Category Archives: Economics

The Price Of Gesture

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The American Left is not longer an ideological movement with a practical political platform and a list of demands. Instead, it has become a secular religion, that engages in ritual and gesture to signal piety to those within the movement. To outsiders, these gestures often seem weird or dangerous, but to insiders they are the coin of the realm. The right gesture can lead to a rise in the movement, while the wrong gesture can spell doom.

Gesture politics, however, is not without its costs. It is one thing to look down your nose at those downscale whites voting Republican and shopping at WalMart. It is quite another to vote in people who seek to act on the rhetoric. White liberals voted for Obama and the Democrats because they hated the people who supported George Bush. They had no other reason to support a guy unprepared for even minor office, much less president.

They did it because it felt good. When Obama was inaugurated, Progressive around the country held parties as if he was the savior and the rapture was upon us. It’s not that they thought he was Jesus or that he had supernatural power. They certainly acted like it, because that signaled their devotion. In a way, Progressivism is a meta-religion, in that it has all the rituals and spiritualism of a conventional religion, without the supernatural core, like a deity or a pantheon of deities. It’s very esoteric and mystical.

But, all that gesturing comes with a price when it results in public policy. ObamaCare was never a thought out policy. What passed was nothing like he ran on as a candidate. His proposal was a gesture to show his virtue. The final product was a collection of give aways to Democratic constituencies. The result is wrecking ball unleashed on an already fragile health care system. The cost for that is now coming due.

But people with no pre-existing conditions like Vinson, a 60-year-old retired teacher, and Waschura, a 52-year-old self-employed engineer, are making up the difference.

“I was laughing at Boehner — until the mail came today,”

Waschura said, referring to House Speaker John Boehner, who is leading the Republican charge to defund Obamacare.

“I really don’t like the Republican tactics, but at least now I can understand why they are so pissed about this. When you take $10,000 out of my family’s pocket each year, that’s otherwise disposable income or retirement savings that will not be going into our local economy.”

Both Vinson and Waschura have adjusted gross incomes greater than four times the federal poverty level — the cutoff for a tax credit. And while both said they anticipated their rates would go up, they didn’t realize they would rise so much.

“Of course, I want people to have health care,” Vinson said. “I just didn’t realize I would be the

one who was going to pay for it personally.”

Amazingly, whole generations of Americans have been raised to think insurance is this magic well of money that is there for you when you don’t feel like spending your money on stuff like health care. Of course everyone should have access to this magical resource. It would be unfair to do otherwise. The Left really thought the only reason everyone did not have insurance was that the dastardly insurance companies were withholding it.

One of the strangest aspects of health care debates is that no one can comes to terms with the fact that all goods and services are rationed. There are no exceptions. They are either rationed by price, as in a market, or they are rationed by a monopoly of supply, usually a state monopoly. In the former, charity can mitigate the realities of the market place. This was common until it was outlawed. In the latter, there is no mitigation and the result is always pretty dreadful. Those are the choices for health care.

Fake Companies

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Is Facebook a real company? That sounds like ridiculous question, because they have a huge market cap and have thousands of employees. That certain looks like real company, even if they are not wildly profitable. Enron had a huge market cap and hired thousands of people, but they turned out to be an accounting fiction. No one thinks Facebook is cooking their books, but there is good reason to wonder if they are what they seem.

For example, dig around in how they make money and what you learn is they are mostly an advertising platform. Newspapers and magazines are advertising platforms too, but none are worth tens of billions. In fact, most are worth nothing as they can’t generate enough cash to cover their expenses. That does not mean Facebook is a cash furnace, but it raises the question of why they can make this model work and no one can figure it out, except for Google, which is a monopoly player on the internet.

Then there is the fact that it is an awful advertising platform. Go find a single person who has every looked at, much less clicked on, one of their ads. People talk about TV and radio ads all the time. The talk around every Super Bowl is about the commercials. No one has ever mentioned a Facebook ad – ever. There’s never been a viral video or ad that started on Facebook. In fact, it is always the other way around. The ad is created on traditional platforms and is hared by users of the new platforms.

That’s worth something, for sure, but is it really so unique to Facebook that they can command a huge market cap? More important, why would ad makers bother paying to be on Facebook, when a clever ad will end up on social media anyway? It seems that the main business model of Facebook depends on ad makers never noticing that ads on social media have no impact on their sales. At some point, they will notice and go back to those traditional advertising methods and not pay Facebook for their service.

Then there is the fact that no one knows how many people are actually on Facebook or any of these social media sites. They say about 80 million accounts are fake, but they are not counting the tens of millions of dead accounts. They are not counting the millions of accounts dedicated to pets or dead people or hobbies. Anyone who as ever run a message board knows that about 10% of accounts create 90% of the posts.

Talk radio has similar numbers. They say 1% of listeners will ever attempt to call the show and comment. In fact, this is so well known that the number of calls is considered more reliable than the ratings numbers. Similarly, comment sections in news sites see the same sorts of numbers. It’s called the Pareto Principle. That probably means the number of active users on Facebook is a fraction of what is claimed. Worldwide it is still a big number, but no where near what the ad men think they are getting.

Now we have the ultimate fake company going to market. Twitter is pretty much just an open RSS feed for idiots. Unlike Facebook, Twitter does have the ability to jam ads in your face on a mobile platform. That’s the Achilles heal of Facebook. These social media sites are best used on a phone or tablet. That limits ad space to nothing. Those microscopic ads at the bottom of apps are hilarious in their pointlessness. Twitter crams them into your feed and makes you look at them.

