The Volokh Conspiracy

Saturday, August 02, 2003

[Randy Barnett, 2:45 PM]
Den Beste on the Breakthrough with North Korea: Another fascinating analysis of the current situation in Korea by Steven Den Beste. It begins with a lengthy history of the Korean conflict in the context of the cold war along with a comparison to Vietnam. Here are some morsels from the middle, but they are no substitute for reading the whole thing:

It's becoming apparent that the defining characteristic of the Bush administration is that it is virtually unaffected by panic or any tendency to react to criticism. . . .

North Koreea shoved all their chips into the middle of the table. But they're playing poker with a Texan. He didn't panic. But I think someone else did. I think that the Chinese finally reached the breaking point.

Just one week after that threat, North Korea's tune seems to have changed completely. After months of unwavering demands for bilateral negotiations with the US, the government of NK has now accepted six-way talks. They seem to have capitulated completely.

North Korea and the United States said on Friday they have agreed to hold six-way talks on the crisis over Pyongyang's nuclear intentions, with President Bush expressing optimism about the talks' prospects and Pyongyang still hoping for a one-on-one meeting.

A spokesman for the Foreign Ministry in Pyongyang said North Korean officials had met U.S. counterparts in New York on Thursday and proposed holding the six-way talks, which would include China, Japan, Russia and South Korea.
It may seem as if the entire issue of just who would even be invited is trivial, but it isn't. This is a major political victory. It indicates the shape of things to come in the negotiations.
Den Beste then explains why, and the explanation involves how and why the Chinese must have shifted for this development to have occurred As I said, you need to read the whole thing.

Funny, how you have to read blogs or websites like NRO to learn ANYTHING about what is or may be really going on. The news media is hopeless. Bias to one side, you simply cannot be informed by reading or listening to the mainstream press.

[Randy Barnett, 2:13 PM]
Our Summer of Discontent? Another great column from Victor Davis Hanson (author of Carnage and Culture: Landmark Battled in the Rise of Western Power) here on NRO. Here is a taste:

The steady killing of American soldiers in ones and twos is tragic and dispiriting — but it is not yet grounds for thinking that such attrition is tantamount to stalemate. We are in a situation not unlike what we would have faced in Western Europe had the Nazis suddenly collapsed in summer 1944 (some high-ranking Wehrmacht officers in fact advocated just such a capitulation), leaving tens of thousands of diehards in pockets throughout Germany, convinced that they had not been beaten and could fight on in terrorist cells. Rather than despair at a novel situation, we need to look at the larger issues that are always critical in guerrilla warfare — and which we know a great deal about, from both long experience in the 19th century and liberationist movements since 1960.

[Randy Barnett, 8:38 AM]
peer filesharing by bringing lawsuits against individuals? I believe the answer is no, unless the publicity surrounding the lawsuits begins to change social norms--the informal web of beliefs about what constitutes acceptable behavior.

One particular passage caught my eye:

The case for intellectual property is complex and uncertain. (Boldrin and Levine's Intellectual Property Page gives links to various papers and discussion on the current controversy among economists as to whether intellectual property is justified.) Intellectual property rights interfere with decentralized decisionmaking concerning the efficient use or resources: bluntly, intellectual property rights interfere with property rights in tangible resources. I'm not saying I'm against intellectual property. Rather, my point is that the case for intellectual property is much less intuitive and far weaker than the case for property in tangible things.

This passage anticipates the direction of my thinking on the subject of so-called "Intellectual Property." I am teaching a seminar this semester at BU entitled, "Intellectual Property: Should it Exist?" in which I will wrestle with the knotty theoretical issues. For a preliminary statement of the direction I am pursuing you can read my review of Larry Lessig's The Future of Ideas. My review in Regulation Magazine is entitled, Reds in Suits.

[Note to P proponents. I do not claim to have presented a complete critique of IP here or in my review. It's coming (though I do not know when). Be patient.]

[Eugene Volokh, 12:29 AM]
Inadvertent self-parody of identity politics: Rep. Sheila Jackson-Lee must not have any real problems to focus on, so she's talking about this:
The 2003 hurricane season is here, and that means a whole new list of names such as Larry, Sam and Wanda ready to make tropical-storm history.

Although Spanish and French names are included in this year’s lineup, among them Juan and Claudette, which struck Texas last week, popular African American names, like Keisha, Jamal and Deshawn, are nowhere to be found.

Some black lawmakers don’t seem to mind, but Rep. Sheila Jackson Lee (D-Texas) does. “All racial groups should be represented,” said Lee. . . .

The National Weather Service says hurricane names are derived from languages spoken in areas that border the Atlantic Ocean, where such storms occur. Yet that doesn’t explain why Gaston, Ernesto and Cindy were chosen and Antwon, Destiny and Latonya were passed over.

Lee said she hoped in the future the weather establishment “would try to be inclusive of African American names.” . . .
(By the way, given that many of the names in the hurricane list are used by Americans of all colors, I'm not sure that it's even accurate to suggest that some racial groups aren't represented.)

Oh, and I'm insisting on Irving, Haym, and Shmuel (Isaac and Rebekah are too ecumenical these days [cf. Isaac Hayes, to tie this to the Lee complaint]).

[Eugene Volokh, 12:02 AM]
Luke Ford interviews Heather MacDonald: Heather is a very interesting, thoughtful, and serious conservative journalist (though she clerked after law school for arch-liberal Judge Stephen Reinhardt, and was indeed a liberal in those days); I know her fairly well professionally, though not that well personally, and I found the interview enlightening, readable, and thought-provoking. I'm not sure how people who don't know her would like it -- I heard her saying her lines as I read it, and perhaps without that the piece wouldn't be the same. But I still highly recommend it. (Thanks to Matt Welch at Reason's Hit & Run for the pointer.)

Friday, August 01, 2003

[Jacob Levy, 5:13 PM]
Teamsters: Do you suppose that now that the Teamsters have endorsed Richard Gephardt for President, the Bush Administration might, just possibly, conceivably, stop adopting protectionist policies in order to curry favor with them and win their endorsement?

I suppose that it's possible the union will make a fresh endorsement after Gephardt loses the Democratic nomination, and that the administration still holds out hope of snagging their blessing at that time. Sigh.

But still, it must be good news that this happened so early. Now the administration won't spend all fall trying to out-protectionist Mr. Former Minority Leader.

Of course, if I thought that the endorsement was actually going to help make Gephardt president, or even make him the Democratic nominee, then that would be my primary concern, and I'd think it very bad news indeed. But, as I've written before, I have considerable faith in Gephardt's complete inability to connect with voters; I saw it up close and personal in New Hampshire in '88. Fifteen years later, he's the same guy, plus all those added years of experience of failing to become Speaker of the House. His candidacy is going nowhere fast, for which I am profoundly grateful. Compared with Gephardt, one at least gets the feeling that the Bush crowd knows what they're doing is wrong when they throw tariffs and quotas around. Gephardt would do it in good conscience and enthusiastically.

[Eugene Volokh, 5:07 PM]
Specialized business and technology track within Maryland courts: The Maryland State Bar Association writes:
The state of Maryland . . . [has created] a virtual business and technology court. Maryland is the first state in the nation to channel technology and complex business cases through a designated case management track. Business and Technology Case Management Programs (BTCMP) are now up and running in most circuit courts in the state.

Effective January 1, 2003, new Rule 16205 of the Maryland Rules of Procedure mandates a statewide BTCMP, requiring circuit courts to designate three judges in each jurisdiction earmarked for this new case management track. To date, circuit court BTCMPs are in varying stages of implementation, contingent on the individual jurisdiction and geographic location.

This new case management track should prove advantageous to attorneys, litigants and the courts. Complex business and technology cases are now assigned to a separate management track which is heard by judges who have undergone specialized training in economic, business and technology law. Their education, and that of pertinent court personnel, will include the application of specialized case management techniques and technology for the handling of these cases.

This proactive approach to business and technology cases fosters judicial competence and continuity. Once assigned, the case stays with one judge from start to finish and is handled in a consistent and timely manner. This should yield more rational, legally accurate and predictable rulings from the special track judges. A higher settlement should also be realized. As an added benefit, all written judicial opinions from all jurisdictions will be available online, serving as a valuable resource to attorneys, judges and businesspersons.

Lawyers may request this spe ial track for their complex business and technology cases. A designated judge or court administrator will determine whether the case merits the BTCMP track and assign the case accordingly. The judges have a great deal of flexibility on assignment decisions. ADR will play a key role and will be used to the fullest extent possible in this case management track. . . .
It will be interesting to see how this works.

[Eugene Volokh, 4:18 PM]
Kozinski and Yeltsin: I was reminded this morning of a 1993 opinion by Judge Kozinski; the case is U.S. v. Caldwell, in which the government argued that it is a federal felony to do anything (whether otherwise criminal or not, and whether deceptive or not) that makes it harder for the federal government to do its job:
The "defraud clause" of 18 U.S.C. § 371 prohibits all conspiracies "to defraud the United States, or any agency thereof in any manner or for any purpose." While this seems to cover only defrauding in the normal sense of the word -- acquiring another's property by intentional misrepresentations -- the word "defraud" has been read much more broadly. "Defrauding" the government under section 371 means obstructing the operation of any government agency by any "deceit, craft or trickery, or at least by means that are dishonest." . . . To convict someone under 18 U.S.C. § 371 the government need only show (1) he entered into an agreement (2) to obstruct a lawful function of the government (3) by deceitful or dishonest means and (4) at least one overt act in furtherance of the conspiracy. This is a very broad provision, which subjects a wide range of activity to potential criminal penalties.

Yet the government proposes an even broader reading of section 371, one that eliminates element (3) altogether. It contends any conspiracy to obstruct a government function is illegal, even if the obstruction is not done deceitfully or dishonestly. Under this reading, the government argues, people have a duty "not to conduct their business affairs in such a manner that the IRS would be impeded and impaired in its . . . collection of revenue." Or, as government counsel candidly asserted at oral argument, "if what you're doing, legal or illegal, is intended to impede and impair the Internal Revenue Service, . . . that constitutes a crime under sec ion 371."
The defendants were tax protesters, a group that rarely wins in court (since tax protesters' arguments generally tend to be inconsistent with current law); and what they were doing might well have been punishable on other grounds. But they were tried under the government's extremely broad theory of 18 U.S.C. § 371, under which the jury simply had to find that they were intending to impede the government. The panel would have none of this:
Under the government's theory, a husband who asks his wife to buy him a radar detector would be a felon -- punishable by up to five years in prison and a fine of $10,000 -- because their actions would obstruct the government function of catching speeders. So would a person who witnesses a crime and suggests to another witness (with no hint of threat) that they not tell the police anything unless specifically asked about it. So would the executives of a business that competes with a government-run enterprise and lowers its prices to siphon off the government's customers. So would co-owners of land who refuse to sell it for use as a military base, forcing the government to go to the extra trouble of condemning it. So would have Elliot Richardson and William Ruckelshaus, had they agreed with each other to quit if asked by President Nixon to fire Archibald Cox.

The federal government does lots of things, more and more every year, and many things private parties do can get in the government's way. It can't be that each such action is automatically a felony. The government may, if it wants to, explicitly outlaw conduct it thinks unduly obstructs its functions; in fact, in 1987, it enacted a regulation, 31 C.F.R. § 103.37, prohibiting the very conduct at issue in this case. But we're unwilling to conclude Congress meant to make it a federal crime to do anything, even that which is otherwise permitted, with the goal of making the government's job more difficult.
In any event, here's the end of the opinion, which is hat I was reminded of this morning:
There are places where, until recently, "everything which [was] not permitted [was] forbidden. . . . [W]hatever [was] permitted [was] mandatory. . . . Citizens were shackled in their actions by the universal passion for banning things." Yeltsin Addresses RSFSR Congress of People's Deputies, BBC Summary of World Broadcasts, Apr. 1, 1991, available in LEXIS, Nexis Library, OMNI file. Fortunately, the United States is not such a place, and we plan to keep it that way.

If the government wants to forbid certain conduct, it may forbid it. If it wants to mandate it, it may mandate it. But we won't lightly infer that in enacting 18 U.S.C. § 371 Congress meant to forbid all things that obstruct the government, or require citizens to do all those things that could make the government's job easier. So long as they don't act dishonestly or deceitfully, and so long as they don't violate some specific law, people living in our society are still free to conduct their affairs any which way they please.
"Citizens were shackled in their actions by the universal passion for banning things" -- quite a phrase, and all too often too apt, in too many places.

[Eugene Volokh, 3:37 PM]
Wish list: Some people post wish lists on their blogs. Here's mine:
About 15 HTML color codes that I can use for each coblogger's name -- enough for the current bloggers and enough for any possible expansion -- each of them attractive, visible, not too garish, and distinguishable from all the others. (Naturally, I'd love to see this as a set of numbers, each in the proper color, so I can instantly see both the colors and the codes.)

A cool but not too busy header for the blog, to replace our current minimalist white-text-on-green. It might use a different font, or include some amusing graphic.

A nice small logo (small both in screen size and in bytes) that can become a recognizable symbol for our blog, and that people can use, if they'd like, alongside our name on blogrolls, lists, and such.

World peace.
Now here is the downside: Naturally, all these items involve work on your part that we won't pay you for (though naturally we'll be delighted to give you full credit), and that we may well decide not to use, simply because it doesn't resonate with us esthetically. If that makes you not want to submit anything, we perfectly well understand. On the other hand, if this gets your creative juices flowing, and you'd like to offer us your help on these ridiculously unfair terms, we'd much appreciate it.

[Daniel Drezner, 11:38 AM]
We return to your regularly scheduled blogging: Time to return to my own blog. Thanks to everyone for reading!

[Eugene Volokh, 11:13 AM]
California gubernatorial race: I heard this point on the radio last week, but unfortunately didn't hear the name of the person who said it: A Republican who wins the California governorship would be like the proverbial dog that caught the car.

[Eugene Volokh, 11:05 AM]
One of my favorite lines: It's from Bulat Okudzhava, a Russian poet-singer; it works much better in the original Russian, but I like it even in English:
It's a pity that our youth is long past; it's a pity that our old age is so short.

[Eugene Volokh, 10:01 AM]
I'm back: Just got back into the office -- many thanks to my cobloggers and the guest-bloggers (David Bernstein and Dan Drezner) for all their posting.

