The skills needed for unskilled work

Again via Maggie's Farm, the experience of a California employer with a business model built on unskilled labor.

I am not an economist, I am a business school grad. We don't worry about explaining structural imbalances so much as look for the profitable opportunities they might present. So a question we business folks might ask instead is: If there are so many under-employed unskilled workers rattling around in the economy, why aren't entrepreneurs crafting business models to exploit this fact?

. . . .

The reason for my despair comes from a single source: the government is making it increasingly difficult and costly to hire unskilled workers, while simultaneously creating a culture among new workers that short-circuits their ability to make progress.

It would be nice to say that the things "government" is doing along these lines are confined to California, and they're certainly at the absurd end of the spectrum there, but the rot has spread.

Neurotypicality and Tolstoy

Via Maggie's Farm:  Interesting findings about connectivity patterns between right and left brains in most people and in people on the autism spectrum:  people without autism symptoms generally share a typical left-right connection pattern, but autistic people show patterns that not only different from the ordinary, but each from all the others.

The King of Jordan and al-Sisi

The quest to deal with radicalism in Islam expands. The two regional leaders are going to hold a conference aimed at finding ways to "modernize" Islam in the hope of constraining groups like Daesh.

Although their voices may be stifled by tightened anti-terrorism laws, many of his subjects are dubious. In a country where some 90% of the population is Sunni Muslim, many wonder why their monarch has joined the American-led coalition against jihadists from Islamic State (IS). “We don’t understand why the king has joined the alliance against Syria’s Sunnis in IS and is helping to prop up Bashar al-Assad, who has far more blood on his hands,” says a Jordanian writer. After the capture by IS of a Jordanian pilot whose plane came down in Syria in December, a group of retired army officers issued statements arguing that Jordan should not be involved.

The king’s appearance at a march in Paris alongside world leaders after the attack on Charlie Hebdo caused further unhappiness. Shortly after the king returned home, a protest gathering against the magazine and its cartoon of the Prophet Muhammad drew thousands of people.

The Wisconsin way

Scott Walker's name is surprisingly unfamiliar to American voters, even Republican ones.  I hope they'll soon get a little more familiar with him.  A good link here to a recent 22-minute speech.

Wealth redistribution

Glenn Reynolds goes right to the Willie Sutton explanation, too:

The truth is, in our redistributionist system politicians make their careers mostly by taking money from one group of citizens that won't vote for them and giving it to another that will. If they run short of money from traditional sources, they'll look for new revenue wherever they can find it. And if that's the homes and savings of the middle class, then that's what they'll target.

For the moment, Americans are safe. With both houses of Congress controlled by the GOP, Obama's proposals are DOA. But over the long term, the appetite for government spending is effectively endless, while the sources of revenue are limited. Keep that in mind as you think about where to invest your money ... and your votes.

The life-cycle of a tariff

Suppose you're a virtuous person in California. You are troubled by the plight of egg-laying hens in large, crowded commercial farms. You go to D.C. and try to persuade Congress to require all American farmers to give their hens twice as much room, but you fail. You then try the same thing in the California legislature, and succeed.

But wait. California consumes more eggs than it produces, so it's a big importer from other states. What's more, requiring California farmers to give their hens twice as much room will put them at a competitive disadvantage with out-of-state egg producers. You could rely on the innate chicken-empathy of your fellow California citizens, but you worry that some of them lack ideological purity and will buy cheap, unenlightened out-of-state "conflict" eggs.

The obvious next step is to ban the transportation across the California state line of conflict eggs. This prevents your fellow Californians from making the incorrect ethical choice, and protects the local farms from unfair competition. It's arguably a violation of the Interstate Commerce Cause, but that will take a long time to work out in the courts. In the meantime, eggs were $1.18 in California a dozen a couple of years ago but have risen to between $3.16 and $5.00 now. Can price caps be far behind?

Over the holidays I noticed that our local grocery store was having trouble keeping eggs in stock--lots of empty shelves. I thought it was just an outbreak of holiday baking enthusiasm, but maybe not! It may be a ripple effect from the growers in the Midwest who want to maintain access to California markets, and had either to invest $40 a chicken in larger cages or to slaughter half their chickens to make room. In any case, my neighbors who sell fresh eggs may find that their free-range prices are starting to look pretty competitive.  Maybe the next law needs to prohibit all municipal anti-noise poultry-raising regulations and promote "victory" chicken gardens.

Skepticism

Freeman Dyson's patience is admirable but limited.

Montana

My father sent me this.

Knowledge Problems

Since we're doing Kevin Williamson (and markets) today, his piece on Davos has a very strong middle. It begins and ends in easy mockery, but in the center he makes a well-crafted argument.

