the Syrian opposition? What could go wrong?). So, the next time you hear your Republican friend say “well, but you know the law of unintended consequences, don’t you?” don’t get frustrated. Simply apply your palm to your face and walk away victorious.

Faith Race

Can people change?

I may be missing my audience with this post. I don’t have much hope many people will care about the later lives of two dead opponents of civil rights. But the stories of these two men are both not only fascinating to me as a microchasm of American race relations, but also inspire me to hope that people, myself included, can change. So, here’s an introduction to Governor George Wallace and Senator Robert Byrd in the 1960s.

George Wallace: Champion of Segregation

George Wallace came from a political family and was active in politics from a young age. At age 33, he was an Alabama Circuit Judge and issued an injunction against the federally-ordered removal of segregation signs from train stations. By 1962, he was elected Governor of Alabama. In his inaugural speech he used the line which often defines him:

In the name of the greatest people that have ever trod this earth, I draw the line in the dust and toss the gauntlet before the feet of tyranny, and I say segregation now, segregation tomorrow, segregation forever.

In 1963, after integration of Alabama schools was ordered by a federal court judge to admit black students to the University of Alabama. Three students–Vivian Malone Jones, Dave McGlathery and James Hood— were admitted, but as Jones and Hood arrived to register, Governor Wallace personally blocked their entrance to Foster Auditorium, where registration took place. After federalizing the Alabama National Guard, John F. Kennedy ordered Wallace to step aside. After some bluster, he did.

Robert Byrd: Exalted Cyclops?

Robert Byrd’s first leadership roles were in the chapter of the Ku Klux Klan in his home town of Sophia, West Virginia. He eventually became the top official in the chapter (Exalted Cyclops). In 1946, at age 28, he wrote this gem to segregationist Senator Theodore Bilbo:

I shall never fight in the armed forces with a negro by my side … Rather I should die a thousand times, and see Old Glory trampled in the dirt never to rise again, than to see this beloved land of ours become degraded by race mongrels, a throwback to the blackest specimen from the wilds.

In 1964, he joined other Democratic Senators in a filibuster of the Civil Rights Act.

Into every life…

By 1972, George Wallace had been elected Alabama governor twice and completed an unsuccessful 3rd party bid for President in 1968. While campaigning in a bid for President, he was shot 5 times. One bullet hit his spine, leaving him paralyzed from the waist down. He would remain so for the rest of his life.

Robert Byrd, by his own account, experienced a crisis of faith in 1982 when his teen-aged grandson was killed in a traffic accident.

For both men, life taught them some things they didn’t know in their twenties and thirties. Byrd recalled that his experience with losing a grandson brought him to the realization that “African-Americans love their children, too.” Wallace describes being “born again” some time after his attempted assassination.

For both men, this new wisdom translated into markedly different public policy. For most of his later career, Senator Byrd’s voting record was dubbed perfect by the NAACP. In Wallace’s last term as governor, he made a record-setting number of appointments of Black men and women to state posts. Both men made concerted efforts both to distance themselves from racist groups, to encourage others to avoid their mistakes, and to make clear their remorse at their role in the oppression of Blacks. Wallace attended the 30th anniversary of the Selma-to-Montgomery march, addressing the crowd and asking their forgiveness. “May your message be heard,” he said. “May your lessons never be forgotten. May our history be always remembered.” How it must have pained Wallace to think of his name forever associated with bigotry and racial violence.


I sympathize with those who might express skepticism with this change of heart for both men. They each continued to make decisions which continued to reveal hints of racism or at least racial ignorance. It’s certainly possible that they’re simple opportunists whose views changed with public opinion. But Wallace and Byrd are both men who demonstrated their ability to take a bold stand against the popular tide. Byrd was the Senate’s staunchest opponent of the Iraq War. At the height of American anger and fear, he exhorted toward calm and care. Both have been outspoken advocates for progressive racial policies to audiences who did not welcome the message.

It would be a shame to let the behavior of these 30-somethings dictate our view of them for the rest of their lives. A nation that takes such pride in its Christian foundations, should rejoice at these stories of redemption and should emulate the example, especially of Governor Wallace, in admitting and seeking to rectify our mistakes at both a personal and a national level.




I love you, but your incessant atheo-splaining is tiresome.

