Thursday, June 30, 2005

Amnesty by any other name

Randall Parker notes a survey of arrested illegal immigrants in which 45% of those surveyed said their decision to illegally immigrate was influenced by rumors of amnesty. Apparently, even if you don't think Bush's guest worker plan is amnesty, many Mexicans disagree, and thus we get the negative effects of amnesty, even though Bush's proposal isn't close to getting through Congress. (Caveat: I do entertain the possibility that illegal immigrants that get caught aren't a representative sample with respect to this question.)

Parker quotes the Washington Post saying "63 percent of more than 800 immigrants arrested along the nation's southern border said they had heard from the Mexican government or media that Bush was offering amnesty." The use of "was" threw me; surely everyone knows Bush's guest worker plan is still just a proposal? The Washington Post article is in turn based on this Judicial Watch analysis, from which it isn't clear whether 63% of the survey participants believe amnesty is available or if they think amnesty will be available in the future. My guess is that most of them think the latter.

Gasoline diversity

Just look at this map of the patchwork of required gasoline formulations in the U.S (hat tip: Andrew Samwick). I don't know whether or not it would be more efficient to impose a uniform national standard, given the externalities of pollution, etc., but there is a third, superior option. Instead of banning conventional gasoline in favor of a locally mandated formulation, state and local governments should allow many different formulations of gasoline, but tax them in proportion to the pollution costs they are estimated to cause. This would let the market decide which type of gasoline is most efficient for a given locale, with pollution costs balanced against the costs of using an uncommon formulation. This system would also flexibly respond to changing costs, which might change which formulation is optimal.

Saturday, June 25, 2005

How many budget hawks?

Believe it or not, there are still Republicans in Congress that believe in a small government. Case in point: this Roll Call article from yesterday. I couldn't find a free copy online, but the Club for Growth sent me a copy in an email bragging about it, so I can provide some excerpts:
Senators, take heed: Sen. Tom Coburn (R-Okla.) may have a "hold" on your bill.

The freshman is using his power as a Senator to put a hold - or secret filibuster threat - on any bill he believes would create a new spending program, whether it is included in an appropriations bill or an authorizing bill.
Placing a hold is essentially "a threat to filibuster or talk at great length" about the subject, said Sen. Trent Lott (R-Miss.). "It's a notification to the leaders that a Member wants to be notified if you're bringing up" a bill or nomination, Lott said.

Lott noted that holds can be "a serious impediment" to getting bills passed, given that many bills in the Senate are passed by unanimous consent at the end of each legislative day during what is known as "wrap up." In particular, many bills containing Senators' pet projects or dealing with purely parochial state issues are passed by unanimous consent in that fashion.
Lott said he wasn't aware of Coburn's plan to hold up myriad bills, but said Coburn is "genuinely and legitimately concerned about the size of the deficit."

Still, during his more than 30 years in Congress, Lott said he has learned something about how to keep the likes of Coburn from stopping his pet projects from becoming law.

"The way I do it is, I fold them into bills where you can't find it," Lott said. "I've been around here long enough to know how to bury it."
Lott's legislation by obfuscation is yet another data point to convince me that the overwhelming tendency of Congress to increase federal spending is a structural phenomenon, and 1995 was just a brief outlier from the trend. Senators like Tom Coburn may be able to do some good at the margins, but there are simply too few people like him in Congress. See for example this estimate by Pat Toomey, president of the Club for Growth:
Q: If you researched the current Republican congressmen, how many would pass your test on taxes and growth?
A: I'm looking to bring on board somebody who can help us compile those kinds of statistics. Historically, the club has never really gone back and evaluated the voting records. My guess is that we would find somewhere between 50 and 70 House members who consistently vote for pro-growth policy, although only 20 or 25 really have sterling records in that regard. And maybe there's a dozen or so in the Senate.
These numbers, besides being just educated guesses by Toomey, are not specifically about spending restraint but also about support for tax cuts; these two things are not perfectly correlated. For more precise and relevant numbers, I turned to the congressional ratings maintained by the Council for Citizens Against Government Waste. Their latest numbers are for 2003. For comparison with Toomey's estimate, there are 11 senators who scored 80 or better (100 being the best possible), whether one measures by lifetime rating or just by 2003 rating. (I didn't take the time to do a similar count for the House.)

