Obligatory 2015 Marijuana update

The minimal evidence we have of marijuana usage harms keeps withering away under more careful study, but the very real harms of police enforcement go on. I’ve really stopped paying attention to this stuff because it never ends; one month of stories look like any other. I just pop in once in awhile to see the latest abuses. Yep, young women cavity searched on the side of the roadkids shot; tons of no-knock drug raids putting everyone in unnecessary danger

America’s criminal justice system is so brutal and resistant to reform that the only way to reduce harm is to lessen people’s contact with it: move regulation strategies away from criminal law. Thankfully, state referendums to get cops out of the pot business are all over and even nation candidates are being forced to take the issue seriously.

To think how much harm could’ve been avoided if the country hadn’t wrapped up marijuana with the war on crack in the 80s. Hard drugs truly were devastating some communities then and now, but the “smell of marijuana” gave the police practically unlimited power and financial resources to forcibly invade and ruin the lives of people, particularly in neighborhoods unlikely to afford decent lawyers. Very few upper class families receive the Cheye Calvo experience, but lots of the little people still do.

Freedom by vote

I’m already seeing folks in my Twitter feed assuring themselves that Ireland’s recent marriage equality referendum could never be repealed. The danger of freedom-by-majority is that public opinion is fickle, and a shift in voter turnout can have a huge effect. No doubt large numbers of Californians against Prop 8 assured themselves that it could never pass and didn’t come out to vote.

So, for Irish freedom-lovers, pat yourselves on the back, but consider the repeal efforts a serious threat.

Update: In this case it’s unlikely the demographical and cultural shift to acceptance will swing back, and it looks like this could not be repealed by simple vote. In fact, putting it to a popular vote might’ve been a wise move even if it would’ve been non-binding; it got people talking and gave the public an anonymous way to voice their support.

Sometimes liberty is finite and must be redistributed

The Civil Rights Act was a triumph of people willing to recognize that, to increase the liberty of black Americans, you had to reduce the freedom of whites to practice discrimination. By 1964, the 1st Amendment’s principles of freedom of association and federalism (emphasis mine):

… had been used as weapons against black Americans, and esoteric concerns seem less important than being unable to eat or get a hotel you’re willing and able to pay for as you drive across your own country. This sort of adherence to principle at the expense of the tangible freedom of millions of African Americans sent a clear message of whose liberty received priority.

Of course the unwillingness of motels and restaurants to serve blacks was just the tip of the iceberg.

Obamacare is also redistributing liberty. Millions of Americans once shut out of the health insurance market (who could otherwise pay) are now able to gain coverage, which is a huge deal. Of course, there was no way to do that other than to force insurers to accept them, which requires the other two legs of the stool.

The first piece above also confronts libertarians for not seeing the world as it is, by embracing a view that racism has abated to the point where it doesn’t affect the daily lives of black Americans. Unfortunately this view is in no way limited to libertarians and couldn’t be more wrong. When people think that government interference in markets or taxation are the major things that blacks have to fear, they’re going to propose policies that are hopelessly out of touch with the real world.

Related: Ta-Nehisi Coates talks about the damage done by housing discrimination:

Elegant racism is invisible, supple, and enduring. It disguises itself in the national vocabulary, avoids epithets and didacticism. Grace is the singular marker of elegant racism. One should never underestimate the touch needed to, say, injure the voting rights of black people without ever saying their names. Elegant racism lives at the border of white shame. Elegant racism was the poll tax. Elegant racism is voter-ID laws.

…If you sought to advantage one group of Americans and disadvantage another, you could scarcely choose a more graceful method than housing discrimination. Housing determines access to transportation, green spaces, decent schools, decent food, decent jobs, and decent services. Housing affects your chances of being robbed and shot as well as your chances of being stopped and frisked. And housing discrimination is as quiet as it is deadly. It can be pursued through violence and terrorism, but it doesn’t need it. Housing discrimination is hard to detect, hard to prove, and hard to prosecute. Even today most people believe that Chicago is the work of organic sorting, as opposed segregationist social engineering. Housing segregation is the weapon that mortally injures, but does not bruise.

On Michael Brown and Darren Wilson

Dumping my thoughts here.

Brown and his family and community obviously got a rotten deal here. It seems very unlikely that Wilson’s behavior was completely appropriate; that Brown would simply attack him for no reason a few days away from starting school. I could imagine a scenario in which Brown was rushing Wilson as a form of self protection. That Wilson did not use a taser or some other method of de-escalation was also a very unfortunate error that he should pay for.

Cameras need to be rolling. Any officer with lethal weapons should be wearing one, and it should auto-activate whenever the officer touches a weapon or moves quickly; better to accidentally capture unneeded footage. Funding is going to be a problem here because—it’s my impression that—high crime areas also tend to be underfunded. We should fix that.

