Friday, December 29, 2006

"Fair Trade Oil?"

I just finished reading The Prize by Daniel Yergin. Fascinating (but long!) history of the past 150 years or so, as told through the lens of the oil industry. It starts out talking just about the industry itself, which occasionally starts bumping up against events of the day, but shortly into the 20th century an interesting inversion takes place whereby the significant events (such as the world wars) can be described in terms of oil itself as oil takes on strategic national significance for many nations of the world. He's not trying to claim that the wars or economic policy were specifically about oil (as many people claim about the current Iraq war) or anything radical like that; rather, he describes how the need for reliable oil supplies shaped strategies and policies and international relations.

Anyhow, I didn't intend this post as a book report; however, it did get me thinking.

Many nations have been "blessed" with rich deposits of oil. But this is a decidedly mixed blessing. Most nations with oil reserves have used that oil to help provide income for the country (in most oil-exporting nations, oil is nationalized) - and for most of these nations that income is (or was) badly needed. However with startlingly few exceptions, most of these nations have also not progressed very far at all, because the wealth stays captured within the government and the well-connected; on the whole, many of these governments are quite repressive, and even the ones that aren't rarely reinvest this money wisely in a way that diversifies the economy, creates a vibrant middle class, increases education, decreases poverty, or otherwise makes life better and more secure for everyone in the country.

My personal opinion is that this results from the fact that the income is "free" - once the well is in the ground, you don't have to do incremental work to gain incremental income. And if the government is getting a stream of income that is reliable, there isn't much incentive to improve its efficiency or reduce corruption. And worse, if that stream of income is coming from oil importing countries rather than from its citizens, then it doesn't need to be terribly responsive to its own citizens, and in fact has a strong incentive to ignore them in their effort to satisfy the foreign customer. A classic economic game of getting what you reward - frankly, nobody should be surprised.

I look at the coffee industry. Economic realities have incentives aligned for some pretty nasty environmental and labor practices in the industry. As a result, over the past few years we've seen a pretty strong rise in "fair trade" coffee, whereby producers and retailers commit to sustainable agricultural processes and fair wages to farmers, and label the resulting product as such, and consumers "agree" to pay a little bit more for the resulting coffee. Heck, even Starbucks, the Wal-Mart of the coffee world (yeah, I'm just saying that; I like Starbucks just fine) has embraced the concept, which says to me that the concept must be economically viable.

So I ask myself this: if its possible to alter the basic economic equation in coffee to account and correct for the intangible social consequences, is it idealistic/naive to suggest that perhaps we find a way to do the same with oil? We could add a "fair trade" certification for oil that comes from countries who:
  • Have certifiably open/transparent government processes that are free of any meaningful degree of corruption
  • Respect human rights - for example, if they want to drill a well in your yard, they actually pay you for your property
  • Respect their environment
  • Plow petroleum profits back into proper investment in their citizenry
  • Work to diversify their economies in order that people outside of the oil industry can have opportunities, and so that the country is not so wholly dependent on oil.
Obviously, you can't very well go in and make Iran or Saudi Arabia or Nigeria adhere to guidelines such as these - particularly when their ruling classes are making so much money from oil sales. However, unlike coffee where the fair-trade rules increase the cost of the resulting product, in this case I don't believe that adhering to these guidelines needs to increase the cost of the oil at all. As such, you can turn the economics around: raise taxes on all oil by some amount, and then eliminate taxes for "fair trade" oil. You could even do this in a revenue-neutral way, making by making the total tax rise fluctuate based on the amount that gets reduced for the fair-trade exemption. That way, you're not hurting the economy or paying more in total for oil, but you are introducing price discrimination into the equation to favor behavior we approve of over that which we do not. Classic economics: if you want a different outcome, change the incentives equation.

Doing so would sure be a whole lot cheaper and easier than going to war over the point.

Friday, December 22, 2006

And people complain about political correctness run amock?

You may have heard about a massive wind storm that hit Seattle last week. It knocked our power and Internet access out for 6 days, and my in-laws still don't have power more than a week later.

While a few people died from flooding and trees falling onto their homes - quite tragic under any circumstances - the largest single cause of deaths appears to have been from carbon monoxide poisoning, from people moving generators or grills indoors. This is particularly tragic because it is so obviously preventable. After all, when the wind is blowing, you can't necessarily stop a tree from falling on you, but you sure as heck don't have to bring a generator or grill inside.

Anyhow, responding to this, our major daily, the Seattle Times, published big bold front-page headlines a few days ago in about 6 different languages warning about what a bad idea it was to bring these fuel-burning devices indoors. Great public service announcement.

Would you believe that the Times actually got letters from people protesting the fact that they published this in a bunch of languages other than English? I understand the goal of having people that move here learn to speak English; heck, I've blogged on this very topic. But let's get some perspective, folks. Which is more important: (a) keeping people alive by giving them some very basic information in a form that they can understand, or (b) advancing your ideology about "English Only?"

Whether or not English is or should be our official language, the facts on the ground are that many people don't speak it or read it, and suggesting that they should not be presented with potentially life-saving information is simply a disgusting elevation of ideology over humanity. Let's save the English-only debate for non-life-threatening issues, OK?

Hard for me to build on this

So I won't even try. I think Fareed is one of the most clearheaded analysts out there, and this is a great summation of the Iraq war.

Sunday, December 10, 2006

Transfats and Foie Gras

Motherhood and apple pie may epitomize "America," but governments lately are taking this literally as they try to act like parents and police what we eat. Chicago, of course, gained notoriety this summer for banning the sale of foie gras (though, in a humorous loophole, I understand that they can still give it away - leading to $100 pizzas with free foie gras on top!) And now New York has banned the sale of foods with trans-fats in them, and is considering following Chicago's lead with foie gras.

The trans-fat issue is one where I think the government might actually have a legitimate role, but is going about it all wrong. Trans-fats raise legitimate health issues, but an outright ban makes no sense - it's heavy handed, and restricts many legitimate uses along with the problem scenarios. Bans like this for decisions that a rational adult should be perfectly capable of making should be anathema to anybody that loves freedom.

Most trans-fats in cooking are a relatively recent (last century or so) invention, and are not naturally occurring (though some small amounts are natural). More to the point, switching away from trans-fats to other fats can generally done transparently, with no obvious effects on taste or outcome. I say "generally" because there are places where these fats fill a unique role - a little bit of Crisco in a pie crust can make it somewhat flakier more effectively than butter.

So going without trans-fats is, with a few minor exceptions, a fine and doable option, and a good thing for people to do. If this is the case, and if a ban is a bad idea, what is a reasonable approach to addressing the health issues associated with trans-fats? The best idea I've heard is one where the government doesn't ban trans-fats explicitly, but requires (a) clear labeling of any foods that contain them, and , (b) taxes levied to recover the associated health costs. This is similar to the approach with cigarettes, of course, and smoking has been declining steadily over the last several years.

The two best ingredients to people making smart personal decisions are good information, which the labeling provides, and an economic proposition that reflects more or less the realities and tradeoffs of the decision at hand, which a tax would provide. Then let people make their own choice. If they decide to get fat and have a heart attack, why shouldn't that be their prerogative, as long as the rest of society doesn't have to pick up the tab for that decision?

The ban on foie gras is not quite the same, in that the issue here is not so much a personal decision as it is one based on an argument of animal cruelty. I would have a hard time trying to justify animal cruelty, but the issue is not whether or not you support animal cruelty, but whether what happens meets the definition of animal cruelty. (I think this argument is analogous to the one I recently made about abortion being a debate about where the line is for infanticide).

"If God didn't want us to eat animals, why did he make them out of meat?"
-- Homer Simpson

If foie gras truly is animal cruelty, then tasty as it is, it is reasonable for governments to ban it. I argue above that the decision to eat trans-fats is a personal one and a "victimless crime," but abusing animals is hardly victimless; it is certainly within the reasonable jurisdiction of governments to ban such activities or their outcomes.

I personally love seared foie gras, and would hate to see it banned. (And frankly, I think Chicago and NY should focus on more pressing problems facing their populations.) Given that geese do not have a natural gagging relfex, it is also not clear to me that this crosses the line to animal cruelty.

Absent a clear distinction between foie gras and other "cruel" foods (veal, factory-farm poultry, etc.), then I worry that banning foie gras is just the first step down a slippery slope towards banning a host of other food products.

Monday, December 04, 2006

Profiling - what's wrong with it?

Profiling seems to be getting a bad rap these days, whether it's racial profiling (getting pulled over for "driving while black", for example) or other forms of profiling, such as suspicions of anyone doing anything overtly Islamic, such as the recent detention of several Muslim clerics from a US Airways flight. (Note that I am deliberately using simply "profiling" rather than the more commonly used "racial profiling" because profiling can go beyond simple race, as the example above illustrates.)

Is profiling inherently problematic? The answer, surprisingly, I think is "no." From a civil-rights perspective, I think there is nothing wrong with profiling per se, provided that it meets one critical test: is it effective. Most of the time, it isn't, and this is where profiling inevitably crosses the line from inconvenience to personal infringement for the person being profiled.

Consider two examples to prove my point about effectiveness. In the first, there is a report of a shooting in a predominantly black neighborhood. If the police are out looking for suspects and focus exclusively on blacks, that IMO is "bad" profiling - you're casting unfair and undue suspicion upon someone because of skin color (seems like an infringement on their rights to me), and you're also ineffective because you are needlessly cutting off leads that could be fruitful.

On the other hand, suppose in the same situation there are eyewitness reports that the shooter was black. In this case, I don't think anybody would think it controversial to focus on black suspects; frankly, I doubt anyone would actually call this "profiling" in this situation.

