Los Angeles Welcomes the Robots

I weep for Los Angeles. The “fight for 15” has made it to the LA City Council and is now poised to pass, setting the stage for a $15 minimum wage by 2020.

Progressives are celebrating of course, but thankfully there are some who understand that this is a bridge too far. Both Jordan Weissman and Danny Vinik of Slate and The New Republic respectively expressed reservations about such an exorbitant hike in the minimum wage, despite their favorable stances on progressive and union economics. Weissman frets that the available economic research “doesn’t really tell us anything about what happens because of an increase along the lines of what Los Angeles is now poised to pass,” while Vinik worries that “this isn’t a small hike and the employment effects could be significant.”

They are right to worry even as they celebrate the effectiveness of the “grass roots” (scare quotes for the fact that this is entirely a Big Labor driven initiative) campaign to agitate for a higher wage. Where they go astray is in their reliance on the “research” of experts and economists because as anyone paying attention knows, an economist or think tank or lobbying interest can produce the research they want to bolster support for a given policy. Data manipulation and rosy projections of a policy’s impact are the rule rather than the exception in Washington. An army of experts is just as fallible as an army of the first four hundred names in the Boston phone book, and in fact most of us would opt for the latter. Instead, progressives are never going to face reality unless they are forced to reckon with their glaring failures.

Fortunately, they seem to think that skepticism of the $15/hr minimum wage is just noise coming from conservative scolds who hate poor people. This kind of dismissive arrogance is going to be their undoing. Whereas Detroit and Baltimore and most major American cities under the thumb of one party Democratic rule took decades to succumb to the market distortions and bad incentives that go hand-in-hand with progressive economics, Seattle, San Francisco and Los Angeles – all who have adopted $15 minimum wages – are going to crater much faster if they adhere to utopian visions of egalitarian societies brought about by coercive meddling in the most basic and essential of all economic tenets: supply and demand.

It still boggles the mind that we have to keep repeating this, but if you arbitrarily hike the cost of labor, an equal and opposite reaction is inevitable. Either the employer will reduce his suddenly higher (doubled!) labor costs by reducing the amount of labor generally (i.e. layoffs) or he is going to raise prices to account for higher costs. That means $7 Big Macs sold through electronic kiosks. In fact it means a whole lot of robots replacing a whole lot of humans as employers find it cost effective to install automation in place of low-skilled workers making $15 an hour. Progressives seem to believe that costs can be magically deferred, or else ignored altogether. This juvenile, childish, ignorant view of the market explains how so many call for companies to pay their employees double what they earn now, because they can “afford” it.

One question: when did we cease treating fast food jobs as the entry level, foot-in-the-door opportunities that they are and instead as vocations in need of proper benefits?

I almost wish the LA measure took effect immediately, as I am eager to get this experiment underway and then over with, as it is going to be anything but pleasant for the residents of my beloved home town. $15/hr is insane. You’re going to see franchises hightailing it to Nevada and Arizona, a massive spike in unemployment, and a huge influx of robots. Remember when George H.W. Bush was raked over the coals for being in awe of an grocery store checkout automation? Prepare yourself for legions of frustrated people whose exasperation at encountering machines and kiosks in every store is compounded by the fact that everything is twice as expensive as before. Progress!

Obviously LA has some time before they implement this folly, so there is hope that someone with sense will get the ear of the city council during the next five years. And as Megan McArdle explains in her warning for Los Angeles, most noticeable impacts from minimum wage distortions tend to take a while:

When the minimum wage goes up, owners do not en masse shut down their restaurants or lay off their staff. What is more likely to happen is that prices will rise, sales will fall off somewhat, and owner profits will be somewhat reduced. People who were looking at opening a fast food or retail or low-wage manufacturing concern will run the numbers and decide that the potential profits can’t justify the risk of some operations. Some folks who have been in the business for a while will conclude that with reduced profits, it’s no longer worth putting their hours into the business, so they’ll close the business and retire or do something else. Businesses that were not very profitable with the earlier minimum wage will slip into the red, and they will miss their franchise payments or loan installments and be forced out of business. Many owners who stay in business will look to invest in labor saving technology that can reduce their headcount, like touch-screen ordering or soda stations that let you fill your own drinks.

This is right, but it is a summary of what typically occurs with small increases in the minimum wage. LA and Seattle and San Francisco are each flirting with stratospheric wage hikes, on the order of 80-100%. Thus, all of the symptoms and reactions by business McArdle outlines will still occur, just much faster. You will see major layoffs, major automation and major corporate flight from Washington and California if these states don’t wise up and walk back these wage increases. I assume this is what will happen, especially once politicians start getting browbeaten by their preferred business interests as well as by their less well off constituents suddenly faced with soaring prices for food and basic essentials. But all this does beg the question: why are they doing it?

Unions. By raising the minimum wage unions enjoy a higher corresponding wage floor from which to bargain in the future. Once a minimum wage is set, it affects contractors across the economy. Bids for public and private sector work must compete with union wage edicts to have any chance at the bid. This serves to crowd at smaller competitors and secure easy access for unions. And it similarly lifts the baselines for pension and benefit negotiations in addition to wages. In short, every single minimum wage initiative in America is about fattening the pockets of unions at the expense of the working poor, who are doubly affected by this union greed in the form of higher prices and fewer available jobs.

