You Can’t Make This Stuff Up!

The timeless Dave Barry commented on the ability of some people to say exactly the opposite of the truth.

The value of advertising is that it tells you the exact opposite of what the advertiser actually thinks. For example, if the advertisement says “This is  not your father’s Oldsmobile,” the advertiser is desperately concerned that this Oldsmobile, like all other Oldsmobiles, appeals primarily to old farts like your father.

It turns out Twitter is the same. Lately, the phrase “You can’t make this stuff up” has been getting a lot of air time and, in many instances is attached to a “fact” that is 100% made up. Not only that, it is often attached to ideas that are the very first thing you’d make up in order to slander someone. Take, for example, this tweet

Now, Reggie is a constant critic of the interim Ukrainian government. On this point, the two of us disagree. This is neither here nor there. The point is that, for someone like Reggie, who loathes both the Ukrainian interim government and President Obama, it’s absolute child’s play to invent the idea that Obama is arming the Ukrainian “Nazis”. I’d be shocked if this weren’t the first thing that came to his mind. To briefly lay out just a few facts, the Obama administration has, so far, resisted pressure from Congressional Republicans to arm Ukraine and while there are neo-Nazi elements who participated in the overthrow of Yanukovich, it’s hard to make a case that they’re a dominant influence. (For my thoughts on the GOP’s ham-handed, amnesiac approach to Ukraine feel free to check out this recent post.)

Pelosi loves unemployment?

I was involved in another conversation on Twitter in which I questioned the source of a quote allegedly by Nancy Pelosi. @LriHendry claimed that Nancy Pelosi said (Lori’s quotation marks, not mine) “Employees cutting hours is a good thing. It gives that person time to pursue dreams and passions.” It was followed by Lori’s personal comment, “Yes. She really said that!” Now, that didn’t seem like something likely to be said by anyone who ever wanted to be elected again, so I googled a little, came up empty, then replied, “No. She didn’t. You can’t just make stuff up.” To which Lori responded (like you knew she would)

After some time, Lori gave up her search for a source of this quote, which, I think, is a misreading of an interview of former Speaker Pelosi by Candy Crowley.

“You can’t make this stuff up” is becoming the go-to conservative defense in response to fact-checking. It’s like the bogus posts that used to circulate social media complete with a link to with an anchor like, “Snopes has already confirmed this is real!” But the real question is, at what level do the posters, tweeters and pinners know they’re being deceitful and when are they guilty of mere credulity.

Pelosi loves emergency rooms?

This final example is by far the best and here the line between deceiver and deceived is quite blurry. Another invented Nancy Pelosi quote, circulates Pinterist, Facebook and Twitter and says something like this:


Recently on Twitter, @ConservPSTeacher tweeted this link and added

The quote is, of course, made up. It turns out it originates on a conservative satire website which likens itself to the Right-leaning version of the Onion. The best part about this example is that, in the Pinterist link, the picture shown is pinned from the very Politifact article which debunks the quote!

And so, I think it’s appropriate to book-end this post with Dave Barry quotes. This one is from the same article above and perhaps explains why Republicans are turning to fabrication to forward their political goals.

The most powerful force in the universe is gossip.

You see, each of the ideas above are viral sensations. It only takes an ignorant second to repost them to your equally gullible friends and followers who desperately want to believe what you’ve told them. But no one who’s not a major news outlet (and not even all of those) discovers they’ve posted an erroneous non-fact and issues a correction. That would be a lot of effort and embarrassment. And even if they did, the correction is much less fun to retweet that the salacious original. And so they slosh around the internet and land periodically in your inbox and twitter feed. Mark my words, one of these days you’ll open your email to read

This is not your father's Oldsmobile.  CAN'T MAKE THIS STUFF UP!


Class Education Gender Race

Check My Privilege? What privilege?

As a former college Republican myself, I had great sympathy for Tal Fortgang, Princeton student conservative, Fox News guest, and author of Why I’ll Never Apologize for My White, Male Privilege. I could hear myself saying some of those same things. And I ached with embarrassment. And so for his good and for mine, I’m posting

An open letter to Tal Fortgang and to my 19-year-old self:

Dear privileged white dudes,

You’re angry. I can tell. You’re frustrated that the world won’t hear you like you think it should. Your sincere and rational arguments aren’t reverenced as they should be. And I know where you’re coming from. I remember hearing exposition of social inequality as a indictment of myself and a devaluation of my talent and effort. Right now, in your darker moments, you think sometimes the brown kids get all the breaks. They get all the scholarships, right? You feel under-appreciated and unfairly passed over for accolades and criticized for oppression to which you’re not party.

I’m here to tell you I’ve been there and that there’s a third way to approach race, class and gender from your perspective.

First, it’s important to establish some facts.

Number 1. You’re a lucky guy. Miraculously lucky. Much of your luck is actually the result of the sweat of people who love you. Your grandfathers and grandmothers fought and worked and were beaten and went hungry and without medical care, to build your life. Your parents saved with admirable gusto, then mortgaged their future to pay for your place at the table. They worked nights and weekends for bosses that abused them to feed brats (you!) that sassed them then borrowed the car and wrecked it. Their gift to you could be measured in literal years taken off of their lives. And they did it all with pleasure because they loved you. And before there was you, they loved the vision of you. But all of those things, you didn’t earn.

