Wednesday, November 30, 2011

Do Nothing

The popular perception is that our do-nothing Congress is going to drive our country into a financial ditch.

Tyler Cowen (one of my favorite economists, even though he's a Bitcoin skeptic) points out that's not actually true.

If Congress does nothing, then a bunch of things will happen which should balance the budget in ten or so years:

The Bush tax cuts will expire. Income tax rates go up for everybody (rich, poor and middle class) and the Federal Government will get a lot more revenue. If you're a Democrat who thought the Bush tax cuts were a really bad idea in the first place then that shouldn't bother you.

The SuperCommittee SuperFailure budget cuts will happen. Military and Domestic spending will be cut. I'd be pretty happy with that, I think we're spending way too much money on our military and don't think we get our money's worth from most Federal government spending.

Medicare spending will be cut, because there will be no "doc fix" to override a law that was passed several years ago that was supposed to limit doctor reimbursement of Medicare expenses. If that happens (I don't think it will), then it'll suddenly become very difficult to find a doctor willing to accept people on Medicare. It would, however, save a ton of money. It would also be a fascinating natural experiment in health-care economics-- given that there's a surprisingly weak correlation between health care spending and longevity or other measures of health maybe we'd all be better off if we collectively spent less money on doctors.

From my perspective, do-nothing looks like a pretty good second-best solution. I'd rather we cut military spending more, kept the tax cuts for people making under $50,000 per year, and implemented Megan McArdle's plan for national catastrophic health insurance. But Congress has shown that it is really good at doing nothing, and I don't expect that to change.

Tuesday, November 15, 2011

Zoning. Lots of Zoning.

Tomorrow night Amherst Town Meeting takes up Article 17, which rezones a couple of "Village Centers" to encourage more mixed-use, walkable, environmentally-friendly development.

The Sustainable Amherst website has a great summary of the reasons it is a good idea.

There are a couple of different things going on in the Article-- first is the proposal to change the zoning. That will bring out the NIMBYs who are afraid of change (which, as I've said before, is completely rational). I hope they can overcome their fear and think about all the nice things that might get built. I really enjoy being able to walk to coffee shops and restaurants and Captain Candy and the Farmer's Market, and I would think people living in North Amherst would enjoy more places to hang out and shop, too.

The second thing going on in Article 17 I'm not so enthusiastic about-- "Form-based zoning." The idea is to write zoning rules to encourage the creation of neighborhoods that 'feel' a desired way.

I'm not enthusiastic just because I would rather take a 'creative destruction' approach-- I believe that if you make it easier to redevelop, then neighborhoods will evolve over time towards whatever their residents most desire. I worry that adding Even More Pages to our Zoning Bylaw will just make redevelopment more difficult and expensive, and will give Nimby neighbors more opportunities to nit-pick a project to death.

But maybe I'm wrong about that. Maybe Form-Based Zoning is a really good idea and will speed the process of redevelopment along, so you get fewer strip malls along the way towards tomorrow's quaint, historic village centers that everybody adores. I'm willing to give it a try, and plan on voting for Article 17 tomorrow night.

Monday, October 24, 2011

Drug-testing before welfare

Is it OK to require people to pass a drug test before getting welfare benefits?

If you're a conservative, you probably think: "Sure! It is against the law to take drugs, and giving welfare to drug addicts just encourages their illegal, self-destructive behavior."

If you're a liberal, you probably think: "No! Drug users are some of the most disadvantaged members of our society, denying them benefits is just heartless and will make their problems worse, and testing innocent people is demeaning and violates their human rights."

Who is right? What should the government do?

I wish people would spend less time arguing about questions like this and realize that the real problem is we've got a winner-take-all system where "There Shall Be One Correct Answer."

It doesn't have to be that way.

Tuesday, October 11, 2011

Garbage Bikes

I like bicycles; our family of four owns eight (and a half, if you count my unicycle). My New Year's resolution for the last 8 or so years has been to ride my bike more (and like all good New Year's resolutions, I've failed miserably).

So I feel as if I should love the "Pedal People" who haul trash around Northampton.

What's not to like? They're working hard, getting exercise, keeping a dirty, polluting garbage truck off the road. And as our local newspaper said in a recent article, it takes 5 Pedal People to do the work of 1 person and a garbage truck, so they're great for the economy.

