Contributing Blogger

A number of people have been talking about the apparent contradiction in economic attitudes and economic facts. Many of these key on a particular figure, the (real) median wage, which is not increasing the way the some would like.

If we consider this the main measure of economic well-being, allow me to offer a modest proposal for bringing that figure up. Consider five workers earning the following:

A quick glance will show that their median wage is $75K. Let’s imagine someone — say, a Paul Krugman — thinks this number should be higher. Easy. Fire Tom and Tanya.

The new median wage? $100K. That’s 33% higher than it was before. Certainly, that’s a good sign, and should be expected in a strong economy.

The question is, has anyone’s economic well-being improved? Hmm.

OK, I must be doing something wrong. Let’s start over. Tom and Tanya keep their jobs. Median wage back at $75K.

Now Harriet’s business is doing really well. She needs some project managers. Starting wage: $50K. Wow! She needs three of them, right away. (continue reading post »)

In an email exchange with a journalist who covers the net neutrality debate, I was asked whether we should treat the Internet similarly to the highway system or the original phone system. Using these common-carrier (“utility”) models, one could argue for both government regulation and direct government investment in broadband rollout. My response:

I will put a stake in the ground about legislating for the future, not for the past. [...]

It seems to me that most of the complaints about the current market, as well as the motivation in ‘96, are based on scarcity [or] lack of competition [...]

What is different now than when, say, the highways or the copper phone system were built, is that today the barriers to entry are much lower. [...]

A long time ago, perhaps only the federal government could build a large national infrastructure. I really don’t see that being the case with bandwidth, and the burdens that come with a utility model should be avoided.

No sooner had I said that — well, OK it was yesterday — that we are presented with new evidence of healthy broadband expansion in the US.

News.com offers some new figures for fiber deployment, with over 600,000 new subscribers and 4 million homes with fiber available (the industry parlance is “homes passed”).

(continue reading post »)

This is hilarious, and apparently real. Great for those still suffering from the idea that the White House press corps is comprised of serious people. A transcript:

Q: Scott, I believe I asked for low foam with cinnamon. Is it the president’s position that everyone drink a mocha grande? Are we now the world’s coffee-drink police?

McClellan: I am not sure who you talked to about that. I’ll see what I can do.

Q: Is this official government policy? It’s not the first time this has happened…seriously, the American people are wondering how we can afford this many calories in wartime. Isn’t it time for the president to show some leadership?

McClellan: Well, I’ll try to get you the background on this. Shall we talk about Iran?

Q: Scott, please don’t evade. These are taxpayer dollars, and they are ruining my waistline. The American people would like to know whether our government should be so dependent on foreign caffeine. They are absolutely tousled.

McClellan: I can assure you the president has precisely no opinion on this.

Q: Some have argued that the more volatile parts of world are simply not ready for espresso. Should we be imposing our values on them?

And, scene.

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Be sure to check out the commenters on the link above. It’s as if some people are uncomfortable with free speech or something. Oops, was that my outside voice?

Cross-posted at The Only Republican in San Francisco

An open letter to my friends from Instapundit to proteinwisdom, from QandO to The Corner. I want to bring to your attention the issue of net neutrality, which you may have heard in your travels.

In a nutshell, the concept of a network neutrality mandate is that all bits on the Internet must be treated identically, by law. It has become something of a hot-button because one of the telcos said some impolitic things that set off the conspiracy theorists and got the attention of Congress.

While “neutrality” sounds benign, the proposed legislation would give the FCC powers that it currently does not have. Be clear, there is no neutrality legislation in place and we are doing just fine. And the best is always yet to come.

More importantly, from a technical and economic perspective, I am inspired by innovation and experimentation and the free markets which enable such. A neutrality mandate would give the federal gov’t regulatory powers to decide right and wrong at the router level. It would become illegal to build the better network, unless you are willing to give it away.

You should not be surprised that the loudest advocates of ‘net neutrality are those on the far left, including MyDD, MoveOn and Craig Newmark (lovely guy but hardened socialist). Their arguments are very much in line with things like McCain-Feingold and the old Fairness Doctrine.
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Drudge pointed me to this Carl Bernstein piece, “Senate Hearings on Bush, Now”. The blogosphere seems to be roundly ignoring it. Frankly, Bernstein was before my time and I haven’t come across any of his work in years. That may be my own ignorance, but he is hardly a “present” voice on a par with the Mark Steyns and Christopher Hitchens of the world.