Naturally, my mailbox is chock full of e-mail that has piled up. Much of it is e-mail from readers pointing me to stories that they thought I might find interesting, both newspaper stories and blog posts. I generally much appreciate such messages (again, if they include both the URL and, for blog posts, the post text), since they often become the source material for my own comments. However, given the volume -- and the fact that most of the material is no longer as timely as it was when the message was first sent -- I'm afraid that I'll probably have to just very quickly skim them. Also -- and I apologize for this -- I'm afraid that I won't be able to personally respond to those messages. Very sorry about that, but at least I thought I might mention it on a bulk basis even if I couldn't do so for each e-mail.

[Daniel Drezner, 8:58 AM]
Progress on North Korea: The last time I guest-blogged at Volokh, the North Korean situation did not look good. So it's good to see multiple press reports confirming that North Korea has agreed to six-party multilateral talks on the nuclear issue. Click here for the North Korean's official explanation.

The Times story explains why the Bush administration was adamant on the multilateral format:
The Bush administration has refused to exclude Japan and South Korea from any negotiation, in part because their publics would not tolerate a deal arranged without them and also because Washington feels any possible deal is more enforceable if more nations take part.

"The more people are involved, the more chances of a deal that will be respected," a senior administration official said. "That's the reason we have not gone along with bilateral talks. It's much better if North Korea negotiates with people on whom it depends for help."
The distinction between bilateral and multilateral talks might seem picayune, but it actually matters a great deal in bargaining with North Korea. Click here, here, here, here, and here for why this is the case.

[Randy Barnett, 4:47 AM]
Am Off to Cato University Came back from Germany last night and leave this morning for California to speak at the Cato University. If you are attending, let me know that you read the Volokh Conspiracy.

[Randy Barnett, 4:44 AM]
What are War Crimes?: Steve Den Beste has a nice discussion of war crimes, and the crucial difference between the Geneva Convention and the International Criminal Court. Read it here.

[Jacob Levy, 4:24 AM]
Reading the journals: Y'know, way back in the mists of time, years and years before blogging, a couple of my former professors at Brown had an idea. They called it BEARS, the Brown Electronic Article Review Service. Its mission statement read (and still reads) as follows:
Traditional academic publishing is a slow conversation. A year to get your idea into final form, a year to get it accepted somewhere, a year for it to appear. Then a year for anyone to get a reply into final form, another year for them to get it accepted, another for it to appear. Life is too short.

BEARS is a small response. We propose to electronically publish short but substantial reviews of articles that have appeared in the last six months. By keeping them under 1000 words, they can be easily read by those trying to keep up with recent work. Still, this length allows a substantial critical discussion -- reviews of whole books are often no longer.

Without the need to print or mail anything, we can publish reviews worldwide within days of receiving them. For this reason many reviews will appear much sooner than our six month limit. By appearing so quickly, the discussion can get underway immediately. Authors of reviewed pieces will always be invited to reply.

We’ll solicit reviews, but we also encourage unsolicited submissions, and will publish the best, most useful ones. If this catches on, we may be able to offer fairly comprehensive coverage in our area: moral and political philosophy.

This is a form of scholarship that has not been possible before. It is not a substitute for articles, but neither is it a mere addition to an already undigestible volume of published material. It enhances the value of ordinary journal articles by providing an immediate, high quality, and fully public critical notice not available in any other form.
I always t ought that this was a pretty nifty thing to set up. Alas, it never really caught on. After what seemed like a good start in '95 and '96, the pace of contributions dwindled pretty rapidly. Professors Dreier and Estlund had planned mechanisms for a sigificant volume of unsolicited submissions, but they never came. By '99 or 2000 there were only about 3-6 new items published a year. That wasn't enough to keep BEARS on people's habitual check-this-page list. It also wasn't enough to make the article response a well-known enough phenomenon that more and more people wanted to write for it. The editors keep the site going to this day, and I suspect that they work hard to drum up one or two symposia per year.

I always meant to write something, but never had a thought of just the right size or an article that I really wanted to respond to. As the site turned heavily toward metaethics and foundational questions, it fell even more off my radar screen.

Now: blogging. BEARS was supposed to be something that would generate a line on one's vitae. (How valuable a line depended, of course, on whether the phenomenon of article reviews took off and got recognized, but that was the idea.) Blogging, of course, is not. It's something we do for the fun of it. But what do we have at Crooked Timber and Solum's legal theory blog: instant symposium on G.A. Cohen's new Philosophy and Public Affairs article! (Start here and here, and move backwards through the links to previous posts.) This branched off from the ongoing discussion of naturalism in ethics that Lawrence Solum (I think) kicked off a week or more ago. There is by now, as they say, a vast literature, at Legal Theory, Crooked Timber, and Crescat Sententia. It's even included contributions by a member of the same department that launched BEARS, the estimable Brian Weatherson.

The discussion is at high enough a level that I feel just about qualified to read it, not qualified to add to it. But somehow that's been fun, on the blogs, whereas it used to feel like work to slog through a BEARS symposium on metaethics because I didn't understand enough of what was going on. I still do think it's a shame that BEARS didn't take off and thrive; but I'm glad we've got such excellent blogs around to read that sometimes do the same sort of thing.

[Tyler Cowen, 4:22 AM]
Harvard hires a readable historian That's Niall Ferguson, Harvard just hired him. By far my favorite book of his is The Pity of War: Explaining World War I. Be warned, it is anti-British in critical regards (he argues the British played a big role in making WWI such a major war). I don't know any book about either World War that uses economic facts so impressively, except perhaps for Richard Overy's Why the Allies won.

On the other hand, he is not afraid to defend the British empire.

He is a provocative and eclectic thinker who violates traditional historical canons whenever he can. I would call Ferguson an economic historian, though in violation of how that term is usually used (for economists who do history out of economics departments).

I leave for Moscow today, I hope to blog from there but who knows?

Thursday, July 31, 2003

[David Bernstein, 8:32 PM]
Over and out My guest-blogging stint has reached its end. My thanks to the regular Conspirators for lending me their soapbox. Feel free to come and visit me at my usual blogging home, bernstein.blogspot.com. Oh, and did I mention I have a book coming out in October?

[Jacob Levy, 2:04 PM]
lokh.com/2003_07_27_volokh_archive.html#105949979167304321">here , here , and here.)

Via the Dartmouth Observer: apparently others have already had the discussion Tyler and I are having now. The Dartmouth Online ran an article last November that quoted a number of people on whether the Sacerdote study had any implications for the reparations debate or not.
While the study does not set out to directly address the national debate on the topic, Sacerdote noted that his finding could be used to argue against slavery reparations.

Other economists and those involved in the reparations debate had varied reactions to the study.

Conservative thinker David Horowitz -- who made headlines over a year ago when he ran an advertisement in college newspapers nationwide citing reasons discounting the idea of slave reparations -- said the study's findings support his viewpoint.

"The study is a very strong argument against affirmative action and all these artificial programs set out by the government to rig the system," Horowitz said. "Even under the circumstances of extreme racism, it's obvious that slaves can make these advances in a short space and that once you remove the artificial barriers, the problem will solve itself."

However, supporters of reparations -- like Dorothy Benton Lewis, national co-chair of the National Coalition of Blacks for Reparations in America -- argued that the study's central question was irrelevant.

"The issue here isn't whether blacks could 'catch-up,'" Lewis said. "Wh t [Sacerdote] is comparing here is victim to victim. Both of these groups were victims of white supremacy and that thanks to the attidudes of racist people, both groups have experienced the same outcome."[...]

Sacerdote and his colleagues emphasized that the point of his study was not to examine the legitimacy of affirmative action or slave reparations, though they accepted that the study will be used in many different ways since it has been released into public domain.

"A lot of the reparations debate isn't at all about the long-term consequences of slavery. Rather, people are trying to get paid the wages slaves were never paid," Professor Edmonds said. "Bruce's study has nothing at all to do with that aspect of the reparations debate. Rather, he is concerned about how individuals recovered from the experience of slavery and the distortions in investments, specialization, etc. that slavery implied."

UPDATE: For further commentary see Prometheus 6 (passim) and Timothy Waligore. I may be done with this topic for now, and likely won't be following up on their posts.

[Daniel Drezner, 1:57 PM]
Bush-bashing in odd places: I'm neither surprised nor offended to see potshots taken at the Bush administration in the print media. However, some of these digs appear in the strangest venues.

First, there's this paragraph in Tom Shales' rave of Jerry Seinfeld's series of comedy shows at the Kennedy Center in yesterday's Washington Post:
The one disappointment was that neither Seinfeld nor [opening act Carol] Leifer did any political humor. It seemed especially odd since President Bush is such an easily mocked figure. Maybe that's it. Maybe it's too easy. It was dismaying, too, to hear Seinfeld ask for a round of applause for "the troops" in Iraq. Not that there's anything wrong with that. And not that "the troops" don't merit honor and homage. But what an easy way to get applause.
Then there's the conclusion to Frank Deford's essay in Sports Illustrated on why football is the most popular sport in the United States, which goes beyond Bush-bashing into idiotarian land:
[M]aybe these times are most in tune with football. At a time when the United States is arrogant, unilateral and insular, baseball can have all its Latins and Asians, and basketball can have all its Croats and Lithuanians, but football is still ours, 100% pure 'Mercan. It's ironic. Although George W. Bush is of baseball, he operates with none of the patient rhythms of the sport but simply charges ahead. He is perhaps the most un-baseball president since the unrepentant Teddy Roosevelt, who declared: "In life, as in a football game ... hit the line hard." Bring it on.
I see..... football is popular because America is a racist country. All football fans must be intolerant nativists.

Drezner's assignment to Gregg Easterbrook: eviscerate Deford's absurd position -- in haiku (click here if you find this suggestion confusing).

[David Bernstein, 12:21 PM]
Suicidal Fantasies Israel Harel has written an impassioned plea, on purely utilitarian grounds, for Israel to refuse to release Palestinian terrorists as a "gesture" to Abbas. In my view, the fact that the Palestinian public has apparently made the release of cold-blooded murderers its first priority--ahead of the security fence, new settlement activity, travel restrictions, employment in Israel, and a host of other concerns that do not involve releasing cold-blooded murderers--shows that the Palestinian public is not yet ready for a peace agreement. The average Palestinian in the street apparently still sees blowing up children in a pizzeria as heroic resistance, and as long as that is true I see little hope for a lasting peace agreement.

This puts PM Sharon in a very difficult position. Israel's primary security problem is not the Palestinians, against whom Israel has only used a fraction of the force it could bring to bear if it chose. Rather, Israel's long-term problems are Al-Qaeda, Iran, and potentially Pakistan (with its "Islamic bomb"). Unlike the Palestinians, Hezbollah, or Syria, these are problems that Israel cannot deal with itself, but needs the cooperation of the world community, and especially the United States. That cooperation is at risk if the Palestinian issue is not resolved.

The Palestinians, then, have the opportunity to cut a decent deal with Israel, but not because of the "heroic martyrs" of the Second Intifadah, who have understandably made the Israeli public less trusting of Palestinian intentions than any time since Oslo. The question is whether the Palestinians will take advantage of this opportunity by joining the ranks of civilization, or will continue to literally engage in suicidal fantasies.

[David Bernstein, 11:55 AM]
Information Markets and Administrative Decisionmaking My colleague Michael Abramowicz has posted his incredibly timely (given the controversy over DARPA's proposed use of information markets in the War on Terror) and interesting paper, Information Markets, Administrative Decisionmaking and Predictive Cost-Benefit Analysis.

[Jacob Levy, 11:48 AM]
Scandal: Matt has found me out. Nolo contendre.

Of course, I don't view the matter as scandalous. I take attendance in my sections of the Chicago common core, classes of twenty-two or fewer students that are discussion-intensive. Participation is stressed throughout the core; the core classes aren't lectures. (Disclaimer: Every year I give two half-hour lectures on early modern history, to set the context for Hobbes and Locke.) I don't know whether all of my colleagues take attendance, but I'm sure I'm not the only one, since I know that most of us treat participation as a component of the grade. I don't take attendance in upper-level undergrad classes.

I've heard that there are institutions on the east coast where as many as a hundred students sit in a big room and watch the professor, or not, as their fancy takes them, as if they were watching television. If true, this is the real scandal!

UPDATE: I appear not to be very good at affecting a faux-naive tone. Yes, I do actually know that Matt's alma mater is home to undergrad classes with enrollments several times larger than a hundred.

[Daniel Drezner, 9:13 AM]
Defending the BBC -- shudder: Glenn Reynolds and Patrick Belton blast the BBC for its biased reporting on Blair's press conference. Belton's concise summary:
here's what Tony Blair said (as he responded to a question asking whether he would continue to serve as prime minister in a third Labour term in government): "There is a big job of work to do - my appetite for doing it is undiminished."

And here's what the BBC reported in its lede: "Mr Blair, who said his appetite for power remained 'undiminished'...."
I am perfectly willing to blast the BBC when it slants its reporting, but in fairness it should be pointed out that the Daily Telegraph, the Independent, and the Financial Times put exactly the same spin on the story as the BBC.

Why would this occur? Josh Chafetz suggests that all of the papers merely latched on to how one reporter phrased a follow-up question. The FT story, however, does an excellent job of providing a backstory to Blair's appetite for continued governance:
Gordon Brown's allies on Wednesday night accused Tony Blair of undermining a deal to hand over the reins of power after the prime minister declared that his appetite for office was "undiminished"....

One Brownite MP, who emphasised he was not speaking with the chancellor's authorisation, said Mr Blair's remarks "further undermine the deal Gordon thought he had with Tony. From Gordon's perspective this will just be another in a long run of attempts to keep him in his place by Downing Street."

Westminster legend has it that, before Labour returned to power, Mr Blair and Mr Brown agreed over dinner that the prime minister would ultimately make way for his chancellor.
Methinks the slant in the way this story was reported had little to do with antiwar antipathy to Blair. Journalists love to hype political conflicts, and in framing the story the way they did, the British press was able to highlight the potential split between Brown and Blair.

UPDATE: One reader e-mails a trenchant point:
I think the explanataion has partly to do with some connotations of the word "power" in the British context that Americans may not be familiar with. In a parliamentary democracy, beyond the first few years of a prime minister's term, there is perennial speculation about when he will quit or be pushed out by his party. So much political reporting and discussion is done with this question in mind. Blair made his comments in response to a question on whether he intended to lead his party into the next election. His answer was quite naturally and properly interpreted as a "yes". The word "power" in this context means simply "continuation in office", not some desire for increased domination.

[David Bernstein, 6:55 AM]
USDA Cafeteria The Washington Post picks up the story of the closure of Agriculture's cafeteria:

There were several citations, according to the inspection report, including: "water leaking excessively" in the ceiling, employees not wearing hair restraints, and inadequate cleaning of the inside of ice machines, cabinets, surfaces and equipment.