Wilson, and probably any officer left in such a situation (having killed an unarmed citizen with no immediate video evidence) should be arrested to show seriousness in delivering justice. Police unions will obviously fight such a policy, but hopefully this will show how failing to do so can make an officer’s life much worse and reduce the credibility of the entire profession. Wilson will be known by many as a murderer of an unarmed teen regardless of what really happened, and that’s not how justice should work.

When he goes to trial it’s hard to imagine anyone being happy with the outcome. Brown was big, tall and could clearly intimidate, and the type of individuals who make it into juries I suspect will very much believe a uniformed officer. A video of Wilson pacing after the shooting won’t prove wrongdoing. Brown’s family would be wise to bring a civil suit against the PD and I’m sure they will. Lots of Ferguson’s citizens and press agencies should sue them. Payoffs change behavior.

The St. Louis Police have, through their incompetence at crowd-handling and arresting of press members, done the country a great service in raising public awareness of the problem of police militarization. Hopefully this will change policies that currently help local police dress like soldiers and bring warfare tactics to U.S. streets.

It’s sad that people will use a peaceful protest as an excuse to loot local businesses and attack officers. Protesters that deny this stuff is happening lose credibility.

I’m conflicted about the wisdom of protesting in the middle of the night. On one hand this will give cover to miscreants and increase the danger to everyone. On the other hand this undoubtedly is helping keep Ferguson and the issues its facing in the public eye. It’s hard to change policies via polite daytime picketing.

Change happens when journalists are chased, shot in the back with rubber bullets, and arrested.

San Francisco, do you want to be Manhattan?

Another day, another article on S.F.’s crazy real estate market. Except it’s perfectly rational behavior: The secret is out that S.F. is an awesome place to live with plenty of very high-paying jobs, but also land is scarce and there are lots of development restrictions.

If no policies change, prices—both housing and general commodities—will continue to go up until S.F. is basically another Manhattan; if you want to live there you either must be in the upper class or able to live in a shoebox. The good news is that California is wonderful and people can live happily outside S.F. The city would just need to beef up its transportation infrastructure for an enormous commuting class, and the Bay Area will suffer the environmental implications of that.

If, however, you think there’s value in having residents from a wider range of incomes, you have to be willing to build a ton of new, and very dense, housing, including bulldozing some old areas—not every inch of the city can be treated as a historic artifact. Unfortunately plenty of lefties think that anything that’s good for rich developers must be bad for everyone else, and it just ain’t so. I highly recommend reading Matt Yglesias’s bite-sized ebook The Rent Is Too Damn High, which makes very convincing arguments that loosening development restrictions is a great idea for everyone. Lots of people want to live in S.F., and we should let them. Density is great for the economy and for decreasing the environmental impact of cars and commutes.

Renters are already living very densely packed in “single family” homes, so it’s pretty clear there would be plenty of demand for new apartments in a variety of sizes. The natural opposition to this is going to be existing owners that benefit from rising prices, but certainly a motivated majority (renters) could successfully push for expanded development. But until they realize it’s in their interest, they’ll keep complaining about a variety of things that don’t matter while being slowly forced out of the city.

Gainesville has been increasing the density of housing around the university and it seems to be pretty great to me. Until a few years ago it seemed inevitable that there would be ever increasing sprawl and student traffic, but now a lot more students can live in walking distance.

We should probably replace the minimum wage with a wage subsidy.

With the recent discussions of hiking the federal minimum wage, I came across a plan that might solve three MW-related problems:

  1. The MW is rarely enough to get by on.
  2. The MW eliminates (from the regulated market at least) all positions that create less value than the MW. Do you have a great idea for a job that someone might happily do for $7.00/hour? Sorry, that job can’t exist legally.
  3. Inexperienced workers or those with criminal records present more risks to employers, and the MW makes it impossible to offset that risk by reducing the starting wage a bit. This makes it hard for these folks to get a foot in the door.

Because of problem 1 (and because we make a value judgment on the individual and project that value onto our expectations of wages), we tend to only push the MW up, which just exacerbates problems 2 and 3. Then we paper over those failures by paying the unemployed to remain idle, which is bad for their health, their skills, and their community’s productivity. So if there never were a MW, it would sure seem like a bad idea compared to Morgan Warstler’s plan of just having the government pay the difference between the market wage and what society feels individuals need to get by on ($280/wk in his outline).

A particular flavor of wage subsidy, this plan would set up a second labor market where qualifying employers (almost any small business) would have access to workers for as low as $40/wk—low enough to create almost infinite demand for labor—but these employees would take home at least $280/wk (the “Guaranteed Income”), with the government picking up the difference.

