GOP front-runners skip forum on black issues

Rudy Guiliani, John McCain, Mitt Romney, and Fred Thompson--the four leading Republican candidates--all skipped a forum hosted by PBS talkshow host, Tavis Smiley that was held last night at Morgan State University. The forum was different from other GOP debates in that it focused on minority concerns, relied on a panel of minority reporters and commentators (Ray Saurez, Cynthia Tucker, Juan Williams), and was held in front of a largely minority audience. A similar forum for Democrats drew nearly every candidate, including all of the front runners.

The minority community holds diverse views. Some Republican policies should be attractive to conservative church-goers, business owners, and the rising middle and upper class, regardless of race. Other policy concerns, like homeland security and the wars in Afghanistan and Iraq, cut across all racial, ethnic, and class lines.

Even if the leading Republican candidates don't expect to get much minority support, they do have an obligation to communicate to all of the constituents that they might one day represent. They also should be willing to have their proposals, promises, and views scrutinized by different audiences. Unfortunately, we are all too familiar with what happens when a chief executive won't leave his comfortable policy bubble.

By skipping the debate, the GOP front-runners missed a golden opportunity to deliver their message to and get feedback from a vital segment of the electorate. More than that, they sent the unmistakeable message that the minority community is simply not worth their time and that they don't have much to offer to that community.

The candidates' myopic strategy will ultimately limit their and the party's appeal. Should any of them win election, it will also limit their ability to govern.

Cotton O'Reilly Comes to Harlem

Proving that some conservatives are open to new, potentially mind-changing, experiences, talk-show host Bill O'Reilly shared his observations about a recent trip to Sylvia's, a black-owned restaurant in Harlem.

Said Bill, "I couldn't get over the fact that there was no difference between Sylvia's restaurant and any other restaurant in New York City. I mean, it was exactly the same, even though it's run by blacks, primarily black patronship."

Get over it Bill.

Bill went on to add, "There wasn't one person in Sylvia's who was screaming, 'M-Fer, I want more iced tea.' You know, I mean, everybody was -- it was like going into an Italian restaurant in an all-white suburb in the sense of people were sitting there, and they were ordering and having fun. And there wasn't any kind of craziness at all."

No craziness excepting Bill.

Finally, about the meal itself, "I like that soul food. I had the meatloaf special. I had coconut shrimp. I had the iced tea. It was great."

As Gomer Pyle would say, "Surprise! Surprise! Surprise!"

If the radio gig ever fizzles out, Bill has a fine future in ethnography.

NEXT EPISODE: Bill quiera Taco Bell!

Ticket auctions and other allocations

Young girls in Greensboro were in tears and their parents were up in arms last week when an upcoming Hannah Montana concert sold out in just a few minutes, leaving many families were waiting in line at the venue's ticket window.

Indignant letters to the editor soon followed expressing frustration that so many "little girls dreams (had been) crushed" and blaming promoters for allowing tickets to go to scalpers--parents noticed that tickets were immediately available on resale at inflated prices on web-sites like stubhub.com.

In this instance, bad communication was part of the problem. More than a third of the 13,000 tickets were "pre-sold" through Hannah Montana's fan club; only about 8,000 were available when the regular sales began. Although that should have been plenty to accommodate the families standing in line, there was an even larger virtual line. Internet sales quickly snapped up nearly all of the available tickets.

One way or the other, somebody was going to be disappointed in a situation like this where demand for a scarce good exceeds the available supply. The only way to reduce the disappointment would be to add another concert date, but even that might not be enough to meet demand.

The fans' real beef focuses on the "unfairness" of the rationing mechanism. Here a combination of pre-sales, queues, and regular sales were used to allocate the tickets initially, and resales (scalping) are being used to reallocate the tickets. Is this system actually unfair? Definitely, but maybe not in the way that you think.

Let's start with the scalpers, who put up the money for the tickets and then assume the risk of being able to resell them. If they can resell the tickets, scalpers are then in a position to capture the difference between the original sales price of the ticket and what some die-hard fans are willing to pay. Nobody forces the fans to actually buy the tickets from the scalpers. Those who do purchase tickets get what they want at a price they are willing to pay. It's just more than they would have had to pay in the absence of a resale market, with the scalpers pocketing the difference.

Even without a resale market, the scarcity of tickets would have led to some unfairness. Some people with only modest valuations of the performance would have gotten access to relatively low-cost tickets. Other people who had much higher valuations and who would be willing to pay more to satisfy those valuations would not have gotten access. Introducing a resale market (scalping) improves efficiency by allowing the people with the highest valuations to get access to the tickets.

There are alternatives that would eliminate the resale incentives. The simplest would have been for the concert promoters to set the initial ticket prices higher, so that there wasn't any excess demand. A clear implication from the fast sales was that the tickets were under-priced. If the tickets had been at the appropriate, market-clearing price there would have been no opportunity for resales--everyone who wanted a ticket at the going price would have already purchased one.

