What is Postlibertarianism? v1.0

When I started blogging here about 18 months ago, I knew that I was having trouble identifying myself as exactly “libertarian”, despite that being my primary blogging perspective for years before that. I’ve mapped out important parts of this “new” position in previous posts, but now I think it would make sense to put everything in one place. Continue reading What is Postlibertarianism? v1.0

The Obama Presidency Was Bad

We’re already caught up in how terrible the Trump presidency is, but over the next four years, it will be important to remember just how bad the Obama presidency was. When overcome with frustration at the current administration, I would urge readers to come back to this post and remember that the last president was also quite terrible. In his farewell speech, Obama tried to make the argument for his presidency’s accomplishments, but many of them were simply court cases that were decided while he was president, or decisions that were nice but had little real policy impact.

There have been plenty of reflections on the Obama presidency, but I think a high level overview of everything Obama did would put in perspective just how awful he’s been, especially as we experience the incompetency and horrible policy decisions of the current administration. I’ve done this by letter grades A through F.

The A’s

Iran Nuclear Deal

So…there was only one thing I could give an A to. Even this A is very hesitant. We did give up a lot for this deal–the Iranian government is pretty awful and by unfreezing their assets, they got access to very large amounts of money. However, I don’t think there was much else to do. Unless Republicans actually wanted to declare war on Iran, this seems like the only way to stop them from developing a nuclear weapon.  Iran’s nuclear program will be prohibited from refining any uranium for 15 years, and this was accomplished without any military intervention whatsoever. That’s pretty excellent. Moreover, the average citizens of Iran matter as well and it is somewhat unfair to punish them with high inflation and economic hardship because their authoritarian government is irresponsible.  Cato expands more here.

The B’s

Trade

One of the most important accomplishments is that Obama’s administration worked to pass several free trade agreements with Korea, Colombia, and Panama. He also tried to complete the Trans-Pacific Partnership and the Transatlantic Free Trade Area, although he could have really pushed harder on these initiatives. Obama didn’t do a great job making the case for free trade and his signature deal was ultimately a failure; honestly, a B is generous here, and is more of a function of the importance of free trade more so than Obama’s actual impact. Also worth noting is that his rhetoric while campaigning was pretty vigorously anti-trade, so he should be commended for changing his mind on this.

Gay Rights

Obama ended Don’t Ask, Don’t Tell, but was still on the record as anti-gay marriage as late as 2012. Sure, public opinion on gay marriage shifted rapidly, but Obama basically waited until it was 50-50 to switch to the right side on this; the Libertarian Party has been on board with gay marriage since the 70s. He should also be applauded for essentially not getting in the way of the court case. I know that’s a low bar, but he could have fought it and tried to keep the DOMA. The other issue is that while this is excellent, the impact of gay marriage legalization is somewhat limited to people who can take advantage of it.

Cuba

The Cuban embargo was imposed over 50 years ago in a bid to quickly end Castro’s dictatorship on the island. It failed. 25 years after the Soviet Union had disintegrated, a president finally spent some political capital to remove an outdated institution. Trade embargoes harm populations, and trade embargoes on a country that has been crushed by horrific socialist economic policies are even more harmful. The president cannot remove the embargo, but everything he can do without Congress, Obama has done on this issue. Trade can bring countries together, and Obama took steps to build those bridges. If he had actually gotten the embargo lifted, this would be an A.

The C’s

Marijuana Legalization

And that’s it for the entirely positive! Marijuana’s big progress had basically nothing to do with Obama, and Obama actually started out fighting it, performing more federal raids on state legal marijuana dispensaries in his first term than Bush. Eventually the administration did make the decision not to continue attempts to enforce marijuana laws with federal police forces. While kind of obvious and not very impressive, this may turn out to be something we remember fondly during the long night of the Jeff Sessions era.

Healthcare

As an incredibly brief overview, the ACA is flawed because it does nothing to address the fundamental problem with the healthcare system: a lack of market forces.  The laws of supply and demand create incentives for lower cost and higher quality care. Plastic surgery and lasik are not covered by insurance and thus must compete on price and quality and over time these areas have seen remarkable improvement with prices remaining the same or even dropping.

Our insurance system insulates both consumers and providers of healthcare from the market prices; consumers don’t pay for care, they don’t pay different prices at different places, and they often don’t even buy the insurance that does pay for care. Instead their employers pay for the thing that pays for their healthcare. And sometimes, if you go to a hospital, the insurance doesn’t really pay for care either, it pays the hospital in obfuscated and arcane ways, which in turn provides the doctors and actual equipment needed to provide care. It’s a complete mess.

