March 15, 2005

Bankruptcy and Paternalism; The Zywicki Article

I've just come across by far the best description I've yet seen of the proposed bankruptcy bill. It's by Todd Zywicki, and I've quoted the most important part below (his description is also useful in that it starts by listing many other important but uncontroversial parts of the bill). Personal bankruptcy law is part of the social regulation I am forever hoping to write a book about, so I'll take the time here to think about it.

The real question is this: Should foolish people be allowed to have credit cards? We all know people who are forever in debt, having run up their credit card balances and never managing to reduce their spending enough to get the balance down to zero despite the burden of high interest rates. Should these people have been allowed to get credit cards?

The bankruptcy bill is not about this directly, of course. Here is the connection. Currently, some people with high incomes and low wealth would like to get credit cards, but they can't, because lenders are afraid they will declare bankruptcy and not pay back their debts. (This includes, for example, people who have already declared bankruptcy once or twice.) The new bill says that if your income is high enough to pay back a lot of your debt within five years, then you can't declare simple bankruptcy and liquidate your debts. Rather, you declare a different kind of bankruptcy, similar to business's Chapter 11, under which a judge decides how much of your debt you repay over a five-year period, during which your creditors cannot seize your assets. Thus, under the new law, some of those people who couldn't get credit cards will be able to.

The bill actually won't have this effect on the foolish people we know who now are in the thrall of credit card debt. Those people were already able to get credit cards.

The bill also isn't really about the profits of the companies issuing credit cards. They'll make more money in the short run, but the bump up in profits won't last. This is a fiercely competitive industry, with easy entry, and the companies compete strongly to lend to the spendthrifts. The spendthrifts pay high interest-- but they also default a lot. The debt slaves are, in effect, subsidizing the deadbeats, but as a group, debtors come out even.

I think I've heard it said that the credit card industry has high profits. That may be true, but I'm a little skeptical because of the competition and easy entry, and because proper accounting is tricky in that industry. A new company will look very profitable at first, because it will be earning high interest and not have any defaults yet. Overall, though, expected profits must even out to not be higher than if the entrepreneur had invested in some other industry-- say, the pickle industry. Thus, if we know profits will be abnormally high in the first five years of the company, we must expect them to be abnormally low in the rest of the company's lifetime. After the first five years, the company will be stuck with a lot of debtors who have a high rate of default. By then, some will be in such poor shape that the company will regret having lent to them-- but it will be too late. I wonder, in particular, what will happen when the debt slaves reach retirement age and their income drops. We may see mass bankruptcy thirty years from now-- and mass losses for the credit card companies.

Also, proper accounting, whenever a new debtor is added, the company should list as a cost some fraction of the expected loss from default. Estimating that expected loss is hard. Thus, even aside from the real path of profits and losses, the accounting path may be distorted-- and usually the company has an incentive to distort it towards having more apparent profits now (and therefore less later).

So the issue should not be credit card company profitability. Let's get back to the question of whether foolish people should be allowed to have credit cards. If bankruptcy is made more difficult in the law, more foolish people will end up with credit cards and debt. If we said that nobody had to pay back credit card debt at all, on the other hand, we'd reduce credit card debt markedly because most people wouldn't be able to find someone to issue them a card. So what should we do?

The libertarian position is that freedom is what matters, so people should be allowed to make any kind of deal they want. In fact, they should be allowed to sign away their right to bankruptcy at all, which would make it much easier for people with little wealth and income to get a credit card.

A liberal position might be that people cannot be allowed to put themselves into debt that is hard for them to repay, even if they want to, because it is degrading to human dignity, and what is good is not what they want but something else. They must be forbidden to borrow for the same reason that they must be forbidden to sell themselves into slavery.

The conventional economic position is similar to the libertarian one, but with a different objective, value maximization. Putting constraints on contracts is almost always bad for value creation, if people are rational decisionmakers. After all, even if

If we depart from the standard economic convention, however, and assume that some people are poor decisionmakers or poorly informed, then credit card debt might be a bad thing. Some people don't realize how unhappy they will be once they are in debt, and we would like to stop those people from making bad decisions. The question then becomes how many people are foolish, and whether we can restrain them without stopping smarter people from taking on debt. Can we keep someone from borrowing to buy clothes while not stopping someone from borrowing to start a home business whose quality can't be understood by a commercial lender? Usually we can't, and so a tradeoff must be made.

This is why some conservatives oppose the new bill, I think. A conservative, as opposed to a libertarian, is willing to be paternalistic on occasion.

A different argument is the moral one-- that consumer debt is bad because it encourages materialistic current consumption and a disregard for the future. This gets as complicated as the poor-information economic argument, though, so I won't pursue it here.

