Hillsdale College is one of the last true meritocracies. There's no place on its application for racial identity, and it doesn't know the racial make-up of its student body until it shows up on campus in the fall.
'The purpose of education is not diversity,' Hillsdale President Larry Arnn says. 'It's truth.'
http://mjperry.blogspot.com/2010/06/quote-of-day.html
Wednesday, June 30, 2010
Money Illusion
TheMoneyIllusion A slightly off-center perspective on monetary problems.
America's amazing success since 1980: Why Krugman is wrong
Suppose you had gotten a room full of economists together in 1980, and made the following predictions:
1. Over the next 28 years the US would grow as fast as Japan, and faster than Europe (in GDP per capita, PPP.)
2. Over the next 28 years Britain would overtake Germany and France in GDP per capita.
And you said you were making these predictions because you thought Thatcher and Reagan's policies would be a success. Your predictions (and the rationale) would have been met with laughter. Indeed around that time most of the top British economists signed a petition asserting that Thatcher's policies would fail. For those of you not old enough to remember 1980, let me explain why. Labour rule of Britain had reduced their economy to a shambles. The government ran the big manufacturing corporations and labor unions were running wild. They had 83% MTRs, 98% on capital. There was garbage piling up in the streets of London. Britain had been the sick man of Europe for decades, growing far more slowly than Germany, France and Italy. The US wasn't doing as badly, but certainly wasn't doing that well either. We had also been growing much more slowly than Europe and Japan.
Unlike Britain, we were still richer than most other developed countries, so this convergence was viewed as partly inevitable (the catch-up from WWII), and partly reflecting the superior economic model of the Germans and Japanese.
Now let's look at what actually happened over the next 28 years. All GDP per capita data are from the World Bank, and are normalized as a fraction of US GDP/person:
Country 1980 1994 2008
USA 1.000 1.000 1.000
Australia .841 .770 .837
Canada .905 .818 .843
Britain .688 .705 .765
France .780 .730 .713
Germany .803 .812 .763
Italy .756 .754 .675
Sweden .868 .777 .794
Switz. 1.146 .987 .915
Asia
HK .547 .845 .948
Japan .732 .815 .736
Singapore .577 .899 1.064
Latin America
Argentina .395 .300 .309
Chile .210 .251 .311
Note that four countries gained significantly on the US, two were roughly stable (Australia, Japan) and the rest regressed. The four that gained were Chile, Britain, Hong Kong and Singapore. Of course lots of poor countries gained on the US, but that's to be expected. But I will show that the performance of every single country on the list is consistent with my view that the neoliberal reforms after 1980 helped growth, and inconsistent with Krugman's view that they did not.
Krugman makes the basic mistake of just looking at time series evidence, and only two data points: US growth before and after 1980. Growth has been slower, but that's true almost everywhere. What is important is that the neoliberal reforms in America have helped arrest our relative decline. The few countries that continued to gain on us were either more aggressive reformers (Chile and Britain), or were developing countries that adopted the world's most capitalist model. (According to every survey I have seen HK and Singapore are the top two in economic freedom.)
Australia: A traditionally rich country whose commodity export model started to sputter in the 1970s. They did major free market reforms (under a left wing government). Reforms continued when the conservatives took power. After 1994 they reversed their relative decline.
Japan: Just the opposite of Australia. Their free market export model did very well in the post war years, and didn't hit a wall until about 1990. After that their economy was unable to find domestic growth sectors, as their dysfunctional government refused to reform their statist domestic economy.
HK and Singapore: Both are in the process of becoming much richer than the US. Some of that is due to their status as city-states. But in modern developed economies the rural populations are small and not that poor, so I think in time people will recognize that Singapore's success is more than just demographics.
Chile and Argentina: Chile is the most famous Latin American example of neoliberal reforms. Note how in 1980 they were barely half as rich as their neighbor Argentina, and are now a bit richer. Almost every serious development economist attributes their relative success to their neoliberal reforms. BTW, there was a severe recession in Chile in 1974-75, but rapid growth from 1975-80. In addition, they were much poorer than Argentina in 1970 as well, so the starting date doesn't explain much.
Canada: Similar to Australia, except that they were not as statist as Australia in the earlier period, and their reforms occurred in the 1990s when they began dramatically shrinking the size of government as a share of GDP. The 1990s reforms worked as their relative decline to the US was reversed, and they started catching up after 1994.
France and Germany: Did some reforms, but much less than Britain. They suffered a decline relative to both Britain and the US. I think the 1980 German numbers include the East, but can't be certain. I do know that Germany's relative decline increased after 1994, by which time the East German incomes had definitely been incorporated in the data.