The ACA did do some nice things like allow people with pre-existing conditions and people who didn’t get their healthcare through their employees and poor people to get health insurance. This is great, and any healthcare reform should strive to do that. However, by not addressing the price issue, they doomed these reforms. Things have sputtered along, but healthcare costs have kept rising, and now insurers are stuck with a disproportionate amount of sick people, needing to raise prices, which only drives away more healthy people. The death spiral was a predictable consequence (and indeed I did predict this in 2010 in a blog attached to my real name and thus will not be linking to here). Obamacare was not a poorly intended bill, but it was an incredible missed opportunity to actually fix the healthcare system. The only reason I didn’t give it a lower grade was because the system was so bad already, it’s hard to argue it was made that much worse.

Global Warming

Obama took steps to reduce climate change. Even if you’re not concerned about the most dire predictions of global warming, that’s probably a net benefit. He also was able to get China to sign onto the Paris Agreement. While not having legal punishments for countries who break their promises, it’s a solid negotiating achievement. However, Obama also implemented, largely by executive order, regulations on coal plants in the US that will have very little impact on carbon emissions. It’s also not at all market oriented, and therefore not particularly economically efficient. Additionally, in his first year in office, Obama had a chance to try and pass a more economically efficient carbon credit trading bill. Assuming climate change is as dire a threat as many say it is (I’m admittedly less worried), it seems to be a poor decision to spend political capital on other bills that did pass, especially something that was as flawed as Obamacare.

The Economy

The employment rate is lower than it has been in a long time, but the problem is this graph. Labor force participation has plummeted from 65% in the depths of the recession to around 62% now. The last time it was this low was before 1980. Since the current labor is around 160 million people, and we are at 62% participation, that means the cohort of the working age population is about 258 million. In 2009, unemployment was around 9%. With a labor force of 155 million people, that’s almost 14 million unemployed. Today with an unemployment rate of 4.7%, that’s only 7.5 million unemployed. However, looking at the people not in the labor force in 2009 there were 83.5 million not working but not unemployed. In 2017, there are 98 million not working but not unemployed. so unemployment dropped by almost 7 million, yet more than twice that many more people were staying out of the labor force entirely. The economy isn’t in free fall, but it’s not knocking it out of the park either, and this is 8 years after the recession. This isn’t entirely Obama’s fault, as the Federal Reserve is much more responsible for economic success overall, but the things Obama did have control over were abject failures: fiscal restraint, entitlement reform, and deregulation.

Immigration

Obama’s legacy on immigration liberalization is mixed. Unfortunately, as this is one of the more important issues in improving the world, a mixed record is disappointing. Obama deported more people than George Bush and he failed to pass any sort of comprehensive reform bill. Obviously, he couldn’t pass bills on everything, but this would have been a pretty important area to do so. Obama did however create an executive order delaying deportations for millions of illegal immigrants. This was a bit odd constitutionally, but with so many illegal immigrants in the United States, it would be impossible to deport them all anyway. Obama’s order simply prioritizes some over others, protecting children and parents of American citizens. This was certainly a good policy, but unfortunately Obama’s legacy in this area should have been so much better.

The D’s

Endless Wars

Obama is the first president to be at war for every day of his presidency. From Iraq to Afghanistan to Libya and Syria, to undeclared wars and bombings in Yemen and Pakistan, we have entered a new era of endless war. Libya is specifically horrifying: Obama chose to involve the American military in Libya unilaterally. He explicitly did not get authorization from Congress, and in fact Congress explicitly voted against a resolution to authorize his military involvement after the fact. That is a terrifying precedent to give Donald Trump.

The only reason this category is not an F is because of Obama’s continued reluctance to expand the US involvement in Syria.  Of course, he did this in the worst possible way, by drawing a line in the sand and then backing down from it but it’s undeniable that a larger American role in Syria would have involved the US in one of the largest, bloodiest civil wars of the last decade. Of course, we have not even touched the fact that American troops are in Iraq 14 years after the invasion, and many US contractors remain in Afghanistan 16 years after that invasion. Obama has still institutionalized war in way never before seen.

The F’s

Surveillance

I mean wow. How did we get here? If you want all the citatations, this Mashable article is a good start. The United States government engages in broad sweeps of Americans’ phone records through unconstitutional general warrants issued via a secret court that had no defense team, no oversight, and has only rejected a handful of warrants in its entire history. The NSA also had a program for collecting data on foreigners and Americans from major technology companies, as well as a massive database storing all of that information for later search. Every available method of siphoning data is apparently being used.  The NSA also invested heavily in ways to break internet encryption standards. They even paid $10 million to RSA to get them to set their default encryption algorithm to one that was fundamentally broken in one of their products. Most impressively, it turns out that the big phone record collection the NSA was conducting in total secret, that had no oversight and Senators couldn’t even talk about, it’s illegal according to a federal appellate court.