After thinking about it, I'm inclined to think the bill is a good thing. (Actually, of course, Tom Veal is correct when he says that this is complicated enough that we should really trust elected representatives whose opinions we value, rather than wanting to make the decisions ourselves.) The key is that this bill is not exactly about making bankruptcy more difficult. Rather, it is about shifting people from Chapter 7 to Chapter 13 bankruptcy-- from liquidation to court-ordered repayment. Consider a high-income low-assets foolish person who was intending to liquidate, but must now repay over a 5-year period. That person would have erased his old debt, and immediately set about getting in debt again. Now, the person will not be able to acquire new debts and overconsume for five years during which his expenditure will be controlled by the court. To the extent that we want to be paternalistic, this seems like a good change. We want to keep money from coming under the control of the foolish person. To the extent we do not want to be paternalistic, it is not a bad thing. The borrower and lender can contract around it, and still allow liquidation to be an option in the borrowing agreement, even though it would not be an automatic option if they did not write it in.

Here's the important passage from the Zywicki NR article:

The most important and controversial provision of the legislation is the "means-testing" of chapter-7 bankruptcy relief. Under current law, a person filing bankruptcy has two options. The debtor can file in chapter 7, the "liquidation" provision, which permits debtors to simply surrender all their assets and get a full discharge of unsecured debts a few months later. Or the debtor can file in chapter 13, under which he enters into a court-supervised repayment plan for a period of 3 to 5 years, during which he pays all of his "disposable income" to pay off what he can of his unsecured debt. To calculate the debtor’s available "disposable income," a judge uses his own subjective preferences to determine the debtor’s allowed living expenses.

The means-testing provisions of the bill will bring some rationality to this system. Those who make above the state median income (adjusted for family size), and can repay a substantial portion of their debts without significant hardship, would be required to file in chapter 13. At the end of the chapter-13 plan, this high-income filer would still get a discharge, just as other bankruptcy filers do. There is no "endless treadmill of payments," just a requirement that high-income debtors repay what they can.

In determining whether the debtor can repay a substantial portion of his debts, the legislation makes allowances for a whole range of expenses right off the top. First, it creates a standardized slate of expenses based on the relevant family size and regional cost of living, for such things as clothing, food, transportation, etc., eliminating the subjective judicial navel-gazing of the current system. It then subtracts from your income all of the debtor’s actual payments on secured debts, such as a home mortgage, car loan, or the like. The debtor can subtract any actual expenses for health care for himself or a dependent, as well as payments for health insurance premiums. Finally, there is an allowance for children’s educational expenses. If after subtracting out all of these expenses, the debtor still can repay $10,000 or 25 percent of his debts over a 5-year period, then he would be presumed to have to file in chapter 13.

The debtor could rebut this presumption by showing "special circumstances" that make it too much of a hardship to file in chapter 13, in which case the debtor would still be permitted to liquidate his debts in chapter 7.

So how many people would be affected by means-testing? The estimates are that some 7-11 percent of current bankruptcy filers would be affected by the means-testing provisions of the bill. Roughly 80 percent of bankruptcy filers earn below their state median income, and so will get tossed out of the means-test immediately. For that 80 percent -- roughly 1.2 million of the 1.5 million bankruptcy filers last year -- the means-test will be completely irrelevant. They will be permitted to file chapter-7 bankruptcy just as under the current system. Roughly half of the remaining 20 percent of filers won’t be able to repay enough of their debt to meet the repayment criteria, so they will be dropped out as well and be permitted to file just as today. So in the end, only the highest-income filers with the largest repayment capacity will be affected.

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February 21, 2005

Death Penalty for Drug Dealing

In 1995, 50% of the population supported the death penalty for drug smuggling. See this Harvard study which cites data from Gallup.

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February 07, 2005

Social Security and Filial Piety; NYTimes Letter

The Conservative Philosopher quotes this letter from the January 31 NYTimes:
To the Editor:

I don't know the intricate details of President Bush's Social Security plan, but I do know this: My mother depends on every cent of her Social Security every month. Without her full benefits, she would not be able to pay for rent, utilities and food.

My mother has survived numerous tragic family losses, worked like a slave for more years than I dare ask and never asked for anything more than what she's earned.

What has my mother ever done to you, Mr. Bush? Why do you want to destroy her future and the future of her children and grandchildren?

Robert Notrica
White Plains, Jan. 27, 2005

Among her problems seems to be her son's willingness to let her be evicted and starved rather than part with any of his own money.

I don't know why The Conservative Philosopher ran this-- the commenters seem rather confused-- but an even bigger question is why the New York Times ran it. I guess they didn't see the irony in the letter. That's significant.

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January 22, 2005

The Natural Law Philosophy of Bush's Second Inaugural

Joseph Bottum has a good Weekly Standard article on Bush's Second Inaugural Address, which I just blogged on. He says, quite rightly, that it is based on the idea of natural law and full of interesting philosophical points....

...The speech was as clear an assertion of a particular Christian political philosophy as we're likely to hear in these latter days. "We go forward with complete confidence in the eventual triumph of freedom," the president declared. "Not because history runs on the wheels of inevitability; it is human choices that move events. Not because we consider ourselves a chosen nation; God moves and chooses as He wills. We have confidence because freedom is the permanent hope of mankind, the hunger in dark places, the longing of the soul."...

