Random Links LV

Consumerism & Signaling:

We evolved as social primates who hardly ever encountered strangers in prehistory,” Dr. Miller says. “So we instinctively treat all strangers as if they’re potential mates or friends or enemies. But your happiness and survival today don’t depend on your relationships with strangers. It doesn’t matter whether you get a nanosecond of deference from a shopkeeper or a stranger in an airport.”

DATD & Unit Cohesion: Anecdotal, but still interesting.  Wonder if this is a representative sample.

They Also Serve:  Why not everyone may be cut out for college.  And why that’s okay.

Technology & the Financial Crisis:  “Models Didn’t Bring Down Wall Street; People Brought Down Wall Street”

I expect one day we’ll have Luddites citing the Gaussian copula & computer modeling as the “root cause” of the crisis.  The above would be something to toss back at them.  Technology is a tool, usable for good or ill.

Discrimination & Housing Bubble: Why the latter may be harder to detect than one might expect.

Wasted Housing “Investment”:

There have been three big banking booms in modern U.S. history. The first began in the late nineteenth century, during the Second Industrial Revolution, when bankers like J. P. Morgan funded the creation of industrial giants like U.S. Steel and International Harvester. The second wave came in the twenties, as electrification transformed manufacturing, and the modern consumer economy took hold. The third wave accompanied the information-technology revolution. […]

The same can’t be said, though, of the boom of the past decade. The housing bubble was unique, and uniquely awful. Each of the previous waves had come in response to a profound shift in the real economy. With the housing bubble, by contrast, there was no meaningful development in the real economy that could explain why homes were suddenly so much more attractive or valuable. The only thing that had changed, really, was that banks were flinging cheap money at would-be homeowners, essentially conjuring up profits out of nowhere. And while previous booms (at least, those of the twenties and the nineties) did end in tears, along the way they made the economy more productive and more innovative in a lasting way. That’s not true of the past decade. Banking grew bigger and more profitable. But all we got in exchange was acres of empty houses in Phoenix.

Debt & Morality:

“If people really acted as if the choice to default were morally neutral, we’d either lose most of our credit system, or the legal rules would have to be much more punitive.”

This is vaguely reminiscent a line from this Tanta post:

“[Lenders] are afraid that rationalization mechanisms will become so effective that [people ‘walking away’ from mortgages] (which is historically pretty rare in home mortgage lending) will become a significant additional problem (in addition to true distress). And they fear this because, delusions to the contrary, those loans did not have enough of a ‘put premium’ priced into them to cover widespread ‘ruthless default.'”

Dollar Oil Pricing Fallacy:  Some stupidies never die….

Oil Prices Redux

Credit Card Reform

Federalism Amendment Redux:

Thoughts re. each proposal:

1.  Disagree w/ this; methinks “big government” has more to do w/ shifts in public attitudes (in favor of greater centralization; plus expectations that Fedgov will ensure prosperity).  Moreover, there are reasonable arguments for & against each type of tax; I’m not convinced we should be writing the “Fair Tax” into law.

2.  Unsure re. this.  In theory, I’m sympathetic to the notion of restricting federal power via the commerce clause; OTOH, I wonder if the economy has so fundamentally changed since the Founding that some degree of national-level regulation is now necessary.

3-5.  Concur w/ these.

6.  Unsure about this.  Methinks original meaning should govern constitutionality, not state-level politics.  OTOH, this proposal arguably doesn’t grant states any more power than already exists in Article V (whereby 2/3rds of states can call a convention, & 3/4ths can change the Constitution); and in the absence of ideal originalist judges, this provision may be a worthwhile check on federal power.

7.  I’d apply this to the House, but not the Senate; and I’d couple it w/ repeals of the 17th & 22nd Amendments.  IMHO, the Founders had it right – the President & Senate are supposed to be somewhat insulated from the populace so that they can (inter alia) look to the long term; term limits are inimical to this.  The People’s House, OTOH, is supposed to remain close to the populace; so term limits make sense here.

8.  I concur w/ a line-item veto; however, I’m not so convinced of fiscal stimulus’s lack of utility that I’d support requiring a 2/3rds majority to execute said stimulus.  I’d de-link these two; give the President the power to selectively veto provisions of legislation, and we can debate the utility of balanced budgets at a later time.