Over the past few years, I think we've seen a lot of hysteria over profiling with regard to terrorism. The imams mentioned above are not the first example of Muslims being removed from airplanes because of middle-eastern looks or because they were overtly Muslim. I hope I'm not saying anything scandalous in saying that this is pretty bad profiling. After all, I'm not aware that we've ever actually caught a terrorist this way. On the other hand, the sort of profiling that has actually stopped terrorists has been looking for people who, say, try to light their shoes on fire on an airplane.

Much of this hysteria I think arises from a mistaken understanding of statistics and probability. For example, it is a fact that the most deadly of terrorist attacks (9/11) and the vast majority of terrorist attacks around the world over the past several years have been committed by Muslims. Sad fact, but pretty obviously true. So the odds that a given terrorist is Muslim are much higher than the odds that the terrorist is, say, Catholic. However, we aren't looking at random terrorists, we're looking at random people. And even if the odds that a random Muslim is a terrorist are twice that of a random non-Muslim, you're still looking at minuscule odds in either case. Stated another way, with over a billion Muslims in the world, if there are even 1 million terrorists among them (which I'm sure there are not), that's still only a 0.1% chance that any given Muslim is a terrorist.

So suspecting a given Muslim of being a terrorist simply because of his religion is a lot like trying to solve a rape case by detaining all of the men in the city. You haven't really narrowed the problem in any meaningful way, and you're violating the rights of a lot of people in the process.

This isn't just an academic point - efficiency in security is actually critical. Trying to achieve good security without efficiency has two very dangerous side effects: (a) it overwhelms the process that you are trying to keep secure, and (b) all the effort expended on pointless security procedures distracts resources from genuinely useful security work, thus creating security holes or lapses that can be exploited by people who don't simply look like the stereotype of the bad guys but who actually are the bad guys.

Removal of shoes and bans on liquids at the airport both offer examples of the latter, and as far as I can tell neither of these time-consuming, arduous, and expensive procedures has stopped a terrorist. Alert passengers on a plane stopped the shoe bomber, and good intelligence stopped the liquids-bombers.

Frankly, I've yet to hear of examples of profiling that are actually effective in practice. And that is what makes the inconvenience and infringement that results so unacceptable.

Sunday, November 19, 2006

A bit of support for my hypothesis

A few weeks ago I posted about the unintended consequences of increased energy efficiency - namely, that increased efficiency (or low cost cheap power or fuels), while it would decrease consumption for a given task, would actually lead to greatly increased energy consumption overall.

I made a not-so-rigorous argument in a not-too-coherent manner, but I've just read a book (The Bottomless Well - The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy by Huber and Mills) that spends much of its pages making precisely the same point with much more data and rational than my mere conjecture contained.

I don't quite agree with all of its assertions. For example, it correctly points out that waste is necessary, that you cannot have perfect efficiency in, well, anything. According to the laws of thermodynamics, this is absolutely correct (and is also why only 2-15%, depending on how you measure, of the raw energy available in a gallon of gasoline actually gets converted into forward motion for a car). But because this inefficiency is unavoidable and a key side effect of extracting work from energy, they claim that waste is therefore "virtuous." That's a stretch to me - just because it is vital doesn't mean you want any more of it than you absolutely have to have.

But most of these disputes are quibbles; I thought that overall the book was quite enlightening in describing the history of human energy consumption, the importance of energy to our economy, and the importance of using energy to extract and refine energy itself, all using compelling data to make some rather counterintuitive points.

Happy non-denominational winter solstice event

Last week there was a funny segment on The Daily Show where Jon Stewart pokes fun at the whole "war on Christmas" thing. I think his satire here is spot-on; the whole "war on Christmas" (obviously a sub-battle of the whole "war on religion") is a farce by people who confuse defensive pushback with offensive attacks.

Let me start small with the Christmas angle. There was a big debate last year certainly (and in other years) about various stores trying to "banish" Christmas by having their employees say "Happy Holidays" instead of "Merry Christmas." Many people felt that this was political correctness run amock, or else saw larger anti-religion overtones in this, and thus felt not only offended by the use of the term "happy holidays" but also that the minority was again ("again" is a funny word to use here, since it presupposes prior legitimate examples) running roughshod over a majority.

But I think this point of view is erroneous for several reasons:
  • I have yet to hear a tale of someone taking offense or filing a lawsuit or a formal complaint or whatever because somebody else wished them Merry Christmas. (Heck, I'm Jewish and I have no problem with it, and I wish people Merry Christmas myself at this time of year.). Yet many people were proposing boycotts of stores for using Happy Holidays. This makes the notion of the minority oppressing the majority tenuous at best.
  • The stores that said Happy Holidays inevitably were filled with red and green inside; there was absolutely no evidence of Christmas being ignored or banished. (And I might argue that that such materialism alone, not the greeting used by the employee, is a far bigger and truer "banishment" of Christmas.) Best Buy this year provides a recent example of this.
  • If you are a shopkeeper know that many of your customers are Jewish or Muslim or whatever, why wouldn't you want to be as welcoming and inclusive as possible?
  • It's a free country, last I looked. Nobody is forcing anybody to say Happy Holidays, so why can't they choose to say what they want?

And at the same time, lots of folks say Merry Christmas. That's fine too. (Other than the fact that Christmas is a holiday that seems to last for a month and a half of the year. But I digress.) While we're on the subject: it's a Christmas tree, not a holiday bush or any other euphamism. The tradition of decorating a tree this time of year is essentially exclusive to Christmas, no harm in calling it that.

So how or why the Happy Holidays/Merry Christmas debate ever became an issue escapes me; it seems to me that it's only an issue, frankly, if you're a religious Christian who can't bear the acknowledgment that there are quite a few non-Christians in the country. Fortunately, most Christians know and behave better.

But there's the larger issue of the "war on religion" that I hear about a lot from my conservative friends who decry the lack of school prayer, or the display of religious symbols in public, or attempts to remove "under God" from the pledge of allegience.

This is an issue where perspective is everything, I think. Take organized prayer in school, as the most glaring example. From the perspective of a religious person, banning organized prayer may seem like outright hostility (rather than neutrality) towards religion. But to a non-religious person - or someone from other religions - such prayer clearly crosses the line to imposition of religion, or at the least a demand that government somehow endorse a religion in particular or religion in general. Yet the defensive pushback to that imposition is viewed as an offensive attack on religion.

School prayer may be the most effective tool in highlighting this, but I think all of the other "hostility to religion" issues fall into the same basic model.

As a side note, the whole notion of not displaying religion in public I think also reflects a subtle but critical distinction in meanings of the word public. "Public" displays by private individuals or groups has always been and (fortunately) continues to be perfectly acceptible. But "Public" can also mean "owned or operated by the public", i.e., government, and this is where neutrality towards religion must be enforced.

I believe in the first amendment. And I have no problem acknowledging that the founding fathers were all Christians, some of strong faith. But that doesn't change the fact that the country that they founded was quite deliberately set up to be a secular government in which religious people could thrive; the first amendment makes that abundently clear to me. And it's worked quite well to keep government out of anything religious.

Religion belongs in the home and in the heart, not in the government. For a perfect example of why, just look at almost any country in the Muslim world that has embraced Islam as a basis for its government. I say that not to slam Islam, but most off the governments that explicitly embrace religion are Islamic and collectively these governments and societies provide ample evidence that government and religion are not a compelling mix.

I have absolutely no problem with PDR (Public Displays of Religion). I have absolutely no problem with religious people of any faith practicing, embracing their religion, or letting it guide them. I have no problem with politicians being guided by their faith - quite the contrary, I think that's quite healthy. But there is a huge difference between being guided by faith and demanding that your government get out of the way of your practice of it, and demanding that government embrace your religion.

Saturday, November 18, 2006

Jury duty and the presumption of innocence

I had the pleasure of serving on a jury a few weeks ago. As part of the jury selection process is something called voir dire where the lawyers try to suss out any points of view that the prospective juror might have that might make it hard for them to be fair.

In this particular trial, the defense's strategy more or less boiled down to trying to establish reasonable doubt (something they failed to do, as it happened) and thus the presumption of that the client is innocent played a large part in the defense's voir dire questioning.

To this end, at one point, the defense lawyer asked a prospective juror "is my client guilty?" The prospective juror gave the correct answer that no, because the case had not yet been proved (heck, it hadn't even begun). More specifically, the defendent is in fact innocent at this point because a guilty verdict has not yet been rendered, and he is not guilty prior to that point. This is, I suppose, what presumption of innocence is about.

But I would have answered this particular question differently. I would have said "most likely." I might have even added "I hope." Because while the defendent most certainly is entitled to the benefit of the doubt as to his guilt or innocence, the very fact that he sits in the defendent's chair is a result of some degree of vetting by the police and prosecutor and perhaps a grand jury as well. They believe they have a good case, or they wouldn't try the case.

In other words, a presumption of innocence very different from a likelihood of innocence, and the lawyer's question was ambiguous about which question (presumption or likelihood) he was asking about.

And it should be so. I'd certainly hope that a high percentage (80-90%?) of cases that make it to trial ultimately result in a guilty verdict. Much less than that and the prosecution is being indiscriminate about who it chooses to try, wasting a lot of time and money on anybody vaguely suspected of the crime. Much more than that and they're either not trying hard enough or the jury system itself isn't working. And ultimately the role of the jury can be viewed as keeping the prosecution honest (i.e., making sure they do the right thing and prove the cases) and making sure that none of the minority of cases where they put the wrong person on trial (or put them on trial for the wrong thing) gets through.

Does this view conflict with the objective role required of a juror? I don't think so, with one big condition: the fact that a defendent is very likely to be guilty must not be treated as a reason to think that the defendent is in fact guilty. Otherwise, you have circular logic creating a self-fulfilling prophecy whereby defendents are found guilty because they are likely to be guilty. It is for this reason that I believe jurors should ask themselves not only should they ask themselves if the case was proved, but also if this could possibly the exception case where the prosecution got it wrong.