I’ve been watching a bit of Bill Maher recently. I appreciate his wit when it comes to things like fiscal policy. But, like a junky, he can’t help but return to his true favorite compulsion–bagging on God. I’m not opposed to a sensible, respectful discussion of the merits of faith. What I object to is the constant strawman-ing wherein Bill first tells me what I believe, then tells me why that’s bad. A recent example is here. Bill tells Ross Douthat, conservative politico, NYT columnist and Catholic, that not believing all of the Bible is somehow cheating. The entire exchange is worth watching as Douthat articulates a very reasonable Christian position, but the exact wording from Maher is

If [the Bible is] not 100% true, I would say the whole thing falls apart.

Confronted with a Christian whose faith has room for things like evolution and a metaphorical interpretation of some of the Bible, Maher becomes suddenly desperate to put Douthat back into the comfortable box in which he’s used to putting theists. I’ve had a few of these conversations myself where I’m expected to defend, to an atheist friend or acquaintance, the faith of the last Christian she talked to. I know this is sometimes done in interest of time, because not many atheist have interest in the fine points of my faith. But I need you, atheist friends, to appreciate that Christians (or Muslims, or Jews, etc.) are not a monolith. There’s staggering variety in the beliefs of Christians worldwide. For example, returning to Maher’s statement, even among Christians in the United States who report attending church every week, only 54% think every word of the Bible is literally true.

People of faith are also surprisingly self-aware. I recall one conversation with a colleague in graduate school. I studied experimental physics which occasionally left us some down time while various things heated up or cooled down or measured this or that. In one such lull, my colleague, who knew I was a Christian turned the conversation to religion. He did not believe in God and ventured, sheepishly, to ask, “Have you ever thought that…maybe…you only…um…believe in God because that’s how you were raised?” This question, stated with such hesitation is riotously funny to me. Only the non-religious could assume that someone pursuing a doctorate in physics at a prestigious university could have grown up in a religious home and never pondered this question. He is a good friend and was only trying to spare my tender feelings, but his question grows out of the assumption that theists like me only believe because we haven’t thought it through.

I’ve dealt with this enough to coin a new term for this phenomenon. Hitching a ride on the recently coined “mansplain” I submit

atheosplain \ˈā-thē-ō-ˌsplān\ v.t. To begin your conversation with a religious person by first educating them on the tenets of his or her own faith.

I think especially with faith, which is often something people have come to through very long, winding and difficult paths, it’s important to allow people to self-define. Respect the journey even if you’ve arrived at a different destination. This advice applies to religious people, too. We should respect that atheists are on a journey as well. Atheists, you may be underestimating the interpersonal connection you’ll make by asking questions of a believer about their faith. Let’s talk. I promise not to preach (again, I can’t speak for all Christians) and to listen equally respectfully to your explanation of the source of your morality and the meaning in your life, whatever that be. Then, you can proceed to tell me why I’m wrong. And so, for you, Mr. Maher:

New Rule. If you’re going to tell me why my belief is ridiculous, you first have to take five minutes to understand what I believe.

America Morality

On Exceptionalism

My children are exceptional. They just are. I’m sorry if you don’t like to hear that. I will always choose them over your children. You should get used to that.

My children are exceptional in that I am prepared to work and sacrifice that they may become amazing people. But no matter what kind of people they become, I will love them. When I say that, I mean that I will always hope for wonderful things for them in a way that I will never feel for your children. Don’t get me wrong. I appreciate your children’s talents and successes. They’re great. But they’re not my children. Objectively, I know mine won’t always perform better than your children but I’m prepared to stand by them even when they come in last place. I’ll even cheer for your children or coach them or encourage them, but not like I cheer for mine. I’ll take their side in a disagreement. Probably I’ll do this more than I ought, but there are plenty of people ready to thwart my children. They deserve at least one consistent ally.

I realize that you feel the same way about your children and that there’s a certain symmetry that makes my conclusion (that my children are the best) no more valid than yours. You’re entitled to your wrong opinion.

But mine is a wide-eyed love. I see the mistakes my children make. Not to see them would be to fail them in my responsibility to make them better. I do not blindly defend my children’s actions, nor do I always submit to their wishes or follow their plans. Again, to pretend they always do right is not love. It’s laziness and bad parenting.