Italy: Did even less reforms than Germany and France, and has a more statist model. Fell far behind Britain.
Sweden: Had a bad recession in the early 1990s and had suffered decades of relative decline. Did major cuts in MTRs, privatization and deregulation during the 1990s, and its relative performance improved after those reforms.
Switzerland: Is the glass half full or half empty? Switzerland has always been regarded as one of the most capitalist countries in Western Europe, but has also been among the least aggressive countries in terms of neoliberal reforms. That pattern would predict high levels of GDP/person, but relative decline vis-a-vis the US. And that is exactly what has occurred. They rested on their laurels and slipped quite a few notches down the Heritage and Fraser rankings. I suppose the highly democratic system allowed them to avoid the worst socialist excesses of the 20th century, but also prevented them from reforming as fast as more dictatorial forms of democracy, such as the UK.
So there you are, all these countries support my hypothesis that neoliberal reforms lead to faster growth in real income, relative to the unreformed alternative.
There are two kinds of economists. Those who read the Economist (or FT) every week, and have a pretty good sense of what is going on in the world, and who know why some countries are doing better than others. And those who are lost in their ivory tower doing arcane research. The latter group is
often much more highly skilled than I am, and come up with more important new ideas than I ever will. But when talking to this group I often find they are totally oblivious to the neoliberal revolution of the past 30 years. (BTW, this isn't a jab at the left, most of the guys I am thinking of are right-wingers.)
You can't just take a single data point to evaluate a complex phenomenon. "Eh, you say there's a neoliberal revolution? OK, let me check to see whether most countries grew faster or slower after 1980. That should settle the argument." Actually it doesn't. The neoliberal revolution occurred precisely because growth was slowing almost everywhere in the 1970s and 1980s, and after 1980 growth slowed the most in those countries that reformed the least.
PS. I don't mean to suggest the left doesn't have any counterarguments. Reasonable progressives would admit than some of the reforms were sensible (cutting MTRs below 90%, privatizing British steel and autos, abolishing the CAB, etc.) And they'd also point to the fact that leisure has increased faster in Europe and thus the hourly real wage numbers look somewhat better vis-a-vis the US. And then I'd respond that the French productivity numbers are inflated by the fact that their labor market keeps many of the least productive people unemployed (teens and immigrants.) And they'd respond by pointing to our large prison population. The debate never ends. But Krugman was using simple real income numbers in his recent post. And by that criterion the results are clear-neoliberal reforms produce higher
levels of GDP per capita.
HT: James, Marcus
Update: Several commenters mentioned median income rather than GDP/person. The median income data does show slower growth than GDP/capita, partly because of increasing inequality, but partly because of statistical problems with the data (health benefits are excluded, etc.) I believe consumption
data is far superior to median real income, and that shows Americans doing much better. Will Wilkinson has posted on this. The consumption data also show a much smaller increase in inequality. But I was primarily interested in international comparisons, for which all I had was GDP data in PPP terms.
The point was that countries that did more reforms did better than those that did fewer reforms. I am not denying that growth in US living standards slowed after 1973, rather I am arguing that it would have slowed more had we not reformed our economy.
http://www.themoneyillusion.com/?p=5164
America's amazing success since 1980: Why Krugman is wrong
Suppose you had gotten a room full of economists together in 1980, and made the following predictions:
1. Over the next 28 years the US would grow as fast as Japan, and faster than Europe (in GDP per capita, PPP.)
2. Over the next 28 years Britain would overtake Germany and France in GDP per capita.
And you said you were making these predictions because you thought Thatcher and Reagan's policies would be a success. Your predictions (and the rationale) would have been met with laughter. Indeed around that time most of the top British economists signed a petition asserting that Thatcher's policies would fail. For those of you not old enough to remember 1980, let me explain why. Labour rule of Britain had reduced their economy to a shambles. The government ran the big manufacturing corporations and labor unions were running wild. They had 83% MTRs, 98% on capital. There was garbage piling up in the streets of London. Britain had been the sick man of Europe for decades, growing far more slowly than Germany, France and Italy. The US wasn't doing as badly, but certainly wasn't doing that well either. We had also been growing much more slowly than Europe and Japan.
Unlike Britain, we were still richer than most other developed countries, so this convergence was viewed as partly inevitable (the catch-up from WWII), and partly reflecting the superior economic model of the Germans and Japanese.