Monday, November 13, 2006

Gay Marriage

I guess that now that the Dems have control of congress, this will be a big topic over the next two years. This is another one of those debates where I think a lot of people talk right past each other and miss the key points.

I think the biggest casualty in the debate is a subtle but critical point, which is this: marriage is a twofold institution. There is the social/religious/traditional side of it, and there is the legal side of it (inheritance rights, for example). The former is the domain of society, the latter the domain of government. The "protection of marriage" folks seem to focus exclusively on the former, while the pro-gay-marriage folks blur the two and want both the legal and the social recognition.

The New Jersey supreme court recently ruled on the issue, finding that the social side of this was a political question, but that the legal side of it was pretty clear. While this may seem like a "split the baby" decision that punted on the hard issue, I think that it was actually entirely the correct decision.

With the usual disclaimer that I'm no lawyer, I don't see how they could have ruled any other way. The 14th amendment to the US constitution says that no state shall make a law that would "deny to any person within its jurisdiction the equal protection of the laws". In other words, a rule must apply to everyone or nobody, it cannot be selective. So if the rule is that anyone can enter into a lifetime contract with a single other person and get a set of benefits as a result of doing so, then that's OK - you can make that contract with anyone who is legally capable of entering into such a contract. This amendment appears (to me at least) to make it illegal to say that if you are white you can only marry another white person, for example, since that is not providing equal protection.

There are of course exceptions that do not violate the 14th amendment. 3 come to mind:
  • You cannot marry more than one person. But the "one other person" rule applies to everyone equally.
  • You cannot marry a minor. But marriage is a contract, and you can't have contracts for illegal behavior (e.g., you cannot have a legal contract to kill someone). Two strikes here: minors cannot legally enter into these sorts of contracts, and sexual relations with a minor are illegal, so this isn't an equal protection issue so much as a "legal contract" issue.
  • You cannot marry a close blood relative. Again, since those relationships are illegal anyhow, the marriage contract would be illegal.
Homosexual relationships were once illegal, and if they still were, then I think there would be a strong analogy with incest and underrage marriage. (Frankly, I think this is one reason that in our 230 year history as a nation, this issue has only come up relatively recently.) However, gay relationships are no longer illegal, so the analogy with illegal contracts evaporates. So I can no longer match up gay marriage with any of the exceptions above. And I can find no fundamental principle that separates gay marriage from interracial marriage, frankly. Interracial marriage bans are anathema, and if there is no principle to distinguish gay marriage, then I am forced to conclude that gay marriage bans - at least from the legal perspective - must also be anathema.

In other words, it seems to me that the decriminalization of homosexual relationships coupled with the 14th amendment has as a natural and direct consequence a requirement to offer gays the same legal benefits/protections/responsibilities that straight couples enjoy with marriage, whether you call it marriage or not.

The NJ supreme court probably used different reasoning (I'm assuming it was actually based on the law, rather than my arguments above), but seem to have come to essentially the same conclusion. They don't care what it's called, as long as the legal rights - i.e., what government actually has a role in - are provided equally.

"What's in a name? That which we call a rose
By any other word would smell as sweet."

--From Romeo and Juliet (II, ii, 1-2)

The other side of the equation, of course, is not the legal side, it is the cultural/social side. If you provide equal rights, do you call it marriage or civil unions or something else. I think this is a silly debate. It's just a name, and Juliet was right. Have a referendum, pass a law, run a campaign - this is just a decision to make, but it doesn't really matter in the end.

There are other arguments against gay marriage that have been made including:
  • Procreation: gays cannot (naturally) conceive children. If this argument were at all valid, then you would also prohibit sterile people from marrying, people that don't want to have kids (or use birth control), or elderly people from getting married. Lame argument, doesn't wash.
  • Differing state laws: what happens when Massachusetts legalizes gay marriage and other states don't (or are forced to do so due to the full-faith-and-credit clause). Again, I think this argument is weak since the states already have to deal with differing rules on legal age to get married or closeness of relatives.

A lot of folks are very threatened by the notion of gays calling their union "marriage." Frankly, I simply don't get how this can possibly be a "threat" to marriage. I'm a happily married straight man, and I don't see how a gay couple that I don't know getting married possibly impacts my marriage. I can't imagine a single straight man now saying "I was going to propose to my girlfriend, but now that gays also have marriage, what's the point." This simply doesn't weaken marriage.

So despite being somewhat nuanced, I think that the NJ supreme court actually got it right.

Wednesday, November 08, 2006

Be careful what you ask for

Well, it appears that the democrats have made significant gains in the elections yesterday (as I write this, the senate is still too close to call). Congratulations are in order, I suppose. However, for most of the past 12 years, the party has been their own worst enemies. And if they're not careful, they will continue to be so.

In particular, Democrats risk interpreting yesterday's vote as an endorsement of them rather than a repudiation of Republicans. I think doing so would be a huge mistake. While the Republicans (for once) were the source of their undoing, the Democrats largely won because they weren't Republicans, not because they had any great ideas of their own.

Pop quiz: while we all agree that Bush has done a terrible job of conducting the war in Iraq, what serious proposal have the Democrats had for doing it better? Yes, congressional oversight and getting Rumsfeld out (looks like the latter just came true) help, but gosh, those are the conditions for a strategy to succeed (which admittedly have been lacking), not an actual strategy itself.

I also worry that the Democrats will waste a lot of time on vindictive investigations rather than productive policymaking. The Democrats have been out of power for a while now, they may forget that it's very easy to complain about the folks with power, much more difficult to actually govern.

I predict that if they step up to their new responsibilities, govern in a unifying manner, avoid the vindictive investigations and focus on positive steps for a successful resolution to Iraq, they will do very well in 2008 and have a decent chance of capturing the white house (unless they nominate another dud like Kerry).

However, I suspect that the more likely scenario is that they will revert to their default behavior, have no credible policy alternatives of their own, and when 2008 comes around the Republicans will have a field day saying "we told you so" and will run roughshod over the Dems.

It will indeed be interesting to see how it turns out.

Friday, October 20, 2006

Internet Gambling

It's somewhat difficult to build on George Will's good column in this week's Newsweek about the recently passed law criminalizing most Internet gambling, but I'll give it a try with two additional broader philosophical points:

a) The government should not be legislating morality, especially in this hypocritical manner. Morality should certainly guide legislation, but legislation should not enforce morality. Freedom means nothing if it constrains the freedom to make potentially bad choices. (This is a huge part of why I think so much of the Muslim world is so messed up, frankly - it has nothing to do with Islam per se, and quite a bit to do with governments viewing their role as enforcing Islam's notion of morality.)

b) "Victimless crimes" should not be criminalized. Yes, some problem gamblers or alcoholics let their vices get out of control to the point where it clearly is not victimless, in which case the right thing is to define those lines and criminalize the behavior that has victims. Millions of people every day consume alcohol or gamble, though, with no problems whatsoever.

Insurance Irony

There's an old joke about banks that says that in order to get a loan you first have to prove that you don't need it. Health insurance is similar in many ways, and likely to get moreso.

At my physical exam last week, my doctor expressed his opinion that over the next decade or two we will probably find ourselves doing more genetic testing to predict predispositions for cancer and other diseases with strong hereditary links. He further opined that this naturally raises a host of issues with insurance companies and privacy, since people who have marker genes for some nasty illness will either be charged outrageous rates for insurance or else will be denied insurance altogether. Or, an alternative consequence would be that people would avoid having these tests done in order to avoid these outcomes - which seems to me to be an even worse outcome, frankly.

I think that either outcome would be a shame, of course, but I think it is also unnecessary. In fact, I think there is possibly an opportunity for a whole new business model to grow.

Let's step back for a moment and understand why people buy insurance and why insurance companies would charge higher rates (or refuse to offer coverage) to people with known, quantifiable risks. At the simplest, insurance companies are betting that you'll stay healthy while policyholders are betting that they will get sick. The word "bet" here is not accidental - it's entirely a statistical process. The insurance company makes money by charging rates that cover the expected rate of claims, plus a small margin for profit. In exchange, the value for the patient is that the financial downside potential of getting sick is capped.

This, of course, only works because of three reasons:
  1. The risk for a given person gets spread among many people, including healthy people
  2. Information about who will get sick (and how sick they will get) is imperfect
  3. Insurance companies have good oddsmakers figuring out the right premiums to charge each policyholder based on known risks (e.g., smoker, overweight, etc.)
The level of predictive quality around those known risks is still pretty low, which is why it must remain a statistically-driven process. However, with genetic testing for serious hereditary diseases, of course, the insurance companies can make far better predictions about expected rates of illness.

Let's take this to its logical extreme to see why my doctor's fears are not unreasonable: suppose that the insurance companies could predict with 100% certainty the future healthcare needs of a given individual. What premium would they charge? Precisely the cost of that healthcare plus some margin (hopefully reasonable!) for profit, of course. On the other end, if a person knew that they would remain perfectly healthy until they die by getting hit by a bus, they would not bother buying any health insurance. In this world of perfect knowledge, therefore, there really is no need for an insurance product at all, since the only people who need insurance would end up having to pay more (by the profit margin) than the health care would cost out-of-pocket. Obviously, that's not good for the insurance companies, nor, frankly, is it good for customers because they have not been able to cap their downside expenses.

In other words, in a world of perfect information, insurance collapses because conditions 1 and 2 above fail. Of course, perfect information is not now nor will it ever be possible, but we will continually get closer.

So how do you prevent these fears from becoming reality as we get closer to perfect information? I think one possible answer (and the potential business opportunity to which I alluded) is by providing an anonymizing buffer to the insurance companies.

Here's how it might work. A buffer company collects customers in groups of, say, 1,000. It collects all of the information it can about the customers so that risk assessment can be accomplished as accurately and completely as possible. It then contracts with an insurance company to insure the whole 1,000 person lot.