But we’re supposed to cheer on the “Fight for 15” and take to the streets to rail against corporate greed. But who is being greedy here? Somehow this mosaic of heroic workers in solidarity loses some romance once you realize they are just props for a larger union agenda, one that doesn’t give an actual damn about poor people or jobs. Unions by and large live by the wisdom of Michael Mulgrew, the former president of the New York United Federation of Teachers, who said

“If someone takes something from me, I’m going to grab it right back out of their cold, twisted, sick hand, and say it is mine. You don’t take what is mine. And I’m going to punch you in the face and push you in the dirt.”

Beautiful. It is also the prevailing wisdom of unions and the Democratic Party. This same sentiment animates progressive objection to reforming the welfare state or anything to do with public pensions. Same with cutting federal spending or eliminating waste. Right now the Ex-Im Bank is close to going the way of the dodo, something all of us on the free market right are cheering with heightened enthusiasm since it will be the first actual elimination of a federal anything in as long as I can remember. This worthless avatar of abject cronyism purports to serve America’s economic interest by providing taxpare loans to companies that deal heavily in exports. In practice the bank is an unfair bonanza for two large companies, Boeing and GM, who enjoy protection from smaller competitors without crony access to the bank’s largess. Conservatives and libertarians in Congress are close to declaring victory by not renewing the bank’s charter. Democrats are threatening to walk from the trade deal if Ex-Im is not renewed. What a farce of a position that is for a party purporting to stand against cronyism and speak for the little guy. Ex-Im is most definitely not about the little guy, rather it is federal bank for handing out favors to connected corporations. Not even Elizabeth Warren will allow it to expire, proving how sincere she is about reducing the incestuous and toxic relationship between big business and big government.

In the end, when it comes time to let a useless federal program sunset, the left rallies in unison to condemn it as heartless and bad for the economy. Because for the left, anything that reduces government at all is bad for the economy. The inverse of never wanting to allow government programs to disappear is always wanting to make more government appear, which is thew motivation behind the “fight for 15.” This is all about expanding union power and reducing private commercial autonomy in the market. The result will be more robots and less humans in the workplace.

While it is possible that Brett and Jermaine might welcome the robot revolution, the rest of us will be screwed. Straighten up, Los Angeles.


The Laffer Era

I won’t presume to speak for “Ready for Hillary,” but it’s a fair guess that they hope to face Jeb Bush because Democrats believe they hold the ultimate trump card which has nothing to do with his name. It is “the 90’s.” The Clinton campaign is convinced that in a matchup with Bush, all they need do is trumpet the “Clinton economy” while decrying the “Bush economy.”

To borrow from Lee Corso, “not so fast.”

Let’s acknowledge that Jeb Bush is not George W. Bush and Hillary Clinton is not Bill Clinton. The odds of President Hillary pronouncing “the era of big government over” or signing a signature welfare reform are as remote as President Jeb Bush championing a new extension of Medicare or proclaiming “deficits don’t matter.” Still, it is inevitable that in a Clinton-Bush race the comparison between Bill Clinton and George W. Bush will be broadly accepted as fair. Team Clinton believes they hold an unassailable advantage because they act like Bill Clinton was the sole progenitor of the 90’s economy.

Now comes their bete noir Rand Paul poking holes in the myth. Speaking at a Lincoln Labs conference in Washington last week, Paul said “when we dramatically lowered tax rates in the ’80s, we got an enormous boom in our country, probably for two decades. Many of us believe that the ’80s and the ’90s, once the boom began, had a lot to do with lowering the tax rates.” With that explicit challenge to conventional liberal wisdom, Paul turned the comparison between the 90’s and the 00’s into a debate on whether the 90’s were really just a continuation of the 80’s.

Cue the long knives.

Jonathan Chait waded into the breach to rebut this claim, arguing in New York that “tax rates on the rich, at least at current levels, have little impact on economic growth.” Note the qualifier at least at current levels. Liberal discussion of the 90’s focuses on Clinton raising the top rate to 39.6% from 31% to the economy’s great benefit. This casually omits how Reagan reduced the top rate from to 50% from 70% and ultimately to 28% with the 1986 tax reform.

Another tactic used against Reagan is that he was a serial tax raiser who saw the light after the 1982 recession proved his initial rate reductions had failed. “For example, when Reagan cut taxes, economic conditions deteriorated thanks to high interest rates. When Reagan realized he’d cut taxes too much and reversed course, raising taxes seven of the eight years he was in office, the economy improved,” says Steve Benen of MSNBC, who can be forgiven for his ignorance due to being Rachel Maddow’s petulant blogger. The left never seem to grasp that not all taxes are created equal. For every minor increase in a payroll tax or specific targeted tax, Reagan’s legacy is indisputably as an historic tax cutter, as the tax rate that matters most for economic growth and capital investment is the top marginal rate. Investors invest in enterprises when they believe the return on their investments will bear returns sufficient to justify the risk. More capital is risked when greater returns are in the offing. When top marginal rates are high there is less incentive to invest.