It's hard to forecast what the exact price should be. If promoters set the price too high, they might be stuck with empty seats. An alternative then would be to use a descending set of prices. Set the initial price very, very high, then every few hours or every day or so discount the prices by a certain amount until all of the tickets are sold. People with the strongest valuations and the least risk tolerance will start to take tickets at high prices; other people will move in at lower prices. Again though, at the end of the process, there won't be any resale opportunities. The unfairness in this system is that some people pay more than others for the same tickets.

Finally, the promoters could run an auction, with tickets and prime seat locations going to the highest bidders. Stubhub.com and Ticketmaster have already done this for some concerts.

Each of these allocation methods eliminates scalping; however, it's not clear that fans really want them. Under the current arrangement, a few lucky fans get access to tickets that are priced below the market clearing rate; others pay higher rates, with the surplus going to the scalpers. Under each of the alternatives--a uniform market-clearing price, high then descending prices, and auctions--tickets would never be sold below the market-clearing price. More of the revenue would be transferred to promoters instead of to scalpers and resellers.

In essence, the parents' complaint is that there weren't enough tickets at prices below the market-clearing rate. Little girls can wish for such make believe endings; parents should be more realistic.

UAW strike

After two months of negotiations and roughly one week after its existing contract expired, the United Auto Workers (UAW) went on strike today against General Motors (GM), the country's largest automaker. Some 73,000 workers are expected to walk off the job.

The number of work stoppages has been down in the U.S. in recent years. Last year, there were no strikes of comparable size. The last major UAW strike occurred nearly a decade ago and involved several parts plants, and the last strike directly against auto manufacturing operations occurred three decades ago.

The strike comes at a bad time for the U.S. economy, which is already battling a housing slump, a credit crunch, and $80 a barrel oil prices. Employment figures last month indicated that the number of jobs had actually decreased from the month before. A large, long-lasting strike would increase the chances of entering a recession. The only "good" news (if you can call it that) is that GM's manufacturing workforce has shrunk so much that many fewer workers are involved than in the earlier UAW strikes.

The strike also comes at a bad time for GM. The company has seen its market share, work force, and profitability decline. In the late 1970s, GM sold nearly half of the vehicles in the U.S.; today it sells less than a quarter. The company has suffered net losses in the last two years. Although worker productivity is high, the company has huge legacy costs that reduce its competitiveness. Also, the strike comes right at the start of the new auto year.

Although both sides are rushing out press releases expressing disappointment and blaming the other for the work stoppage, there are some encouraging signs. The most hopeful are that the UAW and GM are keeping most details of the negotiations under wraps and that the UAW has asked to continue meeting. There also appears to have been some progess in the negotiations on some major issues, such as shifting some of the risk for retiree health expenses away from GM and towards the union. The remaining sticking points appear to be related to job security measures.

Still, a strike of any length is unwelcome news, especially for the families and communities involved.

Poor families on the red-tape diet

Few people like to fill out forms or other paperwork. At a minimum, paperwork is a tedious and time-consuming chore; too often, it can also be frustrating and confusing. In the case of poor families, paperwork can also lead people to lose out on needed food assistance.

Families and individuals who receive means-tested public assistance, like food stamps, are required to fill out numerous forms, supply lots of accompanying documentation, and schedule and participate in in-person or telephone interviews (for example, you could look at North Carolina's 10-page application form for its Food Stamp Program). The purpose behind these forms and procedures is reasonable--program administrators want to ensure that benefits only go to people who are eligible and that people receive exactly the benefits that they need. Nevertheless, the paperwork represents a substantial compliance cost to needy families, especially those with limited reading, writing, and math skills.

The procedures also create some strange incentives with respect to self-sufficiency. Families with earnings typically have to provide more extensive information and do so more frequently than families without earnings. Again, there's a logic to the extra requirements; earnings and hence eligibility can change. Still it's the case that earnings not only cause families to lose benefits but also add to families' paperwork and compliance burden. Not exactly the best way to encourage work.

Marilyn Edelhoch, a research director with the South Carolina Department of Social Services, and I have been looking at these issues for some time. Marilyn's agency gave us access to a large random sample of case records from the South Carolina Food Stamp Program. The records show how long families participate in food stamps before leaving or being kicked off the program. In earlier research, we found that families were several times more likely to stop receiving benefits at the times they were required to complete new paperwork than at other times.

We've just completed a new paper that goes back to these data and examines the reasons that program administrators entered for why the families left. For example, the system records whether families left voluntarily, whether they moved out of state, etc. All of the cases that we examined involved households with children.

The research shows that one-half of the families who lost benefits were dropped from the Food Stamp Program because they failed to re-apply for benefits. Another sixth of the terminations occurred because of incomplete paperwork or missing information. If you put these together, two-thirds of terminations occurred for reasons related to paperwork.