There exists in every human being, in every human organization, and every human system a sort of epistemic horizon, a real and meaningful boundary on the amount of knowledge and cognitive firepower that that person or agency can bring to any given problem. This is a fact that is at some level known and understood across the political spectrum: It is the cornerstone of the progressives’ case for diversity, in that people with different knowledge inventories, different experiences, and different perspectives are more likely to discover effective solutions to complex problems than are groups that are more intellectually homogeneous. For conservatives of a Hayekian bent, this is the familiar “knowledge problem,” the understanding that markets will allocate resources more productively than political agencies will because markets are the only effective means of aggregating usable information about specific economic situations.

We understand the problem of the epistemic horizon, but we do not apply that understanding nearly broadly enough. Progressives believe that “diversity” increases when an organization dominated by white men who are overwhelmingly graduates of the same five law schools, who have read the same books, watch the same television shows, and hold the same relatively narrow range of political opinions adds to its personnel a white woman or a black man who is also a graduate of one of those same five law schools, who has read the same books, watches the same television shows, and holds political views within that same relatively narrow range. Conservatives, to their credit, generally understand that intellectual homogeneity is different from ethnic or sexual homogeneity, but they, too, are generally too unwilling to carry through the more radical implications of that knowledge.

The intellectual homogeneity of policymaking elites is a serious and underestimated problem. To take an obvious example: The American policymaking class includes both progressives and conservatives, but it is overwhelmingly dominated by college graduates and people in occupations that are largely open only to college graduates. Unsurprisingly, our educational-policy debate is almost exclusively focused on how to get more people prepared for college, how to get more people through college, and how to help college graduates deal with financial obligations incurred in the course of a college education. Even a celebrity like John Ratzenberger (Cliff Clavin of Cheers), whose background is in carpentry and whose interest is in cultivating skilled labor, has a difficult time influencing that debate. This is not a result of ill will, selfishness, or malfeasance on the part of elites; it is just that it seems natural to them that the sorts of problems people like them tend to have are the ones that we need to focus on, and that what worked in their lives will work for everybody else....

People whose profession is the crafting of legislation or the application of regulation reflexively (and understandably) assume that if you want more of something, then the thing to do is to pass a law mandating it, and that if you want less of something, then the thing to do is to pass a law punishing it. The bigger picture — that laws and regulations and other aspects of policy interact with one another in unexpected ways — is generally invisible to them. If you are a lawyer, then you understand most social questions as a matter of law; if you are an economist, you understand them as questions of economics; if you are a teacher, you think that the answer to many social problems is better schools. This habit is only natural.

Conservatives are generally inclined to make a moral case for limited government... but the more important argument is the problem of ignorance. Even if Congress were populated exclusively by saintly super-geniuses, there is only so much that 535 human beings can know and understand. The more that decision-making is centralized in political agencies, or even in elites outside of formal government, the more intensively those decisions will be distorted by ignorance. This is true of market-oriented institutions, too, in the sense that big businesses make big mistakes. One of the lessons of the 2007 financial crisis is that the guys who run the banks do not actually know that much about how banks work, even if they know 100 times what the banking regulators know. Free markets offer a critical, if imperfect and partial, corrective to that in the form of financial losses and business failures, which is why things like cars and computers consistently improve while schools and welfare programs don’t. Big markets with lots of competing buyers and sellers are the biggest thinking machines we have, offering the broadest epistemic horizon that our species has figured out how to achieve.

There is a deep philosophical challenge for progressives in that: Progressives say that they want inclusive social decision-making, but the most radically inclusive process we have for social decision-making is the thing that they generally distrust and often hate: capitalism — or, as our left-leaning friends so often put it, “unfettered” capitalism.

I think progressives would be happier with the market if it came with a guaranteed income: the idea of inclusively deciding what we value by individually deciding what we'll spend money on would be more persuasive to them if people reliably had money to spend. This also may be a privilege problem for them more than it's a capitalism problem.

Mini-crusades

Kevin Williamson really, really dislikes Jon Stewart:

The Left has been losing the Big Idea debate for a generation or more, in no small part because its last Big Idea killed 100 million people, give or take, and not in Mr. Klein’s projecting-abstractly-from-a-CBO-study way but in the concentration-camps-and-hunger-terror way. Marxism was the Left’s Big Idea for the better part of a century, and its collapse — which was moral, economic, political, and complete — left a howling void in the Left’s intellectual universe. Nothing has quite managed to fill it: In the immediate wake of the collapse of Communism, the anticapitalists sought shelter in a variety of movements, few of which grew to be of any real consequence, with the exception of the environmentalist movement. But the lenten self-mortification implied by a consistent environmentalist ethic has limited that movement’s appeal as a governing philosophy and an individual ethic both, hence its fragmentation into a motley sprawl of mini-crusades. It is easy to be anti-fracking when that does not require you to give up anything, easy to oppose the expansion of the Keystone pipeline network when you can be confident that the gas pumps in your hometown will always be full, easy for well-off Whole Foods shoppers to abominate varieties of grain that are possessed by evil spirits or cooties or whatever it is this week.