It was such a disaster that Congress eventually tried to pass a reform bill to fix Section 215 of the Patriot Act which is what the courts cited as the justification for these general warrants. Yet in the end, that bill was watered down to the point of uselessness, with Justin Amash, Thomas Massie, and Rand Paul all voting against it due to its lack of real power. In fact, the bill extended the Patriot Act for several years. Obama’s legacy in this area is a total disaster, and he leaves an out of control intelligence agency with no oversight in the hands of a petty authoritarian. The NSA (and all agencies they share information with) knows intimate details about all of our lives, our communication patterns, and our digital existences. As we’ve written before, this is not good.

Transparency

Reason does a good job tearing the Obama administration apart over the “most transparent administration in history” line. Again, this area is such a disaster there are too many things to cover. We can start by discussing how just a month or two prior to the Edward Snowden revealing everything we talked about in the last section, DNI Clapper blatantly lied to a Senate committee about the government’s spying capability. Obama himself has hardly given any interviews to the press. His administration has had more than double the Espionage Act charges against whistleblowers than all previous administrations combined. Which is especially concerning since none of these were acts of espionage! These were legitimate problems that were hidden from view from the public, brought to light by people doing the right thing. But the secrecy was pervasive throughout the administration; regular employees were banned from talking with reporters, a record number of FOIA requests were denied and at least 1 in 3 were denied improperly (which was only ever found out if challenged), and, of course, the government had a secret extrajudicial kill list.

Drone Strikes

Conor Friedersdorf writes that in Obama’s first year in office, his administration conducted over 100 drone strikes…in Pakistan. Quick recap: Congress voted for an Authorization of the Use of Military Force against the perpetrators of the 9/11 Attacks, which allowed the government to invade Afghanistan. Congress also voted to go into Iraq. Pakistan is not one of these countries, yet apparently Obama was carrying out an entire proxy war via drone strikes. In 2010, those strikes only intensified, yet it was worse than that; to cloud the truth, the Obama administration counted all military age males in the vicinity of these strikes as combatants, regardless if they were civilians or not. There were eventually reforms to this process, and the number of civilian casualties per strikes started to go down, but this is but the smallest of victories. In waging these undeclared wars in Yemen, Pakistan, and Somalia, the Obama administration concocted an absurd “legal” process to target specific individuals without a trial, including American citizens. We are talking about a logistically planned and funded protocol for murdering American citizens overseen only by the President. This process eventually ended up killing a civilian by accident, a 16 year old American. This is unjustifiable. No one was ever held accountable for these lawless actions, and the president retains power to murder at will, which he has promptly done, murdering the deceased teenager’s sister this past week. Someone get this guy a Nobel Peace Prize.

Executive Power

This section condenses much of what Gene Healy says in his excellent piece “Goodbye, Obama”. The powers the Obama administration seized and expanded are vast. While initially running against “dumb wars” and unauthorized wars, Obama became the first president to be at war for every day of his presidency. He undertook drone strikes in countries where he had authorization to be in, he even undertook an entire military action in Libya when Congress had expressly voted against supporting it. He continued to use the 2001 AUMF six years after the death of Osama bin Laden and against a group (the Islamic State) that essentially didn’t exist on 9/11. And the Trump administration has continued this justification. His drone strikes have killed hundreds of civilians, and even American citizens. He has created a secret kill list with no oversight from courts or Congress. He has ascended to new heights of secrecy and prosecution of whistleblowers, and he has thwarted attempts at transparency at every turn. Without public knowledge, the ultimate oversight of the democratic process is destroyed as well. And none of this is even touching areas outside national security where Obama also took unilateral presidential orders to new and creative areas. These include instituting new immigration law by executive order when it was bogged down in Congress, creating new overtime labor rules, adding new environmental regulations on power plants, national school curriculum requirements, and even unilaterally amending Obamacare. Healy writes “More than any recent president, Obama has embraced and, to some extent, legitimized the anti-constitutional theory that congressional inaction is a legitimate source of presidential power.”