These terminations would not be bad news if many of the families were soon going to lose eligibility anyway. After all, what incentive is there to fill out paperwork if it's just going to show that you're ineligible? Not surprisingly, we find that the chances of being ineligible are higher among households that let their paperwork lapse than among households that stay on the program. However, we also find that the chances of being eligible are higher than those of being ineligible. So it appears that needy and otherwise eligible families are being dropped from the program. The results take us some way toward explaining why nationally about one-third of eligible families fail or decline to participate in food stamps in any given month.

As is often the case in economics, there are stories here about unintended consequences and about trade-offs in public policy. Clearly, states must check people's eligibility for services. However, they can take steps to streamline their paperwork, reducing it to the minimum necessary. States can also take better advantage of automated data available to them. People shouldn't go hungry because of red tape.

Yes, NASA revised those numbers, but...

The global warming deniers have recently seized on a story regarding NASA's revisions of its annual temperature numbers as evidence that global warming is baloney. The story appeared in an August 16 column by Cal Thomas and has been blog and letter-to-the-editor fodder since then.

There are parts of the story that Mr. Thomas and others have reported correctly, parts that they have omitted, and parts that they have flat out gotten wrong.

The part of the story that is true is that NASA did revise its numbers. The new and old numbers, as well as NASA's explanation can be found at http://data.giss.nasa.gov/gistemp/graphs/ and by following links on that page.

Mr. Thomas and others claim that the revisions have led to changes in the rankings of the warmest years on record. The implication is that rankings of global averages have changed, but this isn't the case.

NASA's changes in rankings apply ONLY to temperatures for the U.S. and not for the world as a whole. In NASA's revised figures, 1934 is the hottest year on record for the U.S. but not for the world. NASA still reports that the 5 hottest years on record for the world happened in the last decade (in order 2005, 1998, 2002, 2003 and 2006).

Having garbled the facts, Mr. Thomas goes on to ask, "Has any of this new information changed the minds of the global warming fundamentalists?" and helpfully answers his own question, "Nope." He skips the more logical question--should the new information have changed anyone's mind--to which the answer is again, "Nope."

Why is this so? Well, the revisions to NASA's numbers for the U.S. were very slight (the largest change was .15 degrees) as were the revisions to the rankings. Prior to the revisions, 1934 and 1998 had been in a virtual dead "heat" (no pun intended). In both the earlier and later figures, 4 of the 10 hottest years on record in the U.S. occurred in the 1930s and 3 of the 10 hottest years occurred in the last decade.

There were also revisions to the global numbers but these were an order of magnitude smaller (in the thousandths). The revisions did not affect the global rankings at all.

As the scientist who put out the revised numbers explained, "Contrary to some of the statements flying around the internet, there is no effect on the rankings of global temperature. Also our prior analysis had 1934 as the warmest year in the U.S. (see the 2001 paper above), and it continues to be the warmest year, both before and after thecorrection to post 2000 temperatures. However, as we note in that paper, the 1934 and 1998 temperature are practically the same, the difference being much smaller than the uncertainty."

While the deniers have focused on a handful of numbers (which again hardly changed), it useful to remember that the figures in question come from a 127 year record. Over that time, the U.S. data are more variable and flatter than the global data. Nevertheless, the trend in the U.S. has been upwards. If you look at the average over the last decade, you will see that it is higher than the average for the decade of the 1930s (U.S. temperatures in the 1930s were quite variable and there were a few "low" years along with the "high" years). NASA also provides 5-year averages. It turns out that even in the revised data, the first, second, third, fourth, and sixth highest 5-year averages for the U.S. occurred in the last decade.

The global trends are even more starkly upward.

A cogent critique of the global warming argument needs to address all of the evidence, not just a figure or two. NASA's revisions in this particular series were minor, and the corrected figures continue to show increasing temperatures over the past century and a quarter. NASA's figures are also not the only evidence. As NOAA reports, changes in sea ice, rises in sea levels, the general retreat of glaciers, ice core data, tree rings, and sediment samples provide near- and long-term evidence that global warming is occuring and that human activity is a contributor.

$450 billion spent so far on Iraq

A rational analysis of our future direction in Iraq requires an appreciation of the costs of the current policy. The current debate has rightly focused on the most important and tragic costs--nearly 3,800 American soldiers killed, over 27,000 wounded, additional coalition losses, and somewhere between 70,000 to 650,000 Iraqi civilians killed. The point of this post is to shine light on the less-publicized and perhaps crass topic of the monetary costs of the war.

In July, the Congressional Research Service (CRS) released an analysis of the incurred and projected costs of the wars in Afghanistan and Iraq. The costs of both wars so far has been $610 billion, of which $450 billion has been spent on Iraq. A special analysis was needed because of the bewildering array of "supplemental" appropriations for the wars, the many budgets that end up being tapped, and a lack of transparency in budgeting by the Department of Defense.

