Relevant and even prescient commentary on news, politics and the economy.

Harvard surveyed their Alumni and guess what they found?

So some econ out of Harvard is shocked about what he found regarding our economy.  It’s a government problem.  The government is just not responding (read that: not doing anything).

Americans no longer trust their political leaders, and political polarization has increased dramatically. Americans are increasingly frustrated with the U.S. political system.

The political system is no longer delivering good results for the average American. Numerous indicators point to failure to compromise and deliver practical solutions to the nation’s problems. Political polarization has especially made it harder to build consensus on sensible economic policies that address key U.S. weaknesses.

The solution:  Cut the corporate tax and balance the fed budget.

The Eight-Point Plan consists of the following policy recommendations: simplify the corporate tax code with lower statutory rates and no loopholes; move to a territorial tax system like all other leading nations’; ease the immigration of highly-skilled individuals; aggressively address distortions and abuses in the international trading system; improve logistics, communications, and energy infrastructure; simplify and streamline regulation; create a sustainable federal budget, including reform to entitlements; and responsibly develop America’s unconventional energy advantage.

What did you expect from the conservative mind?  OK, they do want to do more than cut the corp rate:

Consensus corporate tax reforms include reducing the statutory rate by at least 10 percentage points, moving to a territorial tax regime, and limiting the tax-free treatment of pass-through entities for business income. The transition to a territorial regime should be complete, not half-hearted via the inclusion of an alternative minimum tax on foreign income.

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When I Steal A Blog Post, I Leave A Link

I wanted to look at the WSJ job database, suspecting what I might find, but currently lack the bandwidth in a major way.

Fortunately, Noah took some (more) time from his thesis (“distraction from productive activity”) and did the dirty work. Apparently, being a STEM undergraduate isn’t the path to Nirvana:*

I went through the Wall Street Journal database that Phil cites, and found the following unemployment rates:

  • Genetics: 7.4% unemployed
  • Biochemical Sciences: 7.1% unemployed
  • Neuroscience: 7.2% unemployed
  • Materials Engineering and Materials Science: 7.5% unemployed
  • Computer Engineering: 7.0% unemployed
  • Biomedical Engineering: 5.9% unemployed
  • General Engineering: 5.9% unemployed
  • Engineering Mechanics Physics and Science: 6.5% unemployed
  • Chemistry: 5.1% unemployed
  • Electrical Engineering: 5.0% unemployed
  • Molecular Biology: 5.3% unemployed
  • Mechanical Engineering and Related Technologies: 6.6% unemployed

    Compare these with a 5.0% unemployment rate for all bachelor’s degree holders in 2010.

  • And why do those Astronomy and Astrophysics people** have jobs?

    Earth to [Phil Plait of] Bad Astronomy: your short-list of fully-employed science majors is totally cherry-picked….And all those astronomers who have plenty of jobs? Guess what: they’re employed because they work for the government. Yep, that’s right, the same government whose ability to provide employment Phil laughs at.

    *Raise your hand if you’re surprised by this. Mine is not up.

    **Full disclosure: I speak as someone whose wife’s cousin, with a Ph.D. in Astronomy & Astrophysics, currently has a Fellowship in the Astronomy department at DeLongville.

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    Dave Dayen Is Wrong

    And not in a good way, when he says:

    I understand that Republicans are just playing the culture war game here, trying to link Warren and the loony left. I don’t know how that will play in, er, Massachusetts. And the world has moved on from the Hard Hat riots and the 1972 campaign. The hard hats have been brutalized just as much as the rest of us in this economy.

    No, no, no.

    The “hard hats” have been brutalized much more than “the rest of us” in this economy. And the economy before that. And, basically, every one since 1986,* Bruce Bartlett’s protestations notwithstanding.

    Note especially that having all those English Literature and Anthropology majors with degrees hasn’t hurt.

    *The data only breaks down from 1992 onward, so you’ll have to wait for my tribute to the 1986 “tax reform” act.

    cross-posted from Skippy, the Bush Kangaroo

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    The Cost of Labor

    The standard model of Economic Development is Romer’s (1989, JPE 1990) adaptation* of Solow’s (1956, 1957) Model.  Basically,

    Y=AK^aL^{1-a}\,

    became

    Y = AKα(HL)(1-α)

    where the H stands for “human capital,” which multiplies the ability of labor. (Think high-skills labor—construction work, plumbing, teaching—where the worker continually “learns by doing” [op cit., Arrow, 1962]. The additional “human capital” multiples the effect of the labor.