The problem for ethics is always how to match empirical and logical claims ("Humans want to be free") with moral claims ("Humans should be free"). And, within philosophy, natural law is a way of bridging the gap by asserting a unity of fact and value--based on the endowment of human nature with moral worth by the model on which humans are based. "From the day of our Founding, we have proclaimed that every man and woman on this earth has rights, and dignity, and matchless value," as President Bush explained. And the reason? Well, "because they bear the image of the Maker of heaven and earth."

Now, any philosopher would point out that this is possible only if the moral law itself is real: a set of eternal truths that vary not in content but only in application as the temporal order changes. And, sure enough, there the necessary postulate is in Bush's speech: "Americans move forward in every generation by reaffirming all that is good and true that came before--ideals of justice and conduct that are the same yesterday, today, and forever."

And watch it all come together as Bush reaches toward his peroration in the speech's penultimate moment: "When our Founders declared a new order of the ages ...they were acting on an ancient hope that is meant to be fulfilled. History has an ebb and flow of justice, but history also has a visible direction, set by liberty and the Author of Liberty."...

Bush has done the natural law argument unusually well. As is all too common in discussions based on natural law, lots of hard stuff is bypassed. How do we know that it is God's will for men to be free politically? Are elections an important part of this, or is political freedom something else? (A Greek view of natural law might be that the best men should rule the masses, justly.) Still, he can take it for granted that his audience already believes that political freedom and elections are intrinsically good, and his reasoning is far more sophisticated than usual in a speech.

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January 05, 2005

Planned Parenthood and Planned Failure

The WSJ Best of the Web reports on tests by Consumer Reports:
The strongest condom was the Durex Extra Sensitive Lubricated Latex. And the weakest? "A melon-colored model distributed by Planned Parenthood performed the worst, bursting during a test in which the latex condoms were filled with air."

The report adds that CU "says its review of contraceptives was not politically motivated, although there is an intense debate among health professionals and advocacy groups about the focus on abstinence-only education by the Bush administration."

"We plan our testing programs quite a while in advance," Metcalf tells Reuters. "This is purely accidental." One might say the same about children whose parents use Planned Parenthood condoms.

As I've discussed before, one third of Planned Parenthood's income comes from abortion clinics, about the same as from donations and government grants. So maybe the bad birth control is a way to reduce costs and increase revenues at the same time.

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December 30, 2004

Teaching Evolution in Schools: A Comment on Posner on Democracy

Here's a post that I've also put as a comment on Brian Leiter's website, whereJudge Posner raises the question, as a guest blogger,
"4. May a state ban the teaching of evolution, or require teaching of "creation science," in its public schools."
" the state is being asked to enact, in effect, a religious dogma", which he seems to think is bad (whether the Constitution really bans states from establishing religions or, as I think, *protects* those establishments is a question for another time).
Judge Posner also writes the following, the best paragraph of the post:
"Rawls and others have thought that religious beliefs shouldn’t be allowed to influence public policy, precisely because they are nondiscussable. But this view rests on a misunderstanding of democracy. Modern representative democracy isn’t about making law the outcome of discussion. It is not about modeling politics on the academic seminar. It is about forcing officials to stand for election at short intervals, and about letting ordinary people express their political preferences without having to defend them in debate with their intellectual superiors."
And in a later post he is sympathetic to the idea that ethical beliefs should not be disallowed merely because they are affected by religious beliefs.

I don't see that banning the teaching of evolution or requiring creationism to be taught because of religious beliefs is any different from making murder illegal because of religious beliefs. In all three cases, the voter's opinion is based on his religion, and other voters' opinions are based on their own background beliefs. Person A believes that the Bible is inerrant, and based on this believes that evolution is a mistaken theory. Persons B and C believe the Bible is errant, or that inerrancy does not imply that evolution is wrong. I don't see why B's opinion should be privileged over the others. From the point of view of A, B wants to teach a false theory, and exclude the teaching of competing theories. Shouldn't we be "lettng ordinary people express their political preferences"? Consider the following question:

4a. May a state ban the teaching of astrology, or require teaching of astrology in its public schools.
Surely both of these are in the power of the state, despite the lack of scientific support for astrology. But why should astrologers be privileged over Fundamentalists?

In general, we do not let experts overturn voter preferences. If voters want a minimum wage or sugar import quotas, we do not cite the mass of hostile expert opinion as a reason to thwart them. Legislatures do silly things all the time. If we let public schools teach that recycling helps the environment and saves resources, both clearly false, why should we not let them teach creationism?