The adage “capital goes where it is welcome” is a fundamental truth akin to the laws of physics. Reagan’s success in bringing down top marginal rates are, more than any other external or mitigating factor, the primary reason for the 25 year secular growth trend between 1982-2007. The dramatic rate reduction heralded a new era of entrepreneurial optimism and capital investment as individuals responded to incentives brought about by a more welcoming capital landscape. Yes, one consequence of this was that the rich got richer, but the boom in middle class standards of living as well as upward mobility (an entire new class, the “upper middle” owes its existence to this period) in the 80’s and 90’s was a straight line continuum, putting the lie to the myth that things were sour under Reagan and H.W. Bush until Clinton arrived to save the day with moderate increases in top rates. Any honest appraisal of this era must account for the steady gains in GDP, employment and overall consumer confidence which contributed to multiple quarters of 6% and 7% growth during both the 80’s and 90’s.

Because Bill Clinton did very little to reverse the Reagan revolution on taxes, and in fact bolstered it by lowering investment rates while increasing the top marginal rate nowhere near in proportion to the level that Reagan lowered it, any comparison of the 80’s and 90’s is ultimately moot. We might as well call it “the Laffer era.”

Uber Alles

There are few things I enjoy more than the idiotic leftwing backlash against Uber. Besides revealing an utter lack of comprehension of market forces, those on a moral crusade against Uber are actually engaged in a transparent effort to carry water for cartels, aka the taxi unions. Because nothing says “progress” like championing the perpetuation of inefficient, corrupt, politically protected 19th century labor practices over spontaneous order and innovation.

Customers love Uber. Political hacks on the left hate it because it threatens unions and therefore threatens their donor base.

In Sydney last night, Uber’s decision to respond to spiking demand by quadrupling rates as a way to attract more drivers caused more hubbub on twitter than the actual hostage crisis. How dare that evil, greedy, private company raise its rates in the middle of a crisis? Well, if the intent was to incentive more Uber drivers onto the road to provide their in-demand service, what the hell is the problem? The problem apparently, is that profits are inherently evil, but especially so when sought amid a crisis. Mollie Hemingway corrals some representative tweets here and lobs justified scorn at the mob.

My favorite Uber anecdote is from this past summer, when European capitals saw coordinated protests against the disruptive taxi app by having all their taxi drivers block traffic at key arteries and walk out in solidarity, causing massive traffic jams. The result? Uber subscriptions skyrocketed 850% across the continent in a single day as many who had never heard of Uber were suddenly inclined to check them out. Talk about your all time backfires. Who among us would not leap at cheaper and more efficient modes of travel, especially when those already tasked with public transport merit such disdain for their petty and annoying protests, not to mention for their general performance?  As if the intent is to conform to stereotype, Paris taxi unions are back at it again today, blocking traffic and demanding an end to Uber while determined to learn nothing from their last failed protest. Hope it goes just as well as last time.

One would think the writing would be on the wall and the taxi union would understand that their days of holding a protected monopoly are over. Alas, the unions are doubling down and their allies in media are drooling for any story that can undermine Uber’s credibility. The constant harping on unfair pricing betrays a thorough ignorance of how markets work, though even more disturbing is the lack of imagination on display by these critics. In order to not only appreciate but celebrate the free market, one has to tap the frontier explorer mentality within, which will allow for the acceptance of “creative destruction.” Every innovation we love is born from this basic concept: existing products and services are displaced by new ones that invent better and cheaper ways to satisfy customers. This process requires businesses, jobs and brands to sometimes disappear. Executives and employees alike at firms such as Research in Motion (makers of Blackberry), Blockbuster, LaserDisc and the legacy music labels would undoubtedly have preferred to see their companies remain viable, but economics is like gravity – it is futile to fight. Now think of the firms that took their place: Apple, Netflix, BluRay and Spotify. In ten years, we may or may not still have these popular companies with us. The thing to do is accept reality and applaud the lower prices, better products and services and technological wonder at hand, while the thing one should not indulge is barking at the moon or vainly wielding one’s fist at the heavens because one is uncomfortable with the metaphysical reality that things always change. (Ironic that the vapid slogan “Change” deployed by Obama in ’08 should be so utterly lost on he and his followers when it comes to the constantly changing dynamics in the marketplace, otherwise known as “capitalism”). If you are in favor of change and progress, it makes no sense to stand opposed to innovative and disruptive new technologies just because they threaten old models which you favor and wish to see preserved.

By all accounts, Uber CEO Travis Kalanick is kind of a jerk and has perhaps gone out of his way to stoke the ire of his antagonists. Frankly I could care less what the man’s personality is like or whether he encourages his employees to aggressively (but legally) recruit drivers away from competitors. Competition is not always polite and ethics are important to maintain even in a ruthlessly competitive and nascent market such as the booming sharing economy. But forgive me if I perceive every “Uber is shady” story as part of a broader unease with these carefree, ambitious and cocky tech titans who are supposedly planning to take over the world and turn it into Galt’s Gulch.