For the upcoming fiscal year (FY08), the administration has requested $116 billion for Iraq (however, that figure is predicated on the questionable assumption that our training costs for the Iraqi military and police will go down). Astonishingly, the administration's official projected war costs in all theaters in the following year (FY09) is only $50 billion and its projected costs for future years is zero. So much for playing straight with the American people.

In contrast to the administration's phony number of $50 billion in future costs, the Congressional Budget Office (CBO) estimates that our additional costs over the next decade will be just under $400 billion beyond the amounts requested through FY 08 if combined troop levels in Iraq and Afghanistan are brought down to 30,000 by 2010 or just under $900 billion if combined troop levels are brought down to 75,000 by 2013. The latter figure seems closer to the administration's goals.

Even if we withdraw troops from Iraq, the costs will still be monumental. The CBO estimates that a complete withdrawal by FY 2009 would still cost nearly $150 billion beyond what has already been requested. If we were to draw down troops in Iraq to just 40,000 by 2010, we would incur over $300 billion beyond the requested amount between now and then.

To provide some perspective about the size of the funds, the $116 billion that has been requested for Iraq in FY 2008 is larger than the combined budgets of all federally-funded education, training, and social service programs ($83 billion), energy programs ($1.4 billion), and community and regional development programs ($25 billion). Alternatively, it accounts for roughly half of the projected federal deficit for FY 2008.

Despicable ad

The General Betray Us ad that MoveOn.org ran this morning was despicable. MoveOn.org should retract the ad and issue an immediate apology.

While it is entirely appropriate to debate the effectiveness of the administration's policy in Iraq and to point out its previous misjudgments, there is no justification for questioning General Petraeus' honor. Reasonable, rational people can be motivated by the best intentions and still disagree. MoveOn.org should contribute whatever reasoned arguments it can to the national debate over Iraq and move away from character assassination.

Finally saw An Inconvenient Truth

It's embarrassing to admit, but we finally got around to watching An Inconvenient Truth last night. The movie, based on a multi-media presentation that Al Gore has been giving for several years, makes a convincing case that global warming has begun and will worsen. The movie also portrays Gore in a very sympathetic light, with a light-heartedness and a genuine passion that were largely AWOL during his 2000 campaign. It's easy to see how the film won an Oscar in the documentary category. It's also easy to see why the film gives the oil lobby, coal lobby, and their apologists fits.

The movie builds its case regarding global warming brick by brick. The case isn't based on just one or two statistics but rather on a stack of evidence. Conservative commentators have tended to pick apart selected examples here and there, such as that one of the dozen or so examples of retreating glaciers might be caused by some natural process other than global warming. However, there are just too many pins to knock down, and the case as a whole holds up. My guess is that at least a few people who start the movie as skeptics will have their minds changed by the end, which is about the best that you can hope for when making an argument.

The movie begs the obvious question of what are the next steps. Making the case for global warming isn't the same as making the case for specific policy actions. Conservatives are correct when they point out that some bad policies, such as the current corn-based ethanol boondoggle, are worse than no policies at all. Nevertheless, it does look like there is some low-hanging fruit here.

A first sensible start would be to make people aware of how individual actions like driving over the speed limit, leaving appliances on in stand by mode, and excessively cooling or heating a house contribute to the problem. A second sensible action would be to begin eliminating the billions of dollars of government subsidies to fossil fuel companies.

I suppose that people can argue about anything. But encouraging voluntary conservation and ending subsidies for harmful activities seem like rational starts.

In Iraq for the long haul

Throughout the conflict with Iraq, the Bush administration has tried to give the impression that the duration and objectives of our involvement would be limited. For instance, Secretary Rumsfeld said a month before the war, "It is unknowable how long that conflict will last. It could last six days, six weeks. I doubt six months." A few weeks later Vice President Cheney was asked by Tim Russert whether "the American people are prepared for a long, costly, and bloody battle with significant American casualties;" the Vice President responded "Well, I don’t think it’s likely to unfold that way, Tim, because I really do believe that we will be greeted as liberators."

With respect to narrow objectives, the Vice President stated in that same interview "Our objective will be, if we go in, to defeat whatever forces oppose us, to take down the government of Saddam Hussein, and then to follow on with a series of actions such as eliminating all the weapons of mass destruction, finding where they are and destroying them, preserving the territorial integrity of Turkey. As I say, standing up a broadly representative government that’s preserving the territorial integrity of Iraq and standing up a broadly representative government of the Iraqi people. Those will be our objectives."

In keeping with the expected temporary nature of the conflict, it's costs were not incorporated in the regular budget for several years but were instead covered through a series of supplemental appropriations.

When it's initial rosy predictions proved disastrously wrong, the administration modified its rhetoric but continued to describe a circumscribed involvement, telling the American people that "as Iraqis stand up, we'll stand down." In March 2005 the President said, "that's the position of the United States. Our troops will come home when Iraq is capable of defending herself." Even this week, President Bush told troops during his surprise visit to a U.S. base in Iraq, "Every day you are successful here in Iraq draws nearer to the day when America can begin calling you and your fellow servicemen and women home."