    One central question is how much of α is attributable to capital and how much is attributable to labor.  Standard Macroeconomics and Economic Development courses teach varying values for α, ranging from around 25% to about 1/3 (33.3%): that is, the mixture is between 3 and 4 parts of Labor to every one part of Capital.

    How does the compensation go?  Well, not quite that way:

     

    COE

    The banded area is the estimate of actual allocations of capital and labor. The bars show the compensation to labor (and, therefore, the area above that to 100% are the portion of GDP that is being allocated to capital).

    Economic theory tells us that if something is receiving excessive rents—as capital is clearly doing in the United States—there is suboptimal growth occurring across the economy. The standard method of adjusting for that is to reduce the excessive rents through either the introduction of competition (preferred if possible) or through taxation and redistribution.  Following are the tax rates on Capital v. Labor:

    Labor Tax Bracket

    Capital Gains, Short Term

    Capital Gains, Long Term

    10%

    10%

    0%

    15%

    15%

    0%

    25%

    25%

    15%

    28%

    28%

    15%

    33%

    33%

    15%

    35%

    35%

    15%

    Note also that labor is not necessarily allowed to exclude its “depreciation” above the value of the “standard deduction” ($8,500 for an individual, $11,600 for a married couple). This is clearly a skewed incentive, with preferable tax treatment given to the overvalued resource (capital) at the expense of the undervalued one (labor).

    Happy Labor Day!

    *NBER subscribers can access paper w3173.  Others can just type “Human Capital and Growth: Theory and Evidence” and probably find an ungated copy somewhere.  The uncurious are referred to Wikipedia.

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    A Caesura in Canadian Opposition

    [Expletive Deleted].

    It will be interesting to see whether the Libya of Brad DeLong and Juan Cole’s beliefs produces a respectable opposition leader—one of the surer signs of rule by the people—before Canada does.*

    UPDATE: Via Amy Wilkins Twitter feed, Layton’s final words. Can anyone imagine the 2011 Obama** being able to say this:

    You decided that the way to replace Canada’s Conservative federal government with something better was by working together in partnership with progressive-minded Canadians across the country. You made the right decision then; it is still the right decision today; and it will be the right decision right through to the next election, when we will succeed, together…

    All my life I have worked to make things better. Hope and optimism have defined my political career, and I continue to be hopeful and optimistic about Canada….More and more, you are engaging in politics because you want to change things for the better. Many of you have placed your trust in our party. As my time in political life draws to a close I want to share with you my belief in your power to change this country and this world. There are great challenges before you, from the overwhelming nature of climate change to the unfairness of an economy that excludes so many from our collective wealth, and the changes necessary to build a more inclusive and generous Canada. I believe in you. Your energy, your vision, your passion for justice are exactly what this country needs today. You need to be at the heart of our economy, our political life, and our plans for the present and the future. [emphasis mine]

    *I said “respectable.” This does not include the Liberal Party for as long as they are led by Michael Ignatieff, to whom this post was Far Too Nice.

    **I’ll be nice to those of you who thought that Obama was anything other than a Corporatist from the start.

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    It’s Not that the White House Lies Even to Itself…

    It’s that they are so bad at it.

    At least they made clear that Glenn Greenwald was correct when he said the deal is exactly what Obama wanted:

    Fact: President Obama laid out key priorities that had to be part of any deal. Those priorities are reflected in this compromise.…the initial down payment on deficit reductions does not cut low-income and safety-net programs such as Medicare, Medicaid, and Social Security. Third, we set up a path forward that will put pressure on Congress to adopt a balanced approach. And finally, we raised the debt ceiling until 2013, ensuring that House Republicans could not use the threat of default in just a few months to force severe cuts in Social Security, Medicare, and Medicaid. [emphasis theirs]

    Uh, yeah, about that “we protect Medicare shtick.” Maybe you should try actually saying that in public, or in negotiations.

    And they play with straw men:

    when push came to shove, Republicans backed down on their key demands. For months, Republicans called for a budget that would have ended Medicare as we know it, made catastrophic cuts to Medicaid, or cut investments in education by 25 percent, clean energy by 70 percent and infrastructure spending by 30 percent. As if that wasn’t enough, they also demanded that we repeat this debt-ceiling crisis, just a few months from now.

