The Economist's Cookbook

There has been a lot of hubub over the so-called "Gender Gap" between the payscales of women and men in the workplace in both the US and in some countries in Western Europe. In a culture where it is anything but PC to assume that there are differences between the sexes, there are some interesting notations to be made. Ironically one of which is a rather insightful comment from someone that I completely disagree with on many issues: Peter Singer. Yeah, the guy that basically jump-started the animal liberation movement. But in writing about the differences in pay scale between men and women. He makes a very interesting observation:

While Darwinian thought has no impact on the priority we give to equality as a moral or political ideal, it gives us grounds for believing that since men and women play different roles in reproduction, they may also differ in their inclinations or temperaments, in ways that best promote the reproductive prospects of each sex. Since women are limited in the number of children they can have, they are likely to be selective in their choice of mate. Men, on the other hand, are limited in the number of children they can have only by the number of women they can have sex with. If achieving high status increases access to women, then we can expect men to have a stronger drive for status than women. This means that we cannot use the fact that there is a disproportionately large number of men in high status positions in business and politics as a reason for concluding that there has been discrimination against women. For example, the fact that there are fewer women chief executives of major corporations than men may be due to men being more willing to subordinate their personal lives and other interests to their career goals, and biological differences between men and women may be a factor in that greater readiness to sacrifice everything for the sake of getting to the top.1

It would seem that Singer makes an interesting evolutionary argument for the difference between men and women. I'm not saying here's right, but it did get the wheels turning a bit. I do respect him for not falling into the typical feminist argument of "THERE ARE NO DIFFERENCES BETWEEN THE SEXES!" line that I have heard from people and has actually been espoused by feminist philosophers. To throw a bit of libertarian economics into Singer's argument (which I'm sure would give him a stroke as the guy is a raging socialist and "social justice" advocate): It would seem that, if we accept Singer's argument that males face an evolutionary incentive given our background and genetic programming, we should expect them to have a higher drive to succeed as it increases their potential mate pool. And this isn't that far-fetched given that we know that women in general highly value the stability and ability to provide in a mate.

There is also another reason that I've seen advanced by several Economists with some interesting data to back up their statement that: Women make less during their child-bearing years because companies are discounting the value of their labor inputs because the chances are very good that these women are going to want to have children. As a result they are basically lost to the company for at least 12 months. There's not exactly a temp service for a VP of Plant Operations. I can't seem to find the study right off the top of the net, so if someone has a link to the actual paper I'd appreciate you sharing it. What they noted was that this so-called "gender gap" seems to disappear in post-menopausal women ... I found that, extremely interesting. Yes yes, Correlation is not Causation. That doesn't mean it doens't bear more investigation.

1 Peter Singer, A Darwinian Left: Politics, Evolution, and Cooperation (New Haven: Yale University Press, 2000), pp. 17-18.

Oh my... Walter Williams posts up a piece on how minimum wage hurts workers and someone in the House throws a hissy fit. Is anyone surprised?

I'll just leave this here, because it's ... kind of relevant:


I mean come on, these people in congress get to decide fiscal and economic policy!

And people wonder why we're in a financial mess in this country...
H/T to Cafe Hayek.

So I've finally decided to blog about this because the Rampant ignorance is simply overpowering. Discussions I've had regarding this topic have sprung up on several forums and message boards over the net and as a result I will be using some of this snippets to make my case why not only is the AZ bill a bad idea, the entire Federal Immigration system needs to be trashed and overhauled.

So let's start The_Chef's Talley of the ways that Illegal Immigration doesn't matter.

1.) America was founded upon an idea of free choice. Tragically we've become a society of command and control. This country was built by people from every background. Nearly every group of immigrants that first came to these shores worked in jobs that were demeaning or generally undesirable to the current residents of American soil. I cite as examples the influx of Asians that were instrumental in the development of West Coast Railways, Blacks forcibly brought to America as Slaves, Latinos who helped to build the Southwest and actually helped Texas win her independence from Mexico and Santa Ana.