Obama’s legacy is the Imperial Presidency. Simply by occupying the same office as Obama, Donald Trump inherits vast powers, legislative, military, and judicial. Americans’ private information is available, their lives at risk without the need for due process, the very laws of the country can be changed via the presidential pen. Barack Obama has accomplished much during his presidency, but most of his important projects have ended in utter disaster, and the manner of their attempted accomplishment has greatly imperiled the separation of powers and constitutional restraint. While itg is quite possible, even likely, that the Trump presidency will be worse still, we cannot forget the incredible cost and horrific events of the Obama legacy.


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2017 Predictions

It’s fun to have opinions, and it’s easy to craft a narrative to fit your beliefs. But it’s especially dangerous to look back at events and place them retroactively into your model of the world. You can’t learn anything if you’re only ever looking for evidence that supports you.  However, if you try to use your model of the world to create testable predictions, those predictions can be proven right or wrong, and you can actually learn something. Incorrect predictions can help update our models.

This is, of course, the basis for the scientific method, and generally increasing our understanding of the world. Making predictions is also important for making us more humble; we don’t know everything and so putting our beliefs to the test requires us to reduce our certainty until we’ve researched a subject before making baseless claims.  Confidence levels are an important part of predictions, as they force us to think in the context of value and betting: a 90% confidence level means I would take a $100 bet that required me to put up anything less that $90. Moreover, it’s not just a good idea to make predictions to help increase your knowledge; people who have opinions but refuse to predict things with accompanying confidence levels, and therefore refuse to subject their theories to scrutiny and testability, must be classified as more fraudulent and intellectually dishonest.

First let’s take a look at how I did this past year, and see if my calibration levels were correct. Incorrect predictions are crossed out.

Postlibertarian Specific

  1. Postlibertarian to have >10 additional posts by July 1, 2016:  70%
  2. Postlibertarian Twitter to have more than 240 followers:  70%
  3. Postlibertarian.com to have >10k page loads in 2016: 50% (had 30k according to StatCounter)
  4. The predictions on this page will end up being underconfident: 60%

World Events

  1. Liberland will be recognized by <5 UN members: 99% (recognized by 0)
  2. Free State Project to reach goal of 20,000 people in 2016: 50% (occurred February 3rd)
  3. ISIS to still exist: 80%
  4. ISIS to kill < 100 Americans 2016: 80% (I think <100 were killed by any terrorists, fewer in combat)
  5. US will not get involved in any new major war with death toll of > 100 US soldiers: 80%
  6. No terrorist attack in the USA will kill > 100 people: 80% (50 did die in the Orlando shooting unfortunately)
  7. Donald Trump will not be Republican Nominee: 80% (whoops)
  8. Hillary Clinton to be Democratic nominee: 90%
  9. Republicans to hold Senate: 60%
  10. Republicans to hold House: 80%
  11. Republicans to win Presidential Election: 50% (I predicted in December, Nate Silver had Trump at 35% the day of, who’s a genius now??)
  12. I will vote for the Libertarian Presidential Candidate: 70% *
  13. S&P 500 level end of year < 2500: 70%
  14. Unemployment rate December 2016 < 6% : 70%
  15. WTI Crude Oil price < $50 : 80%
  16. Price of Bitcoin > $500:  60%
  17. Price of Bitcoin < $1000: 80%
  18. Sentient General AI will not be created this year: 99%
  19. Self-driving cars will not be available this year to purchase / legally operate for < $100k: 99%
  20. I will not be able to rent trips on self-driving cars from Uber/ Lyft: 90% **
  21. Humans will not land on moon by end of 2016: 95%
  22. Edward Snowden will not be pardoned by end of Obama Administration: 80% ***

*I didn’t personally vote for the libertarian candidate, but I did trade my vote, resulting in Gary Johnson getting two votes more than he would have had I not voted at all. I’m counting this as at least a vote for Johnson.

**Technically, I am not particularly able to get a ride on a self-driving Uber because I don’t live in Pittsburgh, but I don’t think that’s what I meant. I also didn’t expect any self-driving Uber rides to be available anywhere, so I’m counting it against me.

***Obama still has a few weeks to pardon Snowden, but it’s not looking good

So let’s take a look at how I did by category:

  • Of items I marked as 50% confident, 3 were right and 0 were wrong.
  • Of items I marked as 60% confident, 3 were right and 0 were wrong.
  • Of items I marked as 70% confident, 4 were right and 1 was wrong.
  • Of items I marked as 80% confident, 7 were right and 2 were wrong.
  • Of items I marked as 90% confident, 1 was right and 1 was wrong.
  • Of items I marked as 95% confident, 1 was right and 0 were wrong.
  • Of items I marked as 99% confident, 3 were right and 0 were wrong.