Over and over the administration has said that our involvement would be limited, but many of its actions indicated otherwise.

One clear action was our construction of a new embassy complex, which will be far and away the largest in the world when it is completed this year. Iraq has a population of about 27 million people, which puts it around 45th in the world and a land area that ranks 57th in the world. Why would so much be invested in so large an embassy unless the U.S. intended to maintain a substantial presence?

And despite Secretary Rumsfeld's statement early in the war that "I have never, that I can recall, heard the subject of a permanent base in Iraq discussed in any meeting," the U.S. has also spent billions of dollars constructing numerous permanent military bases throughout the country.

Finally, when a change in the Congress and a report by the non-partisan Iraq Study Group provided a golden opportunity to scale back our commitment and begin drawing down redeploying troops, President Bush did exactly the opposite and ordered a surge. Regardless of its effect on the security situation, the surge cements our position in Iraq over the near term and effectively commits troops to Iraq beyond the Bush presidency. Even if we started evacuating troops tomorrow, it would take many months before we could safely get troops down to their 2006 levels and many more months to make reductions beyond that.

Some less-guarded statements by the President in his interviews with Robert Draper for the book Dead Certain reveal the administration's actual intentions. Consider the following quotes.

"Now we've got a presence in the region—but Iraq creates a different kind of opportunity for a presence."

"So now I'm an October–November man ... I'm playing for October–November to get us in a position where the presidential candidates will be comfortable about sustaining a presence ... to stay longer at the request of the Iraqi government. Which would have the following effect. One, it would serve as a reminder to the region that we're a force of stability. Two, it would remind certain actors that the United States is something to be reckoned with—Iran, for example, if they continue on the course they're doing."

By word and deed, the intention to commit us indefinitely to Iraq seems clear. The President is not open to reason, evidence, or argument. Regardless of what any intelligence estimate, government agency, or independent commission says, his policy is for the U.S. to "stay the course" in Iraq now and for many years to come.

The Iraqi government doesn't pass the GAO's test, even when it awards partial credit

The non-partisan Government Accountability Office (GAO) has just released its assessment of the Iraqi government's progress toward meeting 18 mandated benchmarks. The GAO reports that the Iraqis only met three of the benchmarks, partially met another four, and failed to meet the remaining 11. In fact, in some areas, such as the number of Iraqi security forces that are able to operate independently, the government has moved backwards. In my classes, missing 15 out of 18 would get a failing grade--even with partial credit for some of the outcomes AND a generous curve.

The report is consistent with last month's National Intelligence Estimate, which cited some progress in Iraq's security situation as a result of the military surge but little progress (and scant hope for progress) in the country's political situation. It is also not all that different from the administration's own interim assessment, which looked at progress toward meeting benchmarks rather than actual success and STILL found the Iraqis to be lacking in about half of the areas.

As Congress now begins to consider whether to fund a continuation of the surge, we can expect the Bush administration to resume doing what it has done all along during this conflict, which is to move the goalposts and to throw its previous statements down the memory hole.

For instance, it is doubtful that the administration will point out that all of these benchmarks originally came from the Iraqi government itself.

Nor should we expect the administration to remind us that in announcing the surge policy on January 10, President Bush said

A successful strategy for Iraq goes beyond military operations. Ordinary Iraqi citizens must see that military operations are accompanied by visible improvements in their neighborhoods and communities. So America will hold the Iraqi government to the benchmarks it has announced.

To establish its authority, the Iraqi government plans to take responsibility for security in all of Iraq's provinces by November. To give every Iraqi citizen a stake in the country's economy, Iraq will pass legislation to share oil revenues among all Iraqis. To show that it is committed to delivering a better life, the Iraqi government will spend $10 billion of its own money on reconstruction and infrastructure projects that will create new jobs. To empower local leaders, Iraqis plan to hold provincial elections later this year. And to allow more Iraqis to re-enter their nation's political life, the government will reform de-Baathification laws, and establish a fair process for considering amendments to Iraq's constitution.

Over and over, the administration has justified the surge in terms of giving the Iraqis "breathing space" to achieve political reconciliation. For instance, in an April meeting with Gen. Petraeus, the President said "These troops are all aimed (my emphasis) at helping the Iraqi government find the breathing space necessary to do what the people want them to do, and that is to reconcile and move forward with a government of and by and for the Iraqi people."

The surge puts U.S. troops at risk and its continuation can only be justified if it leads to long-term, lasting gains. Those political gains, which the Iraqi and U.S. government set out as benchmarks, are as distant as ever. With no reconciliation on the horizon and the exhaustion of our troops only a few months away, it is time to call an end to this painful experiment by first ending the surge and then by further reducing troop levels and redeploying our forces within Iraq. As brave and courageous as they are, the troops cannot do the political work of the Iraqi government. The Iraqis must begin the terrible work of sorting out their differences without our troops as a prop or buffer.