    Gosh, I feel so “protected” now. Instead, the White House agreed to cut education loans, sidebarred the EPA discussion until they can lose that (h/t Mark Thoma) (having already surrendered on a “market-based” energy solution), and had Goolsbee lying to Jon Stewart last night about how there will be a National Infrastructure Alliance that will work in the same manner as TARP.

    With friends like this, who needs enemies?

    In a related aside, Dow 3,600 anyone?

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    It Takes a Village: Scarcity, the NCAAs, and the Decline of U.S. Manufacturing

    I don’t remember seeing any of this type of story last year. But this year, Socialism stories abound from the Midwest.

    My ex-roommate* sends this link to a story about Butler Bulldogs’s Senior Matt Howard’s family being able to attend the NCAA Finals tonight in Houston (video link here).

    Luke Winn of Sports Illustrated covered the macro territory. The 12.7% unemployment rate, up from a few years ago and still 2nd-highest in the state of the 92 counties. The population of “about 13,000,” which puts the decline since I graduated high school at worse-than-Detroit levels—but that makes sense since most of the factory work over the previous forty years was Ford-related as the town once referred to as “Little Detroit” lost competitors to larger areas and consolidation.

    Winn’s article, not to mention several other recent pieces about Howard’s childhood make it clear that it really does take a village. From the NYT piece:

    His mother, Linda, who credited her faith for helping her raise 10 children, said strangers would stop and ask, “Are you the lady with all the kids?” before dropping off bags of clothes. “Maybe everything didn’t fit,” she said. “But we didn’t complain.”

    Bryan Caplan’s noted in his presentation at Kauffman that he knows no one who is liquidity-constrained in their ability to raise children; rather, it’s time allocation that stops them. I suspect he needs to get out more.

    And now the city with 12.7% unemployment and a dim future has once again reached into its collective pockets to make certain that Matt Howard’s family gets to see their son’s/brother’s final college game, which also happens to be for the NCAA Championship.

    From each according to his ability, to each according to his needs.

    As I said, I didn’t see stories like this last year. Last year, there was still another year for Howard and the Bulldogs. Now, there is no possible future NCAA Championship; this is the last time this can ever happen. An economist would tell you that people recognized the Scarcity Value and dug into their pockets accordingly.

    So not only did it take a Village to help as best they could to raise the ten Howard children, it took a Village to enable the family to go to Houston to see now-senior Matt Howard and the rest of the Butler Bulldogs play—win or lose; I hope win—for the NCAA Championship.

    Ex ante, it’s a great decision. Ex post, it will still have been one.

    Musical accompaniment: Tom T. Hall, of course.

    *For whom Mike Mandel took a picture of Tyler and Natasha Cowen at last week’s Kauffman Economic Bloggers Forum, since he and Tyler were once ranked (by Tyler) as the #1 and #2 chess players in the area. Sadly, neither went into the sport as a full-time professional.

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    This is US. We have done all of this.

    by: Daniel Becker
    This is very important.  It is a list of all we have done in the world.   Go take a look.  It won’t take long.  I’ll wait for you to return.

    That we do not teach about this in our schools is why we are who we are.  This list should be a banner which is run along the bottom of every news cast for as long as we are involved in such activity or when a new such action is proposed.  It should be a page in every Sunday newspaper edition for as long as we are involved or when a new such action is proposed.

    Most of all, this list and the banner should start with the following words: “You have done all of the following…”  I say “you” because such actions need to remain personal.   It is always personal.  Yes, you and me personally have done all of this.  Don’t start thinking that the use of robotics removes you from the equation.  Don’t fall for that psych-ops.  You, me, we still are the one’s pulling the trigger.  We did this.  All of this. 


    We’re broke? We have to sacrifice? What do we have to sacrifice, our dignity? Our integraty? Do you like someone doing all this in your name? Your name is on it. Don’t make that mistake thinking it’s not.

    Oh, it’s only about the money at this blog? Well, you’re the private sector, you, me and we. Is this how you would choose to spend your Nth dollar? Is this how you would choose to spend your vaction money, your retirement money, your holiday gift money? I mean, it’s all extra spending anyway. Gee, you have no extra? Well then, is this how you would choose to spend your grocery money, your heating money (just filled my tank, $3.59/gal), your insurance money, your TAX money?

    Is the private sector spending it better than the government sector? How can you tell? See, private or government, it’s still US. You pulled the trigger. I pulled the trigger by inclusion. We pulled the trigger.

    And the rest of the world knows it.