The majority of immigrants after the 1840s did not hop over a border or an ocean and suddenly smash their way into the upper crust of society. It took generations of work, sacrifice, and effort for all sorts of certain racial and national groups to work together. As a result our policy should be "Come, come build yourself and your family a better life." Right now we have a policy of "Get The Fuck Out! (Unless you're related to a citizen or have a PhD in a useful field)"

So what does it take to become a Legal US Citizen? Funny you should ask:
http://img693.imageshack.us/img693/918/immigration764383.jpg
Yep a huge freaking flowchart about the Immigration process. Courtesy of Reason Magazine.

2.) I've heard the argument from some people that these "illegals" are putting our social programs under additional strain and are hurting the "American Taxpayer". Well congratulations, you have just made an excellent argument against re-distributive public policy. Ya see, when you promise to give free shit to people, more people will want to take advantage of such a system.

Welfare, Social-Security, Medicare, Medicaid, etc. are nothing more than incentive programs. We may not want to call them that, but let's quickly review:
Welfare: Provides a subsidy to be poor/below X wage bracket. When you subsidize or incentivize a certain behavior you are bound to get more of it. If you deny this premise, you clearly need to pick up Henry Hazlitt's Economics in One Lesson before trying to digest anything else I have to say.
Social-Security: Creates an incentive to spend rather than save. If the Government is going to pay you $X upon retirement, then to maintain a similar standard of living you would not save $X during your labor years. This lack of saving is actually incentivized as well by a Federal Monetary Policy of massive inflation of currency that destroys Savings and harms both the poor and the old people because the prices of goods goes up, while the limited amount of income stays either stagnant or "sticky".
Medicare/Medicaid: Oh these two fraud and promissory programs are really a debacle. With the rising costs of health care which have largely been due to the actions of the Federal Government, the AMA, and the heavy restriction of medical care and the bureaucracy surrounding it, we are literally just going to hand out cash to people for being ill.

Now I'm not saying that we should let people die, but the simple fact of the matter is that there has never to my knowledge been a federal government program that comes in under budget, shrinks with time, or creates less red tape. We have helped to incentivize the over-use of medical facilities and procedures, being poor, and not saving. People over-consume a good when the costs are defrayed and it doesn't come out of their pocket.

These programs are quite literally going to bankrupt this nation. And I do mean that literally. Our sainted Government has promised tens of trillions of dollars to fund these programs.

So if the "illegals" take advantage of our political leader's decision to put a gun in the face of the American people and take their money to hand out to others, then the problem is the collectivized redistribution of resources, NOT the illegals who are hopping the border to work and maybe get a handout. It's not their fault we've created incentives to take advantage of us. IT'S US! WE ARE AT FAULT!

3.) Many of the arguments I hear from Right Wingers amount to two things:

I.) "They took our jerb.... they teeekk errrr jerrrrrrbbb.. teeeyy tttteeekkkkk errrrrrr jerrbbbbbbbb." This assumes that the jobs "belong" to someone other than the company. They own the job, they can fill it as they please. If they want to put a goddamn giant squid in charge of their Marketing Department that is their business to do so. I don't care if they hire some Mexican to cut lawns, or someone from Nicaragua to pick lettuce, it is THE COMPANY'S job slot to fill.

II.) "But ... But ... But they are breaking a LAW!" Well in many states so are you if you're getting a blowjob, having anal sex, modifying your car illegally, not declaring your online purchases on your taxes so that you have to pay sales tax (This can be a felony by the way), if you own "prohibited" firearms in states like Illinois, Cali, or if you ever carry a firearm in a state where it is not legal to do so. LAWS do not decide whether something is morally right or wrong. They determine what politicians have determined to punish. It is "illegal" to do all sorts of things that the government has no business in. So FUCK OFF! The legality of an issue is completely irrelevant to the issue.

4.) Markets want to clear. This is very simple Micro/Intro to economics and I find that this argument goes completely over the heads of most people because the majority of people are economic morons. I'm not saying this to demean them per se, I'm saying this because the VAST majority of Americans don't get it, and they don't want to.

We know that labor markets are constantly shifting. There are not a static number of jobs. Jobs are constantly created and destroyed. A great example is the shift in labor from NE steel mills to the Dakotas for jobs in rare metal and mineral mining/processing.