If there are, say, 200 smokers in that group of 1,000 and 150 people who are likely to get Alzheimers, the insurance company is told these facts. However, the insurer is not told which members of the group of 1,000 are the smokers or the Alzheimers candidates, so it cannot cherrypick the healthy patients - it must cover the whole group of 1,000 or not. The premium it charges, of course, must reflect the fact that (in this example) 15% will likely get Alzheimers and 20% are strong candidates for lung cancer. However, because the group is insured as a block, this model forces the risk to be shared/spread among healthy and unhealthy, and the insurance company is forced to cover all using statistical models.

Of course, premiums should not be the same for everyone. People with discretionary risk factors such as smoking should pay higher premiums, young healthy people typically should pay lower premiums than older people who are almost certain to make greater use of health care services. The buffer company could adjust the premiums as needed to make sure that, in the example above, the smokers pay more than the non-smokers. But by anonymizing/grouping patients, it becomes possible to make sure that everyone can get insurance, to make sure that people with non-discretionary health issues (i.e., inherited) can have reasonably priced coverage, and to make sure that there is no dis-incentive to collecting the most accurate and most complete information possible.

There are a thousand business model details that would need to be worked out to make this new intermediary business work, including the obvious one of "how would it make money?" I suppose that if I were interested in acting on this, I'd be diving in to these details. But I'm not; I leave execution of this idea as an exercise for the reader. I merely offer it as a possible way to solve the "problem" of constantly improving medical information.

Monday, October 09, 2006

China might need an omelette on its face

This week North Korea defied the whole world - including China - by testing a nuclear weapon. That leaves egg on China's face, but I fear it will take more eggs before China behaves like the responsible world member that it wishes to be treated as.

Like a teenager who demands to be treated like an adult but has not yet demonstrated that they have the maturity of an adult, China has long demanded a level of respect on the world stage that it has not yet earned. Like a teenager, it finds itself in a grown-up body economically (and militarily, frankly), but from North Korea to Taiwan to Tibet to a list too long of shady business partners, it has not yet demonstrated the maturity that such a position requires.

Every country must, of course, follow its national interests; even when those interests are opposed to the interests of other nations. The United States certainly does. However, true leader nations also recognize that their long-term interests often require doing things that are short-term undesirable. China has been unwilling to reign in North Korea because of fears of instability and refugees. But by propping up the North Koreans, they're actually creating a far worse long-term problem not only for China but for the whole community of nations.

This was their moment for China to stand up on the world stage and show that it knows how to do the right thing, even when it is difficult to do. They failed this test miserably. Pyongyang has embarassed Beijing, and, frankly, Beijing deserved it.

The right thing to do here is not a pleasant one. China needs to seriously curtail its support of North Korea. Given Pyongyang's policy of putting the military first, doing so will almost certainly cause even more hardship for the already suffering population of the North, but failure to do so only prolongs their existing suffering.

It's time for China to do the right thing. I hope they do, but I am not holding my breath, for the Chinese regime has shown time and again that it has no interest in the broader good, only its own.

Sunday, October 08, 2006

We could all learn from this

So what to you do when a madman shows up at your community's school and murders 5 of your children and shoots 5 more before killing himself? Mourn at his funeral, apparently. Almost half of the people at the killer's funeral were Amish.

Wow, that is unbelievably classy; Webster's should rewrite its definition of the word to cite this example. How many of us would do the same? Many religions preach forgiveness and peace, but very few actually act on those convictions when tested as the Amish have been this week.

The Amish had my sympathies this week for an unspeakable tragedy, they now have my awe as well.

Wednesday, October 04, 2006

The problem with the abortion "debate"

Abortion is certainly a sticky issue in America, and probably one of the longest-lasting; it's been a front-burner issue for many people for pretty much my whole adult life; few other issues can claim that sort of longevity. Why is this? What is it about abortion that makes it so fundamentally intractable?

I think the biggest problem is that, as with many other ideology-based issues, it's one where the principle zealots talk right past each other. Here's the thing: I think that upwards of 99% of Americans actually agree on this issue. As proof, let me offer the statement that I think would garner that level of support: "Infanticide is wrong." Is that really a controversial statement? (Gosh, I sure hope not).

So why the problem? I think it's the whole definition of the Magic Point where something becomes worthy of the designation "baby" (or "person" or "infant," take your pick - it doesn't really matter.) Termination or prevention of pregnancy after the Magic Point is infanticide and hence morally unacceptable; prior to the Magic Point, it is morally a non-event.

I think this gets to the key about why the abortion debate is so intractable. The defining point of babyhood is ultimately a matter of faith, ideology, laws, or convention; it's not a hard-fast scientifically provable point. Catholicism holds that the Magic Point must occur even prior to conception - that it's wrong to even prevent conception via birth control. Many folks including most fundamentalist Christians believe the Magic Point is at conception, whereas at the other extreme Judaism considers the point of viability to be graduation from medical school or law school. (Easy, easy, folks, that was a joke).

Religions might also define the Magic Point as when a new soul is created. That seems reasonable to me, but of course it begs the question of when that happens. Conception is a pretty good candidate event for this, but it doesn't quite work because identical twins arise post conception, and nobody would argue that they share a common soul.

My own point of view? The Magic Point is, unfortunately, to my thinking, very hard to crisply define.

I'll use a loaf of bread as an analogy. (And remember, it's just an analogy - although the similarities are striking, babies are not loaves of bread.) To make bread you must mix water, flour, yeast, and salt together and bake it in an oven for some period of time (we'll skip kneading and rising for simplicity). The "point of conception" for a loaf of bread is the point at which the ingredients are mixed - after all, if you don't mix them, you don't get bread, and it's at the point that you mix them that you have something that is neither flour nor water nor salt nor yeast but something somehow different. Mixing of the ingredients also has a nice secondary property that it is a very well defined point; you can easily point to "before" and "after".

But is a lump of dough just about to go into the oven fairly called a loaf of bread? That's where I have a hard time with this definition. In my view, it clearly is not a loaf of bread - and I do not think that a fertilized egg or a clump of cells shortly thereafter is a child either. Some very critical and very well defined steps have taken place, but additional critical steps still remain, and unfortunately they are not so neatly defined. In the bread case, if the baking time is 20 minutes, it's pretty clear that I will have bread at 20 minutes. I will probably have something that is still decent bread at 15 minutes. I may have something salvageable at 10 minutes. But at 1 minute it is still just dough. Somewhere between minute 0 and minute 20 the Magic Point is clearly crossed, but darned if I can point to the precise point.

It's certainly not satisfying to me to wave my hands over the gestation process and say "somewhere in there a clump of cells becomes a baby," but the clarity of a specific point in time (sperm fertilizes egg) is also not a satisfying criteria.

I consider myself "pro-choice" and think that the trimester model is a reasonable approximation (and just an approximation!) of the process, but I also recognize that this is just my point of view. I can argue (as I have above) that this is the right way to view the Magic Point, but cannot prove it - it's fundamentally just my point of view. And unless someone figures out how to get broad consensus on the Magic Point, I believe that this is why the abortion debate will not go away, nor will its acrimony decrease, anytime soon.

Monday, October 02, 2006

Unintended consequences

Lately I've been thinking a lot about alternative and renewable energy. I think it's an inevitable growth area, the question is not "if" but "when." I assume that there is a finite amount of oil in the ground that is economically recoverable. Some people think that finite amount is 20 years, some think 70 years, some think 150 years. Frankly, I don't know - all I know is that some number of years exist and it will be gone (too expensive) for all practical everyday purposes, reserved for only those applications that can afford the high cost or that simply cannot run on anything else.

I'm not an alarmist in the sense that I don't think the sky is falling over this issue - I think that ingenuity and innovation will find alternative sources of energy and that the laws of economics will make sure that ultimately everything works out, maybe not at a price we like, but ultimately at a price we can live with. Of course, coupled with that statement I also think there is tremendous opportunity in this space and I personally find such opportunities quite intriguing. So do many other people, although I think a lot of them go after opportunities because they are, for example, an alternative to oil, rather than because they are economically competitive with oil today. While I think there has been some good technical thinking that arises from this, it's not a particularly smart approach to creating a sustainable business. (See my earlier post on the need to compete on the merits and the payback period I'm expecting on my own solar panels).

I think that the biggest opportunities in the near term will be around efficiency - getting the same benefit for less energy consumption, and alternative sources will slowly become more and more viable.

So why did I call this post "unintended consequences?" I realized today that there is almost certainly a catch-22 involved in any meaningful gains in efficiency or rise in alternative sources of energy. I confess that this is conjecture, that I can't prove it, but I think there's ample prior examples to suggest that I'm probably right. Anyhow, my hypothesis is that any significant reduction in the cost of energy (whether through efficiency gains, discovery of new oil, practical cold fusion, whatever) will actually lead to an increase in energy consumption, which will offset a significant portion of the savings.

Think that's a nutty proposition? Maybe it is, but consider two examples from other domains:
  • Traffic: When roads are widened from, say, 2 lanes to 4, initially the result is a relief of congestion. But what frequently happens is that now with a wide free-flowing road, housing and employment opportunities that were unattractive down the clogged 2-lane road suddenly becomes attractive down the wide-open 4-lane road. Development ensues, and rapidly the road is again at capacity. This isn't a bad thing or a good thing, it's nothing more than a reflection of people responding to the incentives that we provide. (Economic laws are pretty powerful things!)
  • Computer Processing Power and Bandwidth 10 years ago we had sufficient CPU power and bandwidth for what people were doing with their PCs, and we asked what we would do with more. OK, nobody seriously thought we wouldn't find uses for more CPU or bandwidth, but that's not the same as saying that people were demanding it. Nevertheless, more CPU and bandwidth came, and what happened? I think it's best summarized by The cost of CPU/Bandwidth fell, and people found new must-have uses for it, which would have been prohibitive at the cost of 1995 CPU/bandwidth, but which in 2006 are so cheap that people can use it for the most inane of endeavors. (OK, I enjoy much of what's on Youtube, but you catch my drift.)
Anyhow, I see no reason to think that Energy is fundamentally different. I have 5 PCs in the house, 2 of which are on pretty much all of the time, the other 3 are on only when in use. Somehow, today, even though I could afford the bill for the electricity they would consume, I can't in good conscience do so. But if someone came along and said the electricity would be half the price, not feed money to terrorists in the middle east, and generate no greenhouse emissions or other bad stuff, would I leave these machines on? You betcha. I'd break out my web server into multiple machines, I'd help out with parallel computation problems computing Pi to the 3 billionth decimal place, I'd loan CPU time to SETI, I'd do all sorts of stuff.

