Author: Joshua Hedlund

So the Senate has passed “The Immigration Bill,” and depending on which pundit you believe there is at least a non-trivial chance that Boehner will allow a few Republicans to join the Democrats in the House to eventually get The Bill, or something rather similar, to Obama’s desk.

As usual, I am generally skeptical that anything too good can come out of a 1,000+ pages that most Congressmen probably haven’t even read, much less understood. In general it is supposed to represent some sort of classic Washingtonian compromise, but if it’s a compromise between the welfare-happy clowns on the left and the national-security-happy clowns on the right, there may be little for even the immigration-happy libertarian types to like.

The General Idea

The Bill is supposed to include a long path to citizenship for illegal “undocumented” immigrants in exchange for a no-seriously-we’re-serious-this-time securing of the border. There are already plenty of conservative types claiming it still doesn’t do enough to secure the border and this is just another round of future-liberal-voter amnesty.

I haven’t read enough to parse those claims, and I have a difficult time taking solid stances on anything related to immigration. I’m not sure how much I really want a “secure border” anyway; economically and politically I’m all for free travel and trade and all that jazz, and I generally expect immigrants to “take” jobs but also “supply” jobs just like any other physical humans who generally occupy space around us; there may even be a net gain with educated students and entrepreneurs and the like. And there’s a strong case that existing quotas and rules are both inefficient and unjust.

The big question, of course, is whether or not The Bill will result in too many new poor citizens who stay poor, dragging down the budget in a way that offsets the economic growth of their new freedom to become better tax-paying American consumers. Any answers to that question are Large Calculations too beholden to existing biases to be very useful.

Specific Objections

However, while I’m not sure whether I support or oppose the overall premises of the bill, there are a few specifics in those 1,000+ pages that I definitely don’t like.

First, there’s the “mandatory use of E-verify, a free, online federal database of people eligible to work in the U.S.” In theory this is a good way to make sure businesses aren’t hiring illegal immigrants. In practice, it’s yet another regulation for businesses that don’t need any more incentives (*cough* Obamacare *cough*) to reduce hiring; I don’t know how the details work, but I wonder if this will further encourage contracting type arrangements over regular employment. And of course, it’s yet another example of federal encroachment into everyday life – now the government knows every time you apply for a job.

Second, there’s the rumblings of a “National ID” card. It sounds like it’s not nearly as bad as a lot of conservative emails want it to be (they’ve been freaking out about such things since at least the “REAL ID Act“), but there’s at least enough stuff about some “photo tool” to make me uneasy. The assurance that “the federal government can only access state driver’s license photos if the state and the federal government enter into an agreement to share them” doesn’t mean much if states are given incentives to do just that.

In summary, the main provisions of the bill may or may not lead to increased prosperity for the nation, but there are at least a couple freedom-encroaching things in those thousand-plus pages, and those are just the ones I know about. So I guess I’m hoping the bill doesn’t pass. But I’m not too worked up about it either way.

Two big things happened in the Middle East last week. Obama announced that the United States would send weapons to the rebel side of the civil war in Syria. The next day, a “moderate” “reformist” won Iran’s presidential election.

The first event was the latest chapter in a long history of US intervention in the Middle East. The second event was a reminder of how history is full of those interventions going wrong.

Four years ago, there were enough dissidents of the hardline Iranian Islamist regime to spark major protests (the “Green Revolution”) when Mahmoud Ahmadinejad won a contested second presidential term. This time, the reformers were strong enough to win a decisive election. There are plenty of arguments that this won’t result in any actual moderating from the real power figure Ayatollah Khomeini, though the signals of popular discontent are clearly strong.

But even this tiny glimmer of hope for a freer, less dangerous, less radical Iran is a reminder of how long the repercussions of botched US intervention can last. Khomeini’s regime, though thankfully and finally beginning to lose support these days, has been in power for over three decades, and was originally swept into massively popular power as he overthrew the US-backed Shah who preceded him.

The CIA helped overthrow Iran’s democratically elected government in the 50’s. At the time, we must have thought that guy was less bad than the other guy. But if that hadn’t happened, perhaps the Shah wouldn’t have been there to foster the anti-US sentiment that led to Khomeini’s rise in the 70’s.

Maybe Khomeini would have created his authoritative regime anyway. Maybe something worse would have happened. Like most history, it’s complicated enough that, combined with my own ignorance (reading Wiki articles doesn’t count for that much), I hesitate to take too strong of a stance.

But it sure feels like US meddling to prevent a “bad” regime in the 50’s quite possibly led to an even worse regime in the 70’s that has been handicapping the lives of millions of Iranians, and scaring international leaders around the world, for decades – a situation that we are only now even hinting at the possibility of eventually resolving.

And it is under all of this context that we learn about the United States sending arms to Syrian rebels. That situation is complicated, too. This development is only the latest in a long line of tip toes closer to the rebels that has already included medical supplies and who knows what else.