If there is little hope for Congress, then what about the presidency with its veto power? Anyone who followed the Bush campaign back in 2000 isn't surprised that Bush has worked a lot harder at reforming the federal government than at shrinking it. According to current prices at Tradesports, the top three contenders for the 2008 Repubican nomination are Senators McCain, Frist, and Allen. Their respective CCAGW lifetime ratings are 87, 75, and 73.

Friday, June 24, 2005

Just as with the initial Iranian presidential election, the run-off election appears to have been heavily boycotted, and the Guardian Council is being accused of fraud. Guess who won.

Monday, June 20, 2005

So, not only did Iran's theocrats permit only 8 of 1014 presidential candidates to run (for a presidency whose decisions can be overruled by said theocrats), but now it looks like they've rigged the ballot counting too:
Initially, the Interior Ministry had Mr. Rafsanjani first, Mr. Karroubi, the former speaker of the Parliament, in second, and Mr. Ahmadinejad third. Half an hour later the Guardian Council, which is not supposed to be involved in counting ballots, said Mr. Ahmadinejad was in first place.
Update: See also Michael Ledeen's interesting take.

Friday, June 17, 2005

The global housing bubble:
According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries' combined GDPs. Not only does this dwarf any previous house-price boom, it is larger than the global stockmarket bubble in the late 1990s (an increase over five years of 80% of GDP) or America's stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history.
Very informative interview with William Lewis, the author of The Power of Productivity.

Iran's phony election

How often do George W. Bush's statements get echoed the next day by the New York Times editorial? I'm just pleased to see this high-level criticism of Iran's rigged elections. So, what next? The NYT editors have the right goal:
Some European leaders have been quietly rooting for Mr. Rafsanjani, who is close to the top ayatollahs, in the hope that he would be most able to reach an acceptable nuclear deal and then sell it to the clerical establishment. There is little in his record to justify such hopes. The world would be better off if Western leaders used their little influence to press for more authentic democracy in Iran.
As for the means, this sounds good to me:
How can the United States help?

First, by recognizing the struggle of Iranians for freedom. The administration should denounce the murderers of dissidents, and applaud the freedom fighters, and we should call both heroes and villains by name. In facing tyranny, we must demonstrate clarity of purpose and identify evil where we see it.

Second, the U.S. should encourage other democratic nations to join in refusing to recognize a new government in Iran issued from undemocratic elections.

Third, as Farahanipour and others have suggested, we should massively fund the pro-democracy movement inside Iran.
So far, so good regarding step one. Time for step two, and especially step three.

Wednesday, June 15, 2005

The child tax credit

For the most part I agree with Bruce Bartlett's argument that conservatives should focus more on tax reform. However, I tentatively disagree with him about the child tax credit. Bartlett wants a flat tax, so as to minimize distortion of the economy. That's all well and good, but I think children have important positive externalities. In particular, our future fiscal problems with Social Security and Medicare are significantly effected by how many workers there will be to support future retirees. The number of retirees in, say, 2040 is essentially fixed (caveat: unexpected increases in life expectancy can't be ruled out). The number of workers in 2040 will be essentially fixed around 2020. Massive increases in immigration can't be ruled out, but there are reasons to believe (linked to long ago) that they won't occur. I'm not just talking about a possible anti-immigrant backlash:
Another constraint on immigration to the United States involves supply. Birthrates, having already fallen well below replacement levels in Europe and Asia, are now plummeting throughout Latin America as well, which suggests that the United States' last major source of imported labor will dry up. This could occur long before Latin nations actually stop growing -- as the example of Puerto Rico shows. When most Americans think of Puerto Rico, they think of a sunny, over-crowded island that sends millions of immigrants to the West Side of New York City or to Florida. Yet with a fertility rate well below replacement level and a median age of 31.8 years, Puerto Rico no longer provides a net flow of immigrants to the mainland, despite an open border and a lower standard of living. Evidently, Puerto Rico now produces enough jobs to keep up with its slowing rate of population growth, and the allure of the mainland has thus largely vanished.