So, too, with my country. I love the United States more than any country in the world. I’ll always hope for her success in every arena. When we do wrong, as a country, I’m going to speak up. That how much I love the USA. There is a set of people who think that pointing out the ways the America has done wrong is not patriotism. They think I should deny the Tuskegee experiment and redlining and Stonewall and the Battle of Blair Mountain and just keep waving the flag as if nothing ever happened. I fear for those people’s children. Because that’s not love. It’s cowardice. It takes work and courage to love a country that’s not perfect.

There may be a lot of fine things about your country (unless you’re Belgian. Belgium is the worst.). Some things about your country are undoubtedly better than mine (again, except for Belgium). But it will never be my home. I know America has given us atrocities like the trail of tears and Nagasaki and Iraq and Fergie and Iraq again, but it also gifted the world a lot of nobility and beauty and peace including my beautiful childhood. And so, I’ll sing my lungs out when the Star-Spangled Banner plays. And I’ll paint my face red, white and blue and chant “I believe that we will win!” And I’ll fight for her on varied battlefields.

The other thing I love about both my children and my country is their potential to be even greater. I’ll do what I can to make them all beacons of truth and righteousness. Because that’s what love looks like.

Economics Taxation

Tax the Dead!

Inheritance tax is, by far, my favorite tax. If you concede that there’s any reason for government spending, spending the money of people who don’t eat, work, spend money, recreate or procreate is the best scenario of all. Which is why I was surprised to read un-stupid Harvard economist Greg Mankiw defending massive inheritance in the New York Times.

The way Mankiw goes about it is also perplexing. He begins with the idea of “consumption smoothing.” I find this odd since consumption smoothing and a related concept, diminishing marginal utility, are powerful ideas for justifying heavy taxes on the rich and even brazen wealth redistribution. Mankiw explains it clearly

People get utility from consuming goods and services, but they also exhibit “diminishing marginal utility”: The more you are already consuming, the less benefit you get from the next increase in consumption. Your utility increases if you move from a one- to a two-bathroom home. It rises less if you move from a four- to a five-bathroom home.

An extension of this is that taking $1000 from a very wealthy person and giving it to a very poor person increases the overall happiness of the universe. To the rich man $1000 might mean an extra day in Vail with the family–a nice thing. To the poor man it might mean dental work, college tuition or not getting evicted–all quite essential things. So, taking that extra vacation day from the rich man to fix the poor man’s teeth is a net gain for the universe. So far Mankiw is off to a poor start in justifying massive, inter-generational wealth accumulation.

Zombie capital

A common response to this idea, and the one Mankiw employs, is that wealthy people, on average, use their money more wisely. That’s how they got so wealthy. Speaking about a collective average, rich people make better financial decisions. They watch their dollars carefully and hustle when those dollars need it. They have the skills to turn those dollars into more dollars, often by producing the things you and I need and want. Again, I’d like to be very clear that this is not the case 100% of the time. A serious discussion could be had about whether it’s even true most of the time. But I think a strong case can be made that “rich people” are a group selected for their ability to make the things and render the services people are willing to give the most money for. This is, however, not the discussion I want to have here. My point is much simpler.

Dead, wealthy people do not do any of those things.

They don’t make financial decisions. They don’t invest or hustle or manage or innovate. They haven’t any “sweat equity” left to give. So, the discussion here is about the children of wealthy people. The statement that people with wealthy parents are better users of money is a much more tenuous proposition. Mankiw himself does not shy away from this proposition and it’s here that he goes thoroughly off the reservation. His contention is that large accumulations of money are necessary for economic growth and that the poor do not accumulate capital because they count on “regression to the mean” improving the standard of living of their children. Because of diminishing marginal utility, they prefer to spend money on themselves immediately over saving it for their children who will most likely be richer.


Wrong on all counts. Firstly, many small accumulations of capital are every bit as effective as one large lump. A basket watched by 100 eyes is much safer. Many studies have shown that the collective wisdom of many individuals is often more accurate and reliable than that of experts (isn’t this your line, free marketeers?). One tremendous point of progress in our financial system is the democratization of finance. Ironically, even as middle-class incomes have stagnated and financial instruments have become more opaque, the ability of ordinary folk to participate in markets has grown. Today, anyone with $500 can invest in a wide variety of equities and derivatives cheaply and quickly. Most recently, we’ve seen pooled “small money” beginning to replace “angel” money and venture capital on peer lending sites and kickstarter. Employee-owned businesses are making a comeback as well. Small money is the future. What we need is more investor education on how to make your small money work for you. Ours would be a much healthier economy if more people were investing small amounts.

