Three Axes to Explain Terrorism

The front page of today’s WaPo has me thinking about this.

First, there is the story of the massacre of Christians on Easter in Pakistan.Along the libertarian freedom-vs.-coercion axis, the preferred explanation is blowback. That is intervention by western governments in foreign countries produces terrorism. However, it is difficult to see how this story applies here.

Next, there is a story of how terrorists met in prison in Belgium. You can see that the reporter has an urge to tell an oppressor-vs.-oppressed story of how prisoners from the oppressed class of Muslims turned into terrorists. But if you read all the way through, you see that the attempt does not really work. Still, seeing the headline, many progressives will jump to the conclusion that better treatment of prisoners is the solution to terrorism.

For me, the best explanation of terrorism lies along the conservative civilization-vs-barbarism axis. And I think that President Obama’s steadfast refusal to see Islamic terrorism along those lines is something that many Americans find frustrating and demoralizing.

Genghis Khan on Macro

Stanley Fischer said,

one of the major benefits that were expected from the introduction of inflation-indexed bonds (Treasury Inflation-Protected Securities, generally called TIPS), namely that they would provide a quick and reliable measure of inflation expectations, has not been borne out, and that we still have to struggle to get reasonable estimates of expected inflation.

He cites a paper by D’Amico, Kim, and Wei arguing that a large liquidity premium can suddenly appear in the TIPS market.

Pointer from Mark Thoma.

There is much of interest in Fischer’s speech, but I was particularly struck by the remark on TIPS.

One more excerpt:

it remains a pity that the fiscal lever seems to have been disabled.

I have some objections to that statement.

1. The “automatic stabilizer” components of fiscal policy are significant and certainly have not been disabled.

2. The stimulus package enacted in 2009 was quite large.

3. To the extent that the fiscal lever has been used less than some Keynesians might want, this could perhaps be blamed on the high levels of debt that governments accumulated, even when times were good. If anything has been disabled, it has been the “off switch” for fiscal stimulus. When you run deficits at full employment, this is going to limit your flexibility to increase deficits during a recession.

Reconstituting the Administrative State

Ilan Wurman writes,

whenever an agency or independent commission wants to make a new rule, it must submit the rule directly to Congress by a certain deadline. Congress would then have three options for responding. First, Congress could take no action, leaving the rule idle. (Whether this happens because Congress cannot reach a consensus or because lawmakers in fact approve of the rule is immaterial here.) After seven months of inaction, the rule would take effect and become binding law, provided the president assents to it. Second, Congress could pass a bill containing the rule, or an amended version of the rule; the president would then need to approve the bill, and then the rule would become law. (This second case is no different than the ordinary legislative process described in the Constitution.) Third, Congress could pass a “resolution of disapproval,” which would effectively veto the rule, meaning it would not be presented to the president and would not become law.

Read the whole article, which is about trying to revive the principle of separation of powers while continuing to have agencies that exercise all three powers. The example above would provide a legislative check on the rule-making powers of agencies.

With this legislative veto in place, Wurman argues that the agencies would not longer need to be independent of the executive. The agencies could instead fall under the control of the President, which is what the executive branch is supposed to do.

Wurman also proposes a way to check agencies’ judicial power. I was not able to follow the legal technicalities of his suggestion.

The ideas are impressive. However, in the end, I came away thinking of the proposals as putting lipstick on a pig. The pig is the notion that experts are capable of engaging in planning for everyone. That is the idea that is behind the creation of the agencies and giving them power in the first place. If we continue to operate under the assumption that expertise works well, then Wurman’s proposals would change nothing. And if we challenge that assumption, then the solution is to restrict the powers of the agencies.

To put this another way, it is the cultural status of the administrative state that needs to be changed. Its (un-) constitutional status derives from its cultural status.

Three Axes Explains Soda Taxes

Catherine Rampell writes,

Why not just target the output, rather than some random subset of inputs? We could tax obesity if we wanted to. Or if we want to seem less punitive, we could award tax credits to obese people who lose weight. A tax directly pegged to reduced obesity would certainly be a much more efficient way to achieve the stated policy goal of reducing obesity.

Because taxing obesity would be “blaming the victim” from a progressive perspective. Taxing soda fits the narrative in which the obese are oppressed and soda manufacturers are the oppressors. Never mind about efficiency, tax incidence, and other economic concepts. A soda tax advances the oppressor-oppressed narrative, and therein lies its appeal.

Quantifying Consumers’ Surplus

Tim Kane writes,

Simply put, the WTA value of modern things is vastly higher than older, more tangible, more commoditized goods. I have conducted some preliminary, not-ready-for-peer-review research and discovered a huge gap differential

WTA stands for “willingness to accept,” as in how much money would you be willing to accept to have only the medical care available in 1970? As Kane points out, measuring this is very important if we are going to make well-grounded statements about how economic welfare is distributed and how it is changing over time.

Unfortunately, this research probably will not definitively answer the question of whether there were more welfare gains in 1900-1950 than in 1965-2015. We cannot go back and find the WTAs for automobiles and air travel back then.

Fixing the DC Metrorail System

Thomas A.Firey writes,

Proof of the system’s failure is reflected in the fares Metrorail customers pay. Currently, fares cover less than half of the system’s operating and maintenance expenses—and little to no capital costs. WMATA officials, fearing public backlash, have no interest in raising fares to recover more of the cost. Put simply, Metrorail’s own users judge the system to not be worth its cost.

He offers this shocking solution:

Public officials would better serve both Metrorail customers and the broader public by terminating the rail system and shifting attention to bus transit and the road system.

I think it is fair to say that the idea of terminating the DC Metro rail system is inconceivable to most people, no matter how much its costs exceed its consumer value.

Rail-based transit systems are a symbol of the central planning mindset. They are rigid, impersonal, and in most cases economically unsustainable.

The Republican Crack-up

Joel Kotkin writes,

GOP libertarians want more social freedoms; social conservatives want less. Neocons hunger for war, while most other Republicans, both libertarian and constitutionalist conservatives, reject Bushian interventionism. The rising populist wave now inundating the party and driving the Trump juggernaut both detests, and is detested by, the party’s media, corporate and intellectual establishment.

Apart from the uncharitable “hunger for war” phrase, this seems right. But political trends have a short half-lives nowadays. While I think that the Republican Party will be decimated this fall, I don’t believe that a progressive triumph will prove stable.

The Gatekeeping Function in Research

Ronald Bailey writes,

The current peer review process serves as both gatekeeper and evaluator. Post-publication review would separate these functions by letting the author decide when to publish. “Making publication trivial would foster a stronger recognition that study results are tentative and counter the prevalent and often wrong view that whatever is published is true,” Nosek explains. Another big benefit, as Nosek and his colleagues argued in 2012, is that “the priorities in the peer review process would shift from assessing whether the manuscript should be published to whether the ideas should be taken seriously and how they can be improved.” This change would also remove a major barrier to publishing replications, since novelty-seeking journal editors would no longer serve as naysaying gatekeepers. Ultimately, Nosek would like the OSF to evolve into something like a gigantic open-source version of arXive for all scientific research.

Think of letting blogs can do the job of editors and peer reviewers.