Now let's look at what actually happened over the next 28 years. All GDP per capita data are from the World Bank, and are normalized as a fraction of US GDP/person:
Country 1980 1994 2008
USA 1.000 1.000 1.000
Australia .841 .770 .837
Canada .905 .818 .843
Britain .688 .705 .765
France .780 .730 .713
Germany .803 .812 .763
Italy .756 .754 .675
Sweden .868 .777 .794
Switz. 1.146 .987 .915
Asia
HK .547 .845 .948
Japan .732 .815 .736
Singapore .577 .899 1.064
Latin America
Argentina .395 .300 .309
Chile .210 .251 .311
Note that four countries gained significantly on the US, two were roughly stable (Australia, Japan) and the rest regressed. The four that gained were Chile, Britain, Hong Kong and Singapore. Of course lots of poor countries gained on the US, but that's to be expected. But I will show that the performance of every single country on the list is consistent with my view that the neoliberal reforms after 1980 helped growth, and inconsistent with Krugman's view that they did not.
Krugman makes the basic mistake of just looking at time series evidence, and only two data points: US growth before and after 1980. Growth has been slower, but that's true almost everywhere. What is important is that the neoliberal reforms in America have helped arrest our relative decline. The few countries that continued to gain on us were either more aggressive reformers (Chile and Britain), or were developing countries that adopted the world's most capitalist model. (According to every survey I have seen HK and Singapore are the top two in economic freedom.)
Australia: A traditionally rich country whose commodity export model started to sputter in the 1970s. They did major free market reforms (under a left wing government). Reforms continued when the conservatives took power. After 1994 they reversed their relative decline.
Japan: Just the opposite of Australia. Their free market export model did very well in the post war years, and didn't hit a wall until about 1990. After that their economy was unable to find domestic growth sectors, as their dysfunctional government refused to reform their statist domestic economy.
HK and Singapore: Both are in the process of becoming much richer than the US. Some of that is due to their status as city-states. But in modern developed economies the rural populations are small and not that poor, so I think in time people will recognize that Singapore's success is more than just demographics.
Chile and Argentina: Chile is the most famous Latin American example of neoliberal reforms. Note how in 1980 they were barely half as rich as their neighbor Argentina, and are now a bit richer. Almost every serious development economist attributes their relative success to their neoliberal reforms. BTW, there was a severe recession in Chile in 1974-75, but rapid growth from 1975-80. In addition, they were much poorer than Argentina in 1970 as well, so the starting date doesn't explain much.
Canada: Similar to Australia, except that they were not as statist as Australia in the earlier period, and their reforms occurred in the 1990s when they began dramatically shrinking the size of government as a share of GDP. The 1990s reforms worked as their relative decline to the US was reversed, and they started catching up after 1994.
France and Germany: Did some reforms, but much less than Britain. They suffered a decline relative to both Britain and the US. I think the 1980 German numbers include the East, but can't be certain. I do know that Germany's relative decline increased after 1994, by which time the East German incomes had definitely been incorporated in the data.
Italy: Did even less reforms than Germany and France, and has a more statist model. Fell far behind Britain.
Sweden: Had a bad recession in the early 1990s and had suffered decades of relative decline. Did major cuts in MTRs, privatization and deregulation during the 1990s, and its relative performance improved after those reforms.
Switzerland: Is the glass half full or half empty? Switzerland has always been regarded as one of the most capitalist countries in Western Europe, but has also been among the least aggressive countries in terms of neoliberal reforms. That pattern would predict high levels of GDP/person, but relative decline vis-a-vis the US. And that is exactly what has occurred. They rested on their laurels and slipped quite a few notches down the Heritage and Fraser rankings. I suppose the highly democratic system allowed them to avoid the worst socialist excesses of the 20th century, but also prevented them from reforming as fast as more dictatorial forms of democracy, such as the UK.
So there you are, all these countries support my hypothesis that neoliberal reforms lead to faster growth in real income, relative to the unreformed alternative.
There are two kinds of economists. Those who read the Economist (or FT) every week, and have a pretty good sense of what is going on in the world, and who know why some countries are doing better than others. And those who are lost in their ivory tower doing arcane research. The latter group is
often much more highly skilled than I am, and come up with more important new ideas than I ever will. But when talking to this group I often find they are totally oblivious to the neoliberal revolution of the past 30 years. (BTW, this isn't a jab at the left, most of the guys I am thinking of are right-wingers.)
You can't just take a single data point to evaluate a complex phenomenon. "Eh, you say there's a neoliberal revolution? OK, let me check to see whether most countries grew faster or slower after 1980. That should settle the argument." Actually it doesn't. The neoliberal revolution occurred precisely because growth was slowing almost everywhere in the 1970s and 1980s, and after 1980 growth slowed the most in those countries that reformed the least.