With all thy getting, get understanding

Next, when you count investments in human capital, the poor are great savers. Education is a capital investment. And the poor and middle class do it with abandon. I’ve watched families mortgage to the hilt to land in the right school district or to make outrageous tuition payments. It’s even clearer when you include all of the unpaid labor that goes into raising and education children. This exchange of money and time for human capital is every bit as valid as the investments of the super-rich. Even families raising children at a subsistence level are providing a necessary future resource to the economy. The poor tend to have more children and they make less money, so they spend a much larger fraction of their wealth on tomorrow’s workforce. The question I would rather have heard Mankiw address is whether our national investment portfolio includes too much or too little of these human capital investments.

The first sign of under-investment in workers and education would be a wide gap between employment rates for skilled and unskilled workers. In 2013, workers with just a high school diploma are unemployed at a rate of 7.5%. In that same year, just 2% of workers with a professional or doctorate degree were unemployed. Adding to this, the under-educated make up a much larger fraction of the unused potential workforce on disability or in prison who are not counted in the unemployment statistics. Given the importance of education in our information economy, there’s a strong case to be made that the ways the poor spend their money (on raising and educating children) are exactly what our economy needs more of and that their tax burden should be reduced to boost long-term growth.

I think what Mankiw is trying to say is that inheritance taxes discourage saving by taxing those most prone to save (at least in the sense of saving actual dollars). It is important to pay attention to how public policy affects individuals’ decisions to save or consume. However, there are many ways to encourage saving and not many of them are as disgusting as giving someone tens of millions of dollars because of the circumstances of her birth. If we’re interested in encouraging saving and investment over consumption, why not take a page from our gentle socialist friends across the pond? In UK, everyone is allowed the equivalent of $16,000 per year in tax-free capital gains. This means that most of the working middle class do not pay any tax on their investment income in their younger years since most of their income is wages. Talk about an incentive to save! Why not pay for at least some of this via a heavy tax on inheritances and “let each receive accord to her merits”?

The inheritance tax has almost no downside. It is, in every way superior to every other tax I can think of. Tax the dead. They don’t even vote!

Economics Education Taxation

Why your otherwise smart professor is a socialist

I saw a video the other day from the American Enterprise Institute about the morality of capitalism. Capitalism, to paraphrase, clears access to the satisfaction that comes from achieving something. Being given the same thing brings us far less happiness. Government, then, takes something from someone to whom it brings a lot of joy and gives it to someone to whom it brings very little. Further, it removes the motivation for those receiving welfare to seek the joy of production and achievement. Yuck! How can we be so heartless?

It occurred to me as I was watching that, while I’ve achieved many things in my life, the American Enterprise Institute might scoff that them.  You see, I work for big companies or worse, universities, where I do research that never makes the New York Times and won’t be featured in a product next year–or next decade. Even the work I do for private companies is often funded by public grants given either to my company or to our customers. Like the villains in the video, I’m often not pleasing “customers” so much as the government committees who review grant applications.

Gittin’ ‘er done, collectively

When I achieve things, I share credit with thousands of people. Can this collective achievement be as satisfying or valuable as the individual achievement described in the video? Your professor and I think so. We are used to being a small cog in an absolutely enormous machine and we recognize that some things can only be done this way. My grandfather had a tiny role in the early flights of the Space Shuttle–a very big deal that improves your life whenever you turn on your GPS or check the weather report. But if you listed the contributors to that project, Grandpa would surely be buried somewhere in the back with the dolly grip and craft services. He didn’t mind that at all. Whether it’s better play a small part in our mission to space or a large part in a Jamba Juice franchise can certainly be debated.

These collective works we’re about are far-reaching and critically important. One day we’ll announce cold fusion and a cure for cancer, saving the planet and literally millions of lives. Someone who put together the last piece of the puzzle will be on the cover of Time. But behind her, there’ll be legions of scientists who will sit back in their easy chairs with a self-satisfied grin, knowing they’ve done good work and ever so glad they didn’t take their uncle’s advice to drop this ivory tower nonsense and become a day trader.