As you can see from this data graphed, I have absolutely no idea what I’m talking about when it comes to predictions.

You’re supposed to be as close to the perfect calibration line as possible. The big problems are that I only had 2 or 3 predictions for the 50%, 60%, and 90% confidence intervals. For example, my slip-up on predicting Uber wouldn’t have self-driving cars this year means I was only 1 for 2 on 90% predictions. Clearly I need to find more things to predict, as I had 5 and 9 predictions for the 70% and 80% confidence levels, which were right about on the mark. Luckily for next year, I have almost double the number of predictions:

Predictions for 2017:

World Events

  1. Trump Approval Rating end of June <50% (Reuters or Gallup): 60%
  2. Trump Approval Rating end of year <50% (Reuters or Gallup): 80%
  3. Trump Approval Rating end of year <45% (Reuters or Gallup): 60%
  4. Trump 2017 Average Approval Rating (Gallup) <50%: 70%
  5. ISIS to still exist as a fighting force in Palmyra, Mosul, or Al-Raqqah: 60%
  6. ISIS to kill < 100 Americans: 80%
  7. US will not get involved in any new major war with death toll of > 100 US soldiers: 60%
  8. No terrorist attack in the USA will kill > 100 people: 90%
  9. France will not vote to leave to the EU: 80%
  10. The UK will trigger Article 50 this year: 70%
  11. The UK will not fully leave the EU this year: 99%
  12. No country will leave the Euro (adopt another currency as their national currency): 80%
  13. S&P 500 2016 >10% growth: 60%
  14. S&P 500 will be between 2000 and 2850: 80% (80% confidence interval)
  15. Unemployment rate December 2017 < 6% : 70%
  16. WTI Crude Oil price > $60 : 70%
  17. Price of Bitcoin > $750: 60%
  18. Price of Bitcoin < $1000: 50%
  19. Price of Bitcoin < $2000: 80%
  20. There will not be another cryptocurrency with market cap above $1B: 80%
  21. There will not be another cryptocurrency with market cap above $500M: 50%
  22. Sentient General AI will not be created this year: 99%
  23. Self-driving cars will not be available this year for general purchase: 90%
  24. Self-driving cars will not be available this year to purchase / legally operate for < $100k: 99%
  25. I will not be able to buy trips on self-driving cars from Uber/Lyft in a location I am living: 80%
  26. I will not be able to buy a trip on a self-driving car from Uber/Lyft without a backup employee in the car anywhere in the US: 90%
  27. Humans will not land on moon by end of 2017: 95%
  28. SpaceX will bring humans to low earth orbit: 50%
  29. SpaceX successfully launches a reused rocket: 60%
  30. No SpaceX rockets explode without launching their payload to orbit: 60%
  31. Actual wall on Mexican border not built: 99%
  32. Some increased spending on immigration through expanding CBP, ICE, or the border fence: 80%
  33. Corporate Tax Rate will be cut to 20% or below: 50%
  34. Obamacare (at least mandate, community pricing, pre-existing conditions) not reversed: 80%
  35. Budget deficit will increase: 90%
  36. Increase in spending or action on Drug War (e.g. raiding marijuana dispensaries, increased spending on DEA, etc): 70%
  37. Some tariffs raised: 90%
  38. The US will not significantly change its relationship to NAFTA: 60%
  39. Federal government institutes some interference with state level legal marijuana: 60%
  40. At least one instance where the executive branch violates a citable civil liberties court case: 70%
  41. Trump administration does not file a lawsuit against any news organization for defamation: 60%
  42. Trump not impeached (also no Trump resignation): 95%

Postlibertarian

  1. Postlibertarian.com to have >15 more blog posts by July 1, 2017: 80%
  2. Postlibertarian.com to have >30 blog posts by end of year: 70%
  3. Postlibertarian.com to have fewer hits than last year (no election): 60%
  4. Postlibertarian Twitter account to have <300 followers: 90%
  5. Postlibertarian Twitter account to have >270 followers: 60%
  6. Postlibertarian Subreddit to have <100 subscribers: 90%

 


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Rawlsian Rebuttal to Inequality Concerns

This was stolen from a comment on this week’s EconTalk with Richard Epstein.

The concept of the rich getting richer and the poor getting poorer is oft-repeated, although according to my Google results, many of the top hits are articles disproving it. Despite this, sources from the Washington Post to Gawker to Thomas Piketty have talked about inequality and its negative consequences.

On EconTalk Russ Roberts stated the following:

I want to create a Rawlsian veil of ignorance…where we’re going to imagine different states of the world, but you don’t know where you’re going to be in those different states.