While it is surely not the driving motivation behind their attempt to discredit and ultimately destroy Uber, one factor must be that these champions of the uber-state and haters of anything that can reasonably be attributed to the philosophy of Ayn Rand are petrified of the growing “libertarian moment” and feel it is their moral obligation to stop it in its tracks. The level of Ayn Rand paranoia on the left is staggering. There are at least a dozen more influential philosophers and economists on the right than Rand, though she is unquestionably among the canonized thinkers for libertarians. As Robert Tracinski lays out in a wonderful piece, the one enduring lesson the left could learn from Ayn Rand is that “there are no evil thoughts except one: the refusal to think.” Rather than do the hard work of reading Hayek or Schumpeter, or even bother much to think, critics of free market economics lazily single out Rand as our one true prophet because she is easier to demagogue and her arguments easier to caricature. But I think the fundamental explanation for the left’s passionate assault on anything to do with free market economics or deregulation has to do with the libertarian moment coming directly on the heels of what was supposed to be the great progressive resurgence of 2008.

We are the ones we have been waiting for” was only six years ago but it feels a generation ago now. For all the starry-eyed millennials and social justice warriors and would-be authoritarians in cloistered academia, the rapid erosion of Hope and Change is surreal and responsible for massive whiplash. Beaten and bloodied and staring the demise of their movement in the face, progressives are behaving as any cornered animal would, by lashing out. “The Liberal Hour,” as the WSJ editorial page characterized the national mood in April of 2009, is no more. All that remains is an embittered hostility to actual, observable change.


How to Help the Poor

Mother Jones’ Kevin Drum laments the Democrats’ worrying trend with working class white voters and traces the discontent to lingering unhappiness with the Democratic tax and spend welfare state model. Drum accurately highlights how liberal obsession with food stamps, unemployment benefits, Medicaid and Obamacare can alienate working class whites as they see more and more assistance going to their marginally less well-off neighbors while they get nothing. Personally I think race has very little to do with what is really an economic and a government problem, but since the left can’t tie their shoes without noting the latent racism involved in shoelace production, they have to identify their middle and working class voter problem as one to do with the “white working class.” Fine. Whatever gets them to any level of introspection is only good news for the debate going forward.

In getting to his conclusion that he has no conclusion for how to solve this electoral dilemma, Drum offers this precious piece of liberal self-congratulation:

“Helping the poor is one of the great causes of liberalism, and we forfeit our souls if we give up on it.”

I wonder if the left will ever understand observable reality and change its mind on what constitutes helping the poor. Everyone with a conscience, left or right, wishes to see the plight of the poor improve, the question is how to achieve improvement. I (kinda, sorta) accept Drum and liberals at their word that their aim is true when they advocate for these government programs for the poor; my problem is with their stubborn refusal to be accountable and admit that the ambitious War on Poverty was a failure, especially if viewed in terms of trajectories – American poverty was steadily declining between 1945 and 1965, only to flatten after the Great Society was introduced. The line has remained flat for a generation.

us poverty graph

It is an insult to basic intelligence to suggest these programs were successful at eradicating American poverty. Possessing noble intentions does not automatically translate into good policy, but seeking well-intended results through government is guaranteed to create bad policy because government is inherently inefficient (and likely inherently stupid too).

Whatever merits progressives assign to the Great Society are dwarfed by the incontrovertible fact that its biggest legacy is likely to be the destruction of the black family in America. And not just the black family, either. One of the more fundamental disagreements between left and right is over the matter of incentives. The left doesn’t bother with incentives because, if I may be so bold, they typically don’t care about how their policies cause people to behave; they just care that a policy they came up with is made binding on others. Or if you want to be more generous: the left doesn’t focus on behavioral incentives in law because they don’t believe such things exist. Since most leftists come from academia, they are used to theoretical models that deal in static data. The real world, however, deals in dynamic data, in that there is no way to account for the variable known as “human behavior” in academic models of society or the economy.

Laws create behavioral incentives because humans are not robots. Just because it makes sense on paper to increase government spending in order to stimulate aggregate demand does not mean such policy will work in practice. In fact, we know it does not work because rudimentary market economics informs us that government intervention into the economy only creates distortions and mis-allocation of resources. The left has never understood this basic premise when it comes to – well, everything – but especially when it comes to helping the poor.

By aggressively inserting itself into the lives of inner city and rural constituencies the federal government has wildly distorted the markets for labor, education, spouse and dignity in America’s poverty-stricken regions. Government intrusions in the form of food stamps, unemployment and Medicaid sound benign at the outset. But consider how these benefits alter incentives for the beneficiary. Is a worker in the inner city more or less likely to ardently search for work when 99 weeks of unemployment are on the table? Is a struggling shop-owner looking to hire two extra workers on the cheap (offering them an opportunity out of poverty, perhaps) going to be more or less likely to do so when the price of labor is arbitrarily raised on him via a minimum-wage increase? Most crucially, are a couple with children more or less likely to stay together when there are no consequences to family dissolution thanks to the ubiquitous welfare state that allows single mothers to collect plenty of money with none of the dignity attached.