... except they're actually not so great for the economy. True, it takes 5 people to do the work of 1 person plus a truck. But by that logic, it would be better for the economy to hire 50 people to walk garbage to the dump. It isn't, because hiring 50 people is more expensive, and the extra 49 people could spend their time doing something more productive than hauling trash.

Is hauling trash by bike better for the environment? Well, it is a little more expensive, which means the people hiring the pedal people have less money in their pockets at the end of the month (comparing prices, looks likes about $1,000 $50 per year). If they were going to spend that money on a vacation in Tahiti gasoline for a trip to a Tea Party rally in Boston then the bikes are definitely a win for the environment. But if they were going to donate it to a charity dedicated to preserving the environment or lobbying for a carbon tax... then it isn't so clear-cut.

My practical, skeptical side thinks hauling trash by bike is probably a bad idea; I'd love to hear from some Pedal People 10 or 20 years from now to see if most of them are still riding strong or if they're recovering from knee replacement operations. But I do like bicycles, and if the people riding the bikes are happy and the people paying them to ride their bikes are happy maybe I should stop being such a curmudgeon. God knows I spend a fair bit of my money and time doing things that make me feel good for irrational reasons. (Go Patriots! 4 and 1!)

Edited: I confused the Weekly Pedal People pickup schedule with Monthly prices. Sorry!

Saturday, September 17, 2011

Defense is a Public Good. So spend less on it.

When economists talk about something being a "public good" they don't mean "nice stuff that the government does."

The definition of a public good is something that is non-rivalrous and non-excludable. Or in non-econogeek-speak, stuff that doesn't run out no matter how many people use it, and stuff that benefits everybody whether they pay for it or not.

National defense is a public good. I'm not saying all national militaries are "good" -- I think lots of militaries around the world are evil and the world would be a better place without them. But the idea of national defense is a public good-- assuming you're pretty happy with your government and don't want Foreign Invaders to take over your country, everybody benefits from a national military standing guard and keeping you safe. And assuming the Foreign Invader Threat doesn't grow as your population grows, the same military can protect 100 thousand people as easily as it can protect 100 million.

National defense is non-excludable and non-rivalrous.

One funny thing about public goods is since they're non-rivalrous, you can serve more and more people while spending the same amount of money. But we don't do that; we spend more and more money on the military. In all the debates about "cutting" military spending the most radical proposals still keep spending at some constant percentage of GDP.


We should be able to get the same level of safety from Foreign Invaders with a constant level of military spending, no matter how large our population or economy grows. We'd all be much better off, and much safer, if we cut military spending by 90% and spent the money on just about anything else.

Thursday, August 25, 2011

Budget Battle Brainstorm

The big battle over raising the debt ceiling makes me wonder if there might be a better way of handling our national budget.

What would happen if Congress and the President agreed to a top-line number: We Shall Spend XYZ Trillion Dollars This Year.

But left the details of exactly what to spend it on to individual congressional representatives.

Just divide the budget by 435, and let each representative decide what to spend their portion on (maybe after paying out interest on the debt, and putting Social Security revenues/expenses into its own account).

Representatives from far-left-wing districts could decide to spend nothing on Defense, and lots on Medicaid and Food Stamps. Representatives from Florida could decide to spend lots on Medicare. Tea-Party representatives could decide to refund part (or all!) of their share back to the taxpayers in their district.

What would happen?

Would spending rise because voters knew their representatives would spend the money on stuff that they like, or would it fall because representatives would compete to give more and more tax dollars back to voters?

Would special interests gain more or less power?

Has anything like this ever been tried-- are there other countries or states or towns that simply elect a bunch of representatives and then divvy up a budget for them to spend however they wish?

Sunday, August 14, 2011

Money in politics

Pop quiz: how many of the top-ten political "heavy-hitters" over the last 21 years gave more than half of the money they raised to Republicans?

How many are for-profit corporations?

If I hadn't seen the data first, I would have guessed "about half" for both. Wrong!

The Center for Responsive Politics crunched the numbers; results here.

Wednesday, July 27, 2011

More adventures in Australia

Yes, I've been obsessed the last year or so. If you're tired of hearing about Bitcoin, check out our Cassowary Tales blog, which we're updating (ok, Michele has been mostly updating, I've been slacking) with stories of our latest trip to Australia.