    In case you did not go to the link, here is the first list:
    US interventions taken for sole purpose of regime change since 1945:

    1946 – Thailand (Pridi; conservative): success (Covert operation)
    1946 – Argentina (Peron; military/centrist): failure (Subverted election)
    1947 – France (communist): success (Subverted election)
    1947 – Philippines (center-left): success (Subverted election)
    1947 – Romania (Gheorghiu-Dej; stalinist): failure (Covert operation)
    1948 – Italy (communist): success (Subverted election)
    1948 – Colombia (Gaitan; populist/leftist): success (Subverted election)
    1948 – Peru (Bustamante; left/centrist): success (Covert operation)
    1949 – Syria (Kuwatli; neutralist/Pan-Arabist): success (Covert operation)
    1949 – China (Mao; communist): failure (Covert operation)
    1950 – Albania (Hoxha; communist): failure (Covert operation)
    1951 – Bolivia (Paz; center/neutralist): success (Covert operation)
    1951 – DPRK (Kim; stalinist): failure (Overt force)
    1951 – Poland (Cyrankiewicz; stalinist): failure (Covert operation)
    1951 – Thailand (Phibun; conservative): success (Covert operation)
    1952 – Egypt (Farouk; monarchist): success (Covert operation)
    1952 – Cuba (Prio; reform/populist): success (Covert operation)
    1952 – Lebanon (left/populist): success: (Subverted election)
    1953 – British Guyana (left/populist): success (Covert operation)
    1953 – Iran (Mossadegh; liberal nationalist): success (Covert operation)
    1953 – Costa Rica (Figueres; reform liberal): failure (Covert operation)
    1953 – Philippines (center-left): success (Subverted election)
    1954 – Guatemala (Arbenz; liberal nationalist): success (Overt force)
    1955 – Costa Rica (Figueres; reform liberal): failure (Covert operation)
    1955 – India (Nehru; neutralist/socialist): failure (Covert operation)
    1955 – Argentina (Peron; military/centrist): success (Covert operation)
    1955 – China (Zhou; communist): failure (Covert operation)
    1955 – Vietnam (Ho; communist): success (Subverted election)
    1956 – Hungary (Hegedus; communist): success (Covert operation)
    1957 – Egypt (Nasser; military/nationalist): failure (Covert operation)
    1957 – Haiti (Sylvain; left/populist): success (Covert operation)
    1957 – Syria (Kuwatli; neutralist/Pan-Arabist): failure (Covert operation)
    1958 – Japan (left-center): success (Subverted election)
    1958 – Chile (leftists): success (Subverted election)
    1958 – Iraq (Feisal; monarchist): success (Covert operation)
    1958 – Laos (Phouma; nationalist): success (Covert operation)
    1958 – Sudan (Sovereignty Council; nationalist): success (Covert operation)
    1958 – Lebanon (leftist): success (Subverted election)
    1958 – Syria (Kuwatli; neutralist/Pan-Arabist): failure (Covert operation)
    1958 – Indonesia (Sukarno; militarist/neutralist): failure (Subverted election)
    1959 – Laos (Phouma; nationalist): success (Covert operation)
    1959 – Nepal (left-centrist): success (Subverted election)
    1959 – Cambodia (Sihanouk; moderate/neutralist): failure (CO)
    1960 – Ecuador (Ponce; left/populist): success (Covert operation)
    1960 – Laos (Phouma; nationalist): success (Covert operation)
    1960 – Iraq (Qassem; rightist /militarist): failure (Covert operation)
    1960 – S. Korea (Syngman; rightist): success (Covert operation)
    1960 – Turkey (Menderes; liberal): success (Covert operation)
    1961 – Haiti (Duvalier; rightist/militarist): success (Covert operation)
    1961 – Cuba (Castro; communist): failure (Covert operation)
    1961 – Congo (Lumumba; leftist/pan-Africanist): success (Covert operation)
    1961 – Dominican Republic (Trujillo; rightwing/military): success (Covert operation)
    1962 – Brazil (Goulart; liberal/neutralist): failure (Subverted election)
    1962 – Dominican Republic ( left/populist): success (Subverted election)
    1962 – Indonesia (Sukarno; militarist/neutralist): failure (Covert operation)
    1963 – Dominican Republic (Bosch; social democrat): success (Covert operation)
    1963 – Honduras (Montes; left/populist): success (Covert operation)
    1963 – Iraq (Qassem; militarist/rightist): success (Covert operation)
    1963 – S. Vietnam (Diem; rightist): success (Covert operation)
    1963 – Cambodia (Sihanouk; moderate/neutralist): failure (Covert operation)
    1963 – Guatemala (Ygidoras; rightist/reform): success (Covert operation)
    1963 – Ecuador (Velasco; reform militarist): success (Covert operation)
    1964 – Guyana (Jagan; populist/reformist): success (Covert operation)
    1964 – Bolivia (Paz; centrist/neutralist): success (Covert operation)
    1964 – Brazil (Goulart; liberal/neutralist): success (Covert operation)
    1964 – Chile (Allende; social democrat/marxist): success (Subverted election)
    1965 – Indonesia (Sukarno; militarist/neutralist): success (Covert operation)
    1966 – Ghana (Nkrumah; leftist/pan-Africanist): success (Covert operation)
    1966 – Bolivia (leftist): success (Subverted election)
    1966 – France (de Gaulle; centrist): failure (Covert operation)
    1967 – Greece (Papandreou; social democrat): success (Covert operation)
    1968 – Iraq (Arif; rightist): success (Covert operation)
    1969 – Panama (Torrijos; military/reform populist): failure (Covert operation)