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December 19, 2004

Islamic Marriage in Europe

A National Review article from last year brings up the subject of allowng Islamic marriages in Italy.
In Italy, mainstream Muslim groups have asked for the introduction of Islamic marriages with no legal effects under Italian law, a de facto subtraction of the wedlock from the control of authorities. This request is aimed at creating a situation where two different legal systems regulate the lives of two different groups of citizens within the same state. In European legal history, it would represent a jump back to the Middle Ages, when different laws applied to different ethnicities. In practical terms, it would mean that Italian citizens of Muslim faith would be subtracted from the guarantees that the Italian legal system provides to its citizens. Therefore, while Christian Italian women would have the same rights as Italian men, Muslim Italian women would have very few rights. While a Christian woman would have the right to obtain a divorce simply by filing papers, a Muslim woman would have to go to great lengths to prove ill treatment at the hands of her husband.
I think the introduction of Islamic marriages is a good idea, depending on how it is done. It should not be simply that if you are Moslem, you must have an Islamic marriage. Rather, it should be structured to allow choice. Anyone--Moslem or not- would be allowed to enter into a Moslem-style marriage, indicating so at the time of the marriage. People who did not so indicate should probably be assumed to want an ordinary marriage, but it might be a good idea to assume that if you are Moslem, married in an Islamic service, you want a Moslem marriage. This would not be a dimunition of rights, but an increase-- by allowing people to enter into a more traditional kind of marriage than the Italian state currently allows. When someone enters into a contract, he imposes obligations on himself, but that does not mean that allowing people to make contracts hurts them.

Of course, Italy should go further and allow Christian marriages too, which I bet it does not now. Roman Catholics, for example, should be allowed to enter into marriages that do not allow divorce. For more discussion, see my 1998 paper with Jeffrey Stake, "Lifting the Veil of Ignorance: Personalizing the Marriage Contract."

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December 12, 2004

Bayly on Kinsey; When is Good Scholarship a Bad Action?

Pastor Tim Bayly has a good webpost and December 3 Herald-Times op-ed on Kinsey's sex research. It raises questions I've avoided, I realize. The usual charge nowadays against Kinsey is that his research was rubbish, with a hidden agenda, sloppy methods, and deliberate avoidance of sound statistical sampling. Indeed, back in the 1950's there was an issue of the Journal of the American Statistical Association that contained a number of article by top statisticians (I think Tukey was one) that criticized his statistics. At the time, the pretence was that Kinsey himself was a disinterested, straitlaced scientist; we now know that he and his associates were involved in the practices they studied.

But that is not the subject of Pastor Bayly's webpost. Here is some of what he says:

Kinsey spent the rest of his academic career conducting these interviews and disseminating the data. He was convinced that publicizing peoples' private sexual lives would usher in a more peaceful age devoid of shame and inhibition.

But his efforts did not bring the dawn of Aquarian freedom...

So today, instead of community pressure being brought to bear against adulterers and sodomites, it's brought to bear against those condemning such crimes. Freedom is shrinking as IU's diversity advocates and the Bloomington City Council's Human Rights Commission use shame as a disciplinary tool against innocent souls caught in the act of expressing disapproval of sexual perversion.

Pity the poor widow who conscientiously declines to rent her upstairs apartment to an unmarried couple. She will soon learn what G. K. Chesterton warned of: "When you break the big laws, you do not get freedom; you do not even get anarchy. You get the small laws."....

Since Kinsey first began to expose men's secrets, incest, domestic violence, divorce, the poverty rate of women and children, and deaths due to sexually transmitted diseases have all increased dramatically. But no one seems to notice.

We cannot of course attribute the sexual revolution to Kinsey. He contributed to it, but he was part of a big movement, and not an indispensable part. The question I've avoided, though, is whether a true scholar who had researched the same subject as Kinsey should be criticized. What if someone had collected data on sexual behavior in a reasonably accurate way, doing good and unbiased scholarship-- but with results pernicious to society?

It may be that publishing news of widespread immorality is not pernicious to society, but for the sake of argument, suppose that it is. I think, then, that a scholar who so publishes ought to be criticized. It is as if some scientist were to come up with a formula for a cheap homemade bomb, and published it. The scientific discovery might be worthy of the Nobel Prize, but we should not admire him. There are various kinds of criminal behavior that are much more common than people realize. Would it be good to teach teenagers the truth about it, and how low criminal penalties really are? I think one of the problems of the inner city is that people there have a better idea of how limited is the reach of the police. When more people know more things, that does not always make our life better.

There is a danger in such thinking, I realize. Research on race and sex differences is dangerous because so many people think that to demonstrate even true differences is pernicious. Others think that to deny differences is what is pernicious. In the same way, many people think the results of the sexual revolution are good, and that Kinsey's work had a good effect even if its scholarly quality was dubious. In the end, I suppose I would encourage the discovery and dissemination that corrects misbelief. Partly this would be for lack of trust in whoever would judge which discoveries were pernicious, and partly because knowing the truth would help us correct bad situations. If sexual or criminal immorality is rampant, maybe it is better we should all know that, so even if existing social norms weaken, laws or new norms may arise.

The discovery of cheap bombs (or ways to cheat on taxes safely, for another example) is different. In such cases, almost everyone would agree as to the bad consequences of the good scholarship, and the usefulness for progress is much smaller.

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November 24, 2004

Poverty and Government Aid: Facts and 90's Trends

I was wondering what had happened to welfare spending over time. The adjacent table from the 2003 Statistical Abstract shows changes in income-tested government transfers during the 1990's. Compare 1990 and 2000, in constant dollars. Federal and state medical benefits rose from 69 to 225 billion dollars per year. Cash payments went from 61 to 91, peaking at 109 in 1995. Food went from 29 to 34, peaking at 49 in 1994. Housing went from 21 to 34 billion, peaking at 36 in 1996.

