Saturday, March 11, 2017

Today’s liberalism is an anachronism - from Shelby Steele

Some quotes from the Shelby Steele article linked below that I really liked. My italics
"America became stigmatized in the ’60s as racist, sexist and militaristic, it wanted moral authority above all else. Subsequently the American left reconstituted itself as the keeper of America’s moral legitimacy. …From that followed today’s markers of white guilt—political correctness, identity politics, environmental orthodoxy, the diversity cult and so on.
This was the circumstance in which innocence of America’s bigotries and dissociation from the American past became a currency of hardcore political power. Barack Obama and Hillary Clinton, good liberals both, pursued power by offering their candidacies as opportunities for Americans to document their innocence of the nation’s past. …
For this man liberalism was a moral vaccine that immunized him against stigmatization. For Mr. Obama it was raw political power in the real world, enough to lift him—unknown and untested—into the presidency. But for Mrs. Clinton, liberalism was not enough. The white guilt that lifted Mr. Obama did not carry her into office—even though her opponent was soundly stigmatized as an iconic racist and sexist.
Today’s liberalism is an anachronism. It has no understanding, really, of what poverty is and how it has to be overcome. It has no grip whatever on what American exceptionalism is ... Instead it remains defined by an America of 1965—an America newly opening itself to its sins, an America of genuine goodwill, yet lacking in self-knowledge.
This liberalism evolved within a society shamed by its past. But that shame has weakened now.

This liberalism came into being not as an ideology but as an identity. It offered Americans moral esteem against the specter of American shame. …
Let’s stipulate that, given our history, this liberalism is understandable. But American liberalism never acknowledged that it was *about white esteem rather than minority accomplishment*. … Liberalism is exhausted because it has become a corruption."

Monday, March 6, 2017

More musings on the passing of time

I have entered my 70th year. I cannot even remember ever anticipating getting this old. I remember thinking about 60, yes, but 70, that was so far away. Inside I am still 30.
The way my life has unfolded bears a tenuous resemblance to the way I imagined it unfolding. I wanted to be an economist, to teach and write, and I have achieved that in a way I could never have imagined, gaining some real-world business experience along the way. And if things had continued the way they are now, I would have been more than happy. Who would have thought that this year will be my busiest for quite a while - conferences, seminars, book project, an exciting institutional project, and more articles to add to the uptick in recent years (thanks to my young colleague Nicolas Cachanosky for a lot of this).
Add to this many family blessings and I conclude that I am the richest man alive.

Monday, February 20, 2017

Musings on the mysteries of mortality

Musings on the mysteries of mortality.
- It is a short ride really
- Upon entering the house of a close friend who has recently died at a young age - your age. You know he is gone, but the unconscious mind still uncontrollably “expects” see him sitting where you last spoke – his eyes, his expression, the timber of this voice, his special sense of humor, all as they ever were – it cannot accept the notion that all that he was has now somehow suddenly stopped – he has not left the room – he is gone forever. Sadness and frustration overwhelm you.
- 50 year high school reunion. You show up expecting to see your classmates and all you find there are old men and women.

Saturday, February 11, 2017

An early stocktaking

The two issues I identified in my early evaluation of the prospects for the Trump administration also seem to be the most polarizing. I refer to immigration and trade. Educational reform runs a close third. I discuss them in reverse order.

I believe education is the one with most potential for rapid and large benefits. The federal government plays only a minor role in public education, but, if owing to the change in philosophy at the top, one or two states adopt a state-wide voucher program, the dam protecting the public school monopoly will burst (this is Milton Friedman’s metaphor). In very short order, a flurry of entrepreneurial activity will enter the K-12 education industry and parental energy will be mobilized in the interests of their kids. Within a few years a variety of better options for American school-children will be routine. I expect vigorous opposition at every turn, highlighting everything that even smells vaguely like a mistake, suggesting that the less than perfect condemns the better, as if it could be any worse for kids in the inner city than it is now. But the benefits will be huge and not only for the children via better education and earning opportunities, but also for their families and for the whole country, to put America back into the community of nations with high levels of proficiency across the board. Dare one hope?

On the matter of trade, it seems to me unambiguous. Restricting trade that is peaceful is uniformly a very bad idea. Trade is the engine of growth. We should never restrict trade to make something at home that we can import at five times less the cost - as with Mexico. One would think that any successful businessman would know that. How much of this is posturing for political purposes and how much trade and international investment in the U.S. and by U.S. companies abroad will actually be affected, remains to be seen. Again fingers crossed.