The biggest problem, however, seemed to be mouse droppings found everywhere -- in the dry storage room, by the salad bar, behind the ovens, near the serving line, behind the soda machines. There were dead mice in one trap. The rodents can cause some serious diseases.

[Tyler Cowen, 6:15 AM]
Read this defense of "terrorism futures" Should we be allowed to bet on forthcoming terrorist attacks? Check out today's Slate. For a venue so mainstream I am consistently surprised at how interesting they are.

The fact that a government could look at such markets and then (maybe) stop a terrorist attack does not worry me. Think about the stock market. If a company's stock price falls, they might fire the CEO and try to correct matters, thus raising the share price again. No big problem, it doesn't stop useful arbitrage. Check out my earlier post for some stronger criticisms of the terrorist futures idea.

[Tyler Cowen, 5:12 AM]
Who is complained about at the World Trade Organization? See yesterday's GAO report (then click on the reports from July 30 to get an Adobe file).

From 1995 to 2002, there were thirty complaints against the United States (forty-seven percent of the total), next in line was Argentina with six complaints against it and then the EU with five complaints against it.

The EU is the biggest complainer (sixteen), coming next as big complainers are such paragons of free trade as Brazil (nine), Korea (seven), and India (six). Canada and Mexico each levied six complaints as well.

I am for free trade and I do not doubt U.S. protectionism. Still I wonder to what extent we get more complaints because we are the biggest potential market and thus the most worth complaining about. The report also notes that the U.S. has relatively detailed and transparent laws, and thus is relatively vulnerable to documentable complaints.

Wednesday, July 30, 2003

[Tyler Cowen, 6:40 PM]
Slavery, comment on Jacob's blog post below I still see the Sacerdote paper as weakening the case for reparations. If we look at literacy, recently-freed slaves catch up to the earlier-freed slaves within about a generation.

This is consistent with two possible explanations:

1) each group of former slaves recovered from its slavery heritage, once freed (albeit still suffered under a more general burden of racism, which may be huge)

2) The earlier freed slaves made some progress, the later freed slaves then matched that same progress, both suffered about the same lasting amount from slavery.

Jacob points out, correctly, that 2) is possible. But 2) suggests that having a longer slave heritage, across previous generations, is not a bad thing for a later generation. This is not intuitive. If you believe "a slave heritage has persistent bad effects" you probably also should believe "having a longer slave heritage has especially bad persistent effects." But the data don't show the latter. And intuitively, think about it: there ought to be some long-term progress as you move away from a (relatively) short slave heritage.

So either a slavery heritage doesn't add much to the racism explanation (and other alternatives), or the persistent intergenerational costs of slavery kick in at a constant level, once your ancestors have seen a threshold level of enslavement in the past.

And under this latter hypothesis, not only is the past burden one-time and discrete in nature, but the subsequent recovery from a slavery heritage is one-time and discrete in nature as well. I'll vote against the likelihood of this.

It would be interesting to see how slave heritage in the Caribbean predicts (or does not predict) the per capita income of each island.

Contra Jacob, I am not worried that Sacerdote does not measure wealth, occupation, literacy, and education are plenty.
But in the meantime I am still more skeptical about the reparations case, and I would not have expected to find the Sacerdote result.

[Jacob Levy, 5:44 PM]
Slavery reparations continued: I've just read most of the Bruce Sacerdote paper Tyler mentioned below, under the headline "against slavery reparations." I begin by noting that Sacerdote himself doesn't mention any implication his paper has for the reparations debate, as far as I can tell.

And I think he was right not to do so, and that Tyler's wrong that Sacerdote's findings have any relevance for the reparations debate.

The paper finds that the educational attainment, literacy, and occupational status of blacks whose grandparents were born in slave states before 1865 were, by 1920, comparable to those of blacks whose grandparents were born in free states before 1865. (The grandchildren of slaves continued to have a higher incidence of female-headed households.)

But consider the following.

1) Those blacks born in free states before 1865 were themselves typically no more than two generations removed from slavery, and very often less. The study therefore does not, and cannot, show that slavery didn't inflict lasting intergenerational harms and costs. It shows, in effect, that being the grandchild of a slave is equivalent, in some respects, to being the great- or the great-great grandchild of a slave, that certain effects level out. It does not show that being the descendant of a slave is equivalent to not being the descendant of a slave. This might mean that a reparations formula shouldn't differentiate between those blacks descended from slaves freed before the war and those slaves freed during and after the war. It doesn't show anything at all about the appropriateness of reparations in the first place.

2) Moreover, Sacerdote freely acknowledges that there is no 1920 convergence between blacks and whites on his measures. This could be, as h thinks, because of Jim Crow barriers. (Take it away, Professor Bernstein.) If so, that might mean that reparations need to be understood as reparations for slavery plus Jim Crow, not just for slavery; but what of that? Alternatively, the lack of convergence between blacks and whites could mean that slavery by itself inflicted harm that had enduring intergenerational effects on education, literacy, and occupation-- again, with a convergence over time between those whose ancestors were freed earlier and those whose ancestors were freed later, but with no convergence between descendants and non-descendants of slaves. I certainly favor the Jim Crow explanation. But neither explanation forms any part of an argument against reparations.

3) The items on which convergence occurs are certainly important ones. But Sacerdote has no good measure of wealth available. (He does have home ownership, but, as he explains, it's effectively worthless as a wealth measure, since home ownership in 1920 was heavily influenced by employment in agriculture.) And surely we would need this. Even if after two generations the descendants of slaves were as educated, as literate, and in the same professions as the non-descendants of slaves (which, remember, is not the finding of the paper), that would not mean that there was nothing to compensate. Wouldn't we still expect there to be a significant wealth difference between those whose families could not have accumulated more than two generations of capital and those whose families could? As is well-known, there is a very large wealth difference even today between blacks and whites today even after controlling for education and current income. If white wealth was accumulated with stolen black labor (note: I have no ability to judge the debate among economic historians about whether slavery was in fact economically beneficial for whites), then a convergence of literacy rates doesn't seem especially interesting or relevant to the r parations debate. It's not illiteracy that reparations are being demanded for.

I haven't provided any affirmative argument for reparations here. But I don't think the paper provides any reason for opposing them; the argument has to be conducted on other grounds.

[Tyler Cowen, 2:53 PM]
Five lessons in macroeconomics, part V Let us close with sundry topics. If you have further requests here, I will entertain them for the future.

1. Growth theory

Nobel Laureate Robert Lucas argues that growth theory should be at the heart of macroeconomics. After all, if long-run growth is robust, why worry about a few hiccups along the way? I agree that growth is more important than cyclical considerations, but have focused on the latter, the subject of traditional macroeconomics.

2. Gold standard

I would not implement one, sorry to disappoint the goldbugs (and some libertarians) out there. Short of nanotechnology (or alchemy, for producing gold), this would likely stabilize the monetary base at slow rates of growth. This would be better than the monetary policy we had in the 1970s, but would not be better than what we have today. A gold standard also can be manipulated by government, it offers nothing special in this regard. Brad Delong makes excellent points against a gold standard (he is in general an excellent writer on macroeconomics though I often disagree with him). See also my first post, from Monday, on monetary economics.

3. Free banking

A gold standard, or some other commodity standard, supplied by the market rather than by government. There is no significant advantage to market participation here, and you would get the shortcomings of the gold standard. It would not beat our monetary policy of the last twenty years, plus the transition costs could be enormous.

4. Which countries should join a common currency?

Small, responsible countries such as Belgium. Small, hoping-to-be responsible countries, such as the Baltics. As for Germany and France, it remains to be seen.

5. The IMF

Their original mandate was to stabilize the fixed exchange rates of the global economy. The fixed rates are gone, so why are they still around? Brad Delong makes the best case for an international authority to oversee crises. I think they are most useful in providing cover for a domestic politician to take some tough and necessary steps. It is not about to be abolished anytime soon, in the meantime they should not push monetary and fiscal tightening on poor countries as strictly as they do, often without regard for the relevant institutional complexities.

The criticisms of Joseph Stiglitz have merit but are overstated. And the IMF is not the bogeyman that the anti-globalization movement makes it out to be. Abolishing it would not change the world fundamentally.

[Jacob Levy, 2:27 PM]
Rage... building... Argument below about whether the basketball team I hate most or the baseball team I hate most has the greatest dynasty in professional sports. Must... control... fury...

(Or else I might be "bitter and angry"!)

[Philippe de Croy, 2:19 PM]
From the sports desk. We read in Slate that the Los Angeles Lakers are the greatest dynasty in professional sports. After all, “it's been nearly a decade since a Lakers team even was mediocre, and none stayed that way for very long. Since winning the first National Basketball Association championship in Minneapolis in 1950, the Lakers have finished below .500 only 11 times, and over the past 20 years they've won more than 70 percent of their games nine times.” This is in “contrast” to the New York Yankees, who “were mediocre in the mid-1980s and godawful in the mid-1960s.”

     Huh?

     Let’s examine the historical record more closely. If it has been “nearly a decade” since a Lakers team was mediocre, it has been fully a decade since the Yankees were. Since 1950 the longest stretch the Yankees have gone went without breaking .500 is three years. (The Lakers once went twice as long -- six years -- without breaking .500.) During that same period the Yankees have finished under .500 a total of ten times -- less often than the Lakers. The Yankees weren’t mediocre in the mid-1980s (they were 97-64 in 1985), and they weren’t even “godawful” in the mid-1960s (they won the pennant in 1964; it’s true that in 1967 they lost 90 games, but their winning percentage still was .440 and they had a winning record the following year).

     In 1957-58, the Lakers’ winning percentage was .264. Now that’s godawful. Of course baseball teams just don’t post records like that, but even this point about the discrepancies between norms of performance in the two sports doesn’t help. For while it’s true that the Yankees haven’t won 70 percent of their games as often as the Lakers have, that’s because such a record is incredibly rare in baseball, whereas it is not uncommon in basketball. The Yankees did manage to in 70% of their games in 1998, which was extraordinary (the best percentage since. . . the 1927 Yankees), and in general they have had some of the best winning percentages ever seen in their sport.

     The final point is that the Yankees have won their sport’s championship fourteen times since 1950 (and many more times if you are willing to go back farther, of course). The Lakers have won their sport’s championship thirteen times during the same period. The Yankees’ record of championships is by far the best in baseball. The Lakers’ record of championships is not the best in basketball. The Celtics have won more often.

     I’m sorry, but there is no good argument that the Lakers are the greatest dynasty in professional sports. (I really am sorry about it because I’m not a Yankee fan.) Since this is a full-service blog site I felt it was important to debunk this bit of misinformation being spread by Slate.

[Jacob Levy, 11:56 AM]
Obscure: Todd Seavey wrote to remind me that, last fall, the Conspirator-in-Chief decided to find out what countries in the world were the least reported on In Nexised publications. Malawi was the least reported-on country with a population over a million, and had the fewest articles per million population.

(Todd thereafter pointed out the then-current rash of vampire stories and reporting of the Malawian urban legend about the government conspiring to sell the blood of the people abroad in exchange for international aid.)

He asked whether I specifically went to Malawi in order to have visited the Volokh-designated world's most obscure place. Alas, no; I had forgotten this series of posts entirely...

[Daniel Drezner, 11:53 AM]
Conservatives who don't understand the knowledge game: The Chicago Tribune reported last week on the controversy surrounding the University of California's attempts to redraft its policy on academic freedom. The key grafs:
At issue is an antiquated academic freedom policy that state lawmakers 69 years ago forced the school to adopt out of fear that Communist professors were indoctrinating students in the classroom. The policy requires faculty to present impartial lectures free of their personal political biases.

A dispute that erupted here last fall over a Palestinian poetry professor's admonition in a course description that "conservative thinkers" need not apply prompted a re-examination of the policy, which had been forgotten in the academic and social upheaval that the student movement sparked.

University President Richard Atkinson has called for a new policy that frees faculty to "express the widest range of viewpoints" within the classroom. For years it has been acceptable and even expected for professors to argue a given political viewpoint, and Atkinson believes the policy should reflect the reality of today's classroom.

But critics say the proposed changes potentially trample the rights of students, some of whom complain that opposing viewpoints are unwelcome and even scorned by certain professors.
For more on the critics, let's go to this story written by the editor-in-chief of the California Patriot:
The new policy removes language that protects classrooms from “domination by parties, sects or selfish interests” and declares it “alien and hostile” to the university's duty for a professor to “convert or make converts.” The new policy states that the university can no accomplish its goal of instilling in its students “a mature independence of mind” unless “students and faculty are free within the classroom to express the widest range of viewpoints within the norms of scholarly inquiry and professional ethics.”

The old policy specifically precluded the classroom from being used as a platform for propaganda and stressed intellect over passion, and truth to combat error.

“It is a travesty that UC would consider revoking those protections,” said Stanley Kurtz, a fellow at the Hoover Institution who has testified before Congress on education issues. “Students in today's academe are already under pressure to conform to their professors' political points of view. This says something frightening about the state of higher education in this country.”
If you want all the documentary background on this, click here.

I confess to be somewhat puzzled and slightly appalled by the conservative reaction. Their logic seems to be:
1) Most academics are lefties;
2) The change in policy will empower these lefties to broadcast their views in classrooms;
3) Unsuspecting undergraduates will be brainwashed into becoming lefties.
Assertion #1 is probably correct. Assertion #3 is probably incorrect -- click here and here for why.

Assertion #2 suggests a lack of understanding in how the knowledge system works. It doesn't matter if most scholars are motivated by leftist politics, so long as they allow for the possibility of being wrong. Jonathan Rauch makes this key distinction in Kindly Inquisitors: The New Attacks n Free Thought (p. 66-7):
[Not] everyone in the system will be undogmatic all the time; that is impossible, and in fact undesirable. Although the popular image of the scientist has him placidly following his experiments wherever they lead, anyone who looks at science up close quickly discovers, not surprisingly, that this is not the whole story. Physics, psychology, history--all are energized by pigheadedness: by people's taking positions and standing by them.... People oftem perform experiments and dive into research, not with wide-open minds, but because they want to vindicate their prejudices or to "get that bastard."

And, within reason, that's fine. It is important to see that the game of science allows you to feel sure you have the right answer--as long as you play by the rules, submitting yourself to criticism and staying in the game even when it goes against you. If you do that, you can be as dogmatic as you like, but the system will be undogmatic. (emphasis in original)
This is precisely the distinction that the author of the revised UC statement on academic freedom, Berkeley law professor Robert Post, makes:
The quality of scholarship is assessed by its content, not by the motivations that lead to its production. Because academic freedom is concerned with the quality of scholarship, it does not distinguish between 'interested' and 'disinterested' scholarship. It distinguishes instead between competent and incompetent scholarship."
Indeed.