And that's nothing, because I think people who are more clever than I will come up with applications - not just in computers, but in other energy intensive endeavors - that will be obvious 10 years from now but which my small brain doesn't even comprehend right now. (Hey, how many of us understood the internet in 1990?)

So I think it's an interesting unintended consequence of "solving our energy problem" that we will almost certainly end up consuming more energy as a result. Is that a bad thing? Not at all. My instinct says that it has the distinct aroma of opportunity around it. I'm excited.

Now all we need to do is solve this cold fusion thing...

UPDATE: So I'm not insane here, nor am I original (nor am I surprised that I'm not original). Apparently there is a name for this unintended consequence of efficiency, and it's called Jevon's Paradox. The linked article actually goes into a bit of detail about the prerequisites for its existence as well.

Saturday, September 30, 2006

Update on civil liberties

Well it appears that the congress has passed legislation defining the rules for treatment of detainees and for wiretaps.

While the legislation has many flaws (and may still not fully pass constitutional muster), I say "hooray" that congress has finally done its job of setting up the rules of engagement.

There are two things that I find very disappointing, though.

The first is that while congress stepped up to its job of defining the rules, they largely punted on any heavy lifting, pretty much giving the president the discretion to interpret the rules by which he is bound. I thought we had checks and balances for a reason; the whole problem is that you don't want the same person who can declare someone to be an enemy combatant to be the one who decides if it's OK to declare someone an enemy combatant. It boils down to "trust me" on the president. But it doesn't matter whether I trust the president -besides, in two years we'll have another one. I want to put my trust in laws, in process, not in specific people.

The second thing that disappointed me was the politicking around this. I suppose it can't be avoided this close to an election, but, for example, John Boehner said "The Democrats' irrational opposition to strong national-security policies that help keep our nation secure should be of great concern to the American people" in describing the desire of many Democrats to provide checks and balances and a legal framework on wiretapping. If I understand this line of reasoning, then we might as well give Bush the power to monitor any phone conversation, domestically or otherwise, without court supervision? Heck, why stop there, why not let the government read any email, instant messaging, or smoke signals too? Why not let the government demand a second copy of our home keys so that they can make sure that no terrorist activity is going on? We'll be safer that way, won't we?

Shame on you, Mr. Boehner. Nobody - not even the dreaded Democrats - opposes the wiretaps themselves. All they want is for them to be done in a framework that prevents abuse. I thought that was quite a patriotic American value, but perhaps I was mistaken.

The war in Iraq

Of course we need to bring our troops home from Iraq. But it's just not that simple.

Let me back up a bit.

I suppose it's not a politically correct thing to say these days, but I supported the decision to go into Iraq. Not for the reasons that Bush gave, though. Sure, I thought he had WMDs. (OK, hands up everyone who *didn't* think he had WMDs. Seriously. Even the French thought he had WMDs, as well as Clinton during the 90s, and, well, everyone. So for that reason, I think the claim that Bush deliberately lied is something of a stretch. Which is not to absolve him of stretching the truth, ignoring data that didn't fit his world view, and so forth. But I have already digressed well beyond what I should have).

But my reasons for supporting action in Iraq were not about WMDs. There were, I think, a number of other compelling reasons:
  • Post-9/11, a clear message had to be sent to states that sponsor terrorism or provide haven for them. While Iraq never had ties to 9/11 (something that Bush himself has finally admitted), they clearly met these two goals. Two simple examples include cash payments made to families of Palestinian suicide bombers and the hosting of Abu Nidal. Failure to help Al Queda (in fact Saddam hated Al Queda) is irrelevant; he harbored terrorists, and that needed to stop. Sadly, negotiations would not have achieved this outcome, only Saddams ouster would do so. The fact that he had nothing to do with 9/11 was not important - what was important was preventing future attacks from being hatched within Iraq's safe haven.
  • There are many dictators in the world deserving of the adjective "evil", and I would hardly support taking action to remove most of the others. However, I think it is fair to say that Saddam was in a special class of evil all by himself, with a demonstrable track record of genocide and threatening his neighbors, in addition to desires for WMDs and the aforementioned support of terrorism. Even if Germany had not declared war on the US in WWII, I think we can all agree that history would have made it plain that going in to take out the Nazis would have been justified because Hitler was simply that bad and that big of a threat to his neighbors. I know that Hitler comparisons are so overused these days that they are almost cliche, but Saddam is one of those rare dictators who I think actually merit the comparison. And as such, the world cannot and should not wait for such monsters to be a "direct threat" before acting. Hitler had committed quite a few atrocities before the US got involved; it's simply too bad that we didn't get involved sooner.
  • The post-gulf-war stalemate had gone on long enough; it needed to reach a conclusion one way or another.
Phew, I feel better now for getting that off of my chest. So I think Bush did the right thing, albeit for the wrong reasons.

And, I'm afraid, he did it in totally the wrong way and has made an absolute mess of things. Wow. No wonder the recent National Intelligence Estimate says that the Iraq war has become a cause celebre for terrorists. Bush never planned for nation building, he never planned for an insurgency, he never made the investments necessary to help get the civilian population more interested in building a new Iraq, and he never truly got a worldwide coalition like his daddy did to increase our success. One of the lessons I thought we had learned from Vietnam was that once you commit to a war, you go in 120%. We never had sufficient troops to establish order, and without that almost nothing else matters. People with nothing to lose are the most dangerous enemies to have, and most Iraqis currently have nothing to lose.

We had a tremendous opportunity to really make a positive change in a part of the world that so sorely needs to change, but I fear that we went in blinded by ideology rather than pragmatism.

So what do we do now?

I think that we need to get out of Iraq. Actually, I hope that's not as controversial a statement as it may be - after all, I hope that everyone thinks we need to get out of Iraq ultimately. The question is really when and how.

A lot of folks advocate withdrawing our troops immediately. I would label this "wishful thinking" as well as an incredibly dangerous idea. For many people, I believe that the logic is that the war was a mistake (both going in as well as how it has been conducted) and this can somehow roll things back to the way they were, or at least prevent things from getting worse. (And, there's a certain anti-war contingency that seems to oppose any war for any reason). Unfortunately, we can't roll back to the way things were, and pulling out precipitously would make things much worse. Specifically we would leave behind a failed state that would be a safe haven for jihadists, and we would make quite a statement that indeed America can be defeated through these tactics. I believe that terrorism would indeed increase - perhaps dramatically - if we were to do this.

But staying the course is obviously not an option either, despite the president's seeming insistence that somehow there are no options between the two extremes of staying the course or joining Al Queda. To quote Dr. Phil: "How's that working for you, Mr. President?" It's not working, and we need to do something different.

It's trite to say, but what we need to do is to win. To win, we must leave behind a functioning state and have actually improved our security situation. When that is the case, a withdrawal is both possible and prudent. I'm hardly an expert here, so this is probably naive on my part, but I believe that there are 4 components to success here:
  1. Boots on the ground, both ours and Iraqi as well as anybody else we can convince to help us. (I fear Bush has burned a lot of bridges here, though). Security is a precondition to everything.
  2. Infrastructure investment. When we can't even keep the power on in Baghdad as much during the day as Saddam did, is it any wonder that we are resented?
  3. Help get the fledgling government going, ensure that it has legitimacy in the eyes of the people, and has the strength to disarm militias. At the end of the day, only Iraqis can disarm militias - foreigners cannot - but even Iraqis cannot do it while there is still such a power struggle going on.
  4. Phased withdrawals.
I think the "Phased withdrawals" part above requires a bit of explanation of what I mean. Bush has said "as they stand up, we will stand down." Nice theory, but it has a fatal flaw: since the soldier that stands up in Iraq tends to gets shot in the head pretty quickly, there's a pretty strong incentive for the Iraqis to not stand up, to leave the Americans standing up instead. We need to reverse this: we need to stand down so that the Iraqis have no choice but to stand up.

If we do this precipitously (i.e., withdraw from the country), the Iraqi security forces won't last a New York minute; it will create a vacuum that will be filled with anarchy and terrorists. But if we do this a little at a time - particularly after securing a neighborhood as the recent operations in the Adhamiya neighborhood are hoping to achieve - then the Iraqis have a fighting chance to stand up and stay standing. And then we can force the next neigborhood, and the next one, and the next one.

Our problem today is that we cannot pull out because we have not set up the conditions for success, yet our president who famously abhors nation building is not focusing on how to set up those conditions. It seems to me that this is the key to bringing the troops home.

Thursday, September 21, 2006

My Immigration Manifesto

Immigration is certainly a fashionable hot issue these days. It is not, however, an issue that gets me particularly all hot and bothered. It's just not one of the things that keeps me up at night. But I do have opinions on the topic, and since I actually went to the trouble of writing them up in email to a friend a few months ago, I figure I ought to republish those thoughts (with an editorial transition from email to blog), especially given the context they provide for my English Only treatise I published earlier.

I think that the biggest problem we have with respect to the immigration debate in this country, frankly, is that the two sides (not strictly liberals vs. conservatives) seem to be talking completely past one another. Not only are they not recognizing common ground and properly debating the areas of contention, but I think a number of key issues end up essentially ignored.