AFDC, a cash benefits program, was reformed in 1996-- the well- known "welfare reform"-- but other programs were not. As a Heritage Foundation report says,

Only one federal welfare program--AFDC--was reformed in 1996. The other 69 major means-tested programs, including food stamps, housing, and Medicaid, were left largely unchanged with no requirements to be engaged in constructive activity, such as work or education, as a condition for receiving aid.

The rate of caseload decline varies enormously among the 50 states, which shows that welfare policies were the key factors behind falling dependence, not economic conditions. If economic conditions were the main factor driving down caseloads, the variation in state reduction rates would be linked to variation in state economic conditions. But the relative vigor of state economies had no statistically significant effect on caseload decline....

Another Heritage report, on poverty and inequality, has evidence on the peculiarity of the official definition of poverty:
Forty-six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio....

According to the Census Bureau and other various government reports, nearly three-quarters of poor households own a car; 30 percent own two or more cars...

Today, the typical American defined as poor by the government not only has a refrigerator, a stove, and a washing machine, but also has a car, air conditioning in his home, a microwave, a color TV, a VCR, and a stereo. His home is in good repair and is not over-crowded. He is able to obtain medical care. By his own report, his family is not hungry, and in the past year, he had sufficient funds to meet his essential needs.

While this individual's life is not opulent, it is equally far from the popular images of poverty conveyed by politicians, the press, and activists. Most of America's "poor" live in material conditions that would be judged as comfortable or well-off just a few generations ago. Today, the expenditures per person of the lowest-income one-fifth (or quintile) of households equal those of the median American household in the early 1970s, after adjusting for inflation.

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November 21, 2004

Law's Educational Purpose; The Source of Value

What is the purpose of law? To make people behave well. Under Holmes's "Bad Man" theory in "The Path of the Law", laws are for the men who will not do good without the threat of punishment. That, however, neglects other purposes of laws which are important if secondary. One is the "expressive" purpose-- that expressing that something is wrong is satisfing to the public. Related to that is the educational purpose of law. Even the good man does not know everything, and the law teaches him.

Psalm 119 says

97 MEM. O how love I thy law! it is my meditation all the day.

98 Thou through thy commandments hast made me wiser than mine enemies: for they are ever with me.

99 I have more understanding than all my teachers: for thy testimonies are my meditation.


104 Through thy precepts I get understanding: therefore I hate every false way.

But for the law to achieve this purpose, it must be a trustworthy guide. We must trust the lawgiver to be willing to learn from the law. God's law is trustworthy. If nothing else, it tells me what God wants, and that is important in itself. Human law is less reliable. If I see a law saying that it is illegal to perform haircuts without a license, I do not conclude that unlicensed haircuts are immoral, or even unsafe, because I think the legislature is wiser than I am. Rather, I conclude that either the legislature has been fooled, or they have been bribed by the barbers to restrict entry.

The Bible is a comfort to Christians because it is a reliable source of law. It still has many difficulties-- notably, knowing what law in the Old Testament is still applicable after the Resurrection-- but Christians at least have a basis for right and wrong beyond what their culture teaches them. Traditionalists are less grounded, but they at least can find grounding in the axiom that their tradition is reliable. Liberals, despite the confidence they commonly show, are more at sea. They cannot retreat to their culture, since it is a recent and ever-changing one. They are at risk trying to appeal to logical principles grounded in a few generally accepted axioms too, since they often profess a relativism which rules out logic. But that, I think, is what they commonly try to do anyway. John Stuart Mill is an example. He tried to ground morality on the rule of not hurting others, and that is common today too. But the rule turns out to be empty, since anything to which anybody objects hurts them and since it is by no means self-evident that we shouldn't hurt other people (think of the hurt caused by winning a contest with others, or by starting a new business in competition with them).

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October 26, 2004

Strongholds of the Left: Political Donations by University Employees

Ruth Wisse, one of my neighbors during my year visiting Harvard, wrote in yesterday's Wall Street Journal,

The Federal Election Commission could not have foreseen that when it required employment information on political donations of over $200, it would expose scandalous uniformity in a university community that advertises its diversity. The Sacramento Bee reported that the University of California system gave more to the Kerry campaign than any other single employee group, and that Harvard was second, with only 15,000 employees to UC's 160,000. Campus bloggers computed the percentages of Kerry contributions over Bush: Cornell 93%, Dartmouth 97%, Yale 93%, Brown 89%.

What is the relevance of this? --That our universities are strongholds of the Left, and of the Democratic Party. That is fine-- other organizations are equally strongholds of the Right and the Republican Party. But students should realize that their professors, as a group, are leftwing, and letters saying that 123 law professors or 234 economics professors oppose Bush should fail to impress anyone.