I don't think the proposed replacement of the Left's failed Big Idea is only a series of mini-environmental crusades. I think it's an attempt to achieve redistribution and a command-and-control economy by force, without thinking through where the force will lead when free people resist.

The cure

Victor Davis Hanson on the strategies that do and do not work for Islamic extremism:

[I]f Islamic-inspired violence abroad does not directly and negatively affect the Middle East, or if it creates a sense of fear of radical Islam among Westerners that does not translate into hardship for the Muslim world — or that perhaps even succeeds in winning a sort of warped prestige — then there is no reason to expect the Islamic community will take the necessary measures to curb it.

The sense of perceived persecution in the Middle East is real — analogous to Germany’s lamentations after the Versailles Treaty. The retreat into Islamic-inspired terror reflects a larger, complex stew of anger at the reach of Western globalization into traditional and conservative Islamic societies and of envy of the wealth and influence of the Western world, combined with an inability to offer self-critical analyses about the role of tribalism, statism, gender apartheid, religious fundamentalism, intolerance, autocracy, and anti-Semitism in institutionalizing poverty and instability.

For a sizable minority of Muslim immigrants to the West, a sense of inferiority is sometimes enhanced rather than diminished by contact with Western liberal society. The longer and further immigrants are away from the mess of the Middle East that caused them to flee or at least stay away, the more they are able under the aegis of Western freedom, prosperity, and security to romanticize what provides them with the sense of self that they have not earned in their adopted countries.

In the Middle East, when modern societies reach such a point, they prefer to blame “Jews” or “the decadent West” rather than their own pathologies for a perceived descent from the glories of a past — and religiously pure — age. . . .

When the nihilism of radical Islam manifests itself not just in the bombings in Paris or Boston, but right at home with the rise of the murderous Islamic State, or when the Arab Spring is hijacked by Islamists who typically leave Somalias in their wake, or when Middle Eastern Muslims find it hard to emigrate to and reside in Western countries or to freely import Western goods, or when the leaders of Middle Eastern appeasing states are ostracized from international gatherings, or when states that behead and stone are shunned by the West, then support for the terrorists and what produced them will begin slowly to fade.

Market talk

Thomas Sowell is the man for me.  ConservativeBlog is featuring a series of interviews with him:

[Interviewer] DH: Let’s move on to the next chapter, “Myths about Markets.” Let’s start with the phrase “dictates of the market.” What’s wrong with that phrase?

TS [Thomas Sowell]: The market is in no position to dictate. You can write a whole book on the misuse of the word “power” as it regards markets. The left likes to say Wal-Mart is a powerful force. There are people who have never set foot in Wal-Mart, who never will set foot in Wal-Mart, and there isn’t a thing Wal-Mart can do about it. Insofar as there are voluntary transactions, there are no dictates. People who use that phrase often want to create a situation whereby they, through the government, can dictate to the market.

DH: Let’s talk next about prices. You write about the concept of reasonable or affordable prices, and, here’s a direct quote, “It is completely unreasonable to expect reasonable prices.” Explain.

TS: Reasonable prices are prices that adjust to our budget. Prices, of course, are determined in part by what it costs to produce things and get them distributed and so on, and so there is no reason whatsoever to expect reasonable prices. There is no reason in the world to expect costs to conform to what you are willing to pay. There is no reason to expect the Hope Diamond to be affordable.

. . . .

DH: I think most people hear the term “non-profit” and think of a group that is selfless, works for the public good and not private gain, and embodies just about everything that is good about human nature. You don’t quite see it that way. You write, “What are called ‘non-profit organizations’ can be better understood when they are seen as institutions which are insulated, to varying degrees, from a need to respond to feedback from those who use their goods and services, or those whose money enabled them to be founded and continue operating.” Can you expand on that?

TS: The difference is that a profit-seeking organization has to please simultaneously the customers and the investors. A non-profit organization doesn’t have to do that with either one—particularly if it is a long-lived organization. Many of the people who have invested in it are already dead. Among those that are still alive it is very hard for them to monitor what is going on inside the organization.