PS. I don't mean to suggest the left doesn't have any counterarguments. Reasonable progressives would admit than some of the reforms were sensible (cutting MTRs below 90%, privatizing British steel and autos, abolishing the CAB, etc.) And they'd also point to the fact that leisure has increased faster in Europe and thus the hourly real wage numbers look somewhat better vis-a-vis the US. And then I'd respond that the French productivity numbers are inflated by the fact that their labor market keeps many of the least productive people unemployed (teens and immigrants.) And they'd respond by pointing to our large prison population. The debate never ends. But Krugman was using simple real income numbers in his recent post. And by that criterion the results are clear-neoliberal reforms produce higher
levels of GDP per capita.
HT: James, Marcus
Update: Several commenters mentioned median income rather than GDP/person. The median income data does show slower growth than GDP/capita, partly because of increasing inequality, but partly because of statistical problems with the data (health benefits are excluded, etc.) I believe consumption
data is far superior to median real income, and that shows Americans doing much better. Will Wilkinson has posted on this. The consumption data also show a much smaller increase in inequality. But I was primarily interested in international comparisons, for which all I had was GDP data in PPP terms.
The point was that countries that did more reforms did better than those that did fewer reforms. I am not denying that growth in US living standards slowed after 1973, rather I am arguing that it would have slowed more had we not reformed our economy.
http://www.themoneyillusion.com/?p=5164
Tuesday, June 29, 2010
Supreme Court keeps Privileges or Immunities in play
IJ is one of my favorite organizations. They work to defend those who can't defend themselves from the depredations of an overly intrusive government.
As for McDonald, thanks to all that's holy that we got this ruling! Of course the right to keep and bear arms is an individual right. I wonder - how far will this series of rulings will go in the future in establishing both the right and the limits on the right to keep and bear arms. Will I be allowed to own, for example, grenades and grenade lauchers?
June 28, 2010
McDonald is More than Victory
For Gun Owners Alone
Justice Thomas Writes to Breathe Life
Into Important Privileges or Immunities Clause
Arlington, Va.-Gun owners today rejoiced as the U.S. Supreme Court today struck down the city of Chicago's ban on handguns in McDonald v. City of Chicago. Today's ruling should be celebrated not just by gun owners, but by everyone who cares about liberty and the unique role played by courts in protecting it under our system of government. The Institute for Justice (IJ) has for decades been among the most consistent defenders of an engaged judiciary and an appropriately originalist interpretation of the Constitution, including particularly the Privileges or Immunities Clause of the 14th Amendment. As today's ruling makes clear, the right to keep and bear arms is a uniquely American, and decidedly fundamental individual right. That will be the result for which the McDonald decision will be remembered and, for many, celebrated.
But McDonald is about much more than just guns. At its heart, McDonald is a case about liberty. The Court was deeply divided over whether the Constitution protects a right to own guns from improper interference by state and local governments-just as District of Columbia v. Heller in 2008 held that the Second Amendment protects such a right against federal interference. Four justices voted to strike down Chicago's handgun ban, finding a right to keep and bear arms under a doctrine called "substantive due process." Four disagreed, voting to uphold the gun ban.
The pivotal fifth vote was Justice Clarence Thomas, who noted that, for all the disagreement between the two groups of four Justices, "neither side argues that the meaning they attribute to the Due Process Clause was consistent with public understanding at the time of its ratification." Justice Thomas agreed that the gun ban should be struck down, but instead proposed "a more straightforward path to this conclusion, one that is more faithful to the Fourteenth Amendment's text and history"-namely, the 14th Amendment's "Privileges or Immunities Clause." That Clause states that "[n]o State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States."
"The most important takeaway from today's decision is that it remains an open question which provision in the 14th Amendment protects the right to keep and bear arms against state infringement," said IJ Senior Attorney Clark Neily, who was one of the three attorneys who litigated District of Columbia v. Heller, the 2008 case that struck down the D.C. gun ban. Neily, who co-authored IJ's amicus briefs throughout the appellate process in McDonald, explained, "Today's outcome is a tremendous victory for liberty, and we are pleased that it hinges on Justice Thomas's compelling account of the history and purpose of the 14th Amendment, including the central role of the Privileges or Immunities Clause."
The phrase "privileges or immunities" may be unfamiliar today, but as Justice Thomas's concurrence shows, 19th-century Americans used it synonymously with a term modern Americans know very well: rights. After the Civil War, officials throughout the South systematically violated the rights of newly freed blacks and white abolitionists in their states and sought to keep them in abject poverty and terror. The whole point in amending the Constitution to add the 14th Amendment-and with it the Privileges or Immunities Clause-was to end the pervasive culture of oppression and tyranny by state and local governments. As the Institute for Justice explained in its amicus brief, two rights the Privileges or Immunities Clause was clearly intended to protect were armed self-defense and economic liberty.