    1969 – Libya (Idris; monarchist): success (Covert operation)
    1970 – Bolivia (Ovando; reform nationalist): success (Covert operation)
    1970 – Cambodia (Sihanouk; moderate/neutralist): success (Covert operation)
    1970 – Chile (Allende; social democrat/Marxist): failure (Subverted election)
    1971 – Bolivia (Torres; nationalist/neutralist): success (Covert operation)
    1971 – Costa Rica (Figueres; reform liberal): failure (Covert operation)
    1971 – Liberia (Tubman; rightist): success (Covert operation)
    1971 – Turkey (Demirel; center-right): success (Covert operation)
    1971 – Uruguay (Frente Amplio; leftist): success (Subverted election)
    1972 – El Salvador (leftist): success (Subverted election)
    1972 – Australia (Whitlam; liberal/labor): failure (Subverted election)
    1973 – Chile (Allende; social democrat/Marxist): success (Covert operation)
    1975 – Australia (Whitlam; liberal/labor): success (Covert operation)
    1975 – Congo (Mobutu; military/rightist): failure (Covert operation)
    1975 – Bangladesh (Mujib; nationalist): success (Covert operation)
    1976 – Jamaica (Manley; social democrat): failure (Subverted election)
    1976 – Portugal (JNS; military/leftist): success (Subverted election)
    1976 – Nigeria (Mohammed; military/nationalist): success (Covert operation)
    1976 – Thailand (rightist): success (Covert operation)
    1976 – Uruguay (Bordaberry; center-right): success (Covert operation)
    1977 – Pakistan (Bhutto: center/nationalist): success (Covert operation)
    1978 – Dominican Republic (Balaguer; center): success (Subverted election)
    1979 – S. Korea (Park; rightist): success (Covert operation)
    1979 – Nicaragua (Sandinistas; leftist): failure (Covert operation)
    1980 – Bolivia (Siles; centrist/reform): success (Covert operation)
    1980 – Iran (Khomeini; Islamic nationalist): failure (Covert operation)
    1980 – Italy (leftist): success (Covert operation)
    1980 – Liberia (Tolbert; rightist): success (Covert operation)
    1980 – Jamaica (Manley; social democrat): success (Subverted election)
    1980 – Dominica (Seraphin; leftist): success (Subverted election)
    1980 – Turkey (Demirel; center-right): success (Covert operation)
    1981 – Seychelles (René; socialist): failure (Covert operation)
    1981 – Spain (Suarez; rightist/neutralist): failure (Covert operation)
    1981 – Panama (Torrijos; military/reform populist); success (Covert operation)
    1981 – Zambia (Kaunda; reform nationalist): failure (Covert operation)
    1982 – Mauritius (center-left): failure (Subverted election)
    1982 – Spain (Suarez; rightist/neutralist): success (Subverted election)
    1982 – Iran (Khomeini; Islamic nationalist): failure (Covert operation)
    1982 – Chad (Oueddei; Islamic nationalist): success (Covert operation)
    1983 – Mozambique (Machel; socialist): failure (Covert operation)
    1983 – Grenada (Bishop; socialist): success (Overt force)
    1984 – Panama (reform/centrist): success (Subverted election)
    1984 – Nicaragua (Sandinistas; leftist): failure (Subverted election)
    1984 – Surinam (Bouterse; left/reformist/neutralist): success (Covert operation)
    1984 – India (Gandhi; nationalist): success (Covert operation)
    1986 – Libya (Qaddafi; Islamic nationalist): failure (Overt force)
    1987 – Fiji (Bavrada; liberal): success (Covert operation)
    1989 – Panama (Noriega; military/reform populist): success (Overt force)
    1990 – Haiti (Aristide; liberal reform): failure (Subverted election)
    1990 – Nicaragua (Ortega; Christian socialist): success (Subverted election)
    1991 – Albania (Alia; communist): success (Subverted election)
    1991 – Haiti (Aristide; liberal reform): success (Covert operation)
    1991 – Iraq (Hussein; military/rightist): failure (Overt force)
    1991 – Bulgaria (BSP; communist): success (Subverted election)
    1992 – Afghanistan (Najibullah; communist): success (Covert operation)
    1993 – Somalia (Aidid; right/militarist): failure (Overt force)
    1993 – Cambodia (Han Sen/CPP; leftist): failure (Subverted election)
    1993 – Burundi (Ndadaye; conservative): success (Covert operation)
    1994 – El Salvador (leftist): success (Subverted election)
    1994 – Rwanda (Habyarimana; conservative): success (Covert operation)
    1994 – Ukraine (Kravchuk; center-left): success (Subverted election)
    1996 – Bosnia (Karadzic; centrist): success (Covert operation)
    1996 – Congo (Mobutu; military/rightist): success (Covert operation)
    1996 – Mongolia (center-left): success (Subverted election)
    1998 – Congo (Kabila; rightist/military): success (Covert operation)
    1998 – Indonesia (Suharto; military/rightist): success (Covert operation)
    1999 – Yugoslavia (Milosevic; left/nationalist): success (Subverted election)
    2000 – Ecuador (NSC; leftist): success: (Covert operation)
    2001 – Afghanistan (Omar; rightist/Islamist): success (Overt force)
    2001 – Belarus (Lukashenko; leftist): failure (Subverted election)
    2001 – Nicaragua (Ortega; Christian socialist): success (Subverted election)
    2001 – Nepal (Birendra; nationalist/monarchist): success (Covert operation)
    2002 – Venezuela (Chavez; reform-populist): failure (Covert operation)
    2002 – Bolivia (Morales; leftist/MAS): success (Subverted election)
    2002 – Brazil (Lula; center-left): failure (Subverted election)