But haven’t we seen this game before? We sent weapons to Afghans in the 80’s because we considered them “less bad” than the Soviets who were attacking them, and two decades later many of those weapons ended up in the hands of the Taliban. It doesn’t take too many reports about al-Qaeda connections to Syrian rebels to wonder if we are practically begging history to repeat itself!

No doubt people like Obama and John McCain have more information about the conflict than I do (though I’m not sure how much you can learn from a photo op). I think it’s extremely likely that they only have enough information to think they know more than they do – just enough to convince themselves that “this time it’s different” and we really can tell the difference between the good guys and the bad guys… even though we “may be arming Islamic rebels who may well be killing Christians,” all without doing much of anything to end the tragic civil war.

Apologies to anyone expecting a Last Week’s news update today. I’ve decided to take a bit of a blogging break. My body has been exhibiting some symptoms of stress lately, and I’ve come across some articles by people claiming that the news was making them stressed and they felt better when they stopped reading it. I don’t feel emotionally stressed, and I’ve always convinced myself that the news doesn’t make me stressed and it’s more of a hobby I greatly enjoy immersing myself in, but either way I’ve decided I have an unhealthy and unsustainable addiction to news anyway.

What started out several years ago as a lunch break checking of Google News has ballooned into multiple daily checkings of econ blogs, twitter feeds of economists and political commentators, user-submission sites like Hacker News and Reddit, raw weather data sites, C-SPAN streams…. It’s gotten to the point where I rarely go two waking hours without checking something. I can’t keep this up as a husband and now father, anyway, even if it’s not affecting my health. Do I really need all this information buzzing through my brain and forming into future blog posts as I fall asleep at night? How can I expect God to speak to me about fatherhood when I’m pulling out my phone to check Bloomberg’s commodities tab every time I sit down to poop?

So I’m going to take a break for a week or so and use the extra time to focus on both physical and spiritual exercise. I still think there’s value in being informed and informing others about what’s going on around the world, and I may come back in smaller doses.

I should emphasize that this is not a reaction to the NSA news or some newfound desire to reduce my online footprint. (Although those leaks were really exciting news for me, and I spent a lot of time consuming information about it, which perhaps helped awaken me to my news addiction.) Since I won’t be doing a blog post about it, in brief, the surveillance is worse than I thought, but still not as bad as many people think; we have hard evidence now of call logs, but as far as I know not evidence that actual calls are being recorded and analyzed. We have tech companies giving the government portal access to more easily get data on specific cases, but as far as I know not evidence that data is being full-scale exported straight to the Utah datacenter or whatever. I’m hopeful that this news and any further leak will lead to greater privacy measures. As always, be careful out there and call your Congresspeoples.

There’s a big debate in the wonkosphere these days about “rate shock,” or whether or not we should believe reports that health insurance premiums under Obamacare are going to be shockingly higher than expected, specifically for individuals buying their own plans.

Ezra Klein says these kinds of reports don’t compare plans accurately, especially for the sicker among us who have had trouble getting insurance in the first place. Josh Barro says, “Dear Young People, Your Insurance Premiums Are Going Up Because Obamacare Is Working As Planned” – Apparently Obamacare was always supposed to involve healthy folks paying more to subsidize the sick.

Peter Suderman has now slammed down the gauntlet pretty much proving that no, that’s not really what the anti-rate-shockers have been talking about at all for the last four-plus years when they were basically promising cheaper, better insurance for everybody.

But now that the cat is coming out of the bag, and we’re just debating about whether it’s been out along and how big it is, I’m starting to wonder…. is this actually starting to look a little socialist after all?

See, like everything else remotely connected to Obama, knee-jerk Republicans have been calling Obamacare “socialism” from the beginning, which has provided no shortage of derision from the left. Silly repubs, it’s not a government takeover of healthcare! It’s government giving millions of new customers to private companies! Besides, the whole individual mandate originated with Republicans in the 90’s and was first implemented by a Republican governor! Nobody calls car insurance “socialism”! It’s just like car insurance, except with a government-enforced mandate to fix the adverse selection problem! You’re already paying for it with uninsured emergency room care anyway, so this will bring down costs for everyone!

Except… now… maybe it won’t? Now the young and healthy were supposed to pay higher premiums all along?

Well, this feels a little different.

It’s not quite like Social Security or Medicare, which are more or less taken from everyone and doled out to everyone at equal (and thus demographically unsustainable) rates. It’s not quite like the income tax, which generally funds what are supposedly public goods. And it’s not quite like car insurance, where you’re protecting yourself against risk but also only paying for your own level of risk.

The closest parallels I can think of are things like Medicaid and food stamps, which are more or less funded by everyone and given to the poor. It’s not pure socialism, just as few industries these days are pure capitalism, but I think it’s a little bit socialist. (Perhaps the fact a good portion of the funds are borrowed makes it less socialist?)