The Left has come to dominate universities, the judiciary, the media, the "mainline" religious denominations, schoolteachers. This is what one might expect, and is in line with what Schumpeter predicted in Capitalism, Socialism, and Democracy. His gloomy prediction there was that capitalism would collapse because businessmen were not articulate and political enough to defend themselves against intellectuals. It is interesting that that prediction has not come true. We do have heavy government regulation, but the private sector has defended itself fairly well, has even rolled back some regulation, and has largely defeated the idea of government ownership. Instead, it is on social issues that the Left has triumphed-- abortion, homosexuality, gambling, pornography, secularism, the role of women, affirmative action. I suppose that is because of the Left's strength in the key sectors I named above, combined with the lack of strong individual interests being affected by attitudinal changes. Note that the Left has not been so successful with gun control, which though it arguably has diffuse general benefits would also impose disliked restrictions on individuals. The benefits of pornography control are similarly diffuse, and the restrictions individualized, and so we legalized it once the universities, judiciary, media, ministers, and schoolteachers changed their attitude.

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October 17, 2004

Medical Marijuana-- Marinol

A reader wondered whether there really was a legal way to use marijuana medically. There is-- in every state, I suppose, since the FDA has approved it. The active ingredient in marijuana, THC, is available via the prescription drug Marinol. See WordIQ. Thus, the push for "medical marijuana" is highly misleading. It is based on claims that Marinol is too expensive and that for some reason plain marijuana works better than the concentrated active ingredient.

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September 28, 2004

Marijuana: Enforcement Costs and Illegality

In an earlier post, "Why Marijuana Should Be Illegal," I argued that marijuana should be illegal even if it is a neutral activity, like watching bad TV shows, because neutral activities displace good activities. In that post, I explicitly put aside considerations of the cost of enforcement, noting that they could reverse the conclusion. But on reflection, I think I was wrong to say that. If we have decided that marijuana should be illegal, putting aside enforcement costs, then high enforcement costs would not reverse the conclusion.

The reason is simple: just because we make something illegal doesn't mean we need to enforce the law. To be sure, our current marijuana laws, though by no means vigorously enforced, are costly-- we do devote police time to tracking down major growers and dealers, even though I doubt police are spending any time tracking down users (as opposed, perhaps, to arresting them if they smoke in front of a policeman who is passing by for other reasons). But we wouldn't have to. We could limit ourselves to going after marijuana fields that the policeman happens to see while patrolling, and going only after dealers who advertise on national TV. The degree of enforcement is an important policy question-- an issue where the advocates of marijuana have largely won-- but it is separable from the legality issue. Minimal enforcement is close to costless (it could even be profitable, with fines and seizures); tight enforcement would probably be more costly than the current lax enforcement.

It's not obvious to me, though, that tight enforcement would be more costly to non-criminals than the current lax enforcement. Currently we investigate, prosecute, and punish dealers. This is expensive because enough profit is at stake for them to hide their activities carefully, to be dangerous to the police, and to hire talented lawyers, and we punish them with prison time, which is expensive. Users are more numerous, but each is cheaper.

The idea that illegality and enforcement levels can be separated applies generally. We could make pornography, adultery, homosexuality, cruelty to animals, and necrophilia illegal while spending minimally on enforcement. And in fact we tolerate high levels of many crimes. Consider burglary. We spend vast sums of money to catch and imprison burglars, but the War on Burglary has failed, a critic might say. Burglary is still common. But that we've failed to stop burglary does not tell us that it should be made legal, or that we should spend less on suppressing it.

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September 07, 2004

Why Marijuana Should Be Illegal

Steve Sailer writes about the true reason why marijuana should be illegal:

In Quentin Tarantino's Jackie Brown, Samuel L. Jackson comes home to find Bridget Fonda lying on the couch, smoking dope, and giggling at the TV. Disgusted, he tells her that marijuana will rob her of her ambitions.

"Not if your ambition is to get high and watch TV," she replies.

The problem with marijuana is not that it's some wild and crazy thing, but that it's middle-age-in-a-bong. Smoking dope saps the energy from youth, turning them into sedentary couch potatoes.


The parents of America already have a hard enough time getting their teenagers -- and, increasingly, their adult children who have come back home to live -- off the TV room floor when they are perfectly straight. Parents understand that changing laws to make marijuana more readily available -- and, let's not kid ourselves, that's what these "reforms" would do -- would create an even more inert and obese generation of young people.

There are questions of enforcement and practical compromise, but the basic question we need to ask is this: 1. Which America is better, one in which nobody smokes marijuana, or one in which fifty million people smoke marijuana? Or, let me pose it a bit differently, to make it easier for you to think about: 2. Which country would you rather live in, one in which nobody smokes marijuana, or one in which fifty million people smoke marijuana?

The answer is not obvious.

If you like to smoke marijuana, you might prefer the Marijuana America-- though you might not, since about fifty million other people will also be smoking it. (I would like a country in which I can drive without the bother of a license, but not one in which other people are also exempt from licensing.)

The economist's way of thinking is useful in this connection, though economists do not use it to the full. At the simplest level, an economist would say that Marijuana America is best, because more people are able to satisfy their desires. We do not ask whether someone is better off eating chocolate ice cream or vanilla. Rather, we give them the freedom to choose, and believe that they will choose what makes them happiest. Since happiness is good, we have thereby achieved a good outcome. I personally may prefer chocolate to vanilla, but I have no reason to force my choice on everyone else. Thus, if someone wants to spend his money on Marijuana instead of Mozart, we should let him.