Wednesday, June 29, 2011

Proactive engagement

One of Bitcoin's major challenges is the legal uncertainty surrounding it.

It is really no different from other new Internet technologies (should Skype be regulated like a phone company? Does google's deep-linking violate copyright? ... to give two examples from a few years ago...), but because it is money there are a lot more laws and regulations that may or may not apply.

It'd be easy to ignore that and just damn the torpedoes, full steam ahead with the technology. And given the nature of geeks on the Internet, that is what is going to happen anyway... but I decided it wouldn't hurt to try to be proactive and start a conversation with my representatives in Washington, DC about the Bitcoin Project.

So I met briefly with staffers from Rep. Olver and Sen. Brown's offices yesterday. I gave a very brief overview of bitcoin, mentioned Senator Schumer's "eradicate Silk Road" press conference, and stressed that Bitcoin is meant to be a stable, secure, international currency for the Internet, NOT a currency for criminals.

I also mentioned that the legal uncertainty is a barrier to innovation, and asked for advice on what, if anything, could be done about that. There is no good answer-- government moves really slowly, and they're wedging newfangled Internet ideas into legal structures that were created when telephone were the latest and greatest technology.

However, the house of representatives staffer I talked with did suggest that encouraging you-all to introduce yourselves to your congressperson's staff is a good idea. If they know that interesting, job-creating bitcoin businesses are happening in their districts and they've met the person making it happen, then they're much more likely to support bitcoin-friendly legislation.

So, if you're an upstanding, law-abiding, clear-thinking citizen doing interesting things with Bitcoin, I encourage you to take a little time and introduce yourself to your representative's staff. I wouldn't bother talking to the representative-- they're probably too old to really understand bitcoin ("Tubes! Money through the tubes I say!"). Talk to a 20-something staffer who grew up with the Internet and is likely to be a lot more sympathetic to the idea of a peer-to-peer Internet money.

(cross-posted from the Bitcoin Forums)

Monday, June 27, 2011

Worth more than the computer they are stored on...

Reporters sometimes ask me how many bitcoins I own; I think they assume that I'm a bitcoin millionaire.

I wish!

I don't feel comfortable telling the world exactly how many bitcoins I own (I don't feel comfortable saying how many dollars I have in the bank either), so I tell them I own thousands of bitcoins-- not tens or hundreds of thousands. At about $17 each, that means my bitcoins are worth a lot more than my computer, and I worry about them being lost or stolen.

Here's how I keep them safe:

First, I have an advantage because I'm a geek who keeps track of the latest security threats and know the ways malware can worm its way onto my system. I keep my operating system and web browsing software up-to-date, never open email attachments I'm not expecting to get, am very careful about what programs I allow to run on my computer.

Even so, I'm human so I expect that sooner or later I'll click the wrong link or view a YouTube video containing a zero-day Flash exploit and my desktop computer will be compromised.

So I keep most of my bitcoins on an old Mac laptop that I don't use for anything else. It is turned off most of the time; I only turn it on when I need to move some bitcoin from 'cold storage' because I will want to use them soon. I turn it on, let bitcoin run for a while to catch up with the block chain, and then send as many coins as I think I'll spend in the next week or so. I'll wait for the transaction to get a confirmation or three, then shut it back down.

I use a long, strong pass-phrase to login, and my home directory is encrypted using the OSX's built-in FileVault protection, so even if somebody manages to find out where I store that machine and steals it they won't be able to decrypt the wallet without the pass-phrase.

To make sure I don't lose the bitcoins if I lose the laptop, I also encrypt and back-up the wallet "to the cloud" -- I use gpg to encrypt and Amazon's S3 for storage, but there are plenty of great file encryption and online backup services.

All of this is much more complicated than it needs to be and is still vulnerable to "rubber-hose cryptanalysis"; bitcoin is still at the do-it-yourself bleeding-edge-technology stage. I expect there to be ultra-secure, low-cost, easy-to-use, "you don't have to trust us" services or devices for storing bitcoins within the next year or so, and when there are I'll switch, and I'll write a blog post encouraging you to switch.

Friday, June 24, 2011

Why aren't bitcoin wallets encrypted?

Now that bitcoins are worth stealing, virus writers and scammers are busy trying to steal them.

The current bitcoin software that you can download and run on your computer makes no attempt to keep your bitcoins safe from malware infecting your computer. None. Nada. Zip.