What is interesting, and widely noted, is our mainstream press’ fascination with the 70’s, and its refusal to deal in the present or future. Of course there are many exceptions, but they are unfortunately outnumbered by journalists who are more interested in “speaking truth to power”, rather than reporting. Like most of the American left, the MSM is ultimately all about the self.

Anyway, since there is nary an echo on what might otherwise be a controversial piece, allow me to try to find meaning in Bernstein’s words. The subhead asks:

Should Republicans on the Hill take the high road and save themselves come November? [...]

Leaders of both parties are acutely aware of the vehemence of anti-Bush sentiment in the country, expressed especially in the increasing number of Americans—nearing 50 percent in some polls—who say they would favor impeachment if the president were proved to have deliberately lied to justify going to war in Iraq.

If the Republicans lose in November, it will be because they have disappointed their base, not because they failed to “take the high road”. Bush’s problems can certainly reflect poorly on Republicans, just as he can reflect well on them when he is popular.

But this is marginal compared to the fact that too many ‘Pubs have abandoned their first principles. Their base might stay home, and that is their electoral problem. The same polls put Democratic and general Congressional support even lower than the Republicans and Bush, by the way.

So what then shall be the article’s focus?

The ostensible subject: whether Bush should be censured for unconstitutional conduct in ordering electronic surveillance of Americans without a warrant. (continue reading post »)

An article over at the Financial Times declares China’s competitiveness ‘on the decline’. They base this headline on the fact that labor prices in China are rising, after several years of deflation.

This is a great sign, despite the dour headline. Why? It means that the standard of living in China is rising.

[...] an average 2-3 per cent increase in the once unbeatable China price its US and European clients were willing to pay. He pointed to a “double-digit” rise in Chinese labour costs, the revaluation of the renminbi and higher oil and energy costs for the shift.

“China’s costs are all going up,” Mr Fung said. “It is no longer the most cost-effective country in the region…Anything [sourced] from China has a higher inflation component than from other places around the world.”

A “double-digit rise in labor costs” can only come from one place: higher wages. These higher wages increase the buying power of a large swath of the population, bringing them out of poverty and creating a consumer class.

This development is entirely natural in a free market. You’ve probably heard arguments which claim that the pursuit of inexpensive labor is exploitative and that we should follow “fair trade” standards. While well intended, these are typically counterproductive when trying to improve living standards.

Consumers — not just Wal-Mart shoppers but large labor consumers like manufacturers — will seek out the best product at the best price. The cheapest labor comes from the poorest countries, and this is not at all coincidental. This dictates a greater likelihood that flows of capital will go to the places that most need it. To me, that is the essence of “fair”: a system which directs wealth to those which need it most.

Based on this thinking, if China is becoming more expensive, what might we expect? (continue reading post »)

The Gentle Cricket posted the first in a series on California state bill SB840, which (by his reading) would bring all Cali health care under government control. I suggest that you read his post, since he is clearly invested in studying the bill and its promoters. An excerpt:

All federal, state and county monies currently spent on health care will be reallocated to the state Health Care Fund. This will supply about one-third of the needed funding. [...] The remaining funding will come from state health taxes that will replace health insurance premiums now paid to insurance companies and co-pays and deductibles now paid to providers. Premiums will be affordable for every Californian and every business because what families pay is in proportion to their income and what employers pay is in proportion to wages

Oy! Doesn’t that sound a lot like the old Karl Marx quote, “From each, according to his ability, to each, according to his needs”? Talk about repeating history…

The problem with socialized health care is that there is no relationship between what one pays and what one receives. Further, like any tax, the rich pay for more than they receive, and the poor pay much less, which makes for a two-tiered society — if the rich folks decide to stay, that is.

(If you think your insurance company is bureaucratic, imagine if health care were run by those who run the DMV!)

Kidding aside, this bill would be tragic. The hope that spending would somehow be manageable flies in the face of logic and history. The only way for health care to be both widely available and generally equitable is to have those who receive treatment be responsible for buying it. Vacuuming and redistributing all health care dollars through “the system” is the opposite of this.
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