Number 2. You’re a hard worker yourself. No one should devalue the fact that you studied and worked and practiced and prayed while others of your high school friends partied and slacked off. It would have been nice to spend some time in home economics or consumer math. Instead, you dragged your feet to Mr. McCarthy’s calculus class where you’d surely get a solid hour’s worth of homework. But you went every day (except that one day you skipped school to go to Wild Waves). Well done.

Number 3. You’re (temporarily) stupid. It’s not your fault. What makes you stupid is all the things you haven’t seen. In particular, some of the things you haven’t seen are the things your grandparents have. Like people assuming you’re lazy or irresponsible or criminal because you’re poor or speak with an accent. Or being judged first by the shape of your body. Or having no idea how to fill out a FAFSA.

But you won’t always be stupid. You’re quite close right now to a lot of wisdom. Expressing gratitude to your parents is an important foundation. Right now, you still feel like an extension of your parents’ family. Your successes are their successes and their efforts feel a little like your efforts. Denying yourself the advantages they worked to give you would be denying it to them as well. But as you get older you’ll meet very deserving, talented and hard-working people who weren’t given the things you were given. And soon, God willing, it will occur to you that, while someone certainly earned your privilege, it wasn’t you, or at least not primarily you.

And at that moment, you may even realize that while your effort was significant, doors have opened for you your whole life because people expect to be led by someone your color and gender. Principals, professors and bosses see in you an echo of themselves. When you assert yourself, it’s interpreted as a young man growing into the leader he was meant to be. It’s not that way for everyone. And that’s before even considering what your parents gave you individually. Is a minority scholarship any different than the tuition grant you got from the Get Tal To Move Out of the Basement Foundation?

So, as someone who’s been where you’re standing, here’s my unsolicited advice to you:

Listen more. That doesn’t mean you stop expressing your thoughts. But your instinct is to speak a little too often. Maybe only speak the cleverest half of the things you instinctively would. Spend the rest of the time listening to other perspectives and trying to imagine what it would be like living someone else’s life.

Do speak. But as you do so remember that the perspective of privilege has been heard. It’s been heard and codified–canonized even–in laws and textbooks and even in scriptures. That perspective is as valuable as any other but, in particular when the topic is social inequality, you may be the one speaking from a position of ignorance. Asking sincere questions is almost always welcome.

Stop hearing personal criticism. Living as a white man in a system that advantages white men does not make you bad. Refusing to acknowledge it does…a little. Often when we discuss social justice, we’re talking about things that happen at institutional levels. You don’t have to be a misogynist, or even a man, to be a part of a system (a company, a university) that disadvantages women. So, instead of assuming you’re forever relegated to play the villain in this narrative, hear an invitation to be part of the solution.

The next time you hear “Check your privilege,” hear it in your grandfather’s voice. Are there times when he might reprimand you for ingratitude? Would he relate better to you or to the person on the opposite end of your argument? Would he give you less credit than you give yourself? When you refuse to acknowledge what he’s given you, you disrespect him.

You’re a good person.You don’t harbor ill will toward others. Once you gain a little knowledge, you’ll be a great help to the world and a happier person yourself.

Your sincere ally,


Gender Race

That’s Reverse Discrimination!


7 of 10 Fox News viewers think America is unfair to White people

A few years ago, the Brooking Institute reported that, among regular viewers of Fox News, nearly 7 in 10 believe that, in the United States, discrimination against whites is a bigger problem than discrimination against blacks and other minorities. In the context of the disproportionate success of white people in America, the racism in that statement is astounding. To convince yourself that whites are more successful in business, education, politics and science in spite of a systematic disadvantage, you’d have to be quite thoroughly convinced of the genetic superiority of white people.

GOP leaders agree. In Mitt Romney’s infamous “47 percent” speech, we mostly ignored his statement that “had [his father] been born of Mexican parents, [Romney would] have a better shot of winning this.” You heard that right. Captain Oblivious is so fundamentally superior a person that he’d have risen to the top no matter where or to whom he’d been born. And if it happened to be to one of those Mexican families that get all the breaks, he’d be a shoe-in.

“So, what?”

So, there’s a despicable racism that makes people think “reverse discrimination” is common. There’s also a perilously warped sense of justice behind the belief that society should worry more about disadvantaging the white beneficiaries of centuries of slavery and imperialism than about mitigating the damage to the children of its victims. We are only a generation or two separated from a time when Blacks were effectively precluded from voting in some states. So, instead of debating whether this-or-that program is discrimination against white people, perhaps the best reaction to accusations of reverse discrimination is “so, what?”. White men oppressed and enslaved the world for a thousand years. Will it really all come crashing down if Latinas have a leg up for a few decades?


Economics Environment Taxation

Governor Stupid: “Warren Buffett should write a check and shut up”

We turn our attention to Chris Christie, who, in truth, is my kind of Republican. But nobody’s perfect. Back in 2012, he repeated a familiar refrain in the GOP, although he stated it more forcibly than some. In response to Warren Buffett’s revelation that he pays a lower tax rate than his secretary, Christie said that Buffett should “just write a check and shut up.” That is, if Buffett wants to pay more taxes, he can. What Christie resents is that Warren Buffett wants to force others to pay more taxes to support his favorite programs.

WilliamFBuckleyWilliam F. Buckley once said something related

Liberals,  it has been said, are generous with other peoples’ money, except when it comes to questions of national survival when they prefer to be generous with other people’s freedom and security.