But the Supreme Court essentially wrote the Privileges or Immunities Clause out of the 14th Amendment in an 1873 decision called the Slaughter-House Cases. The result was predictably disastrous: Those who were politically disenfranchised would continue to be economically marginalized and stripped of any meaningful ability to protect themselves from the vicious reprisals and Klan violence that soon became a shameful hallmark of Reconstruction.
"When the Institute for Justice was founded almost 20 years ago, it was unthinkable to most people that the Supreme Court would ever revisit the Slaughter-House Cases," said Chip Mellor, IJ's co-founder and general counsel. "Today's divided opinion shows the enormous distance we have covered since then and sends a strong signal that the Court cannot remain out of step with the original meaning of the Constitution forever."
The other Justices who voted to strike down the gun ban did not join Justice Thomas' interpretation of the Privileges or Immunities Clause. Justice Samuel Alito, writing for the four-justice plurality, found "no reason to reconsider [Slaughter-House's] interpretation here," instead relying on a set of precedents outlining a "substantive due process" inquiry into "whether the right to keep and bear arms is fundamental to our scheme of ordered liberty."
Justice Thomas rejected this sort of free-floating inquiry, suggesting that the Court should focus on questions of what the text of the Constitution means, rather than on which rights judges find sufficiently fundamental. "To be sure, interpreting the Privileges or Immunities Clause may produce hard questions," Justice Thomas' opinion acknowledges. "But they will have the advantage of being questions the Constitution asks us to answer."
"People who are worried about judicial activism should be worried about the fact that eight justices today argued that the question of whether Americans enjoy a right to keep and bear arms would come down to the abstract question of how 'fundamental' that right is," said IJ Staff Attorney Robert McNamara. "Justice Thomas' opinion points toward principled judicial engagement. Judges will be constrained by what the provisions of the Constitution actually meant when they were adopted, but at the same time they must give full force to the powerful protections for individual rights encompassed in the 14th Amendment."
"Overturning the Slaughter-House Cases was one of the Institute for Justice's founding goals, and today's decision gives that mission new vigor," concluded Mellor. "IJ has fought and will continue to fight for principled judicial engagement, which means that courts should strike down when the executive or legislative branches violate individual rights or exceed powers enumerated in the Constitution. Today's divided Court opens the door to restoring the 14th Amendment as a crucial bulwark of individual liberty against overreaching government power. We are confident the Court's understanding of the law will soon catch up to the scholarly consensus, and IJ stands ready to help defend the rights of all Americans to live their lives free from abuse at the hands of state governments."
Journalists can find comprehensive material on the Privileges or Immunities Clause by visiting: www.ij.org/PorI <http://click.icptrack.com/icp/relay.php?r=6640673&msgid=189153&act=ZGYO&c=155019&destination=http%3A%2F%2Fwww.ij.org%2FPorI> .
# # #
As for McDonald, thanks to all that's holy that we got this ruling! Of course the right to keep and bear arms is an individual right. I wonder - how far will this series of rulings will go in the future in establishing both the right and the limits on the right to keep and bear arms. Will I be allowed to own, for example, grenades and grenade lauchers?
June 28, 2010
McDonald is More than Victory
For Gun Owners Alone
Justice Thomas Writes to Breathe Life
Into Important Privileges or Immunities Clause
Arlington, Va.-Gun owners today rejoiced as the U.S. Supreme Court today struck down the city of Chicago's ban on handguns in McDonald v. City of Chicago. Today's ruling should be celebrated not just by gun owners, but by everyone who cares about liberty and the unique role played by courts in protecting it under our system of government. The Institute for Justice (IJ) has for decades been among the most consistent defenders of an engaged judiciary and an appropriately originalist interpretation of the Constitution, including particularly the Privileges or Immunities Clause of the 14th Amendment. As today's ruling makes clear, the right to keep and bear arms is a uniquely American, and decidedly fundamental individual right. That will be the result for which the McDonald decision will be remembered and, for many, celebrated.
But McDonald is about much more than just guns. At its heart, McDonald is a case about liberty. The Court was deeply divided over whether the Constitution protects a right to own guns from improper interference by state and local governments-just as District of Columbia v. Heller in 2008 held that the Second Amendment protects such a right against federal interference. Four justices voted to strike down Chicago's handgun ban, finding a right to keep and bear arms under a doctrine called "substantive due process." Four disagreed, voting to uphold the gun ban.