Note, however, that this economic argument only addresses Question 1, not Question 2. The Economist might answer Question 2 by saying he is indifferent, personally, between Marijuana America and Mozart America. In that case, his answer has no implications for Question 1. But what if the Economist says he prefers not to have other people smoking marijuana? That *does* have implications for Question 1, because we now have an "externality", a "spillover". The very fact that some people object to other people smoking marijuana is a sign that they get unhappiness from people smoking it, so we can no longer apply so simply the argument that freely chosen marijuana use increases happiness. Smith's dopesmoking makes him happier, but it makes Jones unhappier, and we have to do some calculations to figure out the overall effect.

Or, it could be that the externality goes the opposite way: that you actually *prefer* other people to smoke marijuana. It might be, for example, that without marijuana, many people would substitute to committing crimes, not quite the example Sailer is thinking of when he urges kids to get off their couches, but an example nonetheless. Crime takes energy and initiative. The question is hard to answer, though, because in fact many people committing crimes purposely smoke marijuana or drink alcoholic beverages before they do it, to psych themselves up. So maybe marijuana use increases crime, rather than reducing it.

So if the Economist remembers the concept of Externalities, he won't be quite so quick to be libertarian. But there is a second economic concept that is even more fundamental: Poor Information. The basic economic argument is that people choose what makes them happier. That's perfectly reasonable when it comes to picking vanilla instead of chocolate ice cream. But should we accept without question that people who choose to smoke marijuana have chosen the best life for themselves?

I think not. We know that people make wrong choices all the time. They buy defective used cars, stock in phony companies, quack medicines, and crazy government policies. They choose to drive their cars too fast on slick roads to eat too much dessert, and to go to boring movies. Afterwards, once they've learned, people regret all these choices. They wish they hadn't made them, and presumably wish they hadn't been given the option to make the mistake. (Yes, I know some people say they wouldn't have done anything differently in their past lives, but I don't believe them. Do you really think they wouldn't rather have bought Microsoft stock in 1985 than whatever investment they did make?)

Many of these mistakes are predictable by other people at the time. So we regulate them. We make it illegal to make false claims about cars being sold and to sell phony stock, and to sell certain kinds of quack medicine. We do allow other quack medicines, and we do allow crazy government policies, but that is because we are worried about overregulation and slippery slopes, a separate consideration.

What about marijuana? Do we think that maybe the best use of a person's time is indeed to smoke dope? If not, then we should ban it. I don't think many old people would say, " One thing I regret in life is not spending enough time and money smoking dope." In fact, I would expect the opposite ( though a poll would be useful.

Let's add yet another variant to our questions: 3. If you had a thirty-year-old son who wanted to smoke marijuana daily, would you be pleased if he were given the legal right to do so?

I think most people would not want their son to smoke dope every day, even if he said it made him happier. And it's not the direct externality-- that he would telephone me less often or something like that. Rather, we want the best for our children, and we don't think smoking marijuana is the best use of their time. But if this is true for our children, why shouldn't it be true for people in general? It seems rather selfish to say that we don't want our own children to damage their lives but we don't care a bit about what anybody else does, and we certainly don't want to spend any of our tax money protecting them from their own actions.

An objection to this line of argument is that it proves too much. Shouldn't we also ban beer? Do any old men say, " One thing I regret in life is not spending enough time drinking beer." Well, yes. I think lots of people wish they had spent more time having fun and less time working. But what the beer-drinking old men would regret is not solitary drinking, but not spending time drinking beer with friends. Marijuana is often smoked in groups too, but it is an introverting intoxicant, not an extraverting one. From what I can tell of its use when legal (see this general history and this good history of use in India, Egypt, and Greece), it was purely an intoxicant or a medicine, not a way to promote good fellowship.

Well, beer has its uses, but how about eliminating mistaken choices of junk music, books, and movies? Should Britney Spears be banned? I am not averse to the idea in theory, but in practice it requires too many and repeated small policy decisions. We can't just ban junk music and appoint a commission, because we can't trust commissions. We could have a national debate and ban just Britney Spears after due deliberation, but what of the next junk musician? New bad music would keep arriving faster than we could debate it, and there's no simple rule we could put into law such as "No music in 4/4 time allowed." Such things as Marijuana and Alcohol are special enough and big enough that we *can* have national debates-- and did-- to decide whether to ban them, without fear that the next year would bring a new variety of the same evil.

And so we return to Question 1: Which America is better, one in which nobody smokes marijuana, or one in which fifty million people smoke marijuana? Please do answer it for yourself, before going on practical issues such as the cost of jailing dope dealers.

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August 13, 2004

The Kokanee in Flathead Lake--Ecology

Ben Gadd's excellent Handbook of the Canadian Rockies has a story about kokanee fish in Flathead Lake that I think I'll use in my book on "Economic Regulation and Social Regulation". Here's what he says on page 482.