5.) As part of this discussion one of the guys I was intellectually fencing with hit me with this:

So it's OK for a company to reap the rewards of existing in an economy such as the one in the US, where there is need for it's services and people can afford to pay it for it's service, all the while paying wages that would be expected in a much poorer nation? This is unethical to me, and if you can explain why it's not, I'm all ears.

Wages are a function of supply and demand. The idea of working for X wage is/should be the determination of the worker and the market for labor.

In other words:

If person X is willing to work for Y wage, and voluntarily contracts to trade labor for wage at that
rate I don't care. If person X is told "You're working for Y wage and you can't say no and you can't leave the company" by his employer then I have a problem with it. Contracting at the point of a gun is not a contract, it's coercion.

Normally when it comes to wage, you get what you pay for, the better the wage/benefits, the better the workers you can attract. (No this is not a universal, I'm making a generalization, but one that I feel can be backed up by piles of both anecdotal examples, economic principles, and mountains of data).

Even if he's right, and it IS unethical ... how do you plan on fixing the problem? Minimum wage laws? Those create unemployment in the poorest segments of society and price workers out of the market.

The way I see it is that by instituting market reforms across the board and allowing the chips to fall where they may you get better outcomes. Take the medical industry, yes it's expensive, but he majority of groundbreaking research is done in the US, as a result, in order to recoup those losses, the price has to go up a marginal amount.

6.) The biggest kicker of all:
The US has over 70 TRILLION dollars($70,000,000,000,000) in unfunded liabilities and Government Debt/Debt Interest and you are worried about some poor Latinos jumping the border?! Good GOD! You should be more worried about the US currency/economy collapsing and hyperinflation!

If you understood the implications of those debts and liabilities you should be out there calling for the lynchings of 99% of both the Executive and Legislative branches of Gov't!

But no, you're complaining about roughly 10 million people who want to stop eating dirt and give their kids a better life. Yeah you're a real American Hero...
-------------------------------------------------
Keep in mind that I'm talking about very broad and very radical reforms to the status quo. But this country was founded as a series of colonies where people could basically do what they wanted. I don't see why people have to be controlled. Come to the border, bring some sort of ID, we make sure you don't walk in with a nuke or a vial of small pox, and BAM in a month or so, you're a US citizen. That's what the reform needs to be like.

From Cafe Hayek:

The U.S. Department of Agriculture indicated it will allow a small increase in U.S. sugar imports this year, a decision that is likely to do little to quell complaints from confectioners and processors about tight supplies.

So we're going to relax quotas on sugar. We juuuuust couldn't get rid of them could we? No of course not ... that might increase the occurrence of *cue scary music* CAVITIES and competition. Both of which we all know are evil and bad. Morons.

Here is the other bit that really pissed me off:

Mr. Vilsack’s comments raised the prospect of increased demand for global sugar and drove prices up 2.7%, or 0.44 cent, to 16.98 cents a pound on ICE Futures U.S. Prices for U.S. domestic sugar dropped 2.1%, to 30.8 cents a pound.

So we pay almost double for sugar because of all this crap ... and you wonder why your favorite soda has High Fructose Corn Syrup instead of real sugar, which is actually better for you than HFCS.

From the Volokh law blog.

I saw this over at Radley Balko's The Agitator blog and thought I'd give it a glance. And damn ...

It looks like this will be ramrodded through via executive order. From what people can tell from the drafts this is bad news for anyone that does anything on the internet.

Like this for example:

Paragraphs 2 and 3 mandate a statutory damages provision in civil copyright law, as under US law — so that copyright holders, even without the need to demonstrate any measurable harm whatsoever, can recover awards thousands of times greater than any possible damage they may have suffered.

Yeah, because that's totally cool. Some kid downloads the latest album from X band, the company goes after him for $70K instead of the $12.95 cost of the album.

I do find this funny given that much of the non-mainstream music genres (like metal) have embraced the download the album first and see what it's about rather than throwing a collective hissy fit. many of these bands wouldn't get any exposure any other way. An excellent example is the Progressive Death Metal band Persefone (I blog about them here) who is from the tiny country of Andorra. While tey aren't very big in Europe or the US yet, they are huge in Japan. Their success has been directly tied to the international spread of their music through both legal and "illegal" means.