[David Bernstein, 10:47 AM]
New Blog There is a new group blog over at the History News Network, and it promises to be an interesting one.

[Tyler Cowen, 10:12 AM]
Macroeconomics in five easy lessons, part IV Each post is designed to stand alone, but track down the whole series, all written during this week. Today we get:

Open economy macroeconomics and international issues

For the United States, the open economy still matters less than people think it does. Paul Krugman's critique of pop internationalism remains on the mark.

Let me go out on a limb and say that most open economy macroeconomics doesn't make any sense.

It is a built on what is called the "IS-LM" model, supposedly derived from Keynes. This model represents the economy in terms of two aggregate curves, the money market and the goods market. With some work, you can translate these into aggregate supply and aggregate demand. The model assumes that you can shift one of these curves without also necessarily moving the other, a dubious assumption. It also conveniently ignores that one curve uses the nominal interest rate for its vertical axis, the other curve uses the real interest rate. Then we jam the two curves together on the same graph!

Much of open economy macro takes the IS-LM model, or some variant, and adds on some other curves. Try shifting around three curves on a graph and see how many results you can get (almost all possible results). I am reminded of Jeremy Bentham's phrase "nonsense on stilts." If these models ever give sensible results, it is because we backwards-calibrate them with our intuition.

So we don't know much about how the open economy matters for macroeconomics.

Here are a few points though:

We do know that politicians sometimes prefer a lower exchange rate. This doesn't make the country wealthier, in fact it makes it poorer, at least assuming that American citizens hold dollars on net. Bu a lower dollar does make some exports cheaper. In essence, the country as a whole (especially dollar holders, that is the wealthy) are subsidizing job creation in the export sector. It is not a surprise why politicians should like this. It won't get a country anywhere in the longer run.

If I were Britain I would not adopt the Euro. I just don't trust the underlying decision-making procedures, or lack thereof, behind the European Central Bank. What if there were real and persistent disagreements about monetary policy? How will it work as the EU gets bigger? Managing the pound well is not so hard, the Bank of England is probably up to the task. And investors already can hedge their exchange rate risks if they so wish.

Wealthy countries should not even think about instituting capital controls.

Developing countries face a real dilemma. If you allow (relatively) free capital flows, you may meet the fate of Mexico, Argentina, Thailand, Indonesia, and others. At some point you will err in your reforms, and the market will make you pay for it. You will be in for a currency collapse, involving three years or so of pain, suffering, and international humiliation (hardly a recipe for electoral success, and don't forget many of the debts are denominated in terms of dollars). That being said, these economies have managed largely to keep their beneficial reforms, following their currency crises. Call me heartless, but maybe this is just the price of development.

Capital controls tend to bring corruption and rarely are they managed well. Being insulated from global market pressures is not always a good thing, either. Chile and China have used capital controls effectively, although perhaps for China the crisis is simply being postponed.

If I had my finger on the button I would vote "no" on capital controls for developing nations, but I can see how someone might come to the opposite conclusion.

[Daniel Drezner, 9:22 AM]
Power and weakness in East Asia: This Guardian story on the currenct crisis in Burma nicely summarizes the differences between Western and Pacific Rim approaches to diplomacy. The key grafs:
Ms [Aung San] Suu Kyi, a Nobel peace prize winner, and a number of colleagues were taken into custody after a bloody clash on May 30 between her supporters and backers of the military government while she was on a political tour of northern Burma.

The government said that Ms Suu Kyi's supporters provoked a fight, but opposition sources described the incident as an ambush by junta-supported thugs and said dozens of people were killed. Ms Suu Kyi's National League for Democracy party won general elections in 1990, but the military blocked it from taking power.

The recent crackdown triggered worldwide condemnation of the Burmese government, with the EU and the US tightening sanctions against the country.

George Bush, the American president, yesterday signed a law banning the import of products from Burma and issued an executive order freezing the US assets of senior Burmese officials and prohibiting virtually all remittances to the country.

Asean has balked at such overt pressure, preferring a softly-softly approach. Ali Alatas, a former foreign minister and adviser to the Indonesian president, Megawati Sukarnoputri, said: "Asean's policy is clear. We don't believe that isolating Myanmar or applying economic sanctions is either correct or effective."
This story reinforces the dichotomy between Western and Eastern diplomacy. The West prefers coercive pressure and public harangues, while the East prefers subtle persuasion and constructive engagement. One could argue that this is a difference of the appropriate means to achieve a desired end.

Of course, there's another possibility -- that these Pacific Ri countries lack the necessary leverage to take coercive action. In Burma, for example, the Economist points out:
Myanmar is potentially a valuable asset to ASEAN, which constantly talks of a common market among its members. Within the largely rural, densely forested country there are riches. It is the world’s largest exporter of teak, and, illegally, a major source of heroin. Its soil is very fertile. It has important offshore oil and gas deposits.
To be fair, ASEAN has actually gone futher to criticize Burma recently than it would have in the past. However, the fact that ASEAN members themselves are citing pressure from non-Asian countries as a reason for Burma to release Suu Kyi suggests that the supposed philosophical differences over appropriate diplomacy often mask differences in the capabilities of countries to employ coercive tools. [This sounds familiar.--ed. The point has been made before, but not with regard to Asia]

[Juan Non-Volokh, 8:45 AM]
Pryor & Anti-Catholicism Updates: Byron York reports on the Pryor fight and the evolution of the "anti-Catholic" charge. The story includes several quotes from Democratic Senators that supports my claim that at least some of Pryor's opponents believe that a "deeply held" personal or religious belief that abortion is murder is sufficient reason to reject a judicial nominee. As I explained below, I do not believe this charge is motivated by anti-Catholic animus, but it does have a an anti-Catholic effect - a disparate impact, if you will. York's report suggests the sponsors of the ads charging Democrats with anti-Catholicism have moved toward this formulation in response to criticisms of the ad.

Lawrence Solum offers his thoughts on the matter which I would like to incorporate by reference. In the post below, I used "devout Catholics" as shorthand for Catholics that accept the church's teaching on abortion. As Solum notes, the two are not necessarily the same -- that is, whether an individual Catholic accepts the church's teaching on abortion is not necessarily a measure of his or her devoutness. More importantly, whether a judicial nominee is fit for the bench is a function of his or her qualifications and temperament, and whether one is capable of applying the law in a neutral fashion. Insofar as some -- and I repeat some -- of Pryor's opponents suggest that the "deeply held" belief that abortion is the killing of innocent life disqualifies a candidate for the federal bench, I believe they are applying an inappropriate standard.

Finally, Sam Heldman proclaims:
If I were ever given a judgeship . . . you can be assured of this: that if I had a chance to make a ruling that would prevent the slaughter of millions of innocents, I would do it. Even if I had to fudge the precedents a bit, and even if I realized that I was basing my decision in large part on my own preferences, I would do it.
Heldman believes Pryor has demonstrated a propoensity to "fudge" precedents to advance his political views -- a position I do not share -- and therefore believes Pryor would do the same in the abortion context. Heldman, it also may be worth noting, has gone toe-to-toe with Pryor in federal court here and here.

[David Bernstein, 8:35 AM]
Speaking of Diversity A few years ago, I was speaking with a college senior who asked me if George Mason Law School, where I teach, has a "diverse" student body. I replied that we have an extremely diverse student body. Our students are, on average, several years older than students at other area law schools, and I've had students ranging in age from twenty-one to fifty-five, with many students, especially in the part-time program, in their late thirties or early forties; twenty-five percent of Mason students have advanced degrees, in a wide range of subjects; they come from all over the country, many arriving in DC to work on the Hill and staying to go to law school (the law school is two miles outside DC, on the metro); because of our prestigious patent law program, many students have science backgrounds, which is unusual for a law school; I've met students who are Jewish, Catholic, Mormon, Moslem, Sikh, Hindu, and Protestants of various denominations; and students' political views are quite varied, from far left to anarchist libertarians (more of the latter than the former).

The student, nonplussed, replied, "No, I asked you about diversity."

Cheers to Professor Schuck (see previous post below) for recognizing that diversity in America goes well beyond racial diversity, and jeers to all the university bureaucrats who seized on Justice Powell's dictum in Bakke to redefine "diversity" as connoting only racial and ethnic origins (even though, of course, Powell himself considered racial diversity just one of many kinds of diversity universities may consider in admissions).

[Jacob Levy, 8:27 AM]
Now online: My New Republic article-- about Malawi, aren't you surprised?-- is up.

[David Bernstein, 8:07 AM]
Recommended Reading I heartily recommend Yale Law School's Professor Peter Schuck's new book Diversity in America: Keeping Government at a Safe Difference. The chapter on affirmative action, easily the best piece I've ever read on the subject, is alone worth the price of admission. Schuck also tackles immigration, residential integration, and religious diversity, always in a comprehensive and exceedingly fair-minded manner. Indeed, Schuck is almost excruciatingly fair and polite to those who disagree with his positions.

Just what are those positions? Interestingly enough, for someone who has never, as far as I can tell, been previously identified with "the right," Schuck consistently adopts a libertarian perspective (by which I mean Cato Institute-style policy wonk libertarianism, not purer forms of philosophical libertarianism). According to Schuck, the abolition of America's discriminatory immigration policies in 1965 was a good thing, but government-imposed multiculturalism as is Canada (and certain American public school systems) is bad. Voluntary affirmative action by private entities should be allowed, but government-sponsored or imposed racial preferences are divisive and dangerous, and should be banned. Integrated housing for poor blacks is best achieved through Section 8 vouchers and other market mechanisms, not through heavy-handed public housing projects. And education voucher programs that include religious schools are not only permissible, they are actually desirable.

So Diversity in America is not only illuminating and erudite, it's also a heartening example of the mainstreaming of ideas recently confined to libertarian "kooks."

[Tyler Cowen, 7:35 AM]
Betting markets, but not on terrorism Today's Slate has an excellent article on other ways to bet legally, such as on Hollywood movies.

And now you can bet on the success of various blogs, albeit with funny money. I don't have to tell you which to bet on, do I?

[Tyler Cowen, 6:59 AM]
Moscow suggestions welcome I'm headed to Moscow this Friday, for about two weeks, with my wife and stepdaughter (both were born in Russia). I've read all the guidebooks, additional suggestions are welcome, most of all about where to eat.

Tuesday, July 29, 2003

[Tyler Cowen, 4:19 PM]
Five Easy Lessons in Macroeconomics, part III Each post stands alone, but I recommend tracking down the whole series, which started Monday and ends this week.

Let's do Fiscal Policy.

The first thing to know is that expansionary fiscal policy usually doesn't matter much.

You can agonize over Keynes's multipler all you want (is it incoherent? maybe. does government spending just crowd out private expenditure flows? maybe). The bottom line is that most of the budget is set in advance, and the rest doesn't vary so much in any case. So if you are faced with an argument for fiscal policy, simply evaluate the proposed expenditures on their own merits.

That being said, contractionary fiscal policy can damage an economy. Let's say the government laid off half of all federal employees, tomorrow. Even if this were a good idea in the long run, we would have a big downturn, very quickly.

But you don't have to think of this as a fiscal policy effect. It is an unexpected sectoral shift, which leads to unemployment. State budget cuts are extending our recent recession, for related reasons.

Tax cuts don't help the macroeconomy much in the short run, unless the previous level of taxation was extortionary, above maybe sixty percent. Again, just evaluate these policies on their own merits and forget about macroeconomic effects.

Lesson two: no one understands how the deficit (or anything else, for that matter) affects real interest rates. You might like to think that big deficits push up real interest rates, but you have to look really hard to find any effect at all. If you don't believe me, read this.

If anyone ever tells you "my macro plan is great because it will lower real interest rates" run the other way.

I once taught my Ph.d. macro class the following as Cowen's hird Law: "All propositions about real interest rates are wrong." Keep that one in mind.

I'll cover the Bush tax cut in a final post on "Sundry topics," if you would like to hear about any other sundry topics let me know within the next day or so.

[David Bernstein, 3:00 PM]
Labor Unions and Wages Unlike fellow guest blogger Daniel Drezner, I am not appalled that Howard Dean believes that labor unions were the saviors of American workers, because I remember learning this in fifth grade social studies class. I suppose that means that the unions as saviors myth is conventional wisdom, and I don't generally expect politicians to depart from conventional wisdom. But I agree with Daniel that neither economic history nor economic logic support this conventional wisdom. Increases in wage rates follow increases in productivity, and have historically been independent of the concentration of union membership or influence. See F.A. Harper, Why Wages Rise (IHS ed. 1957); Henry Hazlitt, Economics in One Lesson 140 (Arlington House ed. 1979); Campbell R. McConnell, Economics 651 (10th ed. 1987); Douglass C. North, Growth and Welfare in the American Past 179 (1966); Lloyd G. Reynolds et al, Labor Economics and Labor Relations 301, 314 (1986). Economists have found that to the extent that unions raise the wages of their members, the long-term gains come largely, perhaps solely, at the expense of other workers. Albert Rees, The Economics of Trade Unions 87-89 (3d ed. 1989). And labor unions often serve as a barrier to entry to excluded minorities (this was historically true in the U.S., but nowadays blacks are overrepresented in unions) and to unskilled workers.

Update: An excellent paper by Christopher Wonnell of the University of San Diego Law School, using the maximum hours law at issue in Lochner v. New York as a foil, explains the inefficacy of both government regulations and labor unions as a means of aiding workers.

[Juan Non-Volokh, 2:00 PM]
More NYT on Justice Brown: Does NYT reporter Neil Lewis also write Times editorials? Over the weekend, Lewis wrote the following about California Supreme Court Justice Janice Rogers Brown, nominated to the U.S. Court of Appeals for the D.C. Circuit by President Bush:
Justice Brown, who is African-American, wrote the majority opinion in 2000 interpreting California's referendum against affirmative action in a way that greatly pleased conservatives.
Today, a Times editorial on the nomination commented thusly:
Justice Brown . . . is best known for writing a 2000 decision interpreting California's Proposition 209, which bars racial preferences, in a way that deeply troubled many members of racial minorities.
Of note, neither the Lewis story (on which I commented here), nor the editorial explains what was at issue in the case: Whether the city of San Jose's racial preference policy in city contracting violated the the California State Constitution as ameded by Proposition 209. The Times editorial notes that "[t]he chief justice of the California Supreme Court, writing separately in the case, criticized Judge Brown's opinion as a "serious distortion of history" and asserted that it was "likely to be viewed as less than evenhanded," but doesn't mention that the California Supreme Court was unanimous in striking down the program on state constitutional grounds.