The pivotal fifth vote was Justice Clarence Thomas, who noted that, for all the disagreement between the two groups of four Justices, "neither side argues that the meaning they attribute to the Due Process Clause was consistent with public understanding at the time of its ratification." Justice Thomas agreed that the gun ban should be struck down, but instead proposed "a more straightforward path to this conclusion, one that is more faithful to the Fourteenth Amendment's text and history"-namely, the 14th Amendment's "Privileges or Immunities Clause." That Clause states that "[n]o State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States."
"The most important takeaway from today's decision is that it remains an open question which provision in the 14th Amendment protects the right to keep and bear arms against state infringement," said IJ Senior Attorney Clark Neily, who was one of the three attorneys who litigated District of Columbia v. Heller, the 2008 case that struck down the D.C. gun ban. Neily, who co-authored IJ's amicus briefs throughout the appellate process in McDonald, explained, "Today's outcome is a tremendous victory for liberty, and we are pleased that it hinges on Justice Thomas's compelling account of the history and purpose of the 14th Amendment, including the central role of the Privileges or Immunities Clause."
The phrase "privileges or immunities" may be unfamiliar today, but as Justice Thomas's concurrence shows, 19th-century Americans used it synonymously with a term modern Americans know very well: rights. After the Civil War, officials throughout the South systematically violated the rights of newly freed blacks and white abolitionists in their states and sought to keep them in abject poverty and terror. The whole point in amending the Constitution to add the 14th Amendment-and with it the Privileges or Immunities Clause-was to end the pervasive culture of oppression and tyranny by state and local governments. As the Institute for Justice explained in its amicus brief, two rights the Privileges or Immunities Clause was clearly intended to protect were armed self-defense and economic liberty.
But the Supreme Court essentially wrote the Privileges or Immunities Clause out of the 14th Amendment in an 1873 decision called the Slaughter-House Cases. The result was predictably disastrous: Those who were politically disenfranchised would continue to be economically marginalized and stripped of any meaningful ability to protect themselves from the vicious reprisals and Klan violence that soon became a shameful hallmark of Reconstruction.
"When the Institute for Justice was founded almost 20 years ago, it was unthinkable to most people that the Supreme Court would ever revisit the Slaughter-House Cases," said Chip Mellor, IJ's co-founder and general counsel. "Today's divided opinion shows the enormous distance we have covered since then and sends a strong signal that the Court cannot remain out of step with the original meaning of the Constitution forever."
The other Justices who voted to strike down the gun ban did not join Justice Thomas' interpretation of the Privileges or Immunities Clause. Justice Samuel Alito, writing for the four-justice plurality, found "no reason to reconsider [Slaughter-House's] interpretation here," instead relying on a set of precedents outlining a "substantive due process" inquiry into "whether the right to keep and bear arms is fundamental to our scheme of ordered liberty."
Justice Thomas rejected this sort of free-floating inquiry, suggesting that the Court should focus on questions of what the text of the Constitution means, rather than on which rights judges find sufficiently fundamental. "To be sure, interpreting the Privileges or Immunities Clause may produce hard questions," Justice Thomas' opinion acknowledges. "But they will have the advantage of being questions the Constitution asks us to answer."
"People who are worried about judicial activism should be worried about the fact that eight justices today argued that the question of whether Americans enjoy a right to keep and bear arms would come down to the abstract question of how 'fundamental' that right is," said IJ Staff Attorney Robert McNamara. "Justice Thomas' opinion points toward principled judicial engagement. Judges will be constrained by what the provisions of the Constitution actually meant when they were adopted, but at the same time they must give full force to the powerful protections for individual rights encompassed in the 14th Amendment."
"Overturning the Slaughter-House Cases was one of the Institute for Justice's founding goals, and today's decision gives that mission new vigor," concluded Mellor. "IJ has fought and will continue to fight for principled judicial engagement, which means that courts should strike down when the executive or legislative branches violate individual rights or exceed powers enumerated in the Constitution. Today's divided Court opens the door to restoring the 14th Amendment as a crucial bulwark of individual liberty against overreaching government power. We are confident the Court's understanding of the law will soon catch up to the scholarly consensus, and IJ stands ready to help defend the rights of all Americans to live their lives free from abuse at the hands of state governments."
Journalists can find comprehensive material on the Privileges or Immunities Clause by visiting: www.ij.org/PorI <http://click.icptrack.com/icp/relay.php?r=6640673&msgid=189153&act=ZGYO&c=155019&destination=http%3A%2F%2Fwww.ij.org%2FPorI> .