Liberals, including thisweekinstupid, disagree. Once again, an ignorance or underestimation of a basic market failure causes us to talk past one another. Government agencies, including the Department of the Interior, NOAA, the FAA, the CDC, and the SEC,  produce what are called “public goods”–goods that you don’t have to own to enjoy. A more thorough discussion of public goods (now featuring math!) is in our first ever thisweekinstupid appendix.

Public goods for non-economists

In brief, Investopedia defines a public good as a product or service that one individual can consume without reducing its availability to another individual and from which no one is excluded.… National defense, sewer systems, public parks and basic television and radio broadcasts could all be considered public goods. 

Left to the free market, public goods will be under-produced. That is, the dollars I voluntarily spend on public goods return a benefit spread over a large group, so, I tend to lean toward spending on private goods, the benefit of which I can secure to myself. This is rational and efficient on a personal level, but irrational and inefficient on a societal level. This is known as the “free riders” problem.

mowingAn example

Imagine five homes in a cul-de-sac. Each of the homes is for rent by a different landlord. A local landlord’s association reports that a $30 per month lawn service increases the rental value of a property by, on average, $40. Further, $100 worth of landscaping of a median in the middle of the cul-de-sac increases the rent for each of the houses by the same $40. A house with a lawn service and a landscaped median can get $55 more than without any landscaping at all. What should I as a landlord, do? Considering only myself, a lawn service for my own lawn is a good deal, so I sign up. But, if I can get everyone to chip in, landscaping the median is even better. If everyone contributes, we can get the same benefit for only $20 each. Imagine a few of us try to pull the money together for a landscaped median. But, as good libertarians, we’re not going to compel anyone to contribute.  Unfortunately, one owner sees the opportunity for a free ride. If she pays only for her own lawn and the rest of us pay for the median, she can make $55 more in rent for only $30 in lawn care. The rest of us are left with a choice. Pay $25 each to landscape the median, or pay $30 to landscape our own yards. The median is still a better deal, but less so than if we had enforced a contribution, for example through home owner’s association dues.  Public goods work the same way in a larger community. In the absence of public funding for arts, parks, public highways, defense, etc. the temptation to free-ride causes us to spend less than is most efficient. Failing to properly value public goods and take steps to produce them, wastes resources. Where public goods are concerned, government spending via taxation can lead to more wealth, efficiency and happiness (more in the appendix).

Public good skepticism

Intelligent conservatives know this, of course and still want to spend less than me on many government programs. The disagreement is sometimes rooted in the different value conservatives and progressives assign to public goods. Environmental issues are an easy place to see this. In discussions with Republicans and Libertarians on this topic it becomes quickly clear that, compared to myself, they underestimate the differential benefit between an intact ecosystem and one damaged by oil exploration, air pollution or deforestation. This can be either because, compared with me,

  1. they underestimate the ecological damage; or
  2. they undervalue the things a healthy ecosystem provides.

I find that it’s often a combination of these. Climate change skeptics often don’t think carbon emissions cause warming to a great extent, but even if it did, they don’t think warming is so bad. Connecting it to the lawn care analogy, some owners might doubt that tenants care about a landscaped median. Or they might not trust the community to choose the right landscaper and deliver the promised value. Any one of these factors may cause them to undervalue the public good and reject the cooperative solution.

And so it goes with taxation. Compared with me, Chris Christie underestimates our connectedness. I believe that undereducated or unhealthy children and impoverished families cause great harm to us all and so education, public health care and anti-poverty programs are a public good of great value. Further, I believe we’re economically connected enough that the presence of a public safety net is a great economic benefit to the whole country, and especially to the people with assets to lose. If we removed the public safety net, some of us would put money in the collection plate to cover rent and medical care for the poor, but to get really rich, a better strategy would be to keep your money, buy cheap apartments and rent them to the poor, collecting the charity they’re given by everyone else. Free riders win again.

Role reversal

The other half of William Buckley’s statement concerns the military, which is also a public good. You can’t let someone opt out of funding the military because protecting every third house from the Red Dawn is just as expensive as protecting the whole country. Opters-out become free riders. But, in the case of defense spending, Republicans simply value that public good higher than I do. I think our military is big and strong enough to defend our country from any (terrestrial) enemy several times over. I regard the marginal benefit of an additional dollar in the defense budget to be zero (possibly less). So, I’m quite tired of Chris Christie and William Buckley and their set being quite so generous with my money toward military contractors.

Armed with an understanding of public goods and free riders, liberals are not naive enough to remove public services, cut taxes, and wait for libertarians to plow their tax savings into private programs to keep the water clean, track diseases, make sure the planes don’t crash, get the mentally ill off of the street, monitor trading of securities and pay the rent and medical bills of the elderly poor. On the contrary, sensible economic thinking says the market will be far too profligate with other people’s health, air quality and safety.

Instead, I propose the libertarians go first. As soon as there’s a private program tracking the evolution of new diseases, we can defund the CDC. When private charity clinics provide the medical care for all the poor, there’ll be no need for Medicaid. And the great thing about some of these programs is that no one need “go first.” Shriners Hospital provides all kinds of free medical care to children. Every surgery in a Shriners Hospital is one that doesn’t have to be done elsewhere. If the child being treated is covered by Medicaid, that’s savings and deficit reduction right there. In a very organic way, private charities could take over for public services. As I’ve detailed above, I have my own reasons for believing it wouldn’t happen that way, but I’d love to be proven wrong. And this is certainly no less reasonable than the opposite proposition–defunding these programs without a viable replacement and blithely hoping one will appear.