U.S. leads in productivity but not wages

A new report released today by the U.N. International Labour Organization (ILO) indicates that U.S. workers lead the world in total productivity. U.S. employees work more hours than employees in many other countries, but even when productivity is considered on a per-hour basis, the U.S. does well, coming in a close second behind Norway. The ILO report goes on to indicate that the gap in productivity between the U.S. and many other countries is widening.

Despite the impressive performance in productivity, hourly compensation (salary and benefits) for U.S. workers is less than that of many other developed countries. Some of those differences are due to the deteriorating exchange rate position of the U.S. dollar. However, for several years, productivity in the U.S. has been rising while compensation, on an inflation-adjusted basis, has been falling. Indeed, the most recent Census Bureau report on incomes and insurance showed that annual inflation-adjusted earnings for full-time, full-year workers fell by about one percent from 2005 to 2006.

U.S. workers are creating tremendous wealth for businesses. Their pay should reflect those contributions.

Oops, you really are a citizen

Two interesting articles appeared in the local News & Record this morning. The first described a meeting between Senator Dole and several local sheriffs discussing how local police might work to hold and deport illegal immigrants who are arrested for other crimes. The sheriffs seem amenable to this idea but were concerned about the lack of jail space and other costs.

The role of local law enforcement in addressing illegal immigration has been under debate for some time. The issue seems simple enough--illegal immigrants shouldn't be here anyway. So if someone commits a crime AND is here illegally, don't let him or her out of jail. Instead, deport him or her. While simple in concept, there's the thorny problem of determining exactly who is and is not here legally.

The second article, which described a woman caught in Texas for unpaid parking tickets who was held for 14 hours because she was mistaken for an illegal immigrant, illustrates this specific problem. Luckily for the woman, the mix-up only cost her half of a day. But it's easy to imagine much worse outcomes.

Clearly, some balance needs to be struck, and maybe cases like this, which are likely to grow more frequent, are a price that we will need to pay. However, as mix-ups with the Transportation Security Administration's "No Fly" list and other government lists show, it is easy for innocent citizens to fall down bureaucratic rabbit holes. We should be very careful before making people's freedom contingent on such lists.

Thomas Sowell, what a caricature

Caricature -- noun -- a picture, description, etc., ludicrously exaggerating the peculiarities or defects of persons or things. (dictionary.com).

I had a couple of reasons for initiating this blog and naming it what I did. Beyond the obvious motivations of narcissism and self-aggrandizement was and is a genuine belief in people's underlying rationality. As an economist, it's the first assumption that I reach for in an economic or social analysis. Despite a good deal of contradictory evidence from psychology and behavioral economics, rationality still seems the best place to start.

Rationality does not mean that people are always right. However, it does mean that they try to work out problems logically and do their best to achieve their goals subject to the constraints that they face or perceive. Differences in goals, values, constraints, perceptions, and information can all lead to different outcomes. Logic itself takes effort; there's usually only so long that someone can work on a problem before having to take an action or make a decision. It's not surprising that reasonable people come to different conclusions. By writing about and discussing different issues, there is the hope that one's logic or information base might be improved. Similarly, there's often a lot to be gained from reading and carefully considering analyses that are different from your own.

As I wrote, differences in outcomes and opinions can come from differences in underlying values, but they can also come from lots of other things. It seems worthwhile to explore all of these possibilities when evaluating someone's opinion. Put another way, we don't gain much by starting with the assumption that anyone who disagrees with us is a moral or intellectual defective.

Sadly, this does seem to be the starting point of Thomas Sowell (a one-time economist no less) and many conservative columnists. Rather than engage in any logical debate or any hard reasoning, Sowell takes the easy route of ascribing fundamental character flaws to people with different opinions. In this week's column, the compounded tragedy of the Utah mine collapse, opposition to the death penalty, and the absence of a market in the U.S. for human organs are all pinned on "squeamishness," a character flaw that blinds people "who flatter themselves as being more advanced thinkers than the rest of us" from considering trade-offs for the greater good.

In last week's column, the perfidious "left" has as its fundamental goal, failure and poverty. Sowell trots (or more appropriately Trotsky-s) out the old argument that liberals purposefully expand the number of poor and dependent people to expand its voter base. Of course, Sowell is too busy fuming and quoting Marx to consider that the "blue states" in recent elections have tended to be richer than the "red states." In the column before that, he argued that the Minnesota bridge collapse served as a convenient prop for scheming politicians "itching to raise tax rates...to do what they are always trying to do." There's no possibility that someone could logically propose taxes as a way for society to begin to pay more for bills it's neglected; the proposals can only be an excuse to expand the role of government. (For a contrast of how the financing infrastructure might be rationally discussed see Gary Becker's and Richard Posner's blog).