There is overlap in the things that for-profit and non-profit organizations do, like publishing magazines and stuff like that. And so they compete. Over time, if it was true that non-profits didn’t have the problem of generating profits and had better people, the non-profits would be taking away market share from the profit sector. In point of fact, just the opposite happens. For example, it is very common for college bookstores to be taken over by a Barnes & Noble or cafeterias to be taken over by profit-seeking companies. The test of market share is usually won by the profit-seekers.

A Truly Effective Strategy

Talk about getting chewed up.

45 Degrees is Cold? Please.

Some NYT lib is congratulating himself on surviving a house whose thermostat he set to 45 degrees F.

The lowest the thermostat would go was 45 degrees, which I figured was good because I had to make sure the pipes wouldn’t freeze. At first it was fairly unpleasant. I wore two pairs of wool socks, thermal underwear, a thin pair of pants, sweatpants, a wool shirt, a sweatshirt, a light hoodie, a light jacket, a big poofy winter jacket, two winter hats and those fingerless gloves. Yet I was still having trouble typing because of my numb hands. That’s when I pulled out my down sleeping bag, and decided to wear it whenever I was sitting. With the sleeping bag, now that my core had been warmed, my extremities were warming up, too....

I’m not going to say that I liked living in a 45-degree house, but eventually I didn’t mind it, and it taught me that one’s sense of comfort can be redefined with a bit of grit and resourcefulness. Sitting in my sleeping bag, I began to wonder: If we all set our thermostats to our own “comfortable low,” how many West Virginia mountains could we save? How many fewer wells would need to be fracked? How much less greenhouse gas would we emit?

Here at Grim's Hall, there is no bottom to the thermostat. We shut the heat off when we moved in, and don't turn it on but a few days a year. If the temperature is going to get very low, I shut off the water from the well, open the taps so the pipes can't burst, and let the house freeze.

Doesn't hurt anything. When the temperature gets down low enough to be genuinely dangerous -- say the teens -- we all move into the room with the wood stove, tarp it off with blankets, and sleep snugly. The rest of the time, if you're cold you need to work. There's always work to do.

Is crowdfunding unfair?

Compared to what?  Letting experts decide how the rest of us should allocate our own resources to research?

Robin Hood in Modern Denmark

Amazing what they knew how to do in the old days.

Cruel & Unusual Punishment

Aftenposten sends three young fashion bloggers to work in the Cambodian sweatshops where their favorite garments are made.

It's Time Again for One of Eric Blair's Favorite Songs

This time in Yemen.

More recently in September 2014 Obama hailed Yemen, along with Somalia, as a model of the kind of “small footprint” approach he favored for fighting terrorism–sending American advisers and drones but not combat troops.... Yemen, in short, is on the verge of plunging into a Libya-like or Syria-like abyss, which would certainly make it representative of Obama’s foreign policy in the Middle East but not in the way the president intended.

The administration in recent weeks has softened its anti-Houthi rhetoric. Many inside and outside the administration are tempted to see the Houthis as allies because they are fighting AQAP. This is a big mistake. The Houthis are, like Hezbollah, an Iranian-sponsored militia whose slogan is “God is great; death to America; death to Israel.”

So what you're saying is that we needed a bigger footprint. That's easy for you to say, "Max Boot."

Why Not Tax Savings?

I mean, I know we all oppose doing it, but what's the principle that justifies savings not being taxed that is consistent with our current system of taxation?

The Federal government taxes money you earn, then the state (usually) taxes it again. Any of it you spend get taxed a third time; if you save it, any interest it earns gets taxed. If you invest it, and make a profit, the profit gets taxed. If you buy real estate, the real estate -- which is just something you exchanged for the money -- gets taxed every year (and if you can't or don't pay the taxes, they'll sell it out from under you at auction, making sure they get 100% of what they tax before you get whatever, if anything, was left from the fire-sale price they accepted).

So we can't stand on the principle that the government shouldn't seize the fruit of our labor. We can't stand on the principle that they should only do it once, because we already permit double taxation even on income, and because we permit taxes on subsequent activity even after that. We can't stand on the principle that, at least once you own something and have paid all the taxes up to that point it should be yours free and clear: we continue to tax land you buy (and automobiles, at least if you want to take them off the land you bought). So accumulated wealth is already subject to taxation, in certain forms.

Progressives have been talking for years about a wealth tax, of which this is just a partial version. It strikes me that this form isn't that different from the property taxes we pay every year. Why shouldn't you have to pay for the privilege of holding a certain amount of wealth? There are lots of arguments, but are any of them consistent with what we already do?

If not, does that mean that the tax system we have is unprincipled? If so, does that make it unjust? Or is it fine to have a completely contingent system? If that, then, why oppose a wealth tax? It's just one more contingency.

So That Explains It

Ollie North hits one out of the park.