So, Governor Christie, if you want smaller government, call up the Shriners, “write a check, and shut up.”



Elections Race

TWIS: The Republicans freed the slaves and opposed the KKK. The Democrats are the racists

AllenWestAllen West recently read “with a heavy heart” Hank Aaron’s comparison of the Republican Party to the KKK and offered him a history lesson. Other of my conservative friends have offered me the same lesson, pointing out that, for much of American history, opponents of civil rights voted with the Democratic Party, while the Republican Party is the “party of Lincoln.” I wanted to share what I’ve learned about how the Democrats largely lost the support of American racists. In doing so, I’m fearful of offending my Southern friends. I’d like to clarify from the start that not all or even most residents of the Deep South are racists. But, these states do tend to have a non-negligible block of voters who are, in no uncertain terms, racists.

Before that, I’d like to point out what a ridiculous idea this really is. The people who doubt the historic interpretation I’m about to relate would rather believe that the men and women who marched with Martin Luther King like John Lewis and Jesse Jackson suddenly became racists and joined the Democratic Party. Every week the right-wing media reaffirms the Right’s commitment to last century’s ideas on race in their coverage of Trayvon Martin, Ferguson, immigration and anything related to Islam. So, here’s the history.


Beginning at the end of Reconstruction through 1948, the Deep South had voted for the Democratic Party.  The 1928 elections were a bright spot for Republicans. (I’m going to use examples from Presidential politics because there’s less data to parse and I’m more familiar with it.) Herbert Hoover defeated his opponent, Alfred Smith even in his home state of New York. Hoover even won in the Democratic strongholds of Texas and Florida. And yet Smith, a Democrat, still carried the states of the Deep South, Arkansas, Louisiana, Mississippi, Alabama, Georgia and South Carolina, as had every Democratic Presidential candidate since 1880. These states would continue to vote for Democrats in every Presidential election until 1948.

Race and Politics

In that year, Harry Truman, a Democrat, split the Democratic party by supporting desegregation of the military and a civil rights bill. Strom Thurmond of South Carolina led the State’s Rights Democratic Party (the Dixiecrats) and ran for President against Truman, but lost. Thurmond would later switch to the Republican Party and serve in the Senate until 2003. After this, the Southern states returned to the Democratic Party for a few cycles until the Civil Rights Act of 1964. When it was passed, the Civil Rights Act had more support in the Republican Party than in the Democratic Party. Democratic President Lyndon Johnson supported it with some reluctance fearing it would damage his Party in the South.

In that same year, 1964, Barry Goldwater, a conservative Republican for the ages, challenged Johnson for the Presidency. In the short run, Goldwater’s bid was quite unsuccessful. He won only his home state of Arizona and five Southern states protesting Johnson’s signing of the Civil Rights Act. Goldwater, like Ron Paul, had opposed the Civil Rights Act on the grounds that the federal government should not interfere in such State matters and the economic and social forces would desegregate society in the long run. Martin Luther King, Jr. and many other civil rights leaders were not so sanguine and strongly encouraged voters to support Johnson. The comparison of the electoral map in 1956 and 1964 shows just what a radical change 1964 was. Thanks to for the maps.


This “states rights” theme has become an integral part of the modern Republican platform, with its members arguing for a narrowing of the authority of the federal government. Democrats often argue that some issues, civil rights included, are compelling enough that the federal government should intervene to protect the rights of individuals against the tyranny of local state majorities.

Nixon’s Southern Strategy

In 1968, the civil rights debate was still roiling. Richard Nixon followed Goldwater’s lead and emphasized state’s rights over federal authority. Segregationist Alabama Governor George Wallace (a fascinating historical figure and complicated man), ran an independent campaign and won electoral votes from the Deep South. Nixon won the remaining Southern States except Texas, and the election.

Not long after this election, a Nixon political strategist, Kevin Phillips, signaled his intention to abandon the black vote altogether. He even went so far as to say that the presence of blacks in the Democratic Party would drive racist whites to the Republican Party:

From now on, the Republicans are never going to get more than 10 to 20 percent of the Negro vote and they don’t need any more than that…but Republicans would be shortsighted if they weakened enforcement of the Voting Rights Act. The more Negroes who register as Democrats in the South, the sooner the Negrophobe whites will quit the Democrats and become Republicans. That’s where the votes are. Without that prodding from the blacks, the whites will backslide into their old comfortable arrangement with the local Democrats.

The South did return to the Democratic Party to elect Jimmy Carter of Georgia to a single term, and Southerners Carter and Bill Clinton won their home states in their Presidential bids, but from this point, the South moved inexorably toward the Republican Party. Reagan and George H. W.  Bush continued to emphasize minimal federal intervention in State issues. The overt racist appeals were gone, although accusations of implicit or “dog-whistle” racial appeals have been levied.

Ann Coulter has some alternate theories about this switch. It is that the South moved Right with the emergence of a wealthy suburban class who signed on to the Reagan revolution with it’s promises of a less intrusive federal government. Meanwhile, Strom Thurmond and KKK grand wizard and Republican state representative David Duke misunderstood or overlooked the racially progressive Republican agenda and signed on. At the same time, 88% of African-Americans were fooled into signing on to the Democrats’ new and subtler racial oppression via social programs. The reader may judge for herself between these two theories.