9.  Void for vagueness.  What do all those terms – e.g., “free”, “independent”, “natural, inherent and inalienable rights”, “enjoying, defending and preserving their life and liberty”, “pursuing their happiness and safety” – mean?

10.  Concur.

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2 Responses to “Random Links LV”

  1. Regarding the Federalism Amendment:

    1: On principle, I like the _sound_of the Fair Tax, but I am not convinced of its real-world efficacy, or that our current tax situation is so flawed as to be construed as “unfair” by comparison. It is flawed, of course, but methinks these flaws could be solved with far less economic disruption than would occur with the enactment of the Fair Tax.

    2: I would void the concept of this one for vagueness; given the high degree of inter-relationship between the economies of the various states (via corporations that have a presence in multiple states, dispersed manufacturing, etc.), I do not believe one could make a meaningful distinction between economic activities that are restricted to a single state anymore. When the Constitution was first ratified, interstate commerce was far less common due to the difficulties involved, so it makes sense that there would be little Fedgov oversight. The situtation is no longer so simple these days.

    3 thru 5: Also agree; no arguments with these.

    6: It does seem needlessly redundant, but OTOH, given how little people these days seem to know about the original provisions of the Constitution, a firm reminder of this principle isn’t necessarily unwarranted, either. It would, at least, remind both individual citizens and the several states that they do, indeed, have a real say in how Fedgov operates. Methinks we need a reminder, from time to time, of the importance of states’ rights vs. Fedgov authority.

    7: No argument with your assessment; I understand the rationale behind severing the link between state legislatures and the Senate (in its time; corruption was an enormous obstacle back then), but I think we lost this connection to our detriment. The Federalist sets out an extensive (and compelling) argument in support of having a “House of Commons” and a “House of States,” and rejuvenating the status of the latter would go a long way to resurrecting the importance of states’ rights as a check against unwarranted intrusions from Fedgov.

    8: Also agreed; while the current ARRA may not be particularly effective, this does not mean that _all_ fiscal stimulus is ineffective. I tend to think that the scale was too large, but even at that, it could have been better and more swiftly allocated, which likely would have made it more effective than it has been thus far. The Line-Item Veto always struck me as a good idea, particularly when one is committed to the separation of powers between the branches of Fedgov.

    9: I am reminded here of Heinlein’s pertinent (though surely controversial) statements in Chapter 8 of “Starship Troopers”:

    “…what right to life has a man who is drowning in the Pacific? […] What right to life has a man who must die to save his children? […] Of all the so-called natural human rights that have ever been invented, liberty is least likely to be cheap, and is _never_ free of cost…the ‘pursuit of happiness’? It is indeed unalienable but it is not a right; it is simply a universal condition which tyrants cannot take away nor patriots restore…I can ‘pursue happiness’ as long as my brain lives—but neither gods nor saints, wise men nor subtle drugs, can insure that I will catch it.”

    Methinks it is not without reason that these “rights” were not written as specific provisions of the Constitution. One could also argue that this provision is also needlessly redundant with the Constitution in its entirety: the preamble of the Consitution effectively states that providing our citizens with the opportunity to pursue and enjoy these rights is the primary impetus behind the provisions contained therein. Of course, this only helps if one is actually familiar with what the Constitution says…

    10: Oh look…Originalism written into law! Woohoo! Sometimes, I wish the Constitution came with fine print stating something to this effect. The Founders may have given us too much credit…

  2. Re. Fair Tax – I like consumption taxes in theory (and perhaps even in practice); my quibbles w/ the Fair Tax have been a) the misleading tactics sometimes used to promote it; and b) potential impracticality (it would extend to _all_ consumption – not merely those goods/services currently taxed by states – and I’m not sure we know how to collect such a tax effectively). Plus, it’s relatively easy to transform the income tax into a consumption tax; just permit unlimited tax-deductible contributions to IRAs, remove all restrictions on withdrawals therefrom, and tax said withdrawals as income.

    Re. your #9 – AFAIK, the Constitution’s preamble imposes no substantive weight.

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