For example, here are some examples of stupidity on the pro-immigrant side of the debate (I think labeling this group "the left" is a gross simplification, but do not have a better name for this group) such as those who have been marching of late for amnesty and legalization over the past few months:

  • Blanket legalization of the 11-15 million that are here illegally. This is just wrong. We've done amnesty before (late 80s) and it didn't stem the flow of illegal immigrants. We have laws for a reason; one can claim extenuating circumstances that made it unavoidable to break the law (e.g., self defense), but simply claiming to have been otherwise law abiding and a contributor to the economy is not sufficient reason to pardon them for breaking the law. (But see below, because I think that the notion that they should all be deported and/or denied the right to be here legally is also stubborn ideology divorced from reality and practicality)
  • Being here illegally should not be considered a criminal offense (whether misdemeanor or felony). If someone is breaking the law to be here, by what logic should that not be a crime? Certainly it should not be a capital offense (and some of the anti-immigration folks are proposing the immigration equivalent of capital punishment), but it is crazy in my opinion to claim that it should not be considered a criminal offense.
  • The importance of secure borders and immigration control. Secure borders and immigration control is necessary for both security and our economy, and the immigration-rights advocates are completely ignoring this fact. To wit: flying Mexican flags at rallies is a bad idea, it doesn't help one's cause. If one wants to arrest America's growing suspicions about its immigrants, one should learn English, embrace one's new country, help keep other immigrants off of welfare/Medicaid, etc. If one comes here illegally, one should not have an expectation of a right to these services.
Ahh, but the folks marching for immigrant rights hardly have a monopoly on stupidity or audacity. The Tancredos of the world have their own list:

  • Build a fence. If one's goal is to “stem the flow at any cost, I suppose that a fence is a reasonable approach, but I have a big problem with the "“at any cost" part. While it may stem the flow, it's probably the single most expensive approach to solving the problem imaginable, and it only addresses the symptoms, not the cause. In addition, it is a bury-your-head-in-the-sand approach to the problem. There is a reason that people want to come here (and we should be proud of that), and there is a reason that many are willing to do it illegally. With so many illegals proudly proclaiming that they are honest, hardworking, and important to our economy (most of them are probably correct about that), we should be asking how we can lower the barrier to the honest/hardworking folks coming in while keeping the barrier high forundesirablesables. A fence, unfortunately, knows how to make no such distinctions.
  • Make illegal immigration a felony/deport all of the illegals This is also expensive, and we'll probably spend - no, waste - an enormous sum of money getting rid of otherwise law-abiding tax-paying people who really want to be citizens. Deportation is the immigration equivalent of capital punishment (if you oppose capital punishment, please remember that this is analogy, I'm not advocating putting illegals to death!). As such it needs to be an available option and the threat of its application needs to be real in every case, but applying it automatically to everyone seems like a gross simplification.
  • Screaming "“amnesty" at the notion that illegals be given any path to citizenship I think there are many anti-immigrant activists for whom the notion that an illegal could ever become a legal citizen is the ultimate insult, even when that path includes penalties for having broken the law. Reality check: an amnesty is forgiveness (or at least forgetfulness of the offense), so amnesties don't have penalties. If there's a reasonable penalty, then it's not an amnesty and people shouldn't label it as such. The penalty should be sufficient to make being here illegally less desirable than being here legally, and I think that's a point that keeps being missed by both sides. When you park your car illegally, we don't make you forfeit your car and take driving lessons all over.
  • Making it illegal to provide humanitarian aid to someone if theyillegallye illegaly. Wow. Let's turn everyone into INS agents. There'’s a difference between offering humanitarian support (like a priest might offer, or a family letting someone stay with them) and giving them a job. If our lawmakers can't distinguish the two, they shouldn't be making laws. Fortunately, the idea of this becoming law seems more remote now than it did this past spring.
  • Not distinguishing between lawful and unlawful immigration. Perhaps the most important thing that this side is missing is an acknowledgment that illegal immigration stems largely from a strong incentive for people to come here -– and it's not all people looking for asylum or to live off of our generosity. (In fact, most of them just want to work and would be excellent contributors to our society). Every other immigrant group to America in our history has ultimately assimilated, and contributed. What are we so afraid of?
So what do I think we should be doing?

Leverage the marketplace Since most of the strongest anti-immigration voices are conservative, I'll use a conservative argument: we're witnessing a marketplace, subject to market forces. There's a supply/demand force here that is strong enough to make people break laws to get into our country. We can fight this marketplace or we can try to leverage it to do what we want it to do. In particular, we should be making it easier for law-abiding folks to come here legally, we should be opening up the spigot, not closing it.

We have a lot of low-paying jobs to fill, and there is a pool of labor that is anxious to take those jobs, and by and large (especially w.r.t. Mexicans), they are not displacing American workers. And there is an economic imbalance between our countries. This is a force of nature that a wall can slow down, but cannot stop. Why not instead leverage this force, do the free-trade thing and instead figure out pathways to make it easier for workers to come here legally? I suppose this would be a "“guest worker program", but as Fareed Zakaria points out it really needs to have the opportunity/pathway for citizenship attached to it. But the most important point here is to reduce the incentive to be here illegally by offering a realistic path to be here legally. Yes, absolutely by all means, penalize being here illegally. But just as other crimes do not necessarily result in jail or deportation, use things like large fines and a higher bar for gaining legitimacy (English competency sure seems like a good start), removal from schools, etc.

I think that one of the best ways to do this is to make it harder to hire illegals AND easier to hire legal immigrants. You need both carrots and sticks, though. Many people advocate strong enforcement against employers who hire illegal aliens. I actually support that approach, but I also believe it is not only insufficient, but will fail unless paired with incentives for legal immigration. Specifically, it fails because it (a) doesn't do anything to address an employer's need for employees, all it does is cut off the pool, and (b) it puts the employer in the position of being INS, of having to be responsible for the documentation of its imployees.

If, however, you coupled strong enforcement against employers that hire illegal aliens with programs that make it easier for more law-abiding hardworking workers to enter the country legally and document that they are under a program allowing this, then the employer can have access to their labor pool and does not have to make their own decisions about whether to believe their employees. It's win-win; the employer now just has to keep a record that they have checked the INS-issued documentation, and the costs of being illegal would outweigh the costs of being legal.

And yes, this means letting more people into the country in total. This has always been our history, it's OK.

Provide rational pathways to becoming legal A blanket amnesty is a bad idea - it just encourages more illegal immigration. However, We should quit all the scare talk about amnesty. The problem with shouting "“amnesty" that one can't make it easier for people to come here legally without simultaneously making it easier for the illegals to become legal. (In the same way that you can'’t have a tax cut in a progressive-taxation world without the cuts going disproportionately to the rich; one comes with the other.)

But here's a secret: if making it easier for people to come here legally also makes it easier for illegals to become legal, that's actually OK. Otherwise, one is letting the perfect be the enemy of the good. If an immigrant can meet whatever the new criteria is, let them in. And the ones who cannot are the ones we should be throwing out. Simply saying that someone who is here illegally should have no chance whatsoever to become legal is simply counterproductive.

Saturday, September 16, 2006

Why is the Muslim world so thin-skinned?

So now the Islamic world is in an uproar because the Pope made the incredibly incendiary point that there's something wrong with forcing people to your religion by gunpoint/swordpoint. That's a controversial point? Am I on some kind of weird alternate universe where things like violence to spread your religion is actually acceptible dogma? I'm perfectly tolerant of other religions and faiths - whether they're mainstream like Islam or ridiculous like (pick your favorite cult) - but that tolerance ends, unapologetically - when it interfere's with my rights to exercise whatever ridiculousness I wish.

The Islamic world right now is incredibly thin-skinned. From the Pope's recent remarks to the Danish cartoons, there is such a feeling of victimhood and, well, low self esteem that Muslims take offense at just about anything the west says or does.

This is particularly hypocritical from a part of the world that regularly spews vile, noxious, and vitriolic anti-Semitic (yeah, yeah, I know that many Muslims are technically Semites; let me just replace that, then with "anti-Jewish") poison in its press, which regularly questions the holocaust, and which forbids the practice of other religions.

I can't say I've ever heard a Muslim protest these offensive practices. For that matter, whenever a Muslim does something heinous in the name of Islam, such as the recent shooting of a Jewish community center in Seattle, the worries of reprisals are voiced much more loudly than the condemnations of the act. In the Seattle case, fortunately, the Muslim community actually was much better about reaching out than in other recent events, but even so the cries of worry were still pretty loud. Funny, though, how rare is the act of terrorism or reprisals against Muslims compared to the acts committed by Muslims in the name of Islam. Reprisals against innocent Muslims is entirely unjustifiable and wrong, but perhaps if the community were more vocal and active about not tolerating these madmen then there would be no reason to fear reprisals.

I think the reason for this thin-skinned nature is that the Muslim world right now has a cancer of victimhood. And to quote Cher in Moonstruck, I'd like to tell the Islamic world: "Snap out of it!".

The Muslim world - particularly but not exclusively the Arab portion of it - has many ills plaguing it. (I don't mean to paint such a broad picture, but it's largely true, especially in the middle east and northern Africa.) Some of these ills are undoubtedly due to the west. But they blame the west for all of them, and more importantly have not looked inward to themselves as both a cause of these problems and as the primary source of the solution to them. Instead, they grasp onto their victimhood.

Heck, look at Bin Laden - he's still upset about the crusades and the fact that Spain is no longer Muslim. I'm serious (and unfortunately, so is he). It's been 800 years, it's time to get over it.

I sincerely believe that this is one of the reasons that the Israeli/Palestinian conflict has been so intractible. The Israelis want to move on and build a country. The Palestinians can't get over the fact that 60 years ago they got a deal that they didn't like. And when they finally got some control over their situation - autonomy of Gaza - they didn't do anything to improve their situation, instead they voted in Hamas, whose primary objective is still to wipe out Israel, not to do anything to improve the lives of Palestinians. This is the culture of victimhood.