In each case, Sowell caricatures the left as weak or immorally scheming. Maybe when he tires of setting up strawmen, he'll write something that is worth reading. Until then, he could at least have the decency to call himself something other than an economist.

47 million uninsured

The Census Bureau reported today that the number of Americans without health insurance reached a record high in 2006 of 47 million, or nearly one out of every six Americans. Blacks are twice as likely as whites to be without insurance, while Hispanics are more than three times as likely. North Carolinians are slightly more likely to be without insurance than residents of other states. Both the number and the percent of people without insurance have grown since 2000.

President Bush's recent observation that "people have access to health care in America...After all, you just go to an emergency room” is as unhelpful as it is callous. His new rules to restrict states from expanding insurance for children through through the State Children's Health Insurance Program (SCHIP) will only make the problem worse.

What about the following three-part proposal based loosely on the Massachusets plan?

First, offer all Americans the opportunity to participate in either Medicaid, SCHIP, or a new publicly-administered, high-deductible, catastrophic health insurance plan. None of these plans would offer Cadillac care, but they would provide basic, no-frills services.

Second, set the premiums for these plans on a sliding scale based on income. That is, set the premiums to be certain fraction of people's incomes, just as we do with the Food Stamp Program (food stamp families are expected to contribute roughly 30 percent of their incomes to their own food purchases; a smaller percentage would be appropriate for medical insurance). People with no income or very low incomes would be enrolled for free--this is essentially how Medicaid works now. People at or near the poverty line would contribute something, and people with moderate or high incomes would pay the full actuarial cost of participation. Some families who currently participate in Medicaid and SCHIP would have to begin paying something for medical insurance (and have the option to switching to the catastrophic plan) while some near-poor and moderate-income families would begin receiving subsidized health insurance. Families with greater means would get access to services at cost. Payments could be made through the tax system, much as FICA taxes and self-employment taxes (Social Security and Medicare) are handled now. These payments would receive the same tax treatment that private payments now receive.

Finally, mandate that everyone either obtain insurance--either through their employer, from a private provider, or from the government--or demonstrate sufficient resources to cover their own health care. This last provision is needed to keep people from free-riding on emergency room care. It is also needed to broaden the insurance pool and to keep people from waiting until they are sick to purchase one of the government plans. Again, the tax system could be used to enforce this mandate. The government would require payments into one of its health plans unless people could document some other type of coverage or a level of assets.

The proposal has the potential to insure every citizen who needs insurance. The societal costs would be enormous; one way or the other public and private funds would have to pay for 47 million people who aren't covered now. However, the drain on the public treasury would be modest. The government would only take responsibility for providing no-frills plans, and it would only cover a small portion of the payments beyond what it is already covering. The majority of Americans who have private insurance could keep those plans under the same conditions as today.

Paving the way for new development

The Guilford County commissioners faced a tough choice last week when they had to consider rezoning property and approving a special-use permit for a proposed asphalt plant. In deciding to let the plant go forward, the commissioners made a hard, but correct choice.

There's no getting around the negatives associated with a facility like this. Asphalt plants will never qualify as glamorous development. However, a successful development strategy depends on encouraging a variety of businesses. Moreover, such plants are necessary in an area with growing transportation needs.

The plant will be sited in about as good a location as the county could hope for--in an area that already contains other "heavy" industries and that is near a major highway. There may be less overall pollution than other possible sitings because the asphalt can be tranported over shorter distances. Finally, the proprieters made several accomodations in their site plan to gain planning board approval.

This won't be much solace to the neighbors, who reasonably mobilized against the plant (wouldn't you?). However, the decision was in the best interests of the county.

The Social Security clock continues to tick

We haven’t heard much lately from Washington about reforming the Social Security system; however, the problems for the system continue to mount. In their last report in April, the Social Security Board of Trustees projected that we will begin drawing down the Social Security trust fund 10 years from now (in 2017) and that we will exhaust the trust fund 24 years later (in 2041). During the last year, the projected unfunded obligation to pay future retirees over the system’s 75-year planning horizon increased by another $100 billion.

A little background is in order. In 1983, a bipartisan compromise saved the Social Security system. The system had exhausted its trust fund and was paying out more in benefits than it was receiving in revenue. President Reagan, a Republican Senate, and a Democratic House made several fundamental changes to the system. Some of those changes reduced potential obligations of the Social Security System; most importantly, the legislation gradually increased the age at which people qualified for full retirement benefits from 65 to 67. It also delayed cost-of-living increases for six months. Other changes increased funds going into the system; these included raising the FICA tax rate and expanding its coverage to higher earnings levels. As a result of these changes, Social Security once again began taking in more money than it paid out, investing the surplus in U.S. treasury bonds, which would be redeemed after baby-boomers began to retire. In historic terms, the legislation was a stunning success; a program that was insolvent a quarter-century ago was stabilized and will continue operating for many years to come.