So to the matter of immigration. This is by far the most difficult issue and the one I feel most confused and sometimes isolated about. Movement of people across borders is, of course, related to movement of goods and services, and investments, across borders. In general this is an unambiguously good thing – a win-win situation – though of course those whose wages are protected by the absence of low-wage immigrant workers could be hurt. I believe, in the case of Mexican immigration, the number of losers and the extent of the losses are very small, because Mexican labor is complementary to, not competitive with, workers already here. More than thirteen million illegal workers do jobs that the rest of us are very happy to have them do. I cannot see that illegal immigration of this kind hurts anyone. It saddens me greatly to read in the Dallas Morning News this morning of the rounding up of hundreds of undocumented people for deportation. Who gains from this deportation? It diminishes us all. (And this is not new with Trump. Obama was a big deporter of illegals.) 

Whatever violence is associated with this immigration is most likely connected to the drug trade. It is not an immigration problem, it is a drug-enforcement problem. The best way to deal with that is to decriminalize the drug-trade. The drug-war cannot be won. Time to abandon it. And immigration on our southern border is simply not a problem, it is an opportunity, an opportunity to turn an apartheid situation into a integrated labor market with extensive immigration reform. The last thing we need is a wall.

But there is a difference between movement of things and movement of people across borders. People bring attitudes and intentions with them, they can get sick, they can die, they are animate. It cannot be denied that not all immigrants are alike in this regard. As I see it, there are two problem sub-cases connected to immigration, dependency and danger.

Dependency  - it cannot be denied that when people attempt to cross borders out of extreme need, desperation, into a welfare state where those with resources are forced to share those resources with the immigrants a serious moral dilemma exists. This is a really problematic second-best situation. It is fundamentally a problem of the welfare-system itself. But, given the existence of automatic mechanisms to force some to pay for the needs of others, a large influx of needy people could spell economic ruin. And, even if such mechanisms are altered to deny immigrants welfare assistance, the potential exists that the large numbers of immigrants may arrive anyway and constitute a humanitarian crisis beyond the capacity or willingness of private individuals to deal with – as we saw in Greece, Hungary, and other places recently as a result of the Syrian refugee crisis. Who can blame a population for collectively trying to respond to this by setting up some sort of barriers? The origin of the tragedy lies not with them but with the chaos in Syria. There are no simple answers in this kind of situation.

Danger – by the same token it cannot be denied that there are people in the world who are committed to the destruction of everything we hold dear. It cannot be denied that these people are dangerous. So the risks associated with allowing such people to immigrate may be real and one cannot fault an attempt to assess and deal with this risk. My condemnation and alarm at the recent travel ban imposed by Trump is not that this danger does not exist, but that, at the present moment, in America, it actually is not very great, and that danger will not likely be decreased by the kind of shot-gun approach of an across the board ban that affects all Muslims (including students and green-card holders and refugees) from those selected states. True they are states that sponsor terrorism, and for that reason greater scrutiny is already applied to people coming from there, directly or, more likely, indirectly. The harm done to innocent people by this ban is simply not justified.

Perhaps one of the most appealing aspects of candidate Trump was his refusal to be politically correct. I imagine many people voted for him because they were just fed up with the patronizing, whining refusal of the Progressives, personified most visibly by Barak Obama, the refusal to confront simple realities for fear of offending people; specifically to confront the issue of radical Islam, calling it by name, and examining its connection to Islam more generally. No one was served by this condescendingly evasive attitude, and, in fact, it probably played a large part in the election of Donald Trump. So when thinking about Muslim immigration, one should, for example, confront the reality that now exists in France, with its lawless Muslim ghettos openly radical and hostile to the very nation that took them in. Surely it is legitimate to ask, what did they do wrong, and what are the chances that we could suffer the same fate? What makes us different enough to believe that it will end better here?

I actually do think we are different and that it would end better here. I look at the large Muslim population we have already and how integrated they are into American life, not poor, isolated and hostile, especially the next generation. But the conversation is certainly worth having. If I am right, what explains the difference?