First state of the world is 1900. You might end up being a rich person or a poor person. The next state of the world is 2016.  Again, you might end up being a rich person or a poor person. I think most people alive today…would prefer to have a random shot at a 2016 life than even actually to be in the upper 10% or 5% in 1900.

This is a fascinating application of the Rawlsian veil of ignorance, an excellent moral and political philosophy tool. As Russ states, under a veil of ignorance, we take a society and imagine that we could be randomly assigned the life of anyone in that society. Usually this is used comparatively to accept or reject certain layouts of society.  For example, I’ve personally heard economists discussing surveys based on the Rawlsian veil of ignorance where most citizens would choose to live in a more equal society than they think they live in.  Interestingly, most people underestimate the level of inequality in most western countries compared to the actual level of inequality, and would choose societies more equal than what they estimate society to be. The implication is that people’s own revealed preferences when they put themselves in the position of an outsider is to advocate for more income redistribution.

However, there are some links between economic growth and inequality; it may be hard to have one without the other.  If that’s the case, an important question to ask is whether you’d want to be in a poorer economy with low inequality or a richer economy with high inequality. Russ’ thought experiment does this pretty well. It’s also worth comparing today’s economy with the 1970s or 80s. Would you choose to be randomly placed in more equal 1980 or less equal 2016?  Today cars are safer, communication is better, food costs less and more varieties are available, and life is better in immeasurable ways.

What if you were guaranteed to be in the top 50% of the world in 1980? What if you were guaranteed to be in the top 50% of the US in 1980? What level of wealth would you need to guarantee before you stopped risking being a poor person today?  It’s an interesting question, and uses our own intuition to counter the notion of the “rich getting richer and the poor getting poorer”.

Comment on reddit.

Should Tesla charge more for their cars?

Tesla Motors announced their newest car, the Model 3, is now available for pre-order.  It’s always been Tesla’s stated purpose to bring down the cost of electric vehicle dramatically, by first charging people for high end cars, and using those profits to innovate the cost of cars down to affordable levels for the general public. It’s an admirable goal that combines the best intentions with good incentives, using idealism to drive profits.

Tesla has, confusingly, sold 3 models of cars prior to the Model 3: the early Tesla Roadster (all over $109k price), the ultra-luxury sedan Model S (starting price at $76k, but most sell at over $100k), and the newer Model X SUV (about $5000 more than the Model S).  Few Model X’s have been shipped, and only about 2500 Tesla Roadsters were ever built. The vast majority of Tesla’s automobiles have been Model S’s between 2012-2016. In that 4 year span, roughly 107,000 cars have been sold worldwide, with about 63,000 in the United States.

In the past couple weeks, Tesla has received 325,000 almost 400,000 Model 3 pre-orders.

Making matters worse, Tesla has said they expect to start shipping at the end of 2017. Some analysts say that Tesla will ship about 12,000 cars in 2017 and another 60,000 in 2018.  But this might be optimistic, since Tesla was supposed to start building the Model X last year, but only got a couple hundred out the factory before January.

Tesla will get better at manufacturing, but they are not ready to switch from the high end market to the mass market (or as mass market as a $35,000 base model). The Tesla “master plan” is not ready to attack this level of the market yet, but that’s not to say it isn’t successful in other ways; as Ben Thompson wrote: “The real payoff of Musk’s ‘Master Plan’ is the fact that Tesla means something.”  In fact it means so much that the demand for a $35k Tesla in 2017 is something like 10x predicted supply! Tesla should take advantage of this.

The obvious economic answer to quantity demanded outstripping quantity supplied is to raise the price.  Scaling Tesla’s manufacturing output to new heights is not going to be easy, but it will be easier with additional resources. And Tesla could use some additional resources (they lost about $300 million in 2014). Right now, people will be waiting around for their cars for years. Why not take some more from people who want a car sooner, so that more innovation can be done to help the people on the back-end?  That’s Tesla’s whole plan anyway.  Creating an affordable family car that you can only make 50,000 of every year doesn’t help many families!

Now, of course, it’s true that some of the appeal of Tesla is that they are trying to transform the auto industry, and if they charge more for the Model 3, one could argue they aren’t as transformational as they claim.  But I’d counter with Thompson’s comparison to Apple, in that the Tesla brand itself is drenched in cool. Tesla’s brand is quite valuable, and the best way to help humanity with that brand is to push harder for innovation.

An awesome, widely available $35,000 electric car will come, but for now, Tesla has the opportunity to marshal more resources to build a better future; it would be silly to not take advantage of that.