There’s a catch, however, and that has to do with the composition trust fund, which consists entirely of U.S. treasury bonds, that is, debt that we as a country owe to ourselves. Thus, the trust fund is a bunch of IOUs. Depending on your view on these things, this isn’t necessarily a bad thing. Some of the bonds have gone to pay for things like schools, children’s health care, infrastructure, and research that should make the country more prosperous in the long-run and increase its ability to pay. The bottom line, however, is that recovering money from the trust fund does depend on the ability of the U.S. to make good on these debts, while taking care of its other obligations.

Starting in about 2017, a portion of payments to retirees will start to come from these extra payments. To get some idea of the extra pressure on our budget, consider that the federal deficit this year is somewhere in the neighborhood of $160 billion—better than the last couple of years but still unacceptably high for the late stages of an economic expansion. But this figure includes the net contributions to the Social Security trust funds, which are taking in about $190 billion more than they are paying out this year. In the absence of these contributions, the deficit would be more than twice as high as it is right now. Over the next ten years, these extra contributions will fall to zero. To put it one way, there will be an extra $190 billion of pressure on the budget in a decade, and even greater demands after that.

The clock continues to tick.

Say it ain't so, a leaner Krispy Kreme

In a delicious bit of irony, Krispy Kreme today announced a new realignment of its operations to become "leaner" while some of its remaining executives take on "expanded roles." I bow to few in my worship and pursuit of (mmmm) doughnuts. Nevertheless, in these health conscious times, a company whose principle product consists of gluten fried in oil and then glazed with a sugary proprietary substance (mmmm, drool) should word its press releases more carefully.

Treehuggers step up, or rather let up on that gas pedal

A rebuttal column in today's News & Record cataloged evidence supporting global warming. The column set off the usual back and forth about whether the U.S. should or shouldn't do something about global warming. Absent from the column and subsequent commentary was any mention of what people--and in particular, those concerned with global warming--might actually do.

The U.S. Department of Energy offers several tips to improve gas mileage. Two of these stand out: driving sensibly by avoiding rapid starts and excessive braking and obeying the speed limit. The DOE estimates that sensible driving reduces gas consumption by 5-33 percent and that obeying the speed limit reduces consumption by 7-23 percent.

Treehuggers should put up or shut up. Anybody who thinks that global warming is a serious problem should gladly accept the small increase in travel time for the substantial reductions in gas consumption and environmental degradation. Treehuggers' reductions won't be enough to eliminate the anticipated effects of global warming. Nevertheless, they would make a substantial dent in the problem and can be accomplished without expensive or intrusive government programs--all treehuggers need to do is obey the law. This also provides a minimal, ready test of people's commitment to the global warming issue. Treehuggers should not hector others or advocate expensive government actions until they're willing to put their cruise controls where their mouths are. Are treehuggers ready to take this first simple step?

P.S. The U.S. Energy Information Agency estimates that transportation accounts for two-thirds of the petroleum consumed in this country, or slightly more than all of the petroleum that we import. If everyone obeyed the existing traffic laws, oil imports would go down substantially. Stated another way, every extra mile over the speed limit and every jack-rabbit start effectively puts dollars in the hands of Hugo Chavez, Vladimir Putin, and the House of Saud. Before issuing any criticisms of their own, conservatives should carefully consider how their own behavior enriches tyrants and Islamic extremists.

No room for dissent

One of the great strengths of the U.S. is its willingness to tolerate free expression, and especially criticism and dissent. We all benefit from the free flow and careful examination of ideas. It's a shame, however, that the Bush administration does not see things this way. Time and time again, the administration has suppressed dissenting viewpoints. Recently, some of its explicit policies for suppressing dissent were revealed by the ACLU, when it published a copy of the Presidential Advance Manual.

Among other things, the manual makes clear that attendance at Presidential appearances is to be restricted as much as possible to supporters through the selective distribution of tickets. It also directs advance team members to "check for signs or protesters" when admitting attendees and has sections devoted to "preventing demonstrators." Should the odd demonstrator make his or her way into an event, the White House recommends that roaming "rally squads" of either "college/young republican organizations, local athletic teams, and fraternities/sororities" surround, hide, and drown-out the demonstrators. The parallels between the "rally squads" and brown shirts or goon squads are chilling.

The White House sees an obvious gain in the ability to get its message and visuals across without having to respond to others. Undoubtedly, the directive must also be seen as a response to demonstrators who would themselves suppress speech by disrupting public events and shouting the President down. However, the White House has gone far beyond this to suppress even respectful speech.

The policy is wrong on Constitutional grounds; it is in direct contradiction of the first amendment rights to free expression and peaceable assembly. It's also ultimately self-defeating. Arguments are strengthened through criticism. The manual reinforces the notion that this White House exists in and works to maintain a bubble. Beyond this, it reduces the value of the President's own public events by turning them into pure propanda (part of the never-ending political campaign). Rational people catch on to the game and interpret the messages from these events accordingly.