Today’s Grand Old Party

Now, I don’t go in for the accusations that the GOP membership are predominantly racists. I know a lot of Republicans and that’s not my experience at all. The important difference where race is concerned is that Democrats believe racism exists. The Republicans do not, which puts them in a quandary. Minorities, including and especially African-Americans, clearly achieve, on average, less than whites in this country and Republicans are caught scrambling for an explanation for this.

Thomas Sowell thinks it’s the welfare state itself that holds African-Americans back. He often points out that unemployment for blacks was lower than for whites in 1930 (although just in that isolated year). According to Sowell, the change was a result of the Davis-Bacon Act of 1931, which established the first federal minimum wage. This ignores the mountains of progress toward racial equality of all kinds through the 1940s, 50s, 60s and 70s, even as the welfare state was growing. Further, the data do not suggest that States with lower minimum wage have a smaller racial wage gap.

Others fare much worse than Dr. Sowell. When Mitt Romney talks about “cultural differences” explaining the differential success of Palestinians and Israelis, he’s trying to convince you that, while he doesn’t attribute the Palestinians comparatively worse situation to racism, he’s also not like those racists who would say the Palestinians are genetically inferior. You’re not genetically inferior, you’re culturally inferior. See? Don’t you feel better?

And then, of course, the proof is in the pudding. If the Democratic Party were full of closet racists, their policies would be repugnant to minorities. Instead, racial minorities, both those that underachieve and those that overachieve, support the Democrats. Those poor ignorant minorities–snookered by those schemin’ Democrats again.

#BecauseMath Appendix Economics Taxation

Appendix: Public Goods

Our discussion of public goods seemed incomplete without at least a little math to back it up. But no one wants to alienate the mathophobes, so we parked this tidbit in the “appendix.”

Let’s analyze a few public goods. Imagine, again, 5 farmers. Last year, one farmer contracted with a beekeeper to manage a hive of bees near his field. He paid $2500 for the year. The next year, his harvest increased by $4500. A farmer in a nearby neighborhood paid for even more hives and boosted his profits even more, although the first $2500 is the most effective in this regard.

But he’s not the only one who benefits. Each of this neighbors also increased their crop yields. After doing some research, he discovers that, in a community such as theirs, for each of your neighbors hiring a $2500 bee hive, you can get $1500 more crop even without spending a cent on your own bees. Mathematically, let’s conjecture that the value of the increased yield is

[latex]\sqrt{\alpha S_0 + \sum \beta S_i}[/latex]

and the profit from that extra spending is

[latex]\mbox{Profit}= \sqrt{\alpha S_0 + \sum \beta S_i} – S_0[/latex]

where $latex S_0$ is the amount I spend on bees and $latex S_i$ are my neighbors’ spending. The constant (exogenous) parameters $latex \alpha$ and $latex \beta$ control just how much benefit I get from my own and from my neighbors’ spending, respectively. The reason for the square root is the idea of “diminishing marginal utility.” Spending $6000 on bees is still better than spending $3000, but something less than twice as good. Your first dollar is more important than any subsequent dollar. That said, the utility curve does not have to be a square root.

Now, if all of the neighbors are equally interested in their property values, they might agree to all spend the same on bees, perhaps in a written agreement. If we constrain all of $latex S_i$ to be the same value, we have a formula of just one variable and can plot the profit function:

Profit is highest when everyone spends $30.

From the plot, we can see that, if the neighbors all cooperate, they can each get $6000 more crop from spending just $3000 on bees. This is the most efficient level of spending. But here we run into the free rider problem. Suppose the neighbors do not cooperate and one of the neighbors does the calculation without considering anyone else. If everyone else continues spending $3000, how much should I spend to maximize my profit? When we fix $latex S_i$ at $3000 and allow just $latex S_0$ to vary, the new plot looks like this:

Nice guys finish last

The neighbors cooperating can make a $3000 profit, but from the blue curve we  see that the selfish neighbor can spend just $500 on bees and make a $3500 profit. In this situation, the self-interest of the individual hinders the prosperity of the community.

The situation gets even worse for goods which are more public. Perhaps the road leading between the town and the farms needs fixing and they’re freestaters, so the government won’t do it. They’re on their own. This fix will reduce wear on the trucks that take crops to the markets, etc.. Mathematically, $latex \alpha = \beta$. In that case the plot looks like this:


A free-rider, in this case, would have almost no incentive to contribute. That’s not exactly true since even the free riders understand they’re gaming the system and that others will be inclined to seek the same deal. When you incorporate this, you find that, in fact, neighbors are willing to spend just $200 on paving, leaving $3200 of profit on the table. (For more details on this aspect, check out the appendix to the appendix, Galt-ifying Public Goods.) The problem only gets worse as the community grows. If you’re paving a street that benefits 20 people with the same utility function, people are willing to contribute just $47 and will miss out on more than $20,000 profit.

Public goods are not always so easily quantified and it’s usually there that disagreements arise, but a little math goes a long way toward appreciating that opinions about public spending are a continuum and that pretending the market is always right (or always wrong) has real consequences.

Not enough math yet? Check out the appendix to the appendix, where we ask the mathematical question, how much more efficient would John Galt’s community (from the novel Atlas Shrugged) have to be to make up for refusing to subsidize public goods.