Photo Credit: “Candy Red Tesla Model 3”, is a derivative of this photo by Steve Jurvetson, used under CC BY 2.0. “Candy” is licensed under CC BY 2.0 by Mariordo.

Follow-up: Not that wrong about Obamacare

Anytime we see something that challenges our worldview, it’s important to acknowledge it, and investigate whether our model of the world is incorrect, or at least to acknowledge our mistake. Otherwise, we cease to be engaging in discussion and building on knowledge. About a year ago, Josh, one of the former authors on this blog, wrote an excellent piece about how his predictions of massive failure for Obamacare did not seem to be coming true:

I Was Wrong About Obamacare

But now, a year further along, it seems the healthcare system isn’t doing so hot. The Wall Street Journal wrote in October:

Among this population of the uninsured, HHS reports that half are between the ages of 18 and 34 and nearly two-thirds are in excellent or very good health. The exchanges won’t survive actuarially unless they attract this prime demographic: ObamaCare’s individual mandate penalty and social-justice redistribution are supposed to force these low-cost consumers to buy overpriced policies to cross-subsidize everybody else. No wonder HHS Secretary Sylvia Mathews Burwell said meeting even the downgraded target is “probably pretty challenging.”

Late in December, Reason reported:

United announced during an investor briefing Thursday that it was expecting a whopping $425 million hit on its earnings this year, primarily due to mounting losses on its Obamacare exchange business. “We cannot sustain these losses,” United CEO Stephen Hensley declared.

And also in January:

Aetna, for example, has already dropped out of the exchange market in two states. A dozen of the 23 non-profit co-op plans backed by the law have already closed up shop, causing about 600,000 people to lose health plans, and a Politico analysis indicates that most of the remaining co-op plans are in trouble. Blue Cross Blue Shield of Texas and North Carolina both lost a sizable chunk of money on its exchange business during the program’s first year. The financial outlook for a number of insurers participating in Obamacare, in other words, doesn’t look good. And there are few signs that it is set to improve in the near future.

February:

Yet, the mandates aren’t working as planned. My colleague Brian Blase recently summed up the difference between the projected numbers of people who were expected to enroll in the ACA during this third open enrollment and the people who actually did. He notes a high estimate of 12.7 million people signing up for an exchange plan. But Blase actually thinks there will only be an average of 11 million enrollees this year. That’s 16 million fewer than the Rand Corporation predicted, 11.8 million fewer than the Centers for Medicare and Medicaid Services predicted, 12.1 million fewer than the Urban Institute predicted and 10 million fewer than the Congressional Budget Office projected.

It seems more likely than not that there will need to be some sort of change to the health system. Perhaps Josh’s predictions were too dire, but overall, I would retitle his post “I was still mostly right about Obamacare”.

 

Links 20160224

Marginal Revolution has a post about an event that occurred on Shark Tank. The pitch on the show was an alternative to bee honey, made from apples. Part of the pitch was that this would save the bee population by reducing the industrial demand for it (yes, really). Spoiler from Professor Tabarrok: “Reducing the demand for honey, reduces the demand for bees”.

Politico has a nice article about the potential of Bernie Sanders’ campaign, even if he doesn’t win a majority of delegates. The way the Democrats set things up, he will be in an excellent position to make demands on the party platform, possibly reshaping the Democrats’ economic policy for many years to come.

A recent Quinnipiac poll found that head-to-head, Sanders beats Trump by 10 points in a national survey (he does better than Clinton against Trump). Things could change of course, but it seems that Trump really isn’t who I should be worried about becoming president right now, as he’s still not likely to win the Republican nomination, and it seems the Democrats poll well against him.

SCOTUSblog has a nice write up on the next court nomination fight, now that Scalia is gone, what factors will be in play, and how can the Obama administration find a nominee with a spotless record that fires up the base and ensures a left-of-center court for a long time. I doubt they nominate a classical liberal.

Tyler Cowen writes about the benefits market monetary policy can bring, as well as the shortfalls of its approach when critiquing Fed policy.

Apple CEO Tim Cook posted a public letter to Apple customers detailing a demand made by the FBI. Law enforcement wants the company to create a new version of their operating system which they could then install on a criminal’s seized phone. The new OS would have a backdoor allowing the FBI to more quickly access it.  I liked Apple just fine as a company, but this is pretty awesome. This week, it turns out the FBI was lying about this being a one-time request as the DoJ is already pursuing orders to force Apple to unlock about a dozen other phones, according to anonymous sources.