# # #
Thank Goodness for Krugman
I feel grateful for his unique ability to stimulate an easy economics lesson with almost every column he publishes.
Obsessed With Aggregate Demand, Posted: 25 Jun 2010 08:03 PM PDT
Here's a letter to the New York Times:
If Beijing doesn't further raise the value of the renminbi, Paul Krugman wants Uncle Sam to impose trade sanctions on Chinese producers ("The Renminbi Runaround <http://www.nytimes.com/2010/06/25/opinion/25krugman.html?adxnnl=1&ref=opinion&adxnnlx=1277521277-Zv9PxouL+YbwH0TW23oA8A> ," June 25). Mr. Krugman justifies his embrace of protectionism by pointing to today's high unemployment rate: by making Chinese goods less costly for Americans to buy, Beijing's monetary policy allegedly reduces "demand for goods and services to generate the jobs we need."
If Mr. Krugman is correct that access to inexpensive goods and services from abroad causes unemployment by reducing demand for domestically produced outputs (and, hence, for workers who produce those outputs), it must also be true that access to inexpensive goods and services from labor-saving technology causes unemployment. In both cases, fewer domestic workers than before are required to make outputs available to consumers.
So here's a question for Mr. Krugman: does today's high unemployment rate also justify Uncle Sam imposing punitive tariffs on R&D teams, inventors, and other sources of labor-saving technologies?
Sincerely,
Donald J. Boudreaux
http://www.cafehayek.com/
Obsessed With Aggregate Demand, Posted: 25 Jun 2010 08:03 PM PDT
Here's a letter to the New York Times:
If Beijing doesn't further raise the value of the renminbi, Paul Krugman wants Uncle Sam to impose trade sanctions on Chinese producers ("The Renminbi Runaround <http://www.nytimes.com/2010/06/25/opinion/25krugman.html?adxnnl=1&ref=opinion&adxnnlx=1277521277-Zv9PxouL+YbwH0TW23oA8A> ," June 25). Mr. Krugman justifies his embrace of protectionism by pointing to today's high unemployment rate: by making Chinese goods less costly for Americans to buy, Beijing's monetary policy allegedly reduces "demand for goods and services to generate the jobs we need."
If Mr. Krugman is correct that access to inexpensive goods and services from abroad causes unemployment by reducing demand for domestically produced outputs (and, hence, for workers who produce those outputs), it must also be true that access to inexpensive goods and services from labor-saving technology causes unemployment. In both cases, fewer domestic workers than before are required to make outputs available to consumers.
So here's a question for Mr. Krugman: does today's high unemployment rate also justify Uncle Sam imposing punitive tariffs on R&D teams, inventors, and other sources of labor-saving technologies?
Sincerely,
Donald J. Boudreaux
http://www.cafehayek.com/
Dr. B on Keen Reporting (Not)
Crack Reporting
Posted: 01 Jun 2010 10:24 AM PDT
Here's a letter to the New York Times:
Dear Editor:
Suppose Uncle Sam orders you to raise by 41 percent the price you charge for subscriptions to your newspaper. Would you be surprised to find a subsequent fall in the number of subscribers? If you assigned a reporter to investigate the reasons for this decline in subscriptions, would you be impressed if that reporter files a story offering several possible explanations for the fall in subscriptions without, however, once mentioning the mandated 41 percent price hike?
Unless you answered "yes" to this last question, I wonder why you published Mickey Meece's report on today's record high teenage unemployment rate ("Job Outlook for Teenagers Worsens <http://www.nytimes.com/2010/06/01/business/01jobs.html?pagewanted=1&%2334&sq&st=cse&%2359;&%2359;fading%20summer%20job&scp=1> ," June 1). Between 2007 and 2009, Uncle Sam ordered teenage workers (who are mostly unskilled) to raise the price they charge for their labor services by 41 percent. (That is, the federal minimum-wage rose from $5.15 per hour in 2007 to its current level of $7.25 in 2009 - a 41 percent increase.)
Does it not strike you as more than passing strange for your reporter - assigned to help explain why teenagers today have an increasingly difficult time finding jobs - to ignore the fact that these teenagers are ordered by government to raise significantly the wages that they charge their employers?
Sincerely,
Donald J. Boudreaux
Posted: 01 Jun 2010 10:24 AM PDT
Here's a letter to the New York Times:
Dear Editor:
Suppose Uncle Sam orders you to raise by 41 percent the price you charge for subscriptions to your newspaper. Would you be surprised to find a subsequent fall in the number of subscribers? If you assigned a reporter to investigate the reasons for this decline in subscriptions, would you be impressed if that reporter files a story offering several possible explanations for the fall in subscriptions without, however, once mentioning the mandated 41 percent price hike?