Your wallet.dat file is sitting right there on your hard disk, unencrypted. A big, juicy target for viruses and malware.

So why didn't we encrypt it up the wazoo and require that you type six passwords to unlock it? Well, two major reasons:

First, losing your wallet or forgetting your password is (arguably) as big a threat as theft. There is a reason every online service has some 'recover/reset lost password' feature.

Second, encryption might give users a false sense of security. If you use a weak password then encryption doesn't help; bad guys can steal the encrypted wallet and, in a few seconds, try decrypting it with the most popular passwords. And if your machine has malware running on it, then it can easily install a keylogger and get your password when you type it in.

Bitcoin could start playing whack-a-mole with the bad guys-- they implement dumb keyloggers, so we implement an on-screen keyboard and you use your mouse to enter your password. So they implement a screen+keyboard+mouse logger, we come up with some complicated one-time-password scheme involving you printing out pieces of private keys the first time you start bitcoin. So the bad guys wait until you send some coins, and then modify the transaction after you've typed in the information from the piece of paper.

If your computer is infected, then it cannot be trusted, and there is no software in the world that can keep your bitcoins safe if they are stored on it.

However... wallet encryption is planned for the next version of bitcoin. It won't protect you from viruses, but it will stop your cousin from walking up to your computer and helping himself to all of your bitcoins while you're out walking the dog. And if you use a strong password you won't have to worry about somebody stealing a backed-up copy of your wallet and spending all your coins. I just hope users DO use strong passwords and DO NOT lose them.

The real solution is multi-device confirmation of big bitcoin transactions. You'd send coins starting on your computer, but the transaction wouldn't be valid until it was signed by another device, which would somehow contact you (NOT through your computer) and ask you for your OK before sending it along. The guts of bitcoin supports that (and a whole lot more), but it will take a fair bit of work to make it all fool-proof and easy to use.

Monday, June 20, 2011

That which does not kill us makes us stronger

The login database for the largest (and second-oldest) Bitcoin Exchange site got loose. The site wasn't hacked:
It appears that someone who performs audits on our system and had read-only access to our database had their computer compromised.
The good news is Mt.Gox had layered security, so your money or bitcoins stored at Mt. Gox are safe. And if you chose a strong password (my Mt.Gox password is 12 random characters, chosen and remembered by LastPass and not used for anything else) you don't have to worry, because of the way Mt. Gox stored the passwords in the database.

The bad news is lots of people still choose really bad passwords, even for financial sites.

Coming right on the heels of the discovery of bitcoin-wallet-stealing malware, that's a lot of disturbing bitcoin-related news, and I'm getting asked "what does it all mean for Bitcoin?"

I hope it means the bitcoin hype starts to calm down. The insanely rapid growth of both the number of users and the value of a bitcoin over the last month or two was unsustainable, and both the core system and all of the surrounding infrastructure (like the exchanges) need more time to "grow up."

I've said it before, and I'll say it again: Bitcoin is an experiment. Treat it like you would a promising Internet start-up company: maybe it will change the world, but realize that investing your money or time in new ideas is always risky.

Thursday, June 16, 2011

Thoughts on the Great Bitcoin Heist

Drugs last week, a half-a-million-dollar heist this week... all Bitcoin needs now is a celebrity sex scandal to make the hype-meter go from 8 to 11.

So: what happened and what does it mean for Bitcoin?

Apparently, 25,000 bitcoins worth almost half a million dollars were stolen from somebody's machine.


First thought: to be clear, they didn't spend half a million dollars on those bitcoins; they were an early adopter who managed to generate them back when bitcoins were nearly worthless and generating bitcoins was hundreds of thousands of times easier than it is today. That makes me feel a little better; if it was somebody who lost their life savings I'd be much more upset. I'll say it again: DO NOT PUT YOUR LIFE SAVINGS IN BITCOIN. That is risky and a bad idea at this point.

Second thought: this was not a failure or breach of the bitcoin payment network. It isn't yet clear exactly how the bitcoins were stolen; the most likely explanations are either malware infecting their system or somebody finding a backed-up copy of their wallet file. I'll be writing a blog entry about how I keep my bitcoins safe soon, and wallet security is the second thing on my bitcoin development priorities list (the first thing is making sure we handle any "scaling up" problems that might make it impossible for EVERYBODY to use their bitcoins).