The NAACP doesn’t defend Black conservatives

Dr. Ben Carson, MD is a rising GOP star. In a recent online poll by, he was running a close race with Ted Cruz and Rand Paul. Recently, he’s made the obligatory comparison of America to Nazi Germany and also the customary ridiculously hyperbolic condemnation of Obamacare, so you know he’s serious. So, how do we assess this Ben Carson?

“Worst Thing Since Slavery”

Well, in the first place, Obamacare is not the worst thing to happen in America since slavery as Dr. Carson believes. Those would be, in order:

  • Nuking Nagasaki
  • Lynching blacks throughout the South for a century
  • Interning Japanese Americans during WWII
  • Strafe bombing Vietnamese villages
  • Causing a preventable cholera epidemic killing 200,000 Filippinos (3% of population) after the Spanish-American War
  • Waging wars last decade killing 100,000 people in Iraq and 30,000 in Afghanistan
  • Encouraging a war between Iraq and Iran at the cost of 1 million lives
  • Torturing people for freedom
  • Intentionally giving syphilis to rural Guatemalan men and withholding treatment from infected African-Americans to study the effects of the untreated disease.
  • Giving money and weapons to tyrants in Chile, Iraq, Saudi Arabia, Nicaragua, South Africa, etc.
  • …skipping a few here…
  • Making rich people subsidize health care for poor people.

Policing the PC Police

So maybe Dr. Carson overshot a little. This is how you court the far Right, I suppose. Except that Carson also thinks the United States is similar to the Third Reich in that people are afraid to speak their minds in our “Gestapo state.” I guess we take this to mean that there are even more radical things Carson would say if not for the threat of government retribution. As curator of a website documenting Republican stupidity, this makes me desperately curious.

If these few statements are any indication, I think we can safely conclude that Dr. Carson’s verbal filter is completely broken and he just says the first thing that comes to mind. For example, he recently stood up for Condoleezza Rice by asking, “Where are the black liberals when atrocities occur?…Organizations like the NAACP, do you ever see them coming out in support of a conservative black person?” The “atrocity” in question was a protest by students and faculty at Rutgers University over the selection of Condoleezza Rice as commencement speaker. The objection by the protesting students is that Rice was a public supporter of torture by the US government and lied to the American public about weapons in Iraq and is not someone they respect or hold up as an example.

Is Neo-Con A Race?

Now, it’s true, the NAACP didn’t come riding to Secretary Rice’s rescue, but they are quite busy. They agitate for policies to curb predatory lending, voter disenfranchisement, stand-your-ground laws and racial profiling because these issues disproportionately affect African-Americans. As soon as academic backlash against high-ranking former state department officials at graduation events begins to disproportionately affect black people, I’ll expect the NAACP to jump on that as well. But, you can’t lie to people to send their sons and daughters to war and then blame it on racism when they don’t want to listen to you any more. And, in fact, Secretary Rice is still scheduled to speak, so it’s hard to see what exactly Carson expects from the NAACP, the first amendment being what it is.

So, like the parade of African-American darlings of the GOP before him (Allen Keyes, Thomas Sowell, Herman Cain), Ben Carson is no less crazy for being Black. The looniest thing about these episdoes that I don’t find these examples on MotherJones or AlterNet. They’re not some unguarded moment captured on someone’s phone. These are positions proudly trumpeted on conservative sites like Brietbart and Newsmax. The White Right seems sure that if they would just be freed by the PC police to say all the racist things black conservatives can say, that the country would wake up and accept their vision for America. Well, speaking from the Left, I vow to do anything in my power to give voice to these types of authentic conservative views on race in America. Republicans, how can I help?

Update! Eric Holder, black attorney general of the United States, recently cancelled plans to speak to graduates of an Oklahoma City police academy due to protests. So far silence from both the NAACP and Dr. Carson.


Democracy leads to tyranny of the majority. We are a Republic!

We at thisweekinstupid mostly try to lay off of the truly and tragically stupid in favor of ideas that have at least some learned advocates. Today’s topic is almost one we’d leave alone. I see it repeated (and repeated and repeated) by people who can scarcely distinguish tyranny from democracy, but they think this phrase alone makes them some Constitutional scholar. However, it seems to me that a phrase so ubiquitous and so consistently misused deserves addressing.

Edmund Burke
Edmund Burke

The idea, which is a real one, is that a government that gives the majority whatever they want, whenever they want, can find the majority imposing really bad ideas either in some fit of irrational passion or simply because they can’t be trusted to make good decisions en masse. To guard against this, the American founders took a page from David Hume and Edmund Burke to establish “tiers of virtue” within government. Local groups of people each elect a representative. A group of these representatives then elect a single representative (or set of representatives) to govern or represent the whole group. On this principle, the US Senators from states were originally elected not by the people directly, but by a vote of the elected state Senators in that state. The 17th amendment changed the amended the Constitution to require direct election of Senators.

I have no quarrel with Edmund Burke on this point. But recently, I hear this phrase repeated to imply that our system, with its filibusters, its electoral college, lobbyists, gerrymandering, and so on, protects us from the unmitigated wrath of a self-seeking majority, or more explicitly from the tyranny of brown-skinned welfare queens persecuting a poor minority of investment bankers.