Unless you answered "yes" to this last question, I wonder why you published Mickey Meece's report on today's record high teenage unemployment rate ("Job Outlook for Teenagers Worsens <http://www.nytimes.com/2010/06/01/business/01jobs.html?pagewanted=1&%2334&sq&st=cse&%2359;&%2359;fading%20summer%20job&scp=1> ," June 1). Between 2007 and 2009, Uncle Sam ordered teenage workers (who are mostly unskilled) to raise the price they charge for their labor services by 41 percent. (That is, the federal minimum-wage rose from $5.15 per hour in 2007 to its current level of $7.25 in 2009 - a 41 percent increase.)
Does it not strike you as more than passing strange for your reporter - assigned to help explain why teenagers today have an increasingly difficult time finding jobs - to ignore the fact that these teenagers are ordered by government to raise significantly the wages that they charge their employers?
Sincerely,
Donald J. Boudreaux
Monday, June 28, 2010
Classic Quotes, Jefferson
"When we see ourselves in a situation which must be endured and gone through, it is best to make up our minds to it, meet it with firmness, and accommodate everything to it in the best way practicable. This lessens the evil; while fretting and fuming only serves to increase your own torments."
- Thomas Jefferson
Courtesy of CrossFit.com
- Thomas Jefferson
Courtesy of CrossFit.com
Three Questions to Frame A Problem
Mark Thoma writes,
Regulators certainly made mistakes, and there is plenty of room for improvement, but does that mean we should abandon attempts to regulate? Of course not.
It is hard to argue against the proposition that better regulation would be better. But for regulation to be better, I think there has to be some correspondence between the narrative of what went wrong and the proposed regulatory change.
I am to be talking on this at a conference in a couple of days. My current thoughts.
1. My own narrative is that the causes of the problem were a) clumsy capital regulations, which induced a lot of financial innovation that was primarily aimed at regulatory arbitrage; b) housing policy that encouraged lenient, subsidized mortgage credit; c) the suits vs. geeks divide, with people in power (in both large banks and among regulators) having too much confidence and too little knowledge.
2. My policy recommendations match my narrative. Assume that regulation will be clumsy, and aim for a system that is easy to fix as opposed to hard to break; get rid of all policies that encourage lenient subsidized mortgage credit. and break up the 10 largest banks into about 40 banks.
3. The current financial regulation bill matches nobody's narrative. I will explain this view in more detail subsequently. Briefly:
--if the problem was that we deregulated too much over the past 20 years, then why doesn't the bill simply reset regulations to what they were 20 years ago? or 30 years ago?
--if the problem was that house price increases and mortgage leverage got out of hand, then why does government policy continue to try to push mortgage loans with low down payments?
--if the problem is that lenders were exploiting borrowers (which would justify a focus on consumer protection), then why is it that we ended up bailing out the lenders?
http://econlog.econlib.org/archives/2010/06/matching_narrat.html
Regulators certainly made mistakes, and there is plenty of room for improvement, but does that mean we should abandon attempts to regulate? Of course not.
It is hard to argue against the proposition that better regulation would be better. But for regulation to be better, I think there has to be some correspondence between the narrative of what went wrong and the proposed regulatory change.
I am to be talking on this at a conference in a couple of days. My current thoughts.
1. My own narrative is that the causes of the problem were a) clumsy capital regulations, which induced a lot of financial innovation that was primarily aimed at regulatory arbitrage; b) housing policy that encouraged lenient, subsidized mortgage credit; c) the suits vs. geeks divide, with people in power (in both large banks and among regulators) having too much confidence and too little knowledge.
2. My policy recommendations match my narrative. Assume that regulation will be clumsy, and aim for a system that is easy to fix as opposed to hard to break; get rid of all policies that encourage lenient subsidized mortgage credit. and break up the 10 largest banks into about 40 banks.
3. The current financial regulation bill matches nobody's narrative. I will explain this view in more detail subsequently. Briefly:
--if the problem was that we deregulated too much over the past 20 years, then why doesn't the bill simply reset regulations to what they were 20 years ago? or 30 years ago?
--if the problem was that house price increases and mortgage leverage got out of hand, then why does government policy continue to try to push mortgage loans with low down payments?
--if the problem is that lenders were exploiting borrowers (which would justify a focus on consumer protection), then why is it that we ended up bailing out the lenders?
http://econlog.econlib.org/archives/2010/06/matching_narrat.html
Subscribe to:
Posts (Atom)