[Tyler Cowen, 1:35 PM]
Could betting on terrorism really work? Today the Senate stopped DARPA from setting up a market for betting on whether terrorists will strike.

If we had such a market, would it work?

Think of it as a substitute for government intelligence. If you want to know who will win the Super Bowl, check the Las Vegas odds (you wouldn't ask the CIA, even if it were assigned to that task). Why should the best device for aggregating information be any different for terrorism or for that matter anything else?

Here are some criticisms from some prominent Senators.

Which criticisms make sense?

1. Would terrorists bet on attacks and then carry them out?

Maybe, but they can already do this with current stock markets, if they are at all clever.

2. Are we allowing some people to profit from the death of others?

Yes, but how does this differ from life insurance?

3. Would price/betting odds accurately reflect information?

Probably, provided you had a fair number of bettors. Return to the Super Bowl analogy. And the stock market figured out within minutes which contracting firm was responsible for the Challenger crash.

What is the problem then? I see panic as the biggest problem. Say the betting markets told us an attack was very likely very soon. The panic costs might outweigh the chance that we could now react and stop the attack.

Another problem is that the government might use market identities to ferret out possible terrorists (imagine the knock on your door after you win millions), which would bias the betting and thus the odds and resulting prices.

And as one critic points out (see the first link in this post), it could damage our diplomacy, would other countries like t at we bet on whether they attack us (just think how sensitive the Saudis are), or what if we bet on when the Saudi monarchy will fall? This could create an information cascade, and hasten events that might better be left postponed.

Jim Bell once proposed the idea of "Assassination Politics," I am told he was thrown in jail for it.

[Daniel Drezner, 11:47 AM]
Howard Dean's theory of economic development: In a mostly favorable Slate piece on Howard Dean, Chris Sullentrop ends with the following:
But one thing bothers me about Dean, and I raise it with him. He wants to renegotiate NAFTA to include labor and environmental standards—his lone departure from Clinton-style Rubinomics. Dean even says: "I actually had this argument with Bob Rubin, who totally disagrees with me, of course. But I think it's because Bob is fighting the last war. He said they use those arguments to try to undo NAFTA. I said, I know they use them to undo NAFTA, but now you've got NAFTA, and you're going to have NAFTA, now think about what this problem is. He said, you're right about the problem. Your analysis is right. I just don't have the solution. I'll get back to you when I do. I haven't heard back yet." (Dean's theory in a nutshell: The structure of wealth in the United States before labor unions resembled that in Third World countries today, so in order to create middle classes in the developing world, we need to bring labor unions to them.)

Won't Dean's plan make the price of goods go up? "Yeah," he says quietly. "But so what?" My 25 minutes are up.... But I think Dean realizes he's ended the interview on the wrong note because he quickly adds: "Because in return for making the price of goods go up, you've fixed the illegal immigration problem, you've fixed the drain of jobs problem, you've created a middle class that can buy American exports. There's a lot you get for that."
This is such a God-awful distortion of economic theory and economic history that I don't know where to begin. [Hey, how about this 1995 World Bank paper on the role of labor unions in economic development?--ed.] Excellent choice!! This is from the abstract:
The structure of deve oping economies cannot sustain as high a level of unionism as in industrial economies. Typically less (often much less) than a quarter of the workers in a developing country are covered by collective bargaining agreements - and those covered (the labor elite) are likely to be employed by the state and by large private sector employers....

Ultimately, improving workers' standard of living requires growth in productivity, argues Pencavel. Raising a worker's earnings by redistributing income from profits, dividends, and interest cannot sustain a persistent rise in earnings. And mandating or encouraging high wage policies (as in Latin America and the Caribbean) discourages the economic growth that is the ultimate durable source of improvements in workers' living standards.
Another study suggests that union members have receive less of a wage premium from productivity-enhancing qualities -- like education and experience -- than non-union members. [But surely unions bestow greater benefits on their members?--ed. The evidence suggests that unions have less effect on wages than non-wage benefits]

As for the argument that unions created the American middle class, this paper suggests that union membership did not bestow appreciable benefits on one group of workers from the relevant time period. To be fair, Nathan Rosenberg and L.E. Birdzell, in their magisterial How The West Grew Rich (p. 237), do argue that labor unions improved wages in manufacturing. However, their causal logic is slightly different than Howard Dean's:
The co frontational character of employer-employee relations has encouraged the use of labor-saving, capital-intensive methods of production throughout the West. The effects of using these methods include a reduction in the number of employees in manufacturing industry, the substitution of machine effort for human effort in many of the more strenuous jobs, and an increase of the marginal productivity, and hence the compensation, of the remaining workers.
Finally, the notion that protectionist barriers via labor standards will somehow increase demand for U.S. exports is bulls#@t of such a high order that I can only admire the complete absence of economic logic from Dean's thinking. Developing countries that have the greatest access to trade are far more likely to grow at a faster rate, which leads to a larger middle class, which leads to a greater demand for U.S. products.

In the most generous essay I will ever write about Howard Dean, I warned that "Dean sounds more protectionist than most of his rivals on international economic issues." The crackpot economics he told Sullentrop, however, sends a visceral shiver down my back.

[Tyler Cowen, 10:29 AM]
Against slavery reparations I just read a very interesting paper by Bruce Sacerdote, economist at Dartmouth. His abstract tells us:

"How much do sins visited upon one generation harm that generation's future sons, daughters, grandsons and granddaughters?...I find that it took roughly two generations for the descendants of slaves to "catch up" to the descendents of free black men and women."

The paper also reflects the trend that contemporary cutting-edge microeconomics is moving ever closer to being "sociology with better quality statistical work."

[Tyler Cowen, 10:20 AM]
You can no longer bet on terrorists this coming Friday My colleague Robin Hanson was an original inspiration behind this idea, see some of his writings at the link. Use betting markets to calculate the odds of another terrorist attack, just as we use them to calculate football odds. Has to be better than the recent performance of our intelligence agencies

Hillary Clinton just called it "a futures market in death" as the idea was struck down today.

[Juan Non-Volokh, 8:58 AM]
Are Bill Pryor’s Opponents Anti-Catholic Bigots? The Committee for Justice (CFJ), a conservative outfit founded by former White House counsel C. Boyden Gray to support President Bush’s judicial nominations, has produced advertisements suggesting opponents of Bill Pryor’s confirmation as a federal appellate judge are anti-Catholic bigots. The ad shows a picture of a courthouse door bearing a “Catholics Need Not Apply” sign. Several Republican Senators, such as Jeff Sessions, have echoed the charge, suggesting that some oppose Pryor because of his Catholic faith.

As one might expect, the charge of anti-Catholic bigotry has provoked a strong response. Democratic Senators on the Judiciary Committee expressed outrage at the suggestion that they were anti-Catholic and accused Republicans of injecting religion in the Pryor confirmation debate. (Committee Chairman Orrin Hatch, for example, asked Pryor about his religious faith at his confirmation hearing.) Editorials in the Washington Post and Boston Globe, among other publications, charge the anti-Catholic slur is a "canard" “beyond the pale” of civilized debate.

In its own defense, CFJ says:
The Committee for Justice is not accusing any Senator of being intentionally anti-Catholic. We are charging Senate Judiciary Committee Democrats with establishing a litmus test that would exclude people of orthodox religious beliefs - Jew, Christian, and Muslim alike – from th courts. When a devoutly religious nominee’s “deeply held personal beliefs” are repeatedly cited as grounds for rejecting him, even when his public record shows the ability to distinguish personal from legal judgment, we think it warrants public criticism.
CFJ also points to statements, such as the following from Senator Ted Kennedy (a Catholic himself), that suggest an implicit religious test for confirmation:
I think the very legitimate issue in question with your nomination is whether you have an agenda, that many of the positions which you have taken reflect not just an advocacy but a very deeply held view and a philosophy . . .
Such references to Pryor’s “deeply held view” and “philosophy” are, CFJ says, veiled references to his religious belief.

The heart of CFJ’s claim, it seems to me, is not that any Senators or public interest groups opposing Pryor are motivated by anti-Catholic bigotry as such. Rather, it is that some Senators and groups have adopted a standard – a “litmus test,” if you will – that operates as a de facto bar against the confirmation of devout Catholics (among others) to the federal bench. Specifically, some have suggested that anyone who believes abortion is morally wrong in all, or nearly all, cases and that Roe v. Wade led (in Pryor’s words) to the “slaughter of millions of innocent lives” is unsuited for the federal bench. I think this is a reasonable interpretation of the views of some, but by no means all, Pryor opponents. The New York Times, for example, labels such a position “extreme” (as it did in a June 23 editorial) and has repeatedly cited Pryor’s views on abortion as exhibit A in its opposition to his confirmation. The Times also cited the abortion issue as reason to oppose Michael McConnell, since confirmed to the U.S. Court of Appeals for the 10th Circuit. The various abortion rights groups are also c extreme given the division in the country and the legal academy over abortion and the legitimacy or Roe (see Larry Solum's post here) - they should reconsider their views. Again, however, Pryor’s defenders should be careful to distinguish their defensible claim – the abortion litmus test adopted by some discriminates against devout Catholics and other religious groups – from the indefensible claim – Pryor’s opponents are anti-Catholic bigots.

In my view, the real question should not be whether an individual nominee has deply felt religious beliefs about abortion, homosexuality, the death penalty, or some other controversial issue. Rather, it should be whether a given nominee is capable of separating their personal views from the their obligation as a judge – whether, for instance, an anti-abortion judge could nonetheless faithfully apply Roe and other relevant precedents, or whether an anti-death penalty judge could nonetheless faithfully apply laws providing for capital punishment. I believe Pryor’s record as Attorney General suggests he is capable of this, but I respect that reasonable minds may disagree. The point is that the confirmation debate should focus on a nominee's qualifications to be a judge, not their personal religious or ideological views. In my opinion, insofar as some of Pryor's critics are imposing an abortion litmus test on judicial nominees, they have reaped what they sowed.

UPDATE: A self-described historian e-mails that if a reasonable number of Catholics nominated by President Bush have been confirmed, "the unreasonableness of the "no Catholics need apply" charge would be evident beyond reasonable dispute." Not quite. The charge is not against the Senate as a body, the Democratic caucus as a whole, or even all those who oppose Pryor's confirmation. Rather, as I hoped to make clear above, the charge is that some of Pryor's opponents are using a standard which would bar devout Catholics -- or at least Catholics that subscibe to the church's teaching on abortion -- from serving on the federal bench. Thus, the relevant test would be whether the relevant subset of Pryor's critics have also opposed all other nominees who, for religious reasons, believe abortion is the killing of an innocent human life. In the case of the New York Times editorial page and the various abortion rights groups, the answer is clearly yes, as it is, I believe, with a significant subset of the Democratic caucus. That is all that is necessary to support my claim that some of Pryor's opponents have adopted a de facto anti-Catholic policy for judicial nominations.

[Daniel Drezner, 8:49 AM]
Krugman-Sullivan, Round XXVII: Well, this should be entertaining. Paul Krugman, in today's op-ed column on whether the BBC reporter Andrew Gilligan sexed up his report on whether members of the British government wanted to sex up their Iraq dossier, says the following:
In Britain the news remains dominated by the death of Dr. David Kelly, a W.M.D. specialist who became a pawn in a vicious war between the Blair government and the BBC over claims of politicized intelligence. According to news accounts, someone in the Blair government leaked Dr. Kelly's name as the likely source of a critical BBC report, apparently provoking his suicide.

The government's aim seems to have been to discredit the BBC. After attributing the report to Dr. Kelly, officials questioned whether the BBC had accurately reported what Dr. Kelly said. They also suggested that he was at too low a level to know how intelligence on Iraqi weapons had been put together.

But this attack has backfired badly. The BBC apparently has evidence, including a tape, that Dr. Kelly made the key allegations it reported. Moreover, Dr. Kelly was, in fact, in a position to know what he claimed. More information may emerge as a judicial inquiry proceeds, but at this point the BBC seems largely in the clear, while the government looks like a villain.
Andrew Sullivan, who has blogged about this contretemps here and here, responds to Krugman:
Y u read the British press and see if you get that impression. The only committee looking into the matter has backed the government. Gilligan is refusing to have his testimony to Parliament released. Kelly said to Parliament that he could not have been the source for the BBC's allegation. Yes, some people are backing the Beeb. But the notion that the BBC isn't severely on the ropes over this is a delusion.
For those readers who want to believe that Krugman is correct, click here. For those readers who want to believe that Sullivan is correct, click here. For those who want more background, click here.

Developing....

[Juan Non-Volokh, 7:59 AM]
Will the Real Libertarians Please Stand Up: It's Cato vs. Cato on the drug reimportation bill.

[Juan Non-Volokh, 7:57 AM]
Problematic Patriot Reporting: Since Orin is temporarily unable to offer his defenses of the USA Patriot Act, this article by David Tell criticizing this New York Times story will have to do. If Tell's account is accurate, the Times account of a rash of civil rights violations under the Patriot Act was "dead wrong: crippled by a fundamental factual error and, therefore, thoroughly misleading."

UPDATE: David Tell is not the only one filling in for Orin. Michael Drake is too.

[Jacob Levy, 7:55 AM]
Huh? State Department spokesman Richard Boucher, on the Baker-to-Iraq story:
State Department spokesman Richard A. Boucher said at his daily briefing that neither Baker nor Secretary of State Colin L. Powell "had ever heard about it -- it's a dead parrot."
Yes, I know what "dead parrot" is a reference to, but I just don't get it. What's the connection between the Python sketch and any point being mmade?

(I've read the full transcript; it doesn't help.)

Oh, well. At least we can be relieved that James "Fuck the Jews" Baker isn't being made Proconsul of Mesopotamia after all. Baker's reputation as a "fixer" doesn't have anything to do with the skills needed to "fix" postwar Iraq. Having American transformative efforts led by the conscienceless, stability-obsessed man who so badly botched the disintegration of Yugoslavia and who did his best to botch the end of the Soviet Union may not be the very last thing we need, but it's somewhere in the bottom quintile.

[David Bernstein, 7:33 AM]
Best of Bernsteinblog This is one of my favorite, and earliest, posts from Bernsteinblog, and I decided to share it with Conspiracy readers.

My late grandmother, Fay Bernstein, born Frejda Jozefson, arrived in the United States from Szczuczyn, Poland, in 1921. She describes her life in Szczuczyn in a fascinating memoir, posted on the Szczuczyn website. While many Jewish immigrants from Eastern Europe wrote "making it America" autobiographies, far fewer seem to have written "what life was like in the Old Country" memoirs. As grandma wrote, her life there was not particularly pleasant. Her father died when she was less than a year old, leaving her mother with five daughters and no visible means of support. The poverty they lived in, however, was nothing compared to the terror she, her mother, and her sister (the older sisters having since left for America) went through as refugees during World War I, with the memoir providing only a glimpse of the horrors she experienced. Grandma loved to tell stories of her childhood, and I think she would have been pleased to know that people were reading her memoir, so give it a look.