Final thought: we can see where the bitcoins are going, so it is possible the person will be tracked down and caught as they spend the coins. They can try to 'hide their tracks,' but the big bitcoin exchangers have said that they'll cooperate with law enforcement to help catch criminals. Like stealing a famous painting, the crooks might have a hard time actually spending their ill-gotten loot.

Monday, June 06, 2011

But you can use it to buy DRUGS!

Senators Schumer and Manchin are upset about Silk Road, a hidden website that is an "Ebay for illegal narcotics." They accept only bitcoin as payment, because bitcoin is the closest thing to cash on the Internet. Watching the press conference, I get the impression they're also upset at bitcoin; Sen. Schumer says bitcoin is "an online form of money laundering."

First, that's just not true! The biggest bitcoin exchanger (Mt Gox) is careful to comply with all anti-money-laundering laws and regulations. If the operators of Silk Road make lots of bitcoins then if or when they try to exchange them for dollars or euros they're going to have to tell Mt Gox who they are, Mt Gox will be required to report the transaction to the government, and the Silk Road folks might find themselves explaining to an IRS agent how they managed to earn so many bitcoins. It is no different from any other financial institution.

Second, nobody can control what is purchased with bitcoins, just like my local bank cannot control what I do with the cash I withdraw from their ATM machine. I wonder if Senators Schumer and Manchin would like to replace all cash with a government-issued smart card; after all, that would make it much harder for criminals to get away with buying illegal goods anonymously, and if we are all law-abiding citizens then we shouldn't worry about the government knowing about all of our purchases... right?

Finally, I hope that the Senators realize that trying to ban an innovative new technology like bitcoin will put the United States at a competitive disadvantage versus the rest of the world. The US government tried to control strong encryption in the 90's, and only succeeded in driving a lot of cryptographic product development overseas. This is supposed to be the Land of the Free; I think we should learn the lessons of the past and be brave about taking advantage of new technologies like bitcoin, instead of fearing them.

Sunday, May 15, 2011

Better to give than to take...

Sony recently announced that somebody got into their customer database and got the names and addresses (and maybe credit card numbers) of 100 million of its customers.

Michaels Crafts Stores recently announced that debit card readers in 80 of its stores were hacked to steal customers' bank information and PIN numbers.

There's a problem with the way we pay for things these days. The root cause of the problem is that we're trusting somebody else with the keys to our financial life. We hand over our credit cards or bank account numbers and trust merchants to only charge what we've purchased and to keep our personal information safe. Unless we pay in cash, we're always implicitly authorizing them to take money from our accounts.

It doesn't have to be that way. Businesses could give us their information and ask us to deposit money into their accounts, just like we give them cash which they deposit into their cash registers. If Michaels' cash registers had been hacked and a bunch of money stolen, that would be bad for Michaels but it wouldn't affect their customers at all.

Bitcoin is like cash. Merchants that accept bitcoin ask you to send coins to their address-- you never give them permission to reach into your account and take coins. One of the reasons I think bitcoin could take over the payment world is because that is a much better way to do things, for both the customer and the merchant.

If Sony accepted bitcoin payments from its customers, it might have lost a lot of money by screwing up security and having its private keys stolen. But it wouldn't be facing lawsuits from customers worried about identity theft and future fraudulent credit card charges.

Wednesday, April 06, 2011

Thirty-five dollar wires

We'll be in France for a couple of weeks next month, and paying for the house we're renting has involved three trips to the bank and will cost $35 (plus whatever costs are hidden in the exchange rate).

Granted, a couple of those trips to the bank wouldn't have been necessary if we'd gotten everything exactly right the first time. But still... I found myself thinking "paying for this using bitcoins would be SO much easier and less expensive."

Maybe paying for vacation rentals in other countries will be one of the "killer applications" for bitcoin; I bet vacation property owners are the kind of small entrepreneur that might like to cut out the credit card or bank middle-men.

Saturday, April 02, 2011

The Wise Leader fallacy

I've been thinking a lot lately about taking Bitcoin mainstream. Right now, most people interested in a "nobody in charge pseudo-anonymous" internet currency are libertarians and the techno/crypto crowd.

People like me. Which makes me wonder: are my biases making me think Bitcoin is a technology destined for greatness?