The world is not a fair place. Has the west done bad things to the Arabs/Muslims? Sure, I have no doubt. Have they done bad things to the west? Uh, gee, yeah. Quite a bit, actually.

But other cultures who have suffered military or political defeats, or who face serious economic/education problems - notably Japan, China, Germany, India, etc. - have been incredibly successful when they decide that yesterday is past, and that the single most important key to future success is themselves. Sudan, Syria, Iraq (previous to the invasion as well as now), Iran, even relatively "stable" countries such as Pakistan and Egypt simply have not grasped this; they seem to prefer to wallow in their victimhood rather than do something positive (key word there!) about it.

The Muslim world would do very well to take a deep look inside, take a deep breath, and make themselves part of the solution. And most importantly, thicken their skins to the insult and anger that they seem to feel at the wind blowing the wrong way. I think that if they do, they will find that attitudes about Muslims in the west will change rather dramatically for the better.

Do they want to solve their problems or remain victims? So far the evidence, sadly, points to the latter. Which suggests a lot more terrorism ahead.

Sunday, September 10, 2006

English Only?

A few years ago there was a lot of noise about making English the official language of the US, and enforcing all sorts of "English-only" rules. With the revival of the immigration debate recently (topic for a separate posting), this topic has come up again.

The folks who advocate English -only seem to come to this conclusion from a few key driving factors:
  • The ability to communicate is pretty darned essential, and communication can only happen when people speak the same language. (See: Tower of Babel). English is the dominant language in the US, so it makes sense for that to be our common language.
  • The desire for immigrants to assimilate, as all previous immigrant groups have done. This is largely targeted, as far as I can tell, at Spanish speaking migrants, although not exclusively so.
  • The desire to simplify and lower the cost of administering services to immigrants (e.g., why do we need to do ballots in N different languages instead of just one? Spend so much money on translators for jails? Spanish-only education for kids that can't speak English? Etc.)
  • For economic advancement, English is pretty vital. (Translation into English: we don't want a lot of non-English speakers on our welfare roles).
  • I think there is also a subset of English-only advocates who also do not want low-education/poor immigrants in the country, and perhaps an even smaller subset who are racist/xenophobic. While I think the reasons above for supporting English-only are broadly adopted by English-only advocates, I am not willing to paint all English-only advocates with this particular motivation; I just list it for completeness. Since this is also not a valid reason for supporting English Only, I'm going to simply declare it irrelevant to any rational discussion of whether English Only rules/laws make sense.
I think all but the last reason above are perfectly legitimate concerns, and I think that for these reasons there is no excuse for anybody that wishes to move to the US not to learn as much English as possible. Sure there are some 80-year old refugees or similar who are here for whom becoming fluent in English is just not likely to happen, but I don't buy the argument that anyone is incapable of learning at least a little English.

We already have English competency as a requirement for citizenship; I think that makes a ton of sense. Heck, I'd go further than this and suggest that it is reasonable to require some degree of English proficiency (or at least mandatory classes) for anybody wishing to visit the US on more than a tourist visa (i.e., green card holders, work visas, etc.); there's nothing constitutionally that I'm aware of that prohibits the US government from imposing whatever restrictions it wants on visitors or prospective citizens. I think beefing up these requirements for entry and competency requirements for continued residency (with allowances made for age, handicap, etc.) is a perfectly reasonable approach towards ensuring that we meet the goals above as much as possible.

I'm no lawyer, but any reading of the constitution that I can tell suggests that if you want to make English a requirement, you need an amendment to do so. There are no language requirements for citizens to vote or to otherwise exercise their rights as citizens, and if the 1st amendment says you can say anything, then it seems to me that by definition you can say anything in any language you want.

So if that's the case, then does an English-only amendment make sense? I don't think it does. In fact, I think that making English the official language or creating an English-only amendment to the constitution would have a number of severe problems and would do little to solve the problems above.

In particular:
  • Once you make English an official language, you need to define it. Once you decide you need to define a language, you quickly go down the slippery slope that our friends in France and Paris (and Iran and other places) have found themselves, with large and intrusive government bureaucracies deciding what is and what isn't part of the language, what sizes of typeface may be employed on signs, etc. (In my opinion, the creation of such bureaucracies is the first sign that your language is dying and can't survive on its own.) One of English's great strengths is that it is dynamic, evolving, and accepts new words/phrases. In the face of English-only rules, these words/phrases would likely not be acceptible if they came from other languages. If you allow them by default, then the English-only rule becomes meaningless. If you don't allow them by default, then you stifle the language.
  • If you declare that English is the official language, or the only language that can be used, then you need to be very clear about where that applies. If you apply it very narrowly - such as to, say, ballots - then it won't have a terribly big effect on solving the problems above. If you expand it more broadly, such as declaring that classes must be taught in English, then you run into a raft of issues about what is and isn't acceptible. E.g., does this mean that books containing foreign phrases aren't allowed in English classes? How can you reconcile English-only in the classroom with bilingual education for English-speakers trying to become fluent in a 2nd language?
  • Scope is also critical to define for the private sector. Would we have ADA-style rules that say that a business must always accomodate English speakers? If so, wouldn't that mean, for example, that a business in East L.A. that provides services for Hispanics, would be required to include English on their signs? (Or, for that matter, that Italian restaurants could no longer have Italian-only menus, as many do today?) And wouldn't those sorts of rules fly in the face of a first amendment freedom of speech?
  • There are a number of areas where things would certainly be easier if it were exclusively English, but as a practical matter we can't escape it. For example, if a tourist is here who doesn't speak English and is hit by a car, are we going to refuse to treat them because they can't converse in English? If they are accused of a crime, would we not provide a translator so that they could talk to their attorney? We're a civilized society with a strong bill of rights; I just don't see us denying these services even to people who perhaps should speak English but do not, or do not very well.
For the reasons listed at the top of this post, I believe English-only is a valid goal. However, I think that the solutions attempted via English-only rules or declarations are lousy ways to achieve this. I think the best way to achieve English-only is in fact the historically dominent mechanism: the economy. Every prior immigrant group has had enclaves of native-language speakers, but they have also all figured out that English is key to economic success. I do not believe that we should coddle non-English speakers such as with bi-lingual classes for non-English-speaking children; I believe that removes the incentives to assimilate and learn English. But we should not get super hung up on people speaking their native languages either. They or their kids will eventually speak English as their primary language.

Security vs. Liberty

On the eve of the 5th anniversary of the Sept. 11 attacks there is quite a bit of discussion in the press about civil liberties and security. I just have one observation that I think has been overlooked in all of this discussion: it's a false tradeoff.

Specifically, there's nothing inherently wrong with wiretapping - even wiretapping of Americans - when there is suspicion of illegal activity, especially terrorism. Or of using aggressive interrogation tactics, or of doing data mining and the like. Bush is absolutely right about that, and I think that any civil libertarian (of which I count myself) that claims that these tactics are inherently problematic is being blinded by ideology.

Score one for Bush. But now score one for the civil libertarians and against Bush: these tactics MUST be done in a context of lawfullness and accountability, and Bush has studiously resisted any attempt to do this. If FISA, for example, is too burdensome to effectively counter terrorism, then the answer is not to go around FISA. After all, going around the law is something that dictators do, or it is something that a president can do after suspending civil liberties - something that has in fact been done in wartimes past but which Bush has declined to do. Instead of going around FISA, the right thing to do is to get updated legislation passed that will provide the efficiency and speed needed (that the administration claims FISA lacks) while providing the checks/balances/accountability that the population need. I have no plausible explanation for why Bush - whose party controls both houses of congress - has not even tried to do this.

Demanding accountability from our government does not mean being weak on terrorism, it means being strong on the very freedom that we are trying to protect. I for one would hate to gain security at the expense of losing freedom to my own government, and I think anyone who claims that demands for accountability and checks/balances weakens security is playing politics in a disingenuous, dangerous, and destructive manner.

Friday, September 01, 2006

The problem with environmentalists

The problem with many environmentalists (or perhaps I should say instead "the environmental movement") is the same problem with all ideologues/idealists, I think. Specifically, people and organizations can let themselves get blinded by what is "right" to the degree that they take self-defeating or ineffective approaches towards achieving their goals, and are often hostile to the constituency that they most need to make happy (i.e., industry and "the polluters"). But it's not that industry hates the environment, it's that there are legitimate reasons that we burn fossil fuels, legitimate reasons that we create the pressure on the environment that we create. It's not that these activities are inherently bad, it's that we need to recognize their cost and do what we can to mitigate them.

I like to consider myself an environmentalist, at least to the degree that I like unspoiled spaces, I hate to see habitat destroyed, etc. But I'm human, and like any human, I also want a nice life. I drive a car even when I could take alternatives because it's more convenient to do so. I live in a larger house than we probably need. Heck, I fly airplanes for fun, which burns a lot of gas. Do I feel guilty about this? Yeah, a little, I guess, but I think "cut back, don't do these things" is a non-starter of a solution. Asking people to scale back their lifestyle (or aspirations) simply is not a winning strategy, it doesn't mesh with human nature. Heck, in a more extreme example, consider places like Haiti: massive environmental destruction there for firewood, but it doesn't exactly work to tell people not to cut down the trees. They need to feed themselves and cook food. As I mentioned in my earlier posting on I-933, all economic decisions are ultimately personal - given the choice between a concrete immediate personal benefit vs. an abstract "greater good" benefit, people will inevitably choose the former. The environmental movement would do well to recognize that and harness it, rather than fight it.