The exciting thing here is this could instantly produce almost full employment, giving workers lots of choice of jobs and forcing employers to compete for even low-wage workers in pay and work conditions. The evidence seems to suggest that Germany’s wage subsidies (in the form of shorter work weeks) allowed Germany to have one of the lowest unemployment rates of the OECD countries during the recession and it probably cost less than the equivalent unemployment benefits, too. It certainly reduced the extremely damaging effects that unemployment has on individuals and families.

Warstler also suggests having employees and employers use an eBay-like ratings platform to improve information flow (the value of employees, the conditions/benefits of jobs, bad behavior of parties) within the market. This seems like a good idea, and sites like Glassdoor show there’s demand for it at the higher end of the payscale, but I have some doubts that it will make such a huge difference; I think it will still be weird and a bit dangerous to your working relationship to publicly rate your boss. Anyway, I don’t see why we can’t roll this out independently of GI.

Ultimately I think this plan—and all the other wage subsidy schemes—sound much better for workers than the current “if-you-can-find-work-at” minimum wage system, which seems as hopelessly flawed as every other attempt to artificially dictate prices.

A few other concerns with the plan:

  • Not all employers qualify for GI workers and I think the question of which can/can’t will be difficult to pin down. E.g. If I hire my neighbor to do all my chores and vice versa, we each end up pocketing $240/wk in subsidies. Rooting out these schemes would be tough. Warstler seems to think we don’t necessarily need to and that we might get valuable information from seeing how these pan out.
  • GI employers get workers for significantly less than non-GI employers, and I wonder what kind of market distortions that would create. The answer may be none.
  • The transition into GI could be chaotic, as overnight there’d be countless jobs to choose from and non-GI employers would have to react to this serious competition. We just have no idea what kind of jobs people will come up with, but every additional job would seem to improve the situation for workers.
  • How do GI workers get stable healthcare? Do they get access to a group plan? This could cause problems for workers wishing to move between the GI/non-GI markets.

If we’re stuck with a minimum wage, it would seem best to keep it as low as possible and boost/widen availability of tax credits like the EITC. Essentially this also works as a wage subsidy if by another name.

And can we just get rid of the awful “tipping” system/reduced wage for food workers, as if they’re for some reason especially deserving of having every night’s pay be at the whim of customers and dozens of other elements out of their control.

Capitalism has failed as a brand

The word needs to be retired. It gets evoked by some to mean a type of dog eat dog libertarianism and by others as a shorthand for the abuses of corporations and unjust outcomes of markets.

I see the idea as the simple preference that people be free to participate in voluntary markets, not be forced into labor, and be allowed to own property and build wealth. This is real basic stuff that almost everyone agrees on because history showed all the competing ideas led to mass poverty and starvation.

The real important questions of today are how a government deals with the fact that people don’t live in bubbles, they don’t agree on things, they can become physically or mentally ill, they can misbehave under the influence of substances, they can make poor decisions and have bad luck, they take advantage of others, they can use their wealth to buy advantages and monopolies, and they can be born into bad situations by no fault of their own.

Destroying the Venezuelan Economy

It’s sad to watch Venezuela’s economy being crushed by its president, Nicolás Maduro. Venezuela’s real inflation is 280% a year, but the government is trying to deny that by imposing price ceilings and artificially limiting access to foreign currency. The result is massive shortages made even worse by the fact that it’s more profitable to smuggle the rationed goods back out of the country.

But the scariest is that Maduro recently ordered a military-backed looting of one of its big box chains. Those stores certainly won’t be able to re-stock at the government-set prices, so basically Maduro just directly destroyed that business, and all other retailers know they could be next.

Normally this inflation would make Venezuela’s products and labor force more competitive and spur foreign investment to stabilize the economy, but the Venezuelan government can no longer be trusted. If Maduro is re-elected, Venezuela will continue sinking towards a completely government-controlled state, like Cuba. But at least it will be easier to escape from.

Cannabis criminalization helps law enforcement (perform unconstitutional searches)

Opponents of cannabis decriminalization often state we should keep it criminalized in order to help law enforcement catch bad guys, and indeed it serves as an important tool for justifying searches on individuals and premises. After all, these searches may turn up more harmful criminal activities or individuals with warrants. LEO’s will often admit that in many cases they are not really after the pot and may even ignore the offense if no other offenses are found.

From a public safety standpoint, allowing “I smelled marijuana” to serve as probable cause for search may on net improve safety, but we should reject this notion because these searches are basically unconstitutional. Cannabis use, after all, is not what most officers are really after; it’s a justification.

The Fourth Amendment was not created by accident; the power to search without cause can and often is abused by LEOs, and the especially militarized flavor of drug raids in the U.S. is often needlessly violent and deadly.