[David Bernstein, 7:21 AM]
My email If you are trying to reach me via email, please do not click on the "David" link to the left, as that will take you to permanent Volokh Conspirator David Post's wesite. I can be reached at deliotb-at-aol.com.

[Juan Non-Volokh, 6:44 AM]
The Politics of Monkfish: In case you were not aware, monkfish are like senior citizens who pay taxes when they sell capital assets. The Sunday New York Times' food column explains:
If you see a whole monkfish at the market, you'll find its massive mouth scarier than a shark's. Apparently it sits on the bottom of the ocean, opens its Godzilla jaws and waits for poor unsuspecting fishies to swim right into it, not unlike the latest recipients of W's capital-gains cuts.
Link via OpinionJournal.

[Jacob Levy, 6:43 AM]
Marriage: The opponents of gay marriage are changing the subject, again. instead of procreation, the key issue now appears to be non-procreation. Quoth Maggie Gallagher:
It is also true, as gay-marriage advocates note, that we impose no fertility tests for marriage: Infertile and older couples marry, and not every fertile couple chooses procreation. But every marriage between a man and a woman is capable of giving any child they create or adopt a mother and a father. Every marriage between a man and a woman discourages either from creating fatherless children outside the marriage vow. In this sense, neither older married couples nor childless husbands and wives publicly challenge or dilute the core meaning of marriage. Even when a man marries an older woman and they do not adopt, his marriage helps protect children. How? His marriage means, if he keeps his vows, that he will not produce out-of-wedlock children.
Maybe I'm being slow-witted, but it seems to me that a marriage between a man and another man "helps protect children" in precisely the same way. For each groom, "his marriage means that, if he keeps his vows, he will not produce out-of-wedlock children." If the key isn't to procreate within marriage (which Gallagher realizes is unstable ground because of the lack of restriction on infertile marriages) but rather the prevention of procreation outside of marriage...

[Jacob Levy, 5:36 AM]
n is, say, Singapore's relationship to the U.S. The U.S. often has trouble remembering that little fact.

Then: Liberia. Liberia's wounds are an ongoing result of the state's creation as a haven for resettled American former slaves-- on territory that was already inhabited. The conflict between an Americo-Liberian ruling class and the semi-colonized inhabitants is a major cause of that country's almost-perpetual civil war. Other civil wars in other places in Africa have other causes-- a colonial power that classified local class differences as "racial" ones and created an intra-African racial hierarchy, or the oil curse, of what have you. Bu this is one of the roots of the Liberian trauma.

From the perspective of U.S. history, the Liberian experiment seems like an odd, foolish exercise in denial. From Jefferson through Lincoln, many of those who knew slavery to be wrong nonetheless found it impossible to imagine peaceful coexistence between whites and freed blacks on American soil. The fear of the South becoming Haiti was very real, as was the paranoia about miscegenation. Since we, in retrospect, know that slavery was abolished with blacks still living in the U.S., and we know the gravity of the subsequent history of multiracial coexistence, the Liberian experiment seems like a bizarre and doomed little footnote. Compared to the number of slaves, very few freed blacks ever went to Liberia, and it looks to us as though it couldn't have been otherwise. But prior to the Mexican war, and arguably prior to the Civil War, Liberianism was the dominant position among whites who disapproved of slavery. Abolitionism-- that is, the desire to abolish slavery without resettlement in Africa-- was a decidedly fringe position. Liberia was going to be the grand solution to the great American dilemma and tragedy-- this was the view of many apprently intellectually and morally serious people. Moreover, Liberia would be a chance for the U.S. to begin exporting constitutional republican government back into the eastern hemisphere. It had Protestant social reformism and liberal-democratic millenialism all rolled up into one. In short, it was a major undertaking, viewed very seriously by the Americans who indulged their urge for social experimentation.

Liberia wasn't just founded by persons who happened to be freed slaves. It was founded as part of the great American psychodrama about race and slavery, as part of an ostensibly utopian project to (not to put too fine a point on it) abolish slavery but preserve white racial purity and dominance.

Cato's very smart director of foreign policy studies, Ted Carpenter, writes
Some supporters of intervention in Liberia contend that the country is a special case because it was founded by freed American slaves in the 1800s. Of all the justifications for the use of military force, that one is the silliest. The circumstances of the founding of a country more than 150 years ago has no relevance whatsoever to the question of whether the United States ought to take action in the 21st century. When interventionists resort to that kind of argument, they are grasping at straws.
Similarly National Review ODT editorializes, on the question of sending American troops,
Sheer pity, and America's tenuous connection to Liberia-- founded by freed slaves-- argue for it. The lack of any compelling national interest and the difficulties posed by local tribalism argue strongly against.
"Silly"? "Tenuous"? Liberia was created as an attempt to solve one of America's central problems, to end up with two racially homogenous liberal Christian democracies, one on each side of the Atlantic. Instead, it had next to no effect on American racial politics but succeeded in exporting habits of ethnic dominance to another place. Liberia wasn't formally a colony, because precisely what the U.S. wanted was rid of the blacks it was sending "back;" but the American relationship to it is as intimate as that of any colonial power to a colony, and moreso than most. If ever there are historical debts to be paid, the U.S. owes one to the people of its misbegotten creation.

That doesn't automatically translate into military intervention; there has to be a credible case that armed outsiders can improve things rather than becoming just another party to the civil war. But Charles Taylor (no relation, by the way, to the famous Canadian philosopher) is a monster even by the standards of African dictators, and this civil war has been exceptionally horrific. I don't think Belgium should invade Congo in order to en its civil war, though Belgium owes a susbtantial debt to the people of that country for having shattered, slaughtered, and enslaved it in a way that it has yet to recover from. Belgium's army would be just another complication to the conflict. But the balance of powers, and the likely outcomes, are different if the U.S. commits to aiding Liberia and to removing Taylor from power.

[Tyler Cowen, 5:01 AM]
More on money and monetary policy, business cycle series I received two follow-up questions from my blog yesterday.

First, does it matter that large amounts of currency are held overseas?

Basically no, it does not matter for the macroeconomy. It would matter if this money flowed back and forth in volatile fashion, and if currency were a big part of the money supply. But neither is true. The currency just sits there, for use by drug lords and the Russian mafia.

Second, how can deflation be a danger in Japan? Can't the Japanese government simply print more currency?

Economists are divided on this one. Paul Krugman believes that at this point the Japanese will simply hold any additional currency that is printed. He might be right, there is only one way to find out.

Obviously at some point the Japanese would stop holding extra currency, and spend it, but this might involve a money supply so volatile it would not be worth trying.

[Tyler Cowen, 4:52 AM]
Macroeconomics in Five Easy Lessons, Part II Many readers requested this series. You can read each one separately, but I recommend that you go back to part I from yesterday, on Money and Monetary Policy (the hardest topic, all the others get easier).

Today we do Business Cycles.

There are three good accounts of business cycles:

1. Sometimes really bad things happen. The oil price shocks of the 1970s are a good example. Or what if our government raised all tax rates to eighty percent? Or maybe you are Chilean and the price of copper falls drastically. These causes are obvious when they occur.

2. Sometimes a government engineers a shock deflation by contracting the money supply, or by allowing the money supply to fall. See my last post in this series, I discussed this yesterday.

The Great Depression was so bad because both #1 (bank failures, trade war, rise of totalitarianism/pessimism) and #2 operated at the same time.

3. Luck

Most modern business cycles fall into this category. Most modern business cycles are simply bad luck. You can spend your whole life trying to divine the relevant patterns, but you are very likely to fail, no matter how smart you are.

Many macroeconomists argue that the "time series" of most variables is statistically indistinguishable from a random walk. Now these economists might be wrong (click here for a critical view of this idea), but the very fact that this is even debated should tell you everything.

Do you know the literature on the hot hand in sports? You think that Scottie Pippen is hot tonight, "in a groove," because he hit seven shots in a row? But it is really just luck, drawn from a statistical distribution, and you are imaginin patterns that are not really there.

I believe that many business cycles fall into this category.

Obviously, government cannot do much to get us out of "business cycles" of this kind.

Japan is a puzzle to everyone, but I suspect it has had a mix of #1 (banking/bubble problems), #2, and #3 all at the same time, and that is why their problems are so hard to cure.

For further reading I recommend Fischer Black's Exploring General Equilibrium, plus there is my own Risk and Business Cycles.

Monday, July 28, 2003

[David Bernstein, 8:34 PM]
Irony Department From a memo circulating today at the U.S. Department of Agriculture, the agency in charge of food safety regulations:

"This past Friday, a D.C. health inspector inspected the USDA South Building cafeteria during the lunch hour. Based on a critical observation, the inspector immediately shut down the cafeteria. The basis for this action was a building repair problem in the kitchen and other maintenance issues in the dining area. The inspection revealed repair problems that required patching to ensure the cafeteria is adequately sealed off to prevent entry by insect and animal pests."

Update: Josh Chafetz wonders "whether a cafeteria catering to bureaucrats can ever be free of 'insect and animal pests.'"

[Jacob Levy, 4:15 PM]
Virginia Postrel should be pleased: The new NPR lunchtime show, "Day to Day"-- a collaboration with Slate-- apparently understands part of its distinctive contribution to be that it's west-coast based, and that things might "look different" from how they do in the east. (Virginia has noted, several times, the strong east coast bias in picking pundits and talking heads for radio and television, and the difficulties west coasters have in even getting noticed by the big eastern press outlets.)

I kind of want to root for Day to Day to do well; I think a Slate radio show is a good idea. But I won't get to listen to it much myself, and I have to note that it's a direct competitor for hometown favorite Odyssey, a lunchtime production of Chicago's public radio station that does an excellent job exploring serious intellectual issues in extended conversation with thoughtful people. And if I had to choose, I guess I'd rather see Odyssey get picked up more widely...

UPDATE: Heh. Virginia responds.

[Tyler Cowen, 4:06 PM]
No comment on this one From the July 11 TLS:

"Amiri Baraka, turbulent poet laureate of New Jersey [sic], has been stripped of his job title, and the $10,000 stipend that goes with it. Baraka (formerly LeRoi Jones) had outraged poetry lovers in New Jersey and beyond by implying, in his poem "Somebody Blew Up America," that Israel had a hand in the attacks on the World Trade Center..."Who told 4,000 Israeli workers at the Twin Towers/To stay home that day?/Why did Sharon stay away?"

Baraka refused to step down, so last week the New Jersey General Assembly passed a bill that demolished the post of laureate. Baraka points out that he has yet to be paid."

He has since sued the state of New Jersey.

[Randy Barnett, 3:24 PM]
The Mother of All Big Spenders: Good column today on NRO by Veronique de Rugy and Tad DeHaven of the Cato Institute on the Bush administration's profligate spending policies:

The Bush administration's newly released budget projections reveal an anticipated budget deficit of $455 billion for the current fiscal year, up another $151 billion since February. Supporters and critics of the administration are tripping over themselves to blame the deficit on tax cuts, the war, and a slow economy. But the fact is we have mounting deficits because George W. Bush is the most gratuitous big spender to occupy the White House since Jimmy Carter. One could say that he has become the "Mother of All Big Spenders."
Read more here.

[David Bernstein, 2:26 PM]
te professor of American and African religious history at Oberlin College. 'The message is that we are not concerned about the importance of your historical background . . . '" Prof. Miller has things exactly backwards: by allowing only blacks to teach black history, the message is sent that black history isn't sufficiently important to be a worthy subject of interest for anyone but blacks.

As someone who has written many articles and one book about African American history in the context of constitutional history, I take the idea that whites should be barred from teaching (and, by analogy, writing) about black history very personally.

Fortunately, I'm in a field (law) where race is so central in many subareas (constitutional law nd history, criminal procedure, etc.) that the idea of excluding whites from writing and teaching about race would be ludicrous (though as a generally libertarian type, I had a lot of trouble with politically-correct faculties when I was looking for my first teaching job; it was clear that many of those who opposed my candidacies at various schools had not read my work, but knowing that I was writing about race and wasn't liberal was sufficient grounds for opposition). But I have heard that it's extremely difficult for whites to get college-level jobs teaching African American studies, and that's a shame.

As for the Oberlin case, it would clearly be unconstitutional for the school board to reserve the teaching of African American history to blacks, just as the board could not limit to whites the teaching of European history, or to Asians the teaching of Asian history. The school board should not only reject the parents' protest, but should also regularly assign qualified white teachers to the class.

Update: Tim Sandefur notes the irony of this incident occurring in Oberlin, Ohio, a town founded by radical abolitionists.

[Daniel Drezner, 12:59 PM]
The idiocy of subsidies: It's easy to find instances where economists and environmental activists disagree. But as Norman Myers and Crispin Tickell point out in today's Financial Times, they do agree on the costly folly of sectoral subsidies. The key grafs:
Worldwide, perverse subsidies are prominent in six main sectors: agriculture, fossil fuels, road transport, water, forestry and fisheries. In all cases the subsidies serve to undermine national economies as well as environments. Subsidies for agriculture foster over-loading of croplands, leading to erosion of topsoil, pollution from synthetic fertilisers and pesticides, and release of greenhouse gases. Subsidies for fossil fuels are a prime source of pollution. Subsidies for road transport also promote pollution. Subsidies for water encourage misuse and over-use of supplies. Subsidies for forestry encourage over-logging and other forms of deforestation. Subsidies for fisheries foster over-exploitation of fish stocks.

It is hard to calculate the value of such subsidies worldwide, but they probably amount to at least $2,000bn a year. On both economic and environmental grounds, they defer the time when we can achieve the holy grail of sustainable development. The total of $2,000bn is 3½ times as large as the Rio Earth Summit's proposed budget for sustainable development, a sum that governments then dismissed as simply not available. The Organisation for Economic Co-operation and Development countries account for two-thirds of perverse subsidies, and the US over one fifth.
It's worth noting that the subsidies aren't just unbelievably inefficient in and of themselves -- they're also sabotaging the latest round of world trade talks.

[Randy Barnett, 12:00 PM]
More from Den Beste on War Strategy: I confess, the blog I mentioned below is new to me. Here are a couple more posts from Steven Den Beste that are worth reading:

On How the Iraq War Puts Pressure on Saudi Arabia

On the Need to Emphasise WMD as Rationale for the War in response to reaction to the long strategy piece I cited below.