The $64,000 question is whether the American left, facing its worst political moment in a century (the 1920’s were the last time the party had so few seats in the U.S. House of Representatives and the state legislatures – they were wiped out the last two midterms), chooses to double down on welfare statism or decides to speak honestly and culpably about the failures of their grand experiment in leveraging the public sector to fix poverty. If Democrats really want to speak to the white working class again, or for that matter, the poor and underclass who they today purport to serve, they need to accept that there is one – and only one – proven tool for lifting masses of people out of dismal economic conditions: capitalism.

So that’s where we are. The left’s future as I see it depends on their developing a non-transparent and believable appreciation for what makes economies grow. The fact that the global poverty rate fell from 26.8% in 1970 to 5.4% in 2006 due primarily to the introduction of free enterprise and free trade to the rest of the world is entirely lost on the inhabitants of America’s faculty lounges. If they are even aware of this remarkable 80% decline they shrug and attribute it to government aid or something (seriously). Empowering individuals through trade and entrepreneurship is not some fashionable dream concocted by libertarians but the cold hard reality of the how wealth and prosperity are made. The middle and working classes in America aren’t eager to join the poor in the ranks of the dependent class. The poor themselves do not wish to be pandered to and showered with candy while no observable improvements are made in their communities. People are ready for something different, above all in the country’s approach to economics, employment and welfare.

The good news is that, for all the lefty hand-wringing (and really, there ought to be more than there is) over losing the white working class, there is no way they are going to suddenly become champions of capitalism and that means the right is well positioned to cast some much needed light on the plight of overlooked and left behind Americans.

world poverty since 1970

Social Politics

Progressives view American culture the same way that Vladimir Lenin viewed politics: “Who, whom?” Who will dominate whom? The rest is just noise.

Lenin’s understanding of political struggle turned out to be fatally flawed, as the twentieth century showed how societies are actually stronger when the operative impulse is less domination and more facilitation. Because what are democracies and republics if not vessels for facilitating free association and cooperation? Allied victory over totalitarianism was above all a triumph of capitalism over socialism, yes, but it was also vindication for a way of life over that of the martial collective operating with scientific efficiency and with one communal voice, visions shared by Hitler, Stalin, Mao, Mussolini and Roosevelt. The New Deal can be understood as one big effort to copy what Hitler and Mussolini were doing in the 30’s. Western elites and progressives were utterly enamored with Il Duce’s model in particular. What leftists of every stripe loved about these regimes was the way they used “science” to justify their vision and also guard them against criticism. Let the left and right argue over dogma; we disinterested observers are here with the science!Those wishing to turn politics into an empirical science are adopting a stealth approach to Lenin’s axiom. By claiming their so-called “pragmatism” will use disinterested and data-driven analysis to solve complex social problems, these wizards are promising an impartial politics of efficiency and prosperity attained through expert administration. But there is no algorithm that unlocks the secret to the free society. There is, however, that nagging question of “who, whom?” and still far too many who subscribe to the Hobbesian vision of nature that says man’s domination over man is the default condition of humanity. Those claiming the expertise have no expectation of landing on the whom side of the equation. And while we who stand athwart the collectivists know that Lenin’s question is ultimately wrong, we still must contend with the myriad forces that seek nothing less than total domination, even those who do so under the guise of disinterested civil servants.

Marx and the socialists were ostensibly defeated with the end of the Soviet Union. Communism’s ultimate discrediting was supposed to mean the end of history, when the superiority of capitalism was beyond dispute. But you don’t exist as a revolutionary movement for a century and a half and go quietly into the night, and socialism’s strictest adherents were never going to surrender their ideological commitments just because the Cold War ended. Rather, in their obscurity they re-evaluated where they had been successful and vowed to rise again against capitalism, through means other than purely economic. Thus do we see the utterly socialist aims of modern environmentalism, third-wave feminism and other movements of the anticapitalist left.* If they cannot dominate through economic doctrine, the war must be fought on the cultural plane.

Identity politics is just Marxist classism dressed up as enlightened diversity. The ultimate aim of Marxist-socialist theory was to give agency to disaffected and disadvantaged classes of people, and to encourage them to rise up and be heard in a world ostensibly dominated by rapacious capitalists. But as the economic prescriptions favored by these classes and their advocates proved utterlydisastrous, it was inevitable that the focus would shift from economics to culture. For it is just as easy to agitate on behalf of those superficially marginalized by race or gender as it is to do so on behalf of the poor. But what happens when such agitation is successful, as the cultural revolution of the 1960’s surely was in advancing equality under the law? Victory, right? Wrong. There is always be more oppression to fight, and always another injustice in need of eradicating. Thus is the great progress made on behalf of racial, gender, sexual and religious minorities deemed insufficient. It is not enough to ensure equality under the law; the new normal must be celebrated, not merely condoned. Thus does critical theory emerge and meld with postmodern instincts to treat truth as malleable. Moral relativism reigns. This is how modern academia comes to regard Israel as the enemy and Hamas as the victim. Truth is subordinate to injustice because facts are not as compelling as grievance.