For its part, sub-Saharan Africa still produces many potential immigrants to the United States, as do the Middle East and parts of South Asia. But to attract immigrants from these regions, the United States will have to compete with Europe, which is closer geographically and currently has a more acute need for imported labor. Europe also offers higher wages for unskilled work, more generous social benefits, and large, already established populations of immigrants from these areas.

Even if the United States could compete with Europe for immigrants, it is by no means clear how many potential immigrants these regions will produce in the future. Birthrates are falling in sub-Saharan Africa as well as in the rest of the world, and war and disease have made mortality rates there extraordinarily high. UN projections for the continent as a whole show fertility declining to 2.4 children per woman by mid-century, which may well be below replacement levels if mortality does not dramatically improve. Although the course of the AIDS epidemic through sub-Saharan Africa remains uncertain, the CIA projects that AIDS and related diseases could kill as many as a quarter of the region's inhabitants by 2010.
Given the importance of birth rates, how elastic is the demand for children with respect to tax credits? If it is very inelastic, then by all means, let a flat tax steamroll it. However, I suspect there is enough elasticity to make the child tax credit worthwhile, perhaps enough to justify increasing it. Alas, I have only anecdotal evidence. (And to be fair, things like generous family leave policies for workers in European welfare states haven't solved their fertility problems.)

Dave's filter

Sweden really needs welfare reform. I have to wonder what fraction of Europe's troubles with assimilating immigrants is caused by overly generous welfare systems.

Here I found a particularly good point about our difficulties in mustering enough troops for their many missions (especially in Iraq): if it's so bad, then why do we still have so many troops in Europe!? Limiting our military presence in Europe to air force bases (if even that) seems like a no-brainer to me. Am I missing something?

Reading Thomas' dissent in Raich, I can only say "Amen." Alas, Thomas is the only Supreme Court justice willing to overturn bad precedent in favor of originalist interpretation (though he was not the only dissenter in Raich). Is there any feasible scenario in which federalism will mean something again in this country? I've been pondering this for a while, and I've so far failed to come up with more probable than the sadly improbable appointment federalist majority to the Supreme Court. I dream of a reratification the Tenth Amendment, with a postscript: "We really mean it this time." But I can't imagine a political coalition that could accomplish this.

An (anedcotal) comparison of the British and U.S. health care systems. (I've been out of town and mostly off-line for a week, so forgive this last link for being a bit old.)

Sunday, June 05, 2005

Public pension funds (or lack thereof)

Business Week has a good article about the public pensions, focusing on state and local governments. Repeating the fiscal pattern we've seen in just about every aspect of U.S. government, between the recession and the big benefit increases made in the preceding economic boom, public pensions went from a 110% asset/liability ratio in 2000 to an 80% one in 2004 (chart). Actually it's much worse than that: the 110% figure was a lie to begin with (likewise for the 80% figure):
One major category of cost isn't disclosed at all: how much retiree health care has been promised to public retirees. No one can estimate how much these promises will add up to, but they're sure to be in the tens of billions, and only some states seem to have put aside reserves for them, according to bond analysts. That's chilling, given how quickly medical costs are rising. After a pitched battle, the Governmental Accounting Standards Board (GASB), the independent accounting standards-setter for state and local governments, has finally begun to require states to disclose these liabilities.... The requirement will be phased in beginning in late 2006.