Reading Den Beste has made me marvel once again at the miracle of the internet. First, I am reading it here in Germany. Second, I found out about it from a blog written by a law professor friend of mine who is now, due to the internet, a famous and influential dude. Third, and most importantly, pre-ínternet Den Beste would have had no incentive to invest his energies in developing his knowledge and analyses since he would have no way to disseminate his intellectual product. As it is, since it appeared two days ago his strategy page has been visited 8260 times--2000 more than when I blogged it a couple hours ago--which is or shortly will be larger than the circulation of most political magazines, which brings me to fourth, I now get to blog too.

[Daniel Drezner, 11:30 AM]
The trouble with David Rieff's trouble with sanctions: The closer the general media gets to one's area of expertise, the more one becomes frustrated with the mistakes/misperceptions that creep into the analysis. Which is how I feel about David Rieff's evaluation of the sanctions against Iraq from Sunday's NYT Magazine. [What do you know about sanctions?--ed. Click here.]

It's actually a pretty good piece, making a point I've made repeatedly over the past year -- that the use of force was actually a more humane strategy than economic sanctions in dealing with Iraq. The key quote:
One may disagree with the policies the present administration has followed with regard to Iraq -- policies that have led to a brilliantly successful war and a staggeringly inept postwar occupation. But to its credit, at least it had a policy, one partly based on the understanding that Iraq sanctions may have contained Hussein, but they had failed at weakening his grip on his country. Brent Scowcroft is right that without the sanctions the American victory in the second gulf war might very well not have been as smooth. The embargo does seem to have achieved the goal subsequently advanced for it as a rationale; that is, to keep Hussein ''in his box'' and to prevent him from developing weapons of mass destruction. (Of course, the absence of weapons of mass destruction bolsters the case for sanctions but vitiates the stated case for the war itself.)

And yet had sanctions really succeeded, presumably there would have been no need for th war at all. Not that every Iraqi I met preferred sanctions to war. To the contrary, some even insisted that given the choice between being subjected to open-ended sanctions and the bloody resolution of an American invasion, they would opt for the latter. ''I detest the Americans and want them to leave Iraq now, immediately,'' one Shiite notable told me. ''But they got rid of Saddam, and now they have lifted the sanctions. That's good. Otherwise, who knows how long this slow death by water torture, which the sanctions were for us, would have gone on?''
The article is worth reading for two additional reasons. First, it details the specific ways in which Hussein's regime exploited the sanctions to increase their control over the country while simultaneously exploiting the sanctions for propaganda purposes abroad.

Second, Rieff gets Madeleine Albright to admit she was wrong. In 1996, she responsed to a 1996 TV interviewer who questioned whether the sanctions were worth the deaths of many Iraqi children by saying: "This is a very hard choice, but the price, we think the price is worth it." She now tells Rieff: "It was a genuinely stupid thing to say."

So, a good piece. However, knowing what I know, there are some lulus in the essay that I just can't ignore. Here they are, from the specific to the general:

1) Rieff exaggerates the number of Iraqis deaths attributable to the sanctions: He cites a UNICEF figure of 500,000 Iraqi children killed. It's an appalling number. It's also grossly exaggerated.

The most precise study of this topic-- conducted by people hardly sympathetic to the sanctions regime -- concludes that between 100,000 and 227,000 children died during the acute period of sanctions imposition. These are still appalling numbers. But claiming between 273,000 to 400,000 more deaths is cheap and manipulative. [But Rieff is only qu ting the UNICEF figure!!--ed. Rieff is also bright enough to know that UNICEF relied on the post-1991 Iraqi government for much of their data.]

2) Rieff elides over early U.N. efforts to alleviate the humanitarian suffering: The article suggests that the first U.N. effort to alleviate the suffering of the Iraqi people came with Madeleine Albright in 1993. Actually, that's not fair -- Madeleine Albright suggests this in the article:
''I went to various Arab capitals with photographs we'd declassified that showed how much money Saddam Hussein was spending on his palaces,'' she told me recently. ''The Arab leaders were amazed. They hadn't known any of this. But in turn they told me about how much the Iraqi people were suffering under sanctions. They also talked about the anger over sanctions that was building in the Arab 'street.' Of course, this protest was affecting them, too. But I was appalled by what they told me, not just worried about the political consequences. And it was when I returned to the U.N. that I began to try to mitigate the humanitarian consequences of the sanctions. That's when the idea of 'food for oil' was born.''
In point of fact, the Security Council passed Resolution 705 in August 1991, and then Resolution 712 in September 1991. Both of them permitted Iraq to sell $1.6 billion in oil to buy food and humanitarian supplies. The Iraqis rejected both resolutions.

3) Rieff overgeneralizes from the Iraqi experience: In the latter sections of the essay, the point is made that if the sanctions against Iraq had such a devastating humanitarian impact, perhaps they should be thought of differently as a foreign policy tool.

A cursory look at the sanctions universe shows that Rieff is generalizin from the wrong case. Here's a decent chronological overview of sanctions cases from the 20th century. The overwhelming majority of these cases look very different from the Iraqi episode. The sanctions are not comprehensive in scope. The cost of the sanctions to the targeted country are, on average, less than 1/25th the estimated cost in Iraq. Most sanctions episodes last less than five years.

Rieff implies that all attempts at economic sanctions will affect ordinary citizens in a manner similar to Iraq. It's a bogus claim.

4) Rieff fails to understand the word "rational." The essay closes with the following:
The blunt instrument that was applied to Iraq is in the process of being reformed. ''We were learning as we went in Iraq,'' Nancy Soderberg told me. ''We're still learning.''

In all likelihood, it will be a costly lesson, for there is this terrible conundrum at the heart of every sanctions policy: while sanctions imply rationality -- the knowledge on both sides that the pressure being applied can be lessened by compliance -- tyrants like Hussein and Mugabe are often fundamentally irrational. And so my own sense is that sanctions, even the ''smartest'' sanctions, will continue to exact an appalling human toll.

There may indeed be no way around them. But in that case, we should be clear about what we are really saying, which is that there is no way around the ruined lives and the dead bodies strewn across the ruins of broken societies either. Ultimately, as hard as some officials like Albright tried to mitigate the worst effects of Iraq sanctions through oil-for-food and other reforms, opting for them meant choosing American security over Iraqi mass suffering. If tragedy, as the German philosopher Hegel said, is the conflict of two rights, then sanctions are truly a tragedy. (emphasis in original)
There's a lot of aston shing statements in this section. I just pointed out the problem with the last paragraph -- there are humanitarian costs to economic sanctions, but to infer that all sanctions lead to the devastation that befell Iraq is a tendentious claim.

What's worse, however, is the word "irrational." Rieff just devoted 5,500 words to showing that Saddam Hussein acted in a perfectly rational manner. He exploited the sanctions to increase his repressive capabilities at home while building up sympathy abroad. That's acting in an opportunistic and self-interested manner -- hardly the work of an irrational man.

What Rieff fails to comprehend is that despots like Hussein or Mugabe act in a rational manner to maximize their preferences. What makes them different is that they prefer to retain power and starve their citizenry rather than relinquish their power for the greater good.

To Rieff, this is irrational. I would use another, more accurate word -- evil.

Why am I venting about this? One of the reasons I preferred an invasion of Iraq was that the other policy options -- including sanctions -- had a more devastating humanitarian impact. But Iraq is a special case. Rieff is trying, in this article, to suggest that military intervention may always be preferable to sanctions -- and that is just wrong.

UPDATE: Also check out Tom Maguire's take on this.

[Jacob Levy, 11:15 AM]
Malawi post the first: While I sort out which items about Malawian political, social, economic, and religious issues should go here and which should go over at TNR, I'll first blog something cheery and happy. Malawi is under-tourismed, and you should go visit.

It's under-tourismed for reasons that mostly seem to be long-term lag effects from the thirty-year Banda dictatorship. Banda's social conservatism was applied to foreigners and citizens alike, and the truth is he didn't want a lot of foreigners coming in and disrupting his little fiefdom. So outsiders, as the saying goes, stayed away in droves, preferring destinations that didn't legislate the length of women's skirts and men's hair.

Eventually of course, a certain sort of western conscience gets troubled about tourism-- there are too many people, and so there's a destructive effect on the very places they're going to visit-- unless prices are allowed to rise to exorbitant levels to keep the number of tourists down. And, while tourism brings hard currency and employment to areas that need it, there's also something unseemly to our post-imperialist eyes about the tourism economy and the kind of employment it brings.

Malawi's not yet, from what I can tell, anywhere near the inflection point. Considering how spectacularly beautiful, say, the huge Liwonde National Park is, and how easy it is to see elephants and hippos and lots of great birds and more, it's pretty astonishing that there's only yet rooms for a few dozen tourists at any one time. The park seems to be well-managed; and it's sufficiently safe that they've brought a bunch of black rhinos there into a special preserve. And at the moment it can only be a good thing to introduce some new hard-currency-backed jobs into the economy, even if they are tourism/ service industry jobs.

Air Malawi has just recently introduced direct flights into t e park from Blantyre, the largest city. For people visiting for pure tourism, that's probably the way to do it; but I'm glad that my wife and I (there for her research, not for tourism) were instead able to take the 2-3 hour boat trip up the Shire River to the Mvuu Wilderness Camp. And the camp was a terrific place to spend the two leisure days on our trip. ("Mvuu" is the onomatapeic Chichewa word for hippo. They start making that noise about an hour before sunrise, and it carries and reverberates for miles...)

But be warned: Air Malawi tickets are extremely difficult and complicated to buy in advance from the U.S. For that matter, Malawi's not yet easy to get to. (We had to spend the night in Johannesburg before continuing onward.)

More to come.

[Tyler Cowen, 10:53 AM]
Telemarketing exemption The new telemarketing do not call list will exempt...you guessed it...politicians. They can still call you. The link is http://www.foxnews.com/story/0,2933,93091,00.html.

[Randy Barnett, 10:31 AM]
Comprehensive Analysis of US War Strategy This from GlennReynolds.com:

Steven Den Beste has a long post on U.S. strategy in Iraq. I strongly encourage you to read it. It’s also worth reading this item on the guerrilla resistance from Nazi holdouts that U.S. troops faced after World War II — until 1947. I wonder why that hasn’t gotten reported more often, either?
No matter your view on the war in Iraq, Den Beste's piece is a must read. It is long but worth it.

[Tyler Cowen, 10:26 AM]
Macroeconomics, in five easy lessons, part I This series is in response to reader requests. You can read any single part alone, but it is my hope you will track down all the parts, which should appear this week.

Money and monetary policy

Most of macroeconomics today is monetary economics. And the stock market is obsessed with the Fed. So the money topic is central.

I am assuming you already know lesson one, which is printing lots of money leads to hyperinflation.

Lesson two is that the Fed can never do a good job in the long run, no matter how smart or responsible it may be. The Fed's core dilemma is this: it can only control a tiny base, yet the broader superstructure is what matters for the economy.

Now bear with two paragraphs of arcane terminology.

The monetary base is currency plus reserves held at the Fed, the base of the pyramid. The Fed controls this directly and with great accuracy, if you want just think of speeding up the printing presses for more currency. (Don't worry about the discount rate, when the Fed lends to banks, that is secondary and I will ignore it.) But currency is not most of the action. Typically the Fed buys more or fewer short-term T-Bills, and deals with banks ("open market operations").

In contrast, consider what we call M2, a broader monetary aggregate. M2 contains, among other things, demand deposits. Banks lend money by writing extra zeros into the accounts of their borrowers. The Fed can influence this process (more on this below) but cannot control it with any great accuracy.

Milton Friedman told us that "lags are long and variable." That means that when the Fed changes the base, it has a poor idea how M2 (and other aggregates) will respond. The base could go up a little and M2 would go up a lot. Or sometimes M2 goes down. Or whatever.

Now keep that all in the back of your mind for a minute r two. Let's turn to deflation and inflation.

Lesson three is that both falling prices (deflation) and price inflation are usually bad (how is that for an oversimplification, albeit a correct one?).

Deflation pisses people off, by making them accept lower nominal wages. Funny, but academics will scream bloody murder if you cut their wages by $500 in a year. Those same educated people find it OK if their nominal wage is constant but eroded by price inflation over time. Don't try to understand these people, or tell them they should be like Silicon Valley, just accept them for what they are. The bottom line is that a shock deflation will put many people out of work and discombobulate the economy.

Inflation is bad too, though no one has a good account of why. Just believe me on this one (and don't be tempted to send me all this blah-blah-blah on how inflation "distorts" prices, the claim might well be true but no one has ever produced a good model or account of it). Maybe the worst thing about inflation is that if you have enough of it, sooner or later you have to end up with some deflation.

Now let's go back to the Fed. A good Fed will try to prevent both deflation and inflation. When inflation threatens, the Fed will tighten the money supply, hoping to stem inflation. When deflation threatens, the Fed will loosen the money supply, hoping to stop it.

Sooner or later they will mess up. I have already noted that controlling the base doesn't give you much leverage over M2.

Note that the stock market will second-guess the Fed every step of the way.

On average, the Fed cannot make things much better, and is simply hoping to stop things from getting worse, due to its own inevitable mistakes. The power of the so-called Fed is simply power to mess up, or power to avoid messing up too badly.

That is a good chunk of what you need to know. Oh, yes, some of the time the central bank will "goose up" the money supply to reelect the incumbent. That is usually bad.

It is sometimes said that "the Fed controls interest rates." True or false?

The Fed most emphatically does not set short-term rates directly in the literal sense.

The Fed can push around the short-term bank lending rate, by increasing or decreasing the monetary base, by more or less trading money for T-Bills. More money usually makes the nominal short-term rate fall, as there is suddenly more liquidity. Less money makes it rise. This it can be with real accuracy, it simply keeps on trading until it gets the short-term rate it wants.

The Fed has very little control over longer-term interest rates. It can move them lots only by wrecking things (remember the late 1970s?).

Now just a little more on how the monetary base is linked to M2. The Fed can push around the monetary base, hoping to change short-term interest rates enough to affect the lending practices of banks in a predictable way. This is tough to pull off for several reasons, one being that banks may care more about the long-term rate than about the short-term rate. Another is that the bank may not care what the rate of interest is, if it feels it will never get its money back. So Greenspan really has a tough job.

You might wonder why the Fed doesn't simply do nothing, and freeze the monetary base (George Selgin once pushed this idea). I take this proposal seriously, but it has two problems. First, we would all have to get used to regular deflation. Second, short-term interest rates jump around a lot. Banks would scream if the Fed didn't smooth out some of those movements.