And the conversation is worth having undeniably because of the very nature of Islam itself. There are problems there. If we don’t talk about them the dangers of Islamophobia are greater. I think many Muslims understand this. Many non-Muslims need to be reassured.
As a world-view – according to its law-codes – Islam strikes most Americans (and “westerners”) as terribly problematic. Despite deflections by its apologists, it is full of violent, misogynistic, deeply anti-individualistic ideas and commands, and overt anti-Semitism. And the radical version of this accentuates those very elements that we find repugnant and ignores those we find reassuring. The very problematic nature of Islam as a set of doctrines needs to be counterpoised to the reality that Muslims in America do not seem to abide by them – though polls show that, worldwide, most Muslims affirm them. In North America, the vast majority of Muslims, in spite of the severe law codes of their religion, are peaceful and, in varying degrees, open to assimilating western ideas. The everyday lives of moderate Muslims when they work and play and pray, do not make the news. There is very little intellectual activity of a theological nature grappling with the severity of fundamental Islam and how a modern Muslim might live with them without denouncing Islam. The most common response appears to be to ignore those strictures that are not perceived to fit with a modern life, but not to talk much about it and perhaps take offense when asked about it. By contrast, Jews and Christians have no problem distancing themselves from the excesses of their fundamentals (Jews) or their history (Christians). Islam has not come to terms with the modern world in the same way. Islam in the west appears to be just beginning to deal with that.
Donald Trump is right about one thing. The real-world terrorism that emanates mostly from the middle-east and from Pakistan, is inspired by Islamic teachings. When people naively say “Islam is a religion of peace” they are ignoring serious internal contradictions within the fabric of Islam - at the very least that it is a religion explicitly dedicated to world domination by violence if necessary. What they mean to say is that Muslims are by and large, like the rest of us, peaceful people. I am sure that is true. And when Islam is able to make its peace with the world, when it is just another lifestyle choice, a tradition among many, then the world will be a better and more tolerant place. Those Muslims living in the west can and are helping to bring this about in an environment of free and open discussion.  Perhaps that will be a coincidental benefit of the age of Donald Trump. 

Monday, January 23, 2017

Facts relevant to the East Jerusalem Situation.

Ok, so the story linked below is getting a lot of play. I am not an expert, but some basic things should be known and are never reported.
The change referred to involves the issuing of permits to build homes and apartments on land near Jerusalem. Jerusalem is a fast growing metroplex. There is a shortage of housing for people who want to live there. Right now Jerusalem in under Israeli sovereignty. The political backdrop is that the vision of the Palestinian leadership, the Palestinian Authority, which is the current incarnation of the Palestinian Liberation Organization (PLO) sees Jerusalem as part of any interim or final settlement with Israel (like a two-state solution). Israel and most Jews dispute this vigorously. If this Palestinian demand is a precondition for a settlement then the whole thing is a non-starter. So to say that Netanyahu's action in allowing the issuing of housing permits kills the two-state solution is not accurate. It is equally the unrealistic Palestinian demand that kills it.
What are the relative merits on each side of this issue of Jerusalem? If one wants to play the ethnicity game then it should be known that Jerusalem was a Jewish city long before it was a Muslim city and that it is doubtful whether Muslims ever had a majority in the city before the 1949 war (when the Jewish and many Christian inhabitants fled). The Jewish quarter was taken over by Muslims.
“The Jordanian commander is reported to have told his superiors: "For the first time in 1,000 years not a single Jew remains in the Jewish Quarter. Not a single building remains intact. This makes the Jews' return here impossible." The Hurva Synagogue, originally built in 1701, was blown up by the Jordanian Arab Legion. During the nineteen years of Jordanian rule, a third of the Jewish Quarter's buildings were demolished. According to a complaint Israel made to the United Nations, all but one of the thirty-five Jewish houses of worship in the Old City were destroyed. The synagogues were razed or pillaged and stripped and their interiors used as hen-houses or stables.” (
So the notion that Jerusalem is an historically Muslim city is without basis in fact. It is more accurately historically an ethnically mixed city – which is what it is now under Israeli sovereignty. The two biggest ethnic groups are Jews and Arabs (there is an increasing number of Christians living there, but they are a small minority). Jewish and Arab neighborhoods are intricately intertwined and there is no way in any future settlement that they can be unraveled without considerable upheaval. The Arabs living in east Jerusalem work in Israel and have a standard of living a magnitude above those living in the West Bank in an economy segregated from the Israeli economy by the policies of the PA and the reaction to those policies by the Israeli government. So it is extremely doubtful that Jerusalem Arabs would want to live under the PA in any future settlement.
Having said this, there is ample ground for a critical assessment of Israeli housing policy. In general, the Israeli government’s position on land ownership is problematic. Too much of it is owned by the government (I would prefer it all to be private, but this is the age of nation-states). However, for government owned land, access to lease is officially open to all residents, Jewish or Arab (or anyone) and the same is true of privately owned land ( It is probably true, that, in practice, Arabs are discriminated against when it comes to leasing government land.
So, a legitimate cause of concern about the newly available housing permits in Jerusalem is whether or not these permits will be politically granted in the service of the agenda of the religious and nationalist vision of the right-wing political parties. Those concerned for the well-being of the Palestinians should focus of the details of urban development in Jerusalem. Will Arabs have equal access to lease and buy land pursuant to the issue of these new permits? A very valid concern. An open market militates in favor of good relations among the residents.
In terms of the bigger picture, the robust development of Jerusalem, fast becoming Israel’s second largest high-tech sector, is an opportunity for entire West Bank should a way be found to peacefully integrate it into the Israeli economy. A one-economy solution is compatible with a variety of political arrangements.