So now we have Obamacare. Are we really agreeing that there will be a portion of my health insurance premium increase that is not related to my own risk of future health bills but is really only there to subsidize health bills for more expensive folks? (Yes, any given healthy person can become very sick, but presumably that risk was already taken into account in their premiums, and we are now likely talking about fairly significant net transfers from chronically healthy people to chronically sick people.) Is this basically a sort of hidden Medicaid tax (or how about “charity tax”) with a private insurance middleman?

I’m not necessarily saying that’s a bad thing. I’m not necessarily saying that’s not something our society might want to do. Obamacare proponents have claimed that the people who seem most concerned about rate shock tend to seem least concerned about the people who never could qualify for insurance in the first place. That may be so, but I think the proponents seem least concerned about the crowding out of charity.

If the government effectively raises my “charity tax” by forcing me to contribute to specific funds for others, then I have fewer funds available for other forms of charitable giving. Now you may think that the government can spend that money better than I can, or that there would otherwise be a shortage of it. I may disagree, though not too forcefully; while I could point to all the abuses and moral hazards and other unintended consequences of, say, food stamps, I also believe they probably genuinely help a lot of people in unfortunate circumstances, and I’m okay with some compromises on those kinds of little bits of socialism (not that I’d mind a lot of reform).

So maybe we do want to redistribute wealth from healthy people to sick people, and maybe we want Obamacare to do it. That’s a discussion we can certainly have. But let’s stop pretending it’s not kinda sorta a little bit of…… socialism.

I have to admit I chuckled when the WashingtonPost WonkBlog declared, “The economy is holding up surprisingly well in a year of austerity.” Of course, this isn’t that surprising to those of us who never really bought into the sequestermongering. But it’s nice to see even the liberal, mainstream, doom-peddler types admitting that the economy isn’t acting very doomy right now:

Housing prices rose faster over the past year than they have in the past seven, according to data out Tuesday. Consumer confidence hit its highest level in five years. The stock market rallied another 0.6 percent as measured by the Standard & Poor’s 500, leaving it just short of an all-time high reached last week. And the national retail price of gasoline fell for six days straight through Monday and is down 16 cents a gallon since late February.

Since it never shows up, the inevitable pain of austerity keeps getting pushed back. The world didn’t collapse on New Year’s Day because, well, the spending “cuts” were delayed two months and the tax jumps took a little while to get figured into people’s paychecks. The world didn’t collapse on March 1 because, well, the departments would take awhile to adjust to the changed budget of the sequester. Now the pain is apparently delayed until later this year, or maybe even next year!

(Maybe the only thing surprising about the sequester is that the experts are so surprised. How long before “sequester doom” becomes the left’s “hyperinflation”?)

Is Spending Always the Answer?

It certainly may be true that the pain of the sequester will eventually ricochet through the economy, but it sure looks like the Keynesians have a pretty unfalsifiable position. When we increased spending and the economy was still bad, the response was: Oh, it was worse than we thought! We should be spending more! Now when we decrease spending and the economy gets better, the response is: Oh, it wasn’t as bad as we thought! But it would be even better if we were spending more!

Again, it’s not impossible for those positions to be true. But to a non-Keynesian it sure feels like they’re spinning any circumstances through their existing bias to justify more spending.

What About the Tax Increases?

Of course, conservative fiscal hawks have their bias problems, too. Tax increases are always supposed to be bad, but in January the payroll tax for all working Americans and the income tax for rich Americans both returned to previously higher levels. And what happened?

The deficit shrunk faster than expected! The economy is still adding jobs! Despite all that rhetoric about not raising taxes on wealthy job creators, apparently we are nowhere near that part of the Laffer curve where increased taxes leads to lower revenue! (Not that this should be a surprise; the economy had healthy periods with those exact tax rates in the 90’s.)

But conservatives still have plenty of conservativey explanations for the healthy economy, like the huge boom in oil and gas output. We could even speculate that some of the limited government expenditures are reducing its influence over the private sector and leaving more room to grow, although I doubt the marginal differences here would be enough to noticeably offset the short-term effect of the direct missing government dollars.

Conservatives have a big excuse waiting in the wings next time the economy turns sour, too: Obamacare (indeed, many conservatives aren’t even waiting). Any dip in the stock market or rise in inflation or slowdown in job creation will be blamed on the disincentives created by that giant healthcare legislation, and in some cases, they may actually be right. In a complex economy, both sides are pretty good at spinning both good and bad news as evidence that strengthens their pre-existing positions!

As for me, I’m hesitant to put increased confidence in any of my left-right biases about the effects of taxing and spending based on the economy’s post-sequester behavior so far. But the surprise of the experts does increase the confidence in my bias that those experts are overconfident in their ability to predict effects, not only of the stimulus and the sequester but also of a lot of the other interventions (a.k.a. reforms) they’re so fond of proposing.