The kokanee is a salmon native to Canada. It was accidentally introduced to Flathead Lake in Montana in 1916, where it thrived. There were runs of as many as 100,000 fish into McDonald Creek in Glacier National Park. Since the fish die after spawning, this attracted lots of other wildlife, including as many as 600 bald eagles. This became a leading tourist attraction--perhaps the leading attraction-- of the area.

Then in 1987 the kokanee population crashed. The problem was that in the 1970's, Montana fishery officials introduced a small crustacean called Mysis relicta that had provided good food for kokanee and trout all over the Pacific Northwest. In the deep Flathead Lake, though, it had a different effect. The Mysis stayed in deep water during the day, the time when the kokanee feed. Then it would come up to the surface at night and eat the zooplankton that was the kokanee's main food. In addition, bottom-dwelling lake trout, another introduced species, ate the Mysis and increased in number. The lake trout also liked to eat baby kokanees. Having less food and less surviving young, the kokanees were absolutely exterminated by 1995. Flathead Lake had lost its main claim to fame.

The social regulation point is that when we mess with an interlocking system we don't understand very well, very bad things can happen. We don't understand social systems very well, so messing with such things as homosexuality or the role of women can have a very bad effect.

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July 10, 2004


Here we have yet another example of (1) Bush-hating, and (2) the increased vulgarity of America. The New York Times report reports on this concert, the all-time record for political contributions raised in one event.

"Texas Bandito, how much money did you put in your pocket today?" John Mellencamp crooned in a country ballad. "You better split from that Texas Bandito, he's made this world unsafe today. Our thoughts are not free from the Texas Bandito, he's just another cheap thug that sacrifices our young ."

In a two-and-a-half hour gala that raised $7.5 million, a record for a single event, Chevy Chase poked fun at the president's pronunciation of "nuclear" and "terrorist" and said Mr. Bush had invaded Iraq "just so he could be called a wartime president." Paul Newman decried "tax cuts for wealthy thugs like me" as "borderline criminal."

The comedian John Leguizamo, who is half Puerto Rican, said the notion of Hispanics supporting Republicans was "like roaches for Raid." And Whoopi Goldberg, after joking about refusing to submit her material to campaign censors, made an extended sexual pun on the president's surname.

Then the Academy-Award-winning actress Meryl Streep asked which candidates Jesus might support.

"I wondered to myself during 'Shock and Awe,' I wondered which of the megaton bombs Jesus, our president's personal savior, would have personally dropped on the sleeping families of Baghdad?" Ms. Streep said.


After the concert, Mr. Kerry's press secretary, David Wade, said, "Obviously John Kerry and John Edwards do not agree with everything that was said tonight," adding: "Performers have a right to speak their minds even when we don't agree with everything they say. That's the freedom John Kerry put his life on the line to defend."

But unlike one of Mr. Kerry's vanquished primary rivals, Howard Dean, who denounced racial humor and profanity at one of his own fundraisers in New York, Mr. Edwards and Mr. Kerry hardly veered from their script when they mounted the stage at the end of the extravaganza, looking more subdued than they had all week.

"This campaign will be a celebration of real American values," Mr. Edwards promised, saying that voters "deserve a president who knows the difference between what is right and what is wrong."

Mr. Kerry, inviting his and Mr. Edwards's adult children onstage for a sing- along of "This Land Is Your Land," told the crowd that "every single performer" on the bill had "conveyed to you the heart and soul of our country."

It's to the NYT's credit that they reported this, and in this way.

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July 07, 2004


Steve Sailer has interesting things to say, with source links, about the stealing proclivities of Gypsies. It is perhaps surprising that there do not exist more such groups in Western society, loyal to their clan but predatory towards outsiders, given that we are so vulnerable to crime and that the insider-outsider distinction is really the natural one for human beings. Maybe they do exist and I don't know of them. At any rate, here's what Sailer has to say:

As an American, I knew that the teenage males of some ethnic groups had a higher proclivity to steal , but I had never before heard of a group where many parents trained their toddlers to steal. Even more horribly, some parents break their children's teeth or bones as part of an insurance scam or to make them into better beggars.

We're not supposed to think about the victims of Gypsy criminals because, after all, crime victims are not real victims (i.e., they are just random human beings, not an organized political pressure group).

... The Rev. Larry Merino, who evangelizes among American Gypsies in Indiana, notes:
"Gypsies believe a myth that says a lot about the conception most people have of this group. It seems that a Gypsy stole a fourth nail at the crucifixion site that was destined to be used to nail the Savior's head to the cross. Since this act of larceny turned out to be an inadvertent act of mercy, God gave Gypsies the right to take things that didn't belong to them. Many Gypsies believe this is actually true! This being the case, it takes a missionary to this group a long time to undo what has been part of their culture for centuries."
That's why there's never been a Zionist or separatist movement among Gypsies. Jews could successfully start their own national homeland, away from their persecutors, but the Gypsies can't imagine living in their own country with no productive non-Gypsies to leech off.
Gypsies in Indiana! I wonder if I've met any? Actually, I now recall the story of the "Irish Traveller" Madelyne Toogood who was caught on tape punching her 4-year-old in the face in a Kohl's parking lot after trying to con the store by false returns of goods. So there do exist other groups besides Gypsies.

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