It’s no end of peculiar to hear this from conservatives who are all about tyranny of the majority. As Jon Stewart reminded us, there’s only one of the 10 Amendments in the Bill of Rights that conservatives respect and it’s the one most favored by lynch mobs. They rail against the ACLU and advocate tort reform to limit awards, shorten statutes of limitation and otherwise weaken the ability of the people to seek a redress of grievances from private companies (only the government can oppress people, right?). They complain of “judicial tyranny” when judges act to strike down laws which are supported by majorities but which encroach on protected individual rights. They cast aside due process and support stop-and-frisk on the utilitarian grounds that protecting the property of the many outweighs the right of the few to be free from unwarranted search by police.

In their other life, your conservative friends direct their hatred mostly at institutions best suited, and in fact designed, to protecting against tyranny of the majority. The Supreme Court, that constant source of Libertarian frustration, is designed as the last line of defense against tyranny of the majority and is specifically tasked with making sure individual rights are not infringed even at the behest of a majority. The House of Representatives, the last fragile thread of Republican power in today’s federal government, is, in fact, the institution most vulnerable to mob rule.angrywhiteguys It members are most frequently elected and by a direct vote of the people based strictly on population. It’s this branch that John Adams and Thomas Jefferson feared the most. The other institutions–the Senate, Presidential veto, the courts–are assigned the role of keeping the House in check. The good news, I suppose, is that recently, gerrymandering (the redrawing of districts to improve your Party’s chances) has lately blunted the House’s ability to transmit the will of the people. Republican-controlled state governments have redrawn district boundaries to such an extent that, after the 2012 elections, Republicans enjoyed a strong majority in the House despite getting fewer votes than Democrats in House races. Here, at least, we can take comfort that the will of the people is being sufficiently thwarted.

But, for me, the most surreal part of this story is that a Party consisting mostly of white, middle-class, native-born people has come to so fear “the majority.” If there were real danger of a majority imposing their will at the expense of important rights of minorities, wouldn’t you expect to hear it loudest from some identifiable minority? Wouldn’t groups who had experienced Jim Crow and the Trail of Tears be remarkably sensitive to this? And, wouldn’t you expect the racial and religious majorities to be best equipped to defend themselves? But the Right has constructed in their minds a tyrannical majority coalition of unionized teachers, Latinos, Blacks, atheists, college professors, gays, Hollywood and Holocaust survivors out to take what rightfully belongs to them. Perhaps it’s appropriate to call them a minority of stupid.


Health Care

Health Savings Accounts Will Solve Our Health Care Spending Woes

HSAs solve a problem, but not the problem.

Republicans are enthusiastic! From many of them I’ve heard about Health Saving Accounts. It’s not that hard to control health care costs, they say. Just reconnect health care consumers to their spending. Most recently, Dr. Ben Carson weighed in, even suggesting that the government simply fund people’s HSA to the tune of $2000 per person. I’m told that support for HSAs is an important plank in the (possibly mythical) “Republican healthcare plan.”

What’s an HSA?

An HSA is a pre-tax account into which you and/or your employer can put money reserved exclusively for health care costs. It might work like this: In lieu of traditional health insurance for minor medical expenses, your employer might provide you with an HSA to which she contributes. You could also put money into your account yourself. The first health care costs incurred that year would be paid out of your HSA. Once the HSA is exhausted, you, the employee, are responsible for paying medical bills directly. An HSA is usually coupled with a major medical insurance plan with a high deductible so that beyond several thousand dollars in medical bills, a traditional insurance plan kicks in.

How an HSA worksAn employer once offered this to my family. We paid a portion of our premium and got $2000 at the beginning of each year added to our HSA. From this account, we paid the full cost of all our medical expenses–doctor visits, medications, etc.. No copays or cost-sharing. Your HSA pays it all. If expenses got high enough, this account would run dry. After that point, we would pay all expenses out of pocket. To protect us on the high side, the plan included a major medical policy which would begin to cover expenses beyond about $4500, just like a standard insurance policy with a high deductible. You might think this was some scheme by my ruthless employer to cheat us out of health care, but my engineer co-workers and I all agreed. There was no scenario in which this plan would cost employees more than the old plan. If you go to the doctor once for $250, you pay less than the old plan. If you get cancer and rack up $600,000 in bills, you still pay less than the old plan. And for every point in between those two, the new plan was still less expensive for employees.

Market-based savings

So why did my employer make this change? The idea is that employees will pay attention to the cost of their health care and that alone will reduce costs. And it worked, at least on a personal level. We started asking, “How much does that cost?” and “Could we give it another day before seeing the doctor?” We didn’t have any major expenses while under that plan, but if we did, I think I would have asked “Is that the cheapest MRI, or just the closest?” This is where the GOP puts their faith. Unsurprisingly, they count on shrewd consumers in the free market and the responses of equally clever suppliers to bring prices down and quality up. So, is your blowhard Republican roommate right?

But not where we need it most

Unfortunately not. HSAs are effective at controlling costs for small medical bills, but America’s problem is at the other end. We’re spending over half of our health care dollars on just 5% of patients. Those people have long exhausted any reasonable HSA. Meanwhile, the bottom 50% of spenders, those still spending money out of their HSA, account for just 3% of all health care spending. Probably HSAs will affect almost none of the top 20% of health care spenders which account for 80% of health care spending. This graph, borrowed from NIH, shows this effect quite clearly. On the lower axis is the percentile rank according to health care spending. The vertical axis is the  fraction of health care dollars spent on everyone below that percentile rank. So, when we see that the 40th percentile has the value of 1.4%, we know we spend 1.4% of our health care dollars on the healthiest 40% of patients. The steepness of this curve indicates that the spending addressed by HSAs is a very small portion of total spending.