The problem with being green these days is that it does require personal sacrifice. For example, I recently installed solar panels at my house - capable of generating 1.6kW of electricity at peak (i.e., noon on a sunny cool day). I'm thrilled to be able to do this, but this is also something that won't pay back for 30-60 years, depending on what happens with the local price of electricity, and that's even after the various tax breaks/rebates and energy purchase credits (I get paid more for this electricity by my utility than I pay to buy electricity from the utility). I did this math even before I installed the unit, so my eyes were open - I did this because I wanted to, but the high capital cost and the long payback involved mean that this is not something you could expect most rational people to do. The economics just don't pencil out.

So what should the environmental movement be focusing on? I think there are a few winning strategies.

Efficiency rather than Conservation This may be a semantic distinction, but I think it is critical. "Conservation" is about sacrifice - do less, use less, consume less. The message behind it is "temper your expectations, restrain your lifestyle." It's not something that people will rally around - it's explicitly about sacrifice. "Efficiency," on the other hand, is all about getting more out of what you do or doing the same things but consuming less in the process (rather than changing what you do). That's a benefit people can understand and even rally around because it saves money.

Compete on the merits, not just on the green My favorite example here is Tesla Motors, a new car company in California that is building an all-electric sports car. I have no idea how well these guys will do, but I think they're doing a bunch of things right, the most important of which is that they recognize that what they're building will be a hard sell for many scenarios. So instead of trying to get people to shell out extra money for a greener car that has all sorts of negative tradeoffs (there's that "sacrifice" thing again), they are targetting a market (sports cars) where the car is actually a good sell on its own, ignoring the fact that it's green. (And heck, getting someone to buy a Telsa instead of a Porsche will certainly save more emissions than getting a Civic driver to upgrade to a Hybrid Civic, so it's actually a good green strategy too.) If they succeed, people will buy this car because it's fun to drive and a good sports car, not because it's green. But being green will be a wonderful side effect.

Highlight negative externalities and make them internal As I said before, people make their decisions in a personal and immediate way. Things like global warming are just too abstract, distant, and long-term to truly impact the decision of whether to drive down to the supermarket for an ingredient or just make something different for dinner. But part of the reason for this is that the cost of carbon emissions aren't reflected in what we pay. At the macro level, things like cap and trade standards harness the market and make these externalities internal, which is a good thing. At the micro level, selective and careful use of taxes/fees/funds or other ways to make the economic tradeoff immediate and personal are strategies that embrace human nature rather than fight it. Two examples that I think have worked very well in this regard are deposits on bottles (makes the cost of littering, or more accurately the benefit of not littering, tangible) and recycling programs like here in the Seattle area where we recycling has become so easy (no sorting, lots of stuff accepted, big bin for recycling and small bin for trash) that throwing something away is almost more effort than recycling it.

Tuesday, August 29, 2006

Property Rights initiatives

In Washington State this election season there is a property-rights ballot initiative, I-933. Like a similar failed initiative from last decade, it seeks compensation for property owners when regulations impact them in a negative way.

You can read the pro-933 and anti-933 arguments yourself, if you’d like. As usual for any politically charged debate, there is a lot of hyperbole, half-truths, and talking past each other from this; hence my take below.

The motivation for this initiative certainly makes sense:

  • Governments can be heavy handed with regulations, often neglecting the unintended consequences of their impact on the community.
  • Many governments are certainly guilty of rushing to regulation where other methods may work better.
  • If something is in the interests of the broad public but comes at the expense of a few, fairness dictates that the public probably should compensate the few.
  • Broad anger over last year’s US Supreme Court ruling in New London CT is a frightening reminder of the power of government to take your property for questionable uses.
These are legitimate problems. However, I think that this is a case where the medicine is worse than the disease, and the law of unintended consequences will strike this as much as unintended consequences strike when bad regulations are passed.

There are two reasons why I think this would be a bad law if passed:
  • It is based on the premise that regulations that impact property owners constitute a “taking” in the eminent domain sense of the word. I think this is a bogus argument and creates a bad precedent that is ripe for abuse and unintended consequences.
  • It automates the legislative process, which is something that strikes me as an inherently bad idea.
The basic premise of I-933 and similar property-rights laws is that regulations that impede use or value of property is a form of takings. The 5th Amendment to the US consitution says this about compensation "...nor shall private property be taken for public use, without just compensation." The Washington state constitution is somewhat more verbose, and adds the condition “or damaged for public or private use,” but essentially says the same thing.

Both of these use the word "taken," and the Washington State text also uses "damaged." Certainly a strict/literal reading of "taken" means it is no longer in the possession of the same owner as before, while a similar point of view of "damaged" implies that the property in question is no longer in quite the same shape as before. I.e., if they need my land to build a road and I can no longer use it as my own private property, that’s pretty clearly “taken.” And if they dig a retaining pond on my property, it’s “damaged” compared to its prior state. However, I think that a considerably more expansive interpretation of these words is required in order to apply them to restrictions on potential uses of the property. After all, passage of a restriction does nothing to alter my title to the land (it’s still mine to sell) so it hasn’t been taken from me, and it does nothing to the land itself (it doesn’t cause trees to fall) so it hasn’t been damaged.

No, the sorts of regulations targeted by I-933 do not actually take or damage a property itself. Instead, what they “take” or “damage” is potential economic opportunity. Even the text of the initiative admits as much, using phrases like “destroying reasonable expectations of being able to make reasonable beneficial use of property.” Is the expectation of economic opportunity the same thing as private property? I don’t think it is. Private property can be sold; economic opportunity cannot. Private property has a clear notion of ownership, which economic opportunity does not. And, most importantly, every economic opportunity by definition carries with it risks and require execution to become realized, whereas private property is already “owned.”

Consider for example a decision to buy shares in a drug company with a promising new cancer drug. I certainly have a reasonable expectation of future profit from this company. And the shares are certainly my own private property. Now suppose the FDA decides to deny certification to the new drug, causing the share price to plummet. Not what I or the company reasonably expected, but it’s certainly the FDA’s mandate to make those decisions as independently as possible. By the arguments of I-933 (and similar initiatives), I would have a legitimate claim that the FDA “damaged” my property (my shares’ value).

One might argue that the FDA example is different than 933 because 933 distinguishes regulations that affect everyone from ones that affect a select few, but I think that argument fails because I could easily argue that only shareholders in this particular drug company were affected, not everyone who owned stock.

Recognizing that I-933 confuses private property with economic opportunity, there are several problems with that follow any attempt to compensate for “damage” or “takings” of economic opportunity:

  • There are potentially an infinite number of economic opportunities that an owner could contemplate, even if only one of them could actually be pursued. Imagine a property owner who buys a lot of land thinking they could farm it, build a housing development on it, or strip mine it. Obviously, once they go to do one of these, the other two become excluded. Now suppose the land is zoned for farming or housing only. The property owner could claim a loss on the strip mining opportunity. Now suppose it is zoned for farming – the owner could claim a loss for the housing opportunity (which still existed because the lot had not been strip mined). Now suppose in a final insult it is zoned for retail. Now
    the property owner can make a third claim for compensation. All without ever having executed on any of these opportunities. has cited a study that shows that restrictions may have actually helped property values. (I’m personally a bit skeptical of this study because it doesn’t seem to me to be enough to prove cause/effect. However, it certainly provides good strong evidence that the regulations have not actually hurt.)
  • We have a pretty long history of figuring out how much we should compensate someone for actually taking their property – we have actual sales to compare to, assessments, tax records, etc. But evaluating an economic opportunity is notoriously difficult. After all, more than 90% of all startups fail – yet each of them saw an economic opportunity worth going after. And in the other direction, sometimes the opportunity lost is not as great as one might think. In the example of the property owner above, what if after being zoned for retail the owner sells to a retail development company for a tidy profit? It would be hard then to say that the regulations actually hurt him, yet he could have been compensated multiple times.
  • This also potentially means that any attempt to raise property taxes (or even to assess property at a higher value) could trigger a claim for compensation, since a higher tax rate can diminish the value of the property.
The second broad problem I have with regulations like I-933 is that it essentially automates the legislative process, in several key ways. It’s been said that the legislative process is like watching sausage being made, but I also believe Churchill was right when he said that it’s the worst possible form of government with the exception of all the others. In particular, leadership and legislation requires tradeoffs, creativity, and conscious sentient beings lobbying for their interests. One-size-fits-all approaches almost never work well in practice.

The first “automation” problem is that I-933 does not distinguish between good and bad regulations, nor does it allow the legislature to make such a determination. While the initiative does distinguish regulations that effect everyone (not subject to compensation) from regulations that effect only a few, the distinction is not well defined – actually, the only definition is a set of examples which are explicitly exempted or included from requiring compensation.

I-933 is also a forced spending bill: for government to do its job (which in my opinion includes making hard or unpopular decisions), this requires money to be spent to “buy off” the people most directly impacted. (Since this also raises the cost of any regulation, this reinforces my suspicions that an ulterior motive for I-933 is fewer regulations overall).

Ultimately, it appears to me that this initiative in particular (and similar ones in general) are not about “property fairness” but rather about relief from regulations. After all, by putting on a strait jacket that automates spending in order to enact regulations, and makes the cost high
or else guts the regulation by requiring that it be waived, it becomes very hard for governments to enact regulations that they decide (rightly or wrongly) are needed. Nobody likes regulations and restrictions, but regulations rarely appear where voluntary methods (such as those explicitly contemplated by I-933) are working. After all, people make economic tradeoffs based on what’s best for them personally, not what’s best for the community. Nothing wrong with that, but it’s why we have government and why we have regulations.

I think that it is entirely reasonable to compensate property owners for burdens that the public asks them to bear. Governments do this all the time with tax breaks and other methods. I just do not believe that this should be automatic; a decision whether to do this (and if so, for how much) should be one of the many factors that go into the legislative sausage. Making such compensation mandatory (or else requiring a waiver from the regulation) strikes me as a form of extortion, and hence as bad law.