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    My Governor, as usual, Fails Math

    You have to love Chris Christie. The man who said NJ couldn’t afford a tunnel whose cost with overruns was expected to be less than $10B is now backing a tunnel whose initial cost estimate is $13B.

    That the great state of New Jersey has sent an actual physicist to Congress, let alone supplies and hosts most of the talent in the Pharmaceutical and Financial Services industry,* and is run by a man who says we couldn’t afford $10.5B that PATH would control but should give $13B to something Amtrak will continue to control is rather close to proof that G-d is either non-existent or a thug with a sick sense of humor.

    And now, he’s saving money again (h/t Thers):

    Bill A3273 would have expanded New Jerseys’ Medicaid program, essentially reversing action Christie took in July 2010 to ensure $7.5 million in taxpayer money would not go to supporting family planning clinics, most of which [29 of 58 is half, not “most,” but apparently conservative reporters can’t do math either] are run by Planned Parenthood.

    “In Fiscal year 2012, it is anticipated that the state’s Medicaid program faces a budget shortfall of $1.1 billion,” said Governor Christie in a statement. Expanding Medicaid to more people “does not make sense from an overall fiscal and health care policy perspective,” he said.

    Words can confuse numbers, so let me, er, “spell this one out.”

    In Christie-world, not spending $7,500,000 upfront is going to solve a deficit of $1,100,000,000. Those three extra zeroes on the deficit number are, after all, an Arabic creation, and can be ignored if you’re a blithering idiot or a Republican governor.**

    Ignoring, of course, that an increase in conceptions and undesired births, combined with a decline in available prenatal care will lead to more underweight, premature, under- and malnourished babies that will grow up to require more services than they would have had they been healthy and/or desired.

    In Christie-world&mash;that’s where you go, remaining out of touch, knowing that your Lieutenant Governor is visiting her dying father out of the country, so that the Senate president is left to declare a State of Emergency—proper prenatal care doesn’t pay for itself.