Culture warriors understand a fundamental truth of human nature: we understand what we know and care about what we see. Economics escapes the average person’s understanding and concern because it is difficult for him to see it operate in tangible form. Culture, on the other hand, is ubiquitous. It is impossible to be indifferent towards culture because one is forever awash in it. And those whoinstigated the culture war in this country understandably became addicted to the psychic satisfaction that comes from expanding access to natural rights hitherto denied to certain people. (That the belief that successful movements for women’s rights and minority civil rights actually meant the initiation of new rights rather than the restoration of natural ones escaped them is another discussion altogether.) It makes sense then, that this social vanguard would continue looking for victims to unshackle, but at some point you just run out of victims, at least as far as the law is concerned. Suddenly we are concerned with a person’s “right” not to be offended, or we overcorrect to the point of seeing mysoginy everywhere. This is how suchabsurdities as #YesAllWomen and trigger warnings enter the lexicon.

And this new century of ours is particularly vulnerable to outright implosion if social politics continue to define us. Much of the advancement in tolerance, diversity and general acceptance is owed to the laudable impulses of the original culture warriors who came onto the scene in the 60’s. But just as Marxist economics failed because it lacked limiting principles, the culture wars will end badly because the agitators simply don’t know when (or don’t want) to stop. (Abraham Maslowwould agree.) In one respect, it is not hard to see why: playing identity politics and demanding new rights for an ever increasing number of victims will inevitably lead to bigger government and more bureaucracy. If it ain’t broke… That the aims of anticapitalists coincide with the culture warriors’ is also no coincidence. The desire to destroy laissez-faire through regulation does not meet pushback from those looking to invent new rights (right to healthcare, right to housing, right to food), usually because they’re the same people. And when the anticapitalists and social justiciars congregate – in academia, in federal bureaucracies, in Hollywood – the only thing that stands out is the utter lack of any actual diversity, that is, diversity of thought.

The cult of diversity has become so strong and pervasive that among young people in the 21st century it is now obviously safer to tow the line of superficial tolerance (i.e. to conform) than it is to express a heterodox opinion about something,especially something involving the hollow vapidity of our hallowed “diversity.” The word has literally come to mean the opposite of its literal meaning, as Daniel Hannan says. And yet, our future leaders are overwhelmingly consumed by the cult of physical (shallow) diversity. Millennials define themselves politically by social issues, not economics. It is a positional good, a way of signaling one’s status as a member of the tolerant, progressive, enlightened crowd, the group that shuns religion and tradition in favor of “science.” They are happy to tell you that they are better than you, owing not to any particular achievement or education, but simply to the fact that they are not the “other.” Despite marching in lockstep conformity of thought, they impugn their perceived enemies as hopeless and ignorant neanderthals, secure in the knowledge that their identity and worth are defined by what they are not.

It’s morality on the cheap; wholly unearned, but bolstered all the same by a profound sense of “being on the right side of history,” a Marxist trope if ever there was one. Culture matters, and caring about injustice is basic human nature. Much of the social progress that has been made in America and around the globe owes a debt to our friends of leftwing persuasion, even the virulent anticapitalists among them. But you must have a limiting principle, and leftists simply do not. The American Revolution was about restoring limiting principles to society, whereas the French Revolution had the Terror, the guillotine and ended in Napoleanic despotism precisely because there was no philosophical appreciation for such principles. The Jacobins believed they could remake the world entirely anew, that the past was irrelevant, tradition useless. The same phenomenon is again taking place today, only it is confined blessedly (for now) to the culture wars. Increasingly, these battles are bleeding into our politics, and that is a problem. Even worse, future generations are coming to view politics as merely an extension of cultural arguments, rather than of debate and deliberation on eternal matters like the composition of the state, the laws of economics, and the propensity for man to abuse power even when he doesn’t intend to.

If millennials continue to define themselves politically over the social issues they care about, this republic will be lost. The basic truth that 20th century tyrants understood about this country is even more profound today: America can never be destroyed by conquest, but only from within. The next few generations bear a heavy responsibility to not succumb to the cheap satisfactions and faux-morality of “social justice,” which is just a rebranding of class warfare in the most destructive sense. The kids need to get over themselves and their identity politics and understand that there is so much more to the relationship between citizen and state than a fleeting promise of more free stuff, like contraception. Whatever the government today grants you as your “right,” it can tomorrow take it away from you. Only our natural rights are sovereign and unassailable, and it is only the government that can infringe on those.

So this curmudgeonly millennial will end with a plea to his fellow generation: please stop with the identity and social politics. If Reason continues polling young people and continues hearing that they care less about economics and role of government than social issues, we as a nation are sunk. And as the carpenter said to Lord Business at the end of the Lego Movie, “you don’t have to be the bad guy,” so do I say “you don’t have to be the who, and we don’t have to be the whom.” Nobody has to dominate the other, culturally, politically, economically or otherwise. We are all equal under the law and free to live cordially in a pluralistic society that allows for wildly disparate opinions and perspectives. We are all “the special.”

