Author Archives: Arnold Kling

PSST watch

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Timothy Taylor writes,

Every recession involves a reorganization and restructuring of the economy. In a standard recession, this involves a larger-than-usual number of companies going broke, and workers needing to scramble for different jobs. But the restructuring in the pandemic recession–and in continuing restructuring in the pandemic that has continued even though the pandemic recession ended back in April 2020–is of a different sort. There are new dividing lines across the labor force like who can work from home, and what sectors of the economy have been more affected by the pandemic on an ongoing basis, and whether parents can rely on sending their children physically off to school. There are concerns about what working environments are more or less safe.

And every recovery involves discovering new patterns of sustainable specialization and trade, requiriing entrepreneurial trial and error.

New Deal by Stealth

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Douglas Holtz-Eakin writes,

As noted by Gordon Gray, the CTC [childcare tax credit] in the Ways and Means-passed reconciliation bill costs $556 billion – and that covers only the next 5 years. A permanent CTC [expansion] would easily pass the $1 trillion mark, and it is the undisguised aim of the proponents for it to be permanent.

Will Marshall, of the Progressive Policy Institute, writes,

in a warning shot across Democratic bows, nearly three-in-four (73 percent) voters say they are concerned that “Democrats in Congress want to spend too much money without paying for it.”

I don’t think that the far-left faction cares.

One of these things is not like the others: The New Deal; The Great Society; Obamacare; and the $3.5 trillion reconciliation bill.

The difference is that with each of the first three, the radical policy measures were spelled out. The President put in a lot of effort selling them to the public. (I didn’t say that the salesmanship was honest.) With the reconciliation bill, there is no attempt to convince the public that it is desirable to enact an enormous child tax credit or to mandate ending use of fossil fuels in a decade. Instead, what we read is that if you’re on the blue team you want the number to be 3.5, but a few Democrats are holding out for something lower.

If all it takes to get the legislation to pass is to arrive at a compromise number, that can be done using legislative trickery, such as pretending that the CTC expansion will expire even sooner. So the radical agenda has a higher probability of passing than it might appear. If it does, then the latest wave of social transformation will be the first one to be instituted under conditions of near-total stealth.

More FITs news

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My latest essay.

It strikes me that successful politicians, at least nowadays, are very high in “dark triad” traits. It seems obviously true of Clinton (both of them), Obama, Trump, and Biden (does Biden feel an ounce of remorse over Hunter Biden’s graft, the misguided drone strike in Afghanistan, or anything else?).

This is in reaction to an interview on Quillette with evolutionary psychologist David Buss. The essay also highlights recent output from various FITs stars, including Robert Wright, Glenn Loury, Heather Heying, Bret Weinstein, and Wesley Yang.

On the new elite

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In a roundtable organized for Tablet by David Samuels, Angelo Codevilla said,

The current American elites hold every lever of power. But their power is brittle. They no longer try to persuade. They command and find ways of hurting and mocking the reticent. No organization that lives by pulling rank can be considered strong.

I think of this in terms of the distinction between a prestige hierarchy and a dominance hierarchy. When the elite uses dominance moves, that shows that it has lost prestige.

You probably want to read the whole discussion. It concludes with Codevilla saying “If we end up looking like Brazil, we should count ourselves lucky.”

In other words, have a nice day.

Against black racial identity

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Jason D. Hill argues that blacks should lose their blackness.

This will not mean that they will cease referring to themselves as black. The world at large, as I have said, has picked out morphological markers and racialized them. In a very real way, people of color are stuck with those designators. But they can cease identifying psychologically and morally with the burdensome evil of racial ascription and all the ways in which it circumscribes life. Black Americans may learn the process of decoupling their robust or even surface self-images and depth-identities from racial-inflicted, denigrating identities designed for them for myriad reasons.

His piece goes 180 degrees against current trends. It aligns with my thinking.