When cannabis is no longer criminalized, yes, searching individuals based on a hunch (without real cause) will be harder—the goal of the Bill of Rights was not to make policing easy—but consider if we had never criminalized cannabis and it had at least as many users as it currently does. Knowing what we now know about the mild harms of the drug, would we really choose to turn at least several million people into regular criminals in order to give LE the power to search them without cause and occasionally using violent SWAT raids?

No we would not and should not. If anything this “LE tool” argument is a reason to decriminalize.

Bad Analogies Lead to Bad Policies

I was forwarded an e-mail that made a terrible analogy (my emphasis):

Here’s another way to look at the Debt Ceiling: … You come home from work and find …  your home has sewage all the way up to your ceilings.

Sewage would make a home immediately uninhabitable and actively damage the value of the home and its contents. Your first clue that this analogy is a failure is to see that the U.S. debt doesn’t do this. During deficits we’ve had great periods of growing prosperity and people from all over want to come here.

Consider also the huge debt we incurred fighting WWII. If debt were like sewage, we would’ve done more to stay out of the war, or the resulting debt would’ve led us to ruins by the 50s. Instead, high employment (fueled by deficit spending) left us with a strong economy able to quickly pay back that debt while prospering.

U.S. debt is–not coincidentally–more like a credit card. Yes, we’d prefer not to need one, and we must keeping paying on it, but besides the payment, it incurs no other short term liabilities, and no one is demanding we pay it off tomorrow, next year, or in our lifetimes. And unlike most consumers, the U.S. is known to be the most trustworthy borrower in the world, so creditors treat us well, never hitting us with surprise fees (i.e. it doesn’t have the risk associated with a consumer credit card), and in fact they’re willing to loan to us right now at almost no interest on current purchases. (We’ll come back to that.)

We know that credit is helpful during emergencies, regardless of your debt level. If sewage were flooding your home and you had only a credit card to pay with, you’d still call the plumber and charge it.

Back in the real world, a more apt metaphor for flooding in your home is our high unemployment. It is actively damaging human capital as people lose their skills, homes, and families from financial stress. And this damage is not limited to those directly affected. Being unemployed for long is known to reduce the wages you earn for the rest of your working life, which reduces the taxes you can pay, and your productivity, and this makes the country’s long term revenue & growth problems even worse.

The good news is that the waste water is receding. The bad news is that it’s receding slowly, while destroying the value of our nation’s workforce.

Even worse, irrational fears of deficits have distracted us from the real emergency. Politicians and hard money economists have convinced us to choose to accept damagingly high unemployment to avoid using the credit card, and–making the situation even more head-slappingly absurd–is that new purchases on our credit card accrue virtually no interest. We could borrow for almost nothing to help get people back to work doing real productive, useful things growing the economy, but instead we’re a madman yelling, “can’t use the credit card!”, while sewage floods in.

It’s unsurprising that this recovery is slow because it’s the only one in recent history where we’ve simultaneously slashed government spending (mainly at the state/local levels). While politicians complain about our out of control spending–mostly safety net spending that will recede after the recession–we’re fully suffering the effects of austerity, and just like the UK is finding out, it’s painful and ineffective.

I’ve been very much won over by the arguments and real evidence presented in support of Keynes. The hard money advocates have some compelling, ideologically pure arguments, but their models don’t seem to support what we see in the real world during recessions, and getting this wrong hurts millions of people, not just economists’ reputations. Krugman can be a annoyingly partisan hack, but even many right-leaning economists know he’s right on the economics and he regularly posts real data from the economy to prove it. And I’m certain most politicians secretly agree. Watch what happens when budget cuts are proposed in their area. Their argument becomes, “If we cut this (unnecessary) military project it will destroy the town.” And he’s right; government spending can be just as important as consumer spending in supporting an economy. Consumers without jobs can’t buy much and demand drives everything.

That doesn’t mean we should keep unnecessary projects, but at this time there are many useful tasks we should be hiring the unemployed to do. For many it was the jobs they were already doing before state budget cuts–like teaching and policing. This is the absolute best time to bail out state governments and to take up needed infrastructure projects that will have to be done eventually.

Very sadly, neither party will be making the race about the urgency of high unemployment, perhaps because it’s out of sight for them and the unemployed don’t fund SuperPACs. At the very least Obama has tried to pursue legislation like 2011’s American Jobs Act (killed by Republicans).

And despite all the hand-wringing about debt, neither presidential candidate is proposing serious plans to address it. Romney’s tax and growth plans are just fantasy and Obama’s don’t raise enough money to do much.

And if this post isn’t depressing enough, maybe David Frum will work for you.