Saturday, January 21, 2017

It is difficult to change one's mind regarding long-held beliefs.

Milton Friedman was a genius in discussing social policy. He always seemed to have just the right words to communicate to and disarm the critics of his argument, or his proposals. An economy of expression and a master of clarity.
From reading him I came to believe in free markets. But I remember it was not a pleasant experience - not at first. When he opposed federal aid to victims of flooding located in flood planes, I just "knew" that he could not be right, but reading his logic, I could not figure out where he was wrong. And so it was with many similar issues. I felt anger and resentment at him. So damn sure of himself with his ice-cold logic.
I am no Milton Friedman, but I frequently encounter this reaction when I use the same logic against free-market critics. I am sure many of my like-minded friends do as well. Instead of rational counter arguments I encounter hostility - an impugning of my motives, a labeling of my position, a refusal to engage with the logic. Given how I felt back then I understand this reaction; it is understandable, but it is not excusable - not if it is stubbornly maintained. I came to change my mind, once I got past my ego, and became an admirer of Friedman. Perhaps I am asking too much when I am expecting others to do the same.
[I am not referring to those who have a coherent counterargument, based, necessarily on a different worldview. I am referring to those who have no logical counter argument, but just refuse to accept the implications of that.]

Tuesday, January 17, 2017

So how do you feel about President Trump?

Many Americans, myself included, will not be sorry to see the end of Barack Obama as president. The victory of Donald Trump, arguably, owes much to Obama’s many arrogant failures, including prominently the Affordable Care Act (ACA), known unaffectionately as Obamacare. To say the least, Trump is an unlikely candidate for president, and an even more unlikely winner. So, how should we feel about America’s next president, what should we expect?

Clearly there are grounds for some optimism. Trump has promised, and appears to be actively preparing for, a major reform of the ACA; for a significant change of course on environmental and climate policy to remove stupid, debilitating regulations on manufacturing and energy production; a change in education policy to allow for parental choice so kids can escape from the failed public school system; a change in labor policy (where Obama had acted arbitrarily and illegally to support labor unions); and most importantly, a reform and reduction in corporate and other taxes. These and some other proposed initiatives are promising. Some of the people he has nominated for his administration appear committed to following through on these. Let us hope they do.

Also significant for readers of this blog, is the fact that Trump promises a 180 degree turn on Obama’s barely disguised adversarial relationship with Israel. Trump seems to understand the hypocrisy of most of the world vis a vis Israel as evidenced through the actions and deliberations of the United Nations.  And on this, I believe he joins the majority of the American people. Going forward the BDS movement and the UN will not find it as easy to pursue their anti-Israel/anti-Semitic agendas as it was under Obama.

But, there are also grounds for concern. Trump is nothing if not unpredictable. It is hard to know what he really believes or on what he will follow through. Some of his nominees seem to have opinions at odds with his, and with other nominees. So will we have an administration that lacks coherence? This would not be good for the American economy, where the biggest problem for private investment has been uncertainty about government policy.

In addition, Trump articulated some specific policy agendas that strike me as very problematic. He promised to rebuild America’s infrastructure in a way that echoes old-style Keynesian demand-side stimulation policies – policies that have been tried and have failed in every generation since Keynesian economics was born in the 1960’s. One of his closest advisors describes himself as an ‘economic nationalist,’ which is very troubling. And this relates to trade policy, the most troubling of all his proposed policies. From what he says, Trump seems not to understand the most basic of all economic truths, the truth that trade is a win-win proposition, both parties to a voluntary trade gain from it. When he talks about trade with China and about reneging on America’s recent Atlantic free trade agreement and NAFTA, he implies that somehow America is losing from free trade. He emphasizes the losses that some Americans suffer by being unable to compete with foreign competitors and ignores the huge gains to others – producers, workers and consumers – that result from trade. He promises to impose trade barriers that protect local workers. This is known as Protectionism, a policy, like Keynesianism, that has been tried many times and failed, but just refuses to die. Protectionism has the potential to destroy economic dynamism and growth completely. Also, his stated position on immigration is very troubling to me.

How much is talk and how much will translate into significant policy remains to be seen. Trump cannot act alone. He will need the Congress to legislate and fund. I am hoping for the best and fearing the worst.