Most of our health care dollars treat just a few patients.

Health care is classically, almost pathologically, unsuited to a free market. Demand is inelastic. Information is asymmetric. And the numbers are so far beyond people’s experience, that we have great trouble assessing risk and valuing the different health care products. This problem just gets worse for more expensive treatments and, as shown in the graph above, that’s where the problem is. Even if HSAs dramatically reduced costs for the 80% of us whose costs fall under their major medical deductible, we’d still go bankrupt unless we find a way to control costs for that top 20% who’ve exhausted their HSA and have no personal incentive to control costs.

So, even without asking whether convincing people to postpone their colonoscopy or shop for the cheapest throat culture is really a net savings, we can conclude that HSAs are ignoring most of the problem. That doesn’t mean HSAs are a bad idea, but they are, at best, window dressing for anything aspiring to be called a “health care plan.”

#BecauseMath Economics Health Care

The Market Will Set the Right Price for Health Care

I don’t suppose the interweb needs another discussion of the failings of market forces in health care markets. And yet the idea persists that setting the price of health care should be left to the unregulated market and that this will lead to maximum efficiency. The omnipotence of the market is a comforting concept.

Demand-side troubles

But the market for anti-retroviral drugs bears little resemblance to golf clubs or top sirloin. At risk of sounding condescending, a typical demand curve looks like this


As the price of a good or service rises, the quantity demanded shrinks. Lots of people will buy a pair of basketball shoes for $6. A few would pay $140.

But this doesn’t often work for medical services. I recently had my appendix removed. I’m told a typical appendectomy costs $25,000–a lot of money no matter who you are. But whether it had cost $100 or $100,000, I still would have bought exactly one appendectomy. The demand curve for appendectomies looks more like this:

Quantity demanded is unaffected by price
Quantity demanded is unaffected by price

There is, perhaps, some fall in demand. A 96-year-old might decline a quarter million dollar appendectomy. In some cases, there may be more than one treatment for an ailment so that one good or service may be substituted for another. But, in general, demand for health care services, especially the very expensive, life-saving treatments, tends to be highly inelastic. The quantity demanded is affected very little by the price. So, can providers of health care charge whatever they like?

Supply-side salvation?

Not necessarily. There may be some help on the supply side of this market. But, one reason markets are so effective and robust is the interplay of supply and demand. Without both working properly, the market can misallocate. When the supply side of the equation breaks down, for example in the case of a monopoly, we know that even with a healthy demand side, we’ll run into inefficiencies. So, we already have cause to worry. A truly effective market needs both a healthy demand side and supply side.

Switching to the supply side of things, if the price of a good is very high, more people will be willing to supply it. A supplier that overcharges will find herself undercut by a competitor willing to supply the good at a lower price. So, even with highly inelastic demand curves, there’s an equilibrium price at the point where the supply and demand curves meet.

The market sets the price where the supply and deamnd curves meet.
The market sets the price where the supply and deamnd curves meet.

So, it all might work out just fine, as long as actors can’t manipulate the supply curve. Unfortunately, two of the easiest ways to do that are both, of necessity, highly active in health care markets. The first is patents. A patent grants a single company the exclusive right to produce a product for a certain period. A supplier with a patent cannot be undercut by a cheaper competitor. When you are the only supplier of a lifesaving procedure, the market will not place any limit on the price (although public opinion or your own morality might). For this reason, it’s more useful to think about the supply curve for health care research than for particular treatments. If the payout for developing a new drug is very high, more people will be willing to do research toward that end. So, even where patents are applied, there is a functioning supply side curve at work. But in such a market, price signals can take longer to move through the market. When I need medication today, it’s slim comfort to know that the exorbitant price I pay for patent-protected drugs is providing the impetus for a robust market for drug research.

Another common way to move a supply curve is through licensing. Most people who treat you in the hospital are licensed, some of them very licensed, which is wonderful. It comforts me immensely that the person holding the scalpel has undergone years of training and scrutiny. But, the effect of this is to reduce the supply of doctors, nurses and other medical professionals. The FDA’s approval processes provide the same type of scrutiny for medications, equipment and treatments, with the same effect.

I wouldn’t have it any other way, of course, but the effect of this licensing is to shift the supply curve downward, increasing the price of goods. The further the supply is reduced, the higher the price. The inelasticity of the demand curve (and also the supply curve) multiplies this effect.

As the supply is reduced, the price increases.
As the supply is reduced, the price increases.

You can see how influence of these licensing processes could be very lucrative for suppliers. Doctors, for the most part, do important work for sincerely good reasons, but putting the AMA in charge of licensing doctors is a lot like asking the fox to guard the hen house. The tendency of almost everyone is to highly value their own work and the incentive for doctors is to limit the supply of doctors, raising their own salaries. Similarly, if pharmaceutical or medical supply companies can delay or scuttle approval for competing drugs and equipment, they also stand to make lots of money.

I’m not for a minute suggesting we do away with licensing of doctors or patents for drugs. Health care markets can’t be effective without these things. But, perhaps it’s a good idea to think hard about the markets for health care rather than blithely assuming the miraculous market will allocate everything just right. Without some advocates for consumers of health care, rising, inelastic demand will push prices out of reach and make life-saving care an unaffordable luxury.