I still want to know how you regulate an idea or regulate information when the means to pass that data are as easily accessible as they currently are. Intellectual property rights are a sticky debate to begin with and I wonder what the future holds if the international community continues to "clamp down" on the spread of ideas, even if that spread is "illegal".

I found this pic very funny because what has happened is that the more albums circulate for "free" on the internet, the more many of those bands see their revenues increase from the live shows.

So it funny to watch all of the squabbling and hand wringing about how awful free markets are in the wake of this global financial swamp we've dropped ourselves in. Here is an op-ed from the New York Times (Yes yes, I know always a bastion of free market and libertarian thought) which is trying to use this crisis to suggest that isolationism is a way to protect against the global market place tanking your local marketplace.

Hmmm well technically this guy is right. If a country doesn't globalize or throws up large barriers to foreign investment, then there is a buffer to protect a state from fluctuations in the global economy. But is this a beneficial thing? Protectionist countries usually have a much lower growth rate for small businesses because they will limit the amount of foreign investment, which shrinks up the market for loanable funds or it directly shrinks the possibility for Foreign Direct Investment. Closing down those cash flows harms businesses and entrepreneurs.

The other problem with this loon's article is statements like this:

In contrast, the countries that opened the most to the international capital markets, and that sought to bring in business with relatively lax regulations, now are suffering the most. Iceland was the wonder economy of the world; now it is broke.

Iceland is broke because the banks SERIOUSLY over-leveraged themselves and lets face it, lots of banks got into investments that they have NO business being involved in. When an institution piles itself in risk and then fails, why is anyone surprised? So the Globalization is not the problem, the malinvestment by banks is the problem not the lack of "regulatory framework".

But the world might be in better shape now if more countries had chosen that route[financial autarchy], and thus been more insulated from the credit storm that has left companies and countries around the world fearful that they will be unable to obtain needed financing.

Right, If countries had chosen autarchy, then companies would sure as hell be fearful that they would be unable to attain the needed financing. If you shrink up a market, goods become more scarce. This goes for a market for investment just like it does a market for apples. This is not ROCKET SCIENCE PEOPLE!

Oh a chart, I like charts. Pictures tell cool stories.

This kind of idiocy will bury this country and it's views like Floyd Norris' (yeah the guy who wrote the article) that will drive this economy into the ground and begin to dig. Closing our borders to capital is NOT how you prevent or even mitigate a financial mess like we have on our hands.

Don Boudreaux over at Cafe Hayek put it this way:

But the Times should be consistent and have, say, one of its medical reporters write about the upside to suicide. Suicide's practitioners, after all, inoculate themselves against all future illnesses.

Bingo!
[Hat Tip to Cafe Hayek]

I saw this over at Vulcan's Hammer and started giving it some thought.

How to piss off our friends

Europeans are not very happy about the "Buy American" clause in the current stimulus bill:

The EU and Canadian ambassadors to Washington have already warned that the clause could promote protectionism and trigger retaliatory moves.

So I hopped over to read the BBC article.
What do I find? This:

The clause seeks to ensure that only US iron, steel and manufactured goods are used in projects funded by the bill.

A European Commission spokesman said it was the "worst possible signal".

However, German Chancellor Angela Merkel said President Obama had assured her the US would not follow protectionist policies.

Hmmm well right before the Great Depression there was this bill called the Smoot-Hawley Tariff Act. It "raised U.S. tariffs on over 20,000 imported goods to record levels. In the United States 1,028 economists signed a petition against this legislation, and after it was passed, many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports plunged by more than half. In the opinion of some economists, the Smoot-Hawley Act was a catalyst for the severe reduction in U.S.-European trade from its high in 1929 to its depressed levels of 1932 that accompanied the start of the Great Depression."(Via Wiki)

So ... we're going to try this again? Or at the least we are going to try a version of this again. This is completely asinine. It is completely out of bounds. Hell even Greenspan thinks Protectionism is a bad policy:

Protectionism will do little to create jobs and if foreigners retaliate, we will surely lose jobs.
- Alan Greenspan

When will the political parasites in DC wake up? Will they wake up if we stir them from their complacency?