If I play Devil's Advocate and try to think of what might prevent Bitcoin from going mainstream, I think the biggest barrier might be a widespread belief in the Wise Leader Fallacy (which is a form of argument from authority).

We tend to reward and blame our leaders for things that are completely out of their control. If the economy is doing badly-- fire the President. If the baseball team did great during the regular season but got swept in the playoffs-- fire the manager. I think we have a strong need to feel like somebody is in control, whether that somebody is our King or our President or our God.

The idea that wise men are in control of our money is, I think, comforting for most people who believe that our economy can be steered towards stability. They will smooth out the natural ups and downs, making the economy heat up when it is getting too cold and cool down when it is getting too hot.

Combined with people's natural risk aversion and suspicion of anything new, I wonder if that will be enough to prevent people from using bitcoin. "If it ain't broke, don't fix it" is a good rule of thumb; maybe bitcoins will only become mainstream in places where the monetary system is obviously broken.

Sunday, February 20, 2011

Why do we pay teachers for advanced degrees?

First, to all of my liberal, union-friendly (and union-employed) friends and acquaintances-- please don't hate me. I'm an equal-opportunity skeptic; I'm skeptical of everything from homeopathy and astrology to fair-trade coffee and the power of unions to improve society.

So, Max in the comments to my previous post says:
1. Public employees in Massachusetts make LESS (total pay and benefits) than private employees with comparable education. The same is true is Wisconsin. You can look it up.

2. No "public good" for higher than average wages? Huh? Isn't that PRECISELY the way you attract good people to do important teach your children? Back to Finland: one crucial way they took an average educational system (as it was in the 1960s and 1970s) and made it the best (as it is now) was to dramatically raise the pay of teachers. That attracted lots of the best the ones who in the United States go right to law school or business school so they can become investment bankers.

Why the heck wouldn't you want to pay people who perform absolutely essential jobs a top wage?
Is there any research showing that teachers with more education (beyond a basic teaching degree) are better at educating students? All the research I've run across says that advanced degrees don't matter.

As for paying people who perform absolutely essential jobs more: I completely agree, as long as they actually do a good job. We have been paying teachers more and more and yet we're not seeing better results. We have run the experiment of throwing money at underperforming schools, but money doesn't work. Listening to a recent podcast from the Center for American Progress (CAP is a progressive think-tank) drove that point home for me (podcast here).

By the way: I can think of a lot of things that are MORE essential than learning where the private sector seems to do a good job with non-unionized workers. Starting with the food and shelter industries.

One of the things that drove me nuts working at UMass in a unionized position was that my job performance didn't affect how much I was paid, or what benefits I got, one iota. Salary was based on years of service, and the union, while I was there, was actively trying to DEFEAT a pay-for-performance proposal.

Maybe I'm weird expecting that if I do a good job I'll be paid more. Wouldn't we get better teachers if we paid them more when they did a great job?

I think employees should have the right to organize themselves to demand better wages and working conditions. But I don't think it is right that most public employees in Massachusetts must, by law, be unionized.

Thursday, February 17, 2011

Why are teachers unionized?

Maybe I should ask: "why do we require that the people who teach our children in public schools pay union dues?"

Don't get me wrong-- I think teachers should be free to join whatever organization they want.

But why do we REQUIRE union membership (or at least payment of union dues) to teach in the public schools?

Do we think teachers are too dumb to negotiate their own salary?

Do we think that school boards and principals and superintendents will trick teachers out of fair salaries and benefits?

Unions are supposed to improve working conditions and get better salaries and benefits for their members, and there is a "free rider" problem if membership is voluntary-- nothing but Massachusetts State Law stops somebody from deciding NOT to pay for a union that is negotiating for everybody.

So it is obvious why unions and unionized workers like laws that require employees to participate in collective bargaining agreements. They get better working conditions and higher salaries and benefits!

I can see the 'public good' angle for better working conditions; working conditions for people in slaughterhouses in 1910 really were terrible, and those terrible working conditions caused external costs that weren't paid by the slaughterhouses (like sick or injured workers that had reduced life expectancies). Working conditions for teachers in 2011 everywhere besides inner-city schools seem pretty good to me, though, and I doubt they'd be worse if the teachers' union disappeared.

I can't see any public good angle for higher-than-average wages and benefits. And if you disagree and think teachers are overworked and underpaid and have to put up with tyrannical bosses and bad working conditions... then tell me again why teachers are forced to pay union dues? Wouldn't they be better off just keeping all that union dues money for themselves?