Marxist Millennials?

There’s nothing more embarrassing than the left’s periodic flirtation with Marxism. Anytime a skeptical critique of capitalism is given a quasi credible veneer, the left goes nuts and forgets that their most successful (and cynical) tactic of the past hundred years has been to hide their very real and very confused hostility towards capitalism and markets.

So enter Thomas Piketty, who claims that inequality can only get worse with capitalism in his new book Capital in the 21st Century and leftist morons screech “See!!! Inequality is the only thing that matters!!! We don’t know anything about economics but we’re still certain that income inequality is a scourge because, well, because the proposed measures for addressing it involve expanding the reach of the federal government.”

Leftists hate the free market because a) the extent to which they comprehend it is roughly analagous to the depth of Hodor’s vocabulary and b) because free markets and a premium on individualism undermine the left’s sacred fantasy that society can be planned and managed and shaped to fit the majority’s will. The statist mind chooses not to accept the obvious superiority of free market capitalism over all the others because the statist believes, like a child, that perfection is possible in this life and utopia is attainable.

Utopia is impossible. Greed and avarice are innate characteristics of human beings. The least bad method for harnessing humanity’s fallible nature is to allow for maximum individual freedom. The absolute worst method for harnessing productive instincts in society is to concentrate power centrally; to trust other fallible human beings with “expertly” administering a just and equal state is to completely ignore all of human history. Leftists refuse to learn the most important lesson: that power corrupts absolutely, that there are no angels among men, and that central planners don’t fail because they have the wrong plan, but because planning (scientific, Marxist, Keynesian, etc) itself cannot work. Ever.

Are the progressives right to be so in thrall to Piketty’s work? Is their assumption that millennials and minorities will forever stay wedded to the tribe of identity politics and cultural conformity? Progressives used to genuinely champion freedom of thought and expression, but those days are over. In their pursuit to establish an unassailable culture of “tolerance,” the left has so convinced itself of possessing the moral high ground that it takes for granted that it has become indifferent to its own cynicism. This is how you get scores of bright young intellectuals at places like Mozilla and Brandeis acting like intolerant clowns by reviving timeless leftist traditions like censorship and the thought police. When you carry as an article of faith the smug certainty of your own right-thinking benevolence, you are more likely to turn a blind eye on obnoxious conduct so long as the culprits are on the right “team.” It’s all a long way of saying that I have no idea what the fate of millennial politics is. However, I suspect that Marx is the furthest thing from their minds in 2014, especially when Democrats and their Marxist-sympathizing base have had the run of the capitol for the past six years, and their ideas continue to get worse. As technology makes us more individualistic and libertarian every day, millennial lusting for a return of Marx strikes me as the left’s latest iteration of adorable wishful thinking. More likely, when the economy ultimately improves (a development sure to be delayed until our current regime steps down) and jobs are being created and filled by the chronically unemployed youth, millennials will begin to awaken from their stretched-thin hypnotism and absorb the wisdom that comes to all men with age: that government is incapable of delivering on its promises. Every effort to fulfill its promise serves to crowd out the productive private sector, which slows the economy and prolongs stagnation.

Maybe they won’t arrive at this revelation en masse, and maybe it will take longer than I hope for my generation to finally open their eyes to the awful truth of collectivism, but I will be more than a little surprised (and profoundly dismayed) should the millennial generation sustain its dalliance with the identity politics left that demands total fidelity to every aspect of the cause, with heretics put on permanent notice.

Solvency of the States

If you had to guess which American states currently enjoy long-run projections of fiscal solvency and which do not, the answer you give probably depends on what you think of the chasm between red state and blue state governance; particularly of their competing approaches to budgets and balance sheets. If you’re a sane person with a modicum of economic comprehension, you are likely to know the right answer (the red states are more solvent), whereas a progressive is sure to proclaim with the same certainty as Harold Camping predicting the apocalypse that the blue states are the winners.

One of the unfortunate drawbacks of the digital revolution is the way it created fast tracks to confirmation bias. With seemingly all the information at our fingertips, it’s increasingly easy to find support on the web for one’s pre-existing biases, in the form of a snappy infographic, statistic or article. I’m sure I am guilty of this myself on occasion. On matters from the minimum wage to energy to Keynesian multipliers, policy debates in the 21st century that should be “winnable” are instead given to endless harangues by both sides as the crux of the issue at hand gets distorted to the point of incoherence. Like ships passing in the night, points and counterpoints are hurled into the dark like aimless projectiles from blind cannons. No one trusts anything that emanates from the enemy.