Milton Friedman used to think that a steady rate of money growth was a good idea (he has since moved away from this position, as has almost everyone else). But it is not. If you control the growth rate of the monetary base, M2 still moves around. Controlling the growth rate of M2 is much harder, plus it leads to wrenching swings in short-term interest rates.

So we're back to the Fed goofing, sooner or later, no matter what.

The worst thing they can do is to engineer a sudden deflation. At least they have learned not to do that, so we are pretty lucky.

My apologies to the specialists, and please note I am using M2 as a proxy for all broader measures of money.

[David Bernstein, 7:52 AM]
OPEC RIP While we are on the subject of the Middle East, I can't think of any good reason the U.S. shouldn't take the opportunity of its occupation of Iraq (with the attendant control of its oil supply) to put an end to the OPEC cartel, and I can think of a lot of good reasons why it should, to wit: (1) cartels are generally bad things, economically-speaking, and state-run cartels especially bad; (2) terrorism worldwide is largely financed with oil revenues, especially Saudi and Iranian oil revenues; (3) the Saudis and Iranians also use their oil revenues to spread their intolerant versions of Islam around the world; (4) a reduction in oil revenue would destabilize Iran, clearly a good thing, and destabilize Saudi Arabia, not as clearly a good thing, but then again the Saudis become relatively unimportant if their oil is worth a lot less; (5) OPEC has used oil as a weapon against the West, and in theory could do so again; (6) OPEC nations have largely pissed away their oil revenues, while citizens of other nations have lived in greater poverty because of high oil prices.

Caveats: I don't know how much control OPEC currently has over oil prices, but assume that without state-imposed export restrictions in the OPEC nations the price would be much lower. Am I correct? Also, because many oil companies are nationalized, the death of OPEC may not create a true free market in oil, but a situation in which prices continue to be distorted, perhaps downward, by corrupt dictatorships.

[Tyler Cowen, 7:09 AM]
Middle East I am definitely pro-Israel but I think David Bernstein is underrating Israeli injustice in the wake of the 1948 conflict, when Israel used the war as a reason to push out many Palestinians. Even if these Palestinian victims supported an unjust war against Israel, how much does that support lower their subsequent rights? Does it lower our rights if we supported an unjust war in Vietnam?

If I were a Palestinian leader, and somehow immune from assassination, I would advocate giving all the land back to Israel, yes and I do mean all the land. And I would pledge that the Palestinians would give up their voting rights, forever, perhaps letting the Israelis rule them as the British once ruled Hong Kong.

Israel, oddly enough, would have to decline such an offer. And the Palestinians would never think of offering it, even though the average Palestinian would likely end up with greater liberty and prosperity. This set of facts suggests that neither party is fully in the right.

My more general thoughts on the conflict can be read in a piece posted on my home page, click on my name on the left column.

Sunday, July 27, 2003

[David Bernstein, 7:20 PM]
ids casting any of the blame for the refugee problem on the refugees themselves, or on their leaders, instead holding Israel largely responsible.

Marmor elliptically refers to the Palestinian “revolt” of 1948, but neglects to mention that this “revolt” was a war of aggression, consisting of fighting to oppose an internationally-sponsored partition of Palestine that would have left the Palestinians and Israelis with one state each. Had the Palestinians' war of aggression, engaged in with the cooperation of seven Arab armies, succeeded, it would have led to the murder of tens of thousands of Jews. Indeed, the local Arab population engaged in consistent and unprovoked (unless one illiberally considers peaceful purchase and settlement of land “provocation”) violence against the Jewish population of pre-state Palestine, including but certainly not limited to the infamous Hebron massacre of 1929 that destroyed the remnants of thousands of years of Jewish settlement in that city. Arab riots against the Jewish presence in Palestine led to the infamous British White Paper of 1939, which both dashed hopes for the establishment of a Jewish homeland and, by stifling Jewish immigration, condemned hundreds of thousands of European Jews to death.

Before 1948, there were some well-known Jewish advocates of a binational, democratic state in Palestine, but they had no Arab counterparts (and allowing Jews the role of dhimmi does not count as binationalism). The most important Arab leader in World War II-era Palestine, the Mufti of Jerusalem, was an open ally of Hitler. During the 1948 war, Arab villages served as staging grounds for attacks on Israel by Arab armies. Some undetermined (but large) percentage of Arab refugees form that war were not expelled by Israel or “fled from the misfortunes of war,” as Marmor puts it, but fled because they expected the Jews to treat them the way they would have treated the Jews, sometimes even fleeing in anticipation of returning with victorious Arab armies to plunder their Jewish neighbors’ property As far as I am aware, after the assassination of Jordan’s King Abdullah by a "Palestinian" for attempting to make peace with Israel after the 1948 war, no representative of any Arab assembly, including representatives of the Arab refugees, publicly advocated peace with Israel until Sadat in the late 1970s. The PLO, started in 1964 (before Israel’s “occupation” of the West Bank and Gaza), openly called for Israel’s destruction, and for the deportation or murder of the vast majority of its population.

It's unfortunate that innocents suffered along with the aggressive elements of the Arab population, but would Marmor have had Israel readmit hundreds of thousands of individuals whose leaders were committed to its destruction? And how was Israel supposed to accomplish this, even if it wanted to do, while feeding and housing hun reds of thousands of Jewish refugees who were expelled from Arab countries after 1948? Many of these Jews, including my girlfriend’s parents, lived in tents for years when they arrived in Israel, because Israel was so poor and embattled (and had an incompetent socialist bureaucracy). Although our liberal instincts want Israel to have somehow overcome both its lack of resources and self-preservation instincts and help the refugees, the idea that the Israeli state was also obligated to readmit a largely hostile Arab population and take care of them as well was both impractical and not morally justified, especially when the far larger and wealthier Arab countries who bore much responsibility for their plight were available as an alternative.

I should also add that Marmor uses the word “Palestinian” anachronistically throughout his paper. There had never been a state called "Palestine," and the Arabs of Palestine did not have a “Palestinian” identity as of 1948, but were an admixture of clans and even ethnicities, united by pan-Arab resentment against Jewish settlement of the area. The word “Palestinian” in 1947 denoted Jews, not Arabs. With a bit of international assistance, Arabs who fled Palestine in 1948 could have been as easily resettled in neighboring Arab countries as refugees from Queens could be resettled in Staten Island. As Marmor acknowledges, the refugees were not resettled so that they could instead be used as pawns by Arab dictators to distract their citizens from the kleptocratic policies by demonizing Israel. If the Jewish state was occupied taking care of Jewish refugees, the Arab states had a similar obligation to assimilate their brethren.

Moreover, as far as the situation today goes, the Palestinian population, especially those living in refugee camps, has been subjected to virulent forms of anti-Semitic propaganda that could almost make a Nazi blush. Would a sane Jewish nation admit the products of this “education” as citizens? Already, since Oslo Israel ha (stupidly, in the absence of a permanent peace agreement) permitted approximately 90,000 Palestinians from the West Bank and Gaza to “return” to Israel on various grounds, and these returnees have been disproportionately involved in suicide murders.

Israel has undoubtedly not been a paragon of liberalism, compared to, say, Sweden (though it should be noted that there is far less economic inequality between Israel's Jewish and Moslem citizens than between Europe's Christian and Moslem citizens), and has certainly, like other nationstates and national movements, made grave errors, but consistent liberalism in the face of the unrelenting hostility of the neighboring Arab populations and governments would have long ago led to Israel’s destruction.

Sometimes I think that for their own good the Jews of Israel would be better off migrating en masse to an underpopulated American state and creating the Jewish version of Mormon Utah. But so long as her citizens choose not to do so, it hardly seems valid to criticize Israel’s government and people for refusing to commit suicide. Unfortunately, papers like Marmor’s, though well-intentioned and erudite, encourage Arafat and his minions to hold out hope that Israel will indeed agree to do so some day (or be forced to do so by the world community, angered at Israel’s “illiberalism”), an attitude that destroyed the possibility of reconciliation in 2000 at Camp David. Monetary compensation from the world community and voluntary resettlement in a new Palestinian state is the best the refugees and their descendants can (or should) hope for, and is all liberals should reasonably expect.

[Jacob Levy, 2:54 PM]
For those who like this sort of thing: Allow me to draw your attention to Will Kymlicka and Alan Patten, eds.,Language Rights and Political Theory, newly released from OUP. Kymlicka, as you may know, is the leading political philosopher of issues pertaining to ethnicity, culture, and minority rights. The collection includes pieces from a number of disciplinary perspectives; from some very prominent political scientists, theorists, and philosophers (e.g. David Laitin, Thomas Pogge, Phillipe van Parjis); and from a number of intellectual perspectives on language rights and language preservation-- some very skeptical of minority language rights, some strongly supportive.

I'll happily acknowledge that I have a piece in it, too. (A while back, in Matt Yglesias' comments section, there was some discussion of the fact that my own book doesn't, but might have been expected to, deal with language rights in any extended fashion. I've tried to make up for that with this essay.) But that's not, or at least mostly not, why I'm recommending it. I haven't read all of the chapters, but I've read most, and they're very good, thought-provoking, and helpful for thinking about the topic.

[Juan Non-Volokh, 2:06 PM]
Roe & the "Mainstream": Stuart Buck suggests that if opposition to Roe v. Wade is "far outside the political and legal mainstream," then, as a practical matter, a judicial nominee's view of Roe is irrelevant. In response to the New York Times, Buck argues
for a single anti-Roe judge like William Pryor to have any detrimental effect whatsoever, from the pro-abortion point of view, there must be 1) some legislatively-passed restriction on abortion, that is 2) upheld by the votes of Pryor and some other randomly assigned federal judge. In order for there to be any significant risk of those two events occurring in the same case, opposition to Roe would have to be more widespread -- and hence more "mainstream" -- than the Times claims.
Giving the Times the benefit of the doubt, I suppose there are a few potential counter-arguments: 1) there may be a state (say, Alabama) that is sufficiently far out of the mainstream that its legislature could enact "extreme" laws; 2) some states have old laws from bygone eras that would be considered "extreme" today but are nonetheless still on the books; 3) there are older judges from bygone eras still on the bench. Thus, the Times nightmare scenario could result from the combination of either 1) or 2) and 3). There are two other counter-arguments: 4) if a President nominates enough judges outside of the legal "mainstream" (a claim I am certain the Times would support), it is only a matter of time before there are enough judges to uphold such extreme positions. Finally, I assume the Times could argue 5) a judge with non-"mainstream" views on Roe may have similarly unorthodox views on other issues that have yet to arise, and this poses an undue risk to the legal system.

Of course, as frequent readers of this pace may suspect, I don't believe these arguments because I reject the premise (as does Lawrence Solum). Neither opposition to abortion nor a belief that Roe v. Wade was wrongly decided are extreme views. To the contrary, outside of the Times' editorial offices, abortion and Roe remain hotly contested in the legal and political spheres. Indeed, many legal scholars who believe abortion should be legal nonetheless believe state laws limiting or prohibiting abortion are constitutional.

It is bad enough that some, such as the Times' editorial board, wish to constitutionalize their social policy preferences. It is worse that they seek to define all those who disagree out of the mainstream.

[Tyler Cowen, 12:35 PM]
Controversy and transsexuals I've done more reading on J. Michael Bailey's The Man Who Would be Queen, which I wrote about a few blogs ago. I (naively) hadn't been aware that this book on transsexuals had generated so much controversy. Look at the amazon.com reviews, a few of them compare Bailey to Adolf Hitler, and compare this book to Mein Kampf. He is accused of promoting stereotypes, but I see no good reason for the Hitler comparison. For a reasoned discussion of the whole controversy, see this article from the Chronicle of Higher Education.

I still like the book, I found it provocative, daring to ask new (and conceptual) questions about gender, identity, and informed consent.

[Juan Non-Volokh, 12:26 PM]
Neil Lewis on Justice Brown: The New York Times' Neil Lewis penned this story on President Bush's nomination of associate White House counsel Brett Kavanaugh and California Supreme Court Justice Janice Rogers Brown to the U.S. Court of Appeals for the D.C. Circuit. Lewis' piece covers all the political storylines -- Kavanaugh's work on the "Starr report," Brown's ethnic background and Supreme Court prospects, prior GOP opposition to filling the 11th and 12th spots on the D.C. Circuit -- but offers surprisingly little about the views of the two nominees. Perhaps this is understandable with Kavanaugh. He has not had a very "public" career (though Lewis omits several of his qualifications, including his clerkships for Judge Alex Kozinski and Justice Anthony Kennedy, and his time at Kirkland & Ellis). In the case of Justice Brown, however, much can be learned from her various judicial opinions, including her high-profile dissents in Nike v. Kasky and Intel v. Hamadi.

Instead of offering any substantive insight on Brown's views, Lewis gives us the following: "Justice Brown, who is African-American, wrote the majority opinion in 2000 interpreting California's referendum against affirmative action in a way that greatly pleased conservatives." "Greatly pleased conservatives"? Why? What did she hold? Lewis doesn't say. Nor does he mention that the opinion unanimously upheld the lower court (two justices dissented on an isolated aspect of the case). It is as if whether conservatives (or liberals, for that matter) liked her opinion tells readers something meaningful about her approach to the law. Is a single line describing the substance of the case and her holding too much to ask for America's newspaper o record? After all, how hard is it to look up the case. To be fair, Lewis notes some conservatives believe her "judicial philosophy would match that of Supreme Court Justices Antonin Scalia and Clarence Thomas," but this too says relatively little about the merits of her nomination.

One final thought, am I wrong in sensing that the framing of the line -- an African-American woman "pleases" conservatives -- adds racial overtones to the piece? Does this formulation paint Justice Brown as an Uncle (Aunt?) Tom? Perhaps I'm being oversensitive here (and, if so, I'm sure some of you will tell me so). Yet given the role race and ethnicity have come to play in judicial nominations, the line jumped out at me.

[Tyler Cowen, 12:23 PM]
Richard Epstein, in my hands Richard Epstein's new Skepticism and Freedom: A Modern Case for Classical Liberalism just came into my local Borders. A book like this is obviously self-recommending, most of all to readers of this blog.

I think it is Richard's best book to date. I especially like the discussions of behavioral economics, transitivity, endowment effects, and the like. There are not better discussions to be found out there.

More generally, I think Richard's genius is to see/assert/argue that various problems in ethical and political philosophy are in fact best thought of as legal issues. I'm never sure if Richard, the consummate lawyer, is aware how revolutionary he is in this regard. The idea of reducing much of philosophy to law is shocking, if you think about it (well, it is shocking for us non-lawyers!), and it is one reason why he outrages some of his readers.