    In Christie-world, being the state most tasked with subsidizing the Red States enables one to position to quit and run for higher office.*** Or at least that’s the only simple, direct, “rational” explanation for not investing in human capital and spending more on a less-desirable project.

    If Chris Christie isn’t planning to be a short-timer, he’s certainly making certain that his legacy will be one of higher debt and lower preparedness. The next generation of New Jerseyites may be as innumerate as he is.

    In which case, who do the Blue Staters think will pay for all their wars and welfare?

    *Non-hedge fund financial services talent, that is. They generally live and work in Connecticut, from which they pillage with impunity.

    **See also Daniels, Mitch, and Schwarzenegger, Arnold.

    ***I would say this is part-wishful thinking on my part, but the result would be a mix of Glenn Beck and Sarah Palin appearing regularly on CNN or Faux News while—in the grand tradition of previous budget pillager and “centrist” Christine Todd Whitman—the rest of us are left to clean up the mess.

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    The Economics of History, Douthat-Style

    I try not to pay attention—and not provide a direct link—to the NYT’s Stupidest Conservative. It’s one of the greatest advantages of having Susan of Texas around: you can go there and see anything I might write, done better, and (in this case) with cute graphics.

    But when Brad DeLong falls down on the job—dealing well with the social, but not at all with the economic, aspect—it is time to go once (and, I hope, only once) into the breach.

    Douthat, as quoted by DeLong:

    Prior to 1973, 20 percent of births to white, unmarried women (and 9 percent of unwed births over all) led to an adoption. Today, just 1 percent of babies born to unwed mothers are adopted, and would-be adoptive parents face a waiting list that has lengthened beyond reason.

    First thing to note: these are not necessarily comparable sets, for reasons detailed by Amanda Marcotte (op. cit. DeLong as well). Since the babies of today are conceived more voluntarily (in concept; my perpetual caveat about access certainly abides here), you would expect those eligible to be adopted to decline as well. That is, the 19% drop (or 95% drop in percentage terms) in white babies being adopted (or maybe it’s a 8% drop from 9% to 1%, which would be 89% in percentage terms) is the effect you would expect with fewer “unwanted” births. People don’t offer children for adoption unless they can’t raise them.

    So Douthat’s statistics do, if anything, show that overall life is improved since 1973. We can agree that fewer unwanted babies is a good thing, no?

    But if I’m reading Douthat’s prose correctly, there’s a far greater structural problem. Concentrating only on “white” babies— that is, conceding that Douthat is considering a bare majority, if that, of the country—we see that the system he fondly remembers produced a 20% surplus of children born out of wedlock for whom the state or its equivalents needed to care.

    Even ignoring the conditions under which many of those births occurred, that basically means that for one in every five children born out of wedlock, no more than four were successfully adopted.

    The odds are that the ratio is much higher: after all, “births to white, unmarried women” is a large set. Some of those were likely by choice. Some of those likely were followed soon thereafter by marriage. Some of them had “pre-arranged” adoption within the family (or de facto adoption by the woman’s extended family; see Palin, Bristol, for a contemporary example).

    I don’t know the numbers, but if you told me that the above accounted for slightly more than half of the category, I wouldn’t be surprised.

    But that leaves about 40% of those babies needing to be adopted. And by Douthat’s own data, only 20% of them were.

    So the best-case scenario is that, for each one of us who was adopted, there was a minimum of 1/4 of a person who wasn’t—and probably closer to a 1:1 ratio.

    In Douthat’s world, women are supposed to feel guilty ex post because they made a decision. Does that mean that adoptees in the U.S. are supposed to feel guilty because they were adopted and someone else wasn’t? Or that our parents should feel guilty because they chose us, and not someone else?

    From an economic analysis, the pre-1973 situation was one of significant excess supply, and the current 1% adoption rate is beneficial to the chances of a potential adoptee being adopted, while the “would-be adoptive parents [who] face a waiting list” have both an abundant opportunity to provide a relatively better lifestyle for children born in developing economies and to take interim steps such as fostering to ensure that they really want to change their lifestyle enough to raise children.

    No economist in his right mind would consider the pre-1973 environment romanced by Douthat to be more optimal than the current one, unless he really loves human suffering and wasting human capital.

    UPDATE: Tom Levenson at Balloon Juice went out and found some numbers that—to no one’s surprise, I trust—don’t support Douthat’s Delusion either.

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