Tuesday, February 15, 2011

Why argue over trivia?

Scott Sumner has a very interesting take on why we spend so much time arguing over the little stuff and ignoring the big stuff:
I would like to argue that most of the really important public policy issues are not even part of the ongoing debate in the press. Here are some examples:

1. The huge rise in occupational licensing.

2. The huge rise in people incarcerated in the war on drugs, and also the scandalous reluctance of doctors to prescribe adequate pain medication (also due to the war on drugs.)

3. The need for more legal immigration.

4. The need to replace taxes on capital with progressive consumption taxes.

5. Local zoning rules that prevent dense development.

6. Tax exemptions for mortgage interest and health insurance.

These 6 policy failures impose enormous damage on the country, far more than the issues typically discussed on the evening news. Why aren’t they discussed? I would argue that it is partly because the disagreements tend to break down on values, not ideology. Most idealistic intellectuals agree with me on all of these issues. They are not issues that divide the left and the right. It’s also true that most real world politicians agree on these issues. However their views are exactly the opposite of the views of intellectuals. Hence there is no “policy debate” in either the political or intellectual arenas, and hence no “fight” for the media to report. They become invisible issues.
I've written about a few of those things in the past. Even local news seems to focus on "small in the grand scheme of things" issues. For example, the school Superintendent search has dominated local news for the last month or two. But how important is the Superintendent in the grand scheme of things? It seems to me we like to think that a Wise and Strong Leader will Lead Us to the Land of Milk and Honey, but in reality how our kids do in school is really much more a function of how we treat them at home than who is pushing pencils in the head office.

Yeah, yeah, I'm probably underestimating the impact a great superintendent can have on a school district. But in all the opinion pieces I've seen in the local news about the superintendent search I don't recall seeing even one person explaining exactly HOW a great superintendent might vastly improve the screwed-up school system we're stuck with...

Sunday, January 02, 2011

When doing nothing is illegal

My last post got me thinking about how to rejigger things to encourage more donations to private charities.

Maybe we should mandate donations to private charities. Instead of raising taxes on the rich, require that they give X% of their income to the 501(c)3 charities of their choice.

I think that would definitely be better than sending the money through the Washington DC (or Beacon Hill) tax-money-sausage-factory... but would it be constitutional?

Libertarians and conservatives are arguing that the Individual Mandate in Obamacare is unconstitutional. That you can't claim that doing nothing (not buying health insurance) is illegal.

There is at least one thing you're legally required to do in the United States, even if you do absolutely nothing besides being an 18-year-old male. I was legally required to register for the draft; the Supreme Court decided that the constitutional power to "raise and support armies" makes that OK.

I can't think of any other laws that apply if you do absolutely nothing-- are there any? You have to pay income tax, but only if you earn income (which is doing something-- and besides, imposing a national income tax required a constitutional amendment). Requiring that rich people donate to charity is logically just another form of income tax... but legally? I dunno.

To keep the lawyers happy we'd probably have to jack up the tax rates on the rich and then give a tax credit for charitable donations. Which would make the whole scheme complicated enough you'd get the right complaining about high tax rates and the left complaining about rich people using tax deductions to get out of paying their fair share.

Saturday, January 01, 2011

Charity and diversity

Sam Harris over at the Huffington Post has a "New Year's Resolution for the Rich."

Re-reading it, I'm a little confused as to what he's proposing-- he wants rich people to create "a mechanism that bypassed the current dysfunction of government, earmarking the money for unambiguously worthy projects..."

I'm confused because I thought that is exactly what private charities do-- you give money to charities that you think are worthy. He seems to want a charity that everybody agrees is worthy, but I don't think such a thing exists. He might think more education for already-wealthy Americans and alternative energy research are unambiguously worthy, and I agree that those are worthy charities.

But I'm more sympathetic to the priorities of the Gates Foundation-- I think saving children overseas from dying of malaria is a better use of charity dollars than making college free to all the kids who are lucky enough to be born in the U.S.A.

Why are people on the left generally so fond of one-size-fits-all solutions? Why do they talk so much about celebrating diversity, but are so anti-diversity when somebody suggests decentralized solutions to problems like saving for retirement (private accounts for Social Security) or public education (vouchers)?