Tyler says a lot of things to be provocative, including arguing that it is good to say things to be provocative.

the universal basic income. It does make logical sense, especially as we get wealthier. But it, for me, was a kind of formative experience, about 2009, in response to the financial crisis. One of the better policies would have been mortgage cramdowns and write-offs for many afflicted people, and many economists agreed with this. Larry Summers pushed it.

But politically, it proved impossible. People didn’t hate all of the bailouts as much as they claimed, but they hated the idea of the person next door getting a break that they didn’t get, when they had, in their own mind, worked harder and paid all their bills.

The economists and others who thought that mortgage forgiveness was the solution had no idea of the logistical challenges involved. In the old-fashioned world where your bank or savings and loan lent you the money and held the mortgage, it would have been reasonably simple. But in the contemporary world, the investors differ from the servicers. Investors are entitled to various portions of the principal and interest that you owe, based on how securities are structured. The securities had gotten complex–recall the CDO-squared? Meanwhile, the loan servicer is responsible for collecting the payments and passing them along. Mortgage modification imposes huge administrative costs on servicers, who operate on a thin margin to being with. And it raises all sorts of issues with investors, because you end up giving them very different loss allocations than what they signed up for. I predicted back in 2008 that the government would never be able to get mortgage modification to work, and I think that prediction held up well.

Also, the mortgage modification programs were limited to owner-occupants. We now know that a lot of the bad mortgages were for non-owner-occupied houses. These were speculators. If you think that people who were paying their mortgages on time would have resented having delinquent owner-occupants bailed out, imagine how they would have felt having house-flippers bailed out.

I think we’ll actually evolve disability insurance, in some way, to become an obfuscated form of a partial universal basic income.

Commenters on this blog also have pointed out that we like to obfuscate our government charity programs, even though straight tax/transfer schemes would appear to be more efficient. Commenters here also have said things along these lines:

A United States with open borders, I think, politically, would be unworkable in less than 10 years, even though it makes economic sense. It gets back to this optimal degree of insulation. There’s a political culture here, which requires a certain common language, common set of delusion, common set of myths, common set of things we understand. This country does it pretty well, not perfectly, and I don’t think open borders is compatible with that. I think it would kill the goose laying the golden egg. So I favor much more immigration, but not unrestricted immigration.

If you read or listen to the whole discussion, you will find a bit that makes it sound as if I am on the faculty of George Mason. That is not the case.

When Tyler talks about the blogging world, I thought of narrower, deeper, older.

I liked the last section of the conversation, on “over-rated and under-rated,” the best.