Shareholders vs. stakeholders

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Timothy Taylor writes,

if a focus on stakeholders always or usually benefited shareholders, then there would be no reason to argue for a focus on stakeholders. Thus, one can reasonably assume that those who advocate a focus on “stakeholders” believe that such actions would make shareholders worse off, but that this social tradeoff is worthwhile.

I doubt that anyone says this out loud. In any case, Taylor links to a paper by Bebchuk, et al, that finds (as they and others have always found) that CEOs focus on shareholders.

An ethnic studies curriculum

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From FAIR. A few topics:

The Declaration of Independence and the Problem of Slavery
Native Americans and the American Revolution
“Indians” vs. Many Tribes: Native American Diversity
Chief John Ross and the Cherokee
American Jews During Early Independence
E Pluribus Unum: 4th of July Celebrations Across American Cultures
Learning From The Amistad
Sarah and Angelina Grimke: First American Women Advocates for Abolition and Women’s Rights
National Anthems and American Ideals
Immigration and Hyphenated Americanism
John L. O’Sullivan, The Democratic Review, and “Manifest Destiny”
Abraham Lincoln’s Life and Legacy
Martin Luther King, Jr.’s “I Have a Dream” Speech
Human Rights, Civil Rights, Group Rights

More may be found at the link. The point is that the curriculum for such a course does not have to be set by Critical Race Theory. The question is whether school boards can be persuaded to adopt the FAIR approach instead of the CRT approach.

Immigration restrictions are domestic restrictions

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From a book review by Alberto Mingardi:

Controlling (“governing”) immigration means imposing restrictions upon natives too. They will be less “at ease” in their hiring people or buying things from strangers whose legal status they would not otherwise be interested in knowing. It also means a further increase in red tape and in requiring documents from people, exacerbating an unfortunate trend in contemporary nation states. Kukathas points to a simple and yet often forgotten fact: immigration control means controlling more those who are not immigrants. It means, for example, checking on factories to make sure every worker is documented; to make sure that families are not employing a maid who does not have a regular permit to stay in that country

We live in an age where Fear Of Others’ Liberty is on the march.

Why are large cities one-party states?

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Bryan Caplan raises the question.

From the standpoint of the textbook Median Voter Model, this is awfully puzzling. Even if urbanites are extremely left-wing, you would expect urban Republicans to move sharply left to accommodate them. Once they do so, the standard prediction is that Republicans will win half the time. But plainly they don’t.

I think I understand how the Democrats dominate big city elections. The Democrats have the public sector unions on their side, and the public sector unions are the only organized force in local elections. Also, local elections often are held at odd times, not coinciding with national elections, which reduces turnout and favors the organized over the general voting public.

In smaller communities, other, more idiosyncratic sets of interests might influence mayoral outcomes. Or a really popular individual could win against a public-sector bloc is smaller and less tightly organized than those in the big cities.

But if public sector workers aligned with one party are the key to controlling big-city politics, why is national politics competitive? At the Federal level, Democrats dominate within the public-sector work force.

Perhaps we actually do live in a single-party state, in spite of the fact that Republicans sometimes win the Presidency. Suppose that the people who staff the Federal government do not need to always control the Presidency in order to wield power. When a Republican is elected, he becomes a Potemkin President.

Curating talent

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Dwarkesh Patel writes,

if talent, not capital, is the bottleneck to growth, we should use our excess capital to empower the world’s underleveraged talent.

The question is, why aren’t more people trying to curate talent, whether for philanthropic reasons or simply for their own benefit?

But they are. Today, every business that isn’t in its death throes is trying to figure out how to acquire the best talent. But the significance of talent is easier to appreciate in the 21st century than it was previously.

In 1998, I wrote

In an agricultural economy, land is the scarce resource. In an industrial economy, capital is a scarce resource. The institutions that evolved in an industrial economy differ from those in an agricultural economy. This raises the question: what is the economic problem today, and how might institutions evolve in order to address it?

…To me, it is easier to understand the economic challenge today as one of allocating talent to solving problems. Furthermore, when we consider the nature of software as a quasi-public good, the problem is one of allocating talent to producing quasi-public goods.