Of course I blame the left for most, if not all of this. For it is our leftist friends who adhere to the relatavist dogma that says truth is essentially nothing more than a social construct. In other words, truth is whatever society deems it to be. The entire field of macroeconomics can be boiled down as an exercise in giving fanciful collectivism a scientific veneer. A modern political philosophy that scorns individualism and exalts egalitarianism is going to need a shiny veneer if it’s to attract converts, given history’s rather convincing verdict on the matter. Because nearly every consequential epoch of human history since the Middle Ages was premised on the primacy of the individual over that of the Church or the State, it’s a bold endeavor to preach egalitarianism to Americans. The notion that fairness is paramount to our national conscience is apt if we’re talking about opportunity. It is anathema to the free society however, if we’re talking about outcome. And yet progressives really are interested in equal outcomes, much as they know they can’t get away espousing as much in such blatantly socialist language. So the trick is to muddy the waters, cloud the issue, fog the lens. The trick is to erect an army of fact checkers, truth police and Vox Medias in order to keep the ambitious young stenographers active and engaged. This way no sound economic takedown of exhausted Keynesianism can be allowed to stand without some minion somewhere penning a brave defense of bureaucracy and having it picked up by HuffPo and distributed through media channels as DNC talking points.

So it is with that long-winded introduction that I offer this banal piece of data on state budget solvency, from Real Clear Politics. This is funny because even I would not have guessed that the results drew as clear a distinction between red state and blue as these rankings show. The fact that states with smaller governments and fewer impediments to market entry and participation have brighter fiscal outlooks and rosier balance sheets than those of those benevolent blue staters who just want to do right by the poor and downtrodden should come as a shock to no one. But it is still jarring to see such comprehensive success and failure at the front and back ends of the list bifurcated so as to be so ideologically distinguishable. So without further ado, the five most solvent states followed by the five least solvent.

Most Solvent

1. Alaska
2. South Dakota
3. North Dakota
4. Nebraska
5. Wyoming

Least Solvent

46. California
47. Massachusetts
48. Connecticutt
49. Illinois
50. New Jersey

In case you are still under the misapprehension that large public sector workforces financed by high taxation and regulation are the way to go, all one need look to is domestic migration patterns in the U.S. and try to come away with any conclusion other than blue state policies amount to a pathway to citizens shipping out.

Minimum Wage Dishonesty

The left’s dishonesty on the minimum wage is reaching criminal proportions. This morning NPR did a report that said essentially: “In response to the CBO report showing that half a million jobs would be lost [jobs for the poor and unskilled], the Obama administration issued a report citing seven Nobel winners and almost six hundred economists saying that minimum wage hikes have almost no effect on employment.”

Well then! I’m sold! Six HUNDRED economists plus a whole SEVEN Nobel laureates?!?!? Egads, how could anyone so much as question the eminent wisdom of such renowned geniuses? Except, the Nobel awarded the Peace Prize to Obama in his first year in office. When it gave Hayek a Nobel in economics in ’74, it awarded one to a socialist economist the same year. I’m sorry, any organization that recognizes a socialist and free market economist in the same year or gives the Peace Prize to a president based on reputation and rhetoric is an organization not to be taken seriously. And what of the six hundred economists? Well, it could be six hundred Paul Krugmans and Jared Bernsteins which, along with 5 bucks can get you a cup of coffee. These are economists of the left, and they have a political agenda to sell, not an economic analysis to be taken with any kind of seriousness.

But this is just what the left does. “97% of scientists…” “600 economists…” Consensus! Um, consensus among a bunch of like-minded hacks with a political agenda, more like it. The simple fact is the minimum wage hurts the poor, which hurts minorities, and the left is terrified of being exposed on this, thus the asinine claims that a whole bunch of really very smart and wise and not in any way prone to politics people say the minimum wage is all good and magically doesn’t involve trade offs or increase the price of labor.

The only thing worse than the purveyors of this transparently self-serving political propaganda masquerading as “science” or “economics” is that so many people buy it. Remember when the CBO reports that Obamacare would lower deficits and costs were treated as gospel truth (and the only reason the CBO issued those reports was through using the inputs and data provided to them in the Democrats’ assumptions and models)? Well now that CBO looks at some hard data and pisses all over a left wing talking point, it must be refuted, and the way the left refutes things that contradict their propaganda is to trot out the Nobel winners and the “six hundred economists” trope.

It is willfully dishonest and malicious. Even more, it exposes the left’s indifference to the actual plight of poor and minorities, the constituencies most affected by the shrinking labor markets that are the result of minimum wage increases. The left’s hypocrisy on race is manifest in many things (resistance to choice in education being the biggest), but on the minimum wage it is so glaringly obvious and yet they are never called on it. Here we have the CBO, typically the sainted institution upon which all controversial policy is to be settled (so long as the data supports leftist propositions), stating unambiguously that jobs for the low skilled and poor are going to be adversely affected in exchange for some extra benefits going to the non-poor, and the left is in full spin mode and doing all they can to call bullshit on the same CBO they normally love. They have to do this in order to avoid looking like a bunch of hypocrites who are indifferent to the plight of the poor. Which is exactly what they are. The history of labor unions is of a movement meant to crowd out poor and minority workers so that middle class blue collar workers could avoid labor competition through the establishment of wage floors. And the left is still doing this with the minimum wage, a policy that negatively affects African-Americans.

And almost no one calls them on it.