Nostalgia Critic on Channel Awesome on YouTube has a great video detailing the absolutely horrible copyright abuse rampant on YouTube.   Claimants have no repercussions for false claims, even on self-evident fair use cases because YouTube’s system is entirely automated with no oversight.  Copyright battles are not something of the past, there are still huge problems today.

An NBER study from last year found government subsidies more than account for increases in tuition. H/t Slate Star Codex.

The German government gives us another example of how you can’t have government surveillance without fundamentally breaking security. Hacker News discussion.

Second link from Alex Tabarrok, this time on drug prices and the FDA. Apparently the US has the lowest generic drug prices of any developed nation. I feel like we should switch to a prize system where drug companies are awarded $X million for successfully passing approval, and then that drug is immediately released with no patent into the market. X could be set based on the amount of patients in the previous 5 years who could have used the drug.

People like to talk about the “Uber” of some industry, trying to say a company is disrupting their space like Uber did to taxis (also in the interest of fighting monopolies, Lyft is great too).   How about Uber for welfare? The left often opposes “workfare”, or ways which incentivize welfare recipients to work, since finding jobs for everyone isn’t practical “…but today the gig economy offers the solution: It can easily and quickly put millions of people back to work, allowing almost anyone to find a job with hours that are flexible with virtual locations anywhere.”  There’s also some data that working is a really good on a cultural level, teaching discipline and responsibility. This sort of goes against my attraction to a basic income, but could go hand in hand: you get a basic income allowance if you can prove you engaged in the gig economy recently. Really cool idea.

From EconLog, some praise for the Free State Project. Apparently they’ve already got over a dozen people elected to the state legislature? Tried to find somewhere else this is being tracked, but I didn’t see anything. If you have info on this, tweet at me.

Also from EconLog, Bryan Caplan finished his summarized his extended discussion of ancestry and long run growth literature.  In sum, we can’t say that people with more advanced culture thousands of years ago had that much better outcomes today. It’s likely other institutional decisions are more important (like having stable free markets).

Legalize Organ Markets

In 1996, Hurricane Fran hit Raleigh, knocking out power and trees. Duke Political Science Professor Michael Munger describes the response of several citizens from a neighboring town who decided to exploit the situation.  These budding opportunist entrepreneurs rented some refrigerated trucks, filled them with ice and drove to Raleigh, where they sold the bags of ice for about $8 each.  Raleigh police eventually arrived, arrested them for price gouging, and allowed the ice to melt with virtually none distributed to the locals.

Continue reading Legalize Organ Markets

2016 Predictions

How confident should we be? People tend to be overconfident.  One way to figure out if our confidence levels are correct is to test our calibration levels by making predictions and seeing how many of them pan out. Inspired by Slate Star Codex’s predictions, here are my predictions and accompanying confidence levels. For the sake of convenience I will choose from confidence levels of 50%, 60%, 70%, 80%, 90%, 95% or 99%. All predictions are by December 31, 2016 unless noted otherwise.

Postlibertarian Specific

  1. Postlibertarian to have >10 additional posts by July 1, 2016:  70%
  2. Postlibertarian Twitter to have more than 240 followers:  70%
  3. Postlibertarian.com to have >10k page loads in 2016: 50%
  4. The predictions on this page will end up being underconfident: 60%

World Events

  1. Liberland will be recognized by <5 UN members: 99%
  2. Free State Project to reach 20,000 person goal in 2016: 50%
  3. ISIS to still exist: 80%
  4. ISIS to kill < 100 Americans 2016: 80%
  5. US will not get involved in any new major war with death toll of > 100 US soldiers: 80%
  6. No terrorist attack in the USA will kill > 100 people: 80%
  7. Donald Trump will not be Republican Nominee: 80%
  8. Hillary Clinton to be Democratic Nominee: 90%
  9. Republicans to hold Senate: 60%
  10. Republicans to hold House: 80%
  11. Republicans to win Presidential Election: 50%
  12. I will vote for the Libertarian Presidential Candidate: 70%
  13. S&P 500 level end of year < 2500: 70%
  14. Unemployment rate December 2016 < 6% : 70%
  15. WTI Crude Oil price < $50 : 80%
  16. Price of Bitcoin > $500:  60%
  17. Price of Bitcoin < $1000: 80%
  18. Sentient General AI will not be created this year: 99%
  19. Self-driving cars will not be available this year to purchase / legally operate for < $100k: 99%
  20. Customers will not be able to rent trips on self-driving cars from Uber/ Lyft: 90%
  21. Humans will not land on moon by end of 2016: 95%
  22. Edward Snowden will not be pardoned by end of Obama Administration: 80%