In theory, twitter can claim they are forcing users to see the ads and they can estimate how many people see them, based on user activity. Facebook really can’t do that as their ads are on the side or exist as corporate pages. Twitter still loses money, but at least they can plausibly claim someone is looking at their ads. The trouble is, most of their users may be fake. Rachel Maddow famously pumped up her Twitter followers by paying for fake accounts to follow her.

Again, we see the same problem as with Facebook. There’s no way to know how many users are really on their system. By the way, web sites had this problem too. Sites would claim millions of hits when it was just bogus traffic stuffing. Advertisers figured it out and sites can no longer fake their stats. The same scams are at work with social media, bu the ad buyers simply don’t understand how this stuff works, so they have not been able to see the problem. It will happen and when it does, the ad money goes away.

That gets back to the original question. Are these real companies or just elaborate confidence games designed to skim from the ad market? A real business provides a product or service. Facebook and Twitter provide a gateway and they operate like toll takes, but no one really knows if there is anything on the other side. Even if there is, why should these firms have exclusive rights to charge tolls? In the end, they don’t offer a product or service that has vale, so eventually, they go away.

In China Everything Is Fake

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One of the weird things you see in illicit drug markets,  is the intolerance for a specific form of fraud. Just about anything goes in the drug game, except for fake drugs. If a dealer gets caught passing off baby laxative as cocaine, he is going to be dead. It is not just that he ripped off his customers. It’s that he cheats his fellow drug dealers. The guy selling fake stuff raises everyone’s costs and risks. The faker gives everyone a bad name.

It is one of those truth about the marketplace that everyone just accepts. No matter how rough the trade, every deal is based on trust. It’s why pawn shops willingly cooperate with the police to counter theft for similar reasons. Their customers are not going to solicit a business that supports burglary. Antique dealers try to uncover fakes as it undercuts their business. Why spend big money on an original when you can get a fake?

None of these measures stop the fakers, of course, but part of every organic market is an organic mechanism to police the market. Counter-intuitively, highly distributed markets can do this better than centralized markets. It’s why industries like music and movies lobby the state to crack down on forgers. Unlike the drug dealer, the record company cannot kill a downloader. Hollywood cannot go around breaking skull in movie theaters when they catch a guy pirating a film. They turn to government for that.

There is a vast middle ground where most of us live and that’s where fakers can cause the most trouble. For example, a site like National Review will post something like this in their article queue. It is not an article, but an advertisement dressed up to look like an article. National Review agrees to place ads like this in their article queue in order to trick people into clicking on the link, thinking it is legitimate content.

Magazines now have multi-page advertisements made up to look just like one of their normal stories. Even more strange is the ad in question here is itself full of fake stuff. The whole xenoestrogen stuff is largely nonsense, at least as it relates to organic food. Plants have all sorts of tricks to ward off pests. That’s just one of the many ways life has evolved over millions of years. Calling something organic has come to mean “good” and in morally good, but it is important to remember that cobras are organic too.

Putting that aside, this is deception. it is just as much a forgery as the guy printing fame art or selling fake drugs. The market place for ideas is a marketplace like the drug trade or the art trade. It relied on the participants acting in good faith and maintaining a high level of intolerance for fraud. When the creators of the market for conservative ideas are embracing wholesale fakery, it calls their integrity into question.  In the case of conservatives, it simply confirms what everyone has suspected for a long time.

It does not stop there. According to this story in the Economist, academic papers are also being forged. The market for fake term papers is well developed. Even before the internet, there was a market for term papers, and essays among undergraduates. Today, the internet makes it a thriving market, so colleges now employ software to combat it. You can probably outsource your thesis if you are so inclined. Since few of them are every read, who’s going to notice if your thesis is mostly recycled from prior work?

To no one’s surprise, the epicenter of this new fraud is China. There’s always been an embrace of banditry among the Chinese.  We get the term “sand bag” from China. In the colonial days, Chinese tea merchants would put sandbags at the bottom of casks to defraud the British. It is a bandit culture with no history of integrity. There are companies that have to use special coding on their boxes to distinguish their product from the fakes, as the Chinese will fake even the most mundane things.

Like the fake news story, fake research has a terrible trade off. If no one can tell the real stories in a magazine from the ads, people stop buying the magazine. If we can no longer distinguish real research from fake stuff from China, we no longer do research because no one can trust it. This is the great challenge to the West posed by China. If they are to remain a part of the developed world, they have to play by Western rules regarding fraud and theft. If they can’t do that, then they have to be isolated and excluded.

That’s not so easy when China can offer Western counties access to a billion cheap workers and unlimited ecological degradation. Making batteries in China is cheaper than making them in California, because the Chinese government does not care if the workers die and the land is poisoned. The battery maker is willing to tolerate some theft, but can the rest of us tolerate it?  Is that a good trade? What’s good for business is not always what’s good for society. Otherwise, we would still have slavery.

The Cult of Modern Economics

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Economics is not a STEM field, even though economists try hard to convince people it is a branch of mathematics. It is a social science decorated with mathematics. That gives it the veneer of respectability that a field like sociology lacks. That said, it often resembles a cult, in that it has developed an internal logic and language that makes perfect sense to those inside, but seems weird and nutty to those outside. For example, they treat Maynard Keynes in the same way Mormons treat Joseph Smith.

Anyway, the buzzing over the Fed’s sudden course change is a good example. This is a fairly typical example. It does not mention Keynes, but the the belief that creating credit money is always and everywhere a good thing is on display. The intellectual trap they have made for themselves is quite clear. If credit creation  adds to the GDP, then it is always good to create debt. There are no conditions under which it can be bad so expanding he money supply becomes a permanent part of the economy.

No one ever stops to wonder how this can be so? After all, if it were that easy, it should have worked all the other times it was tried. The answer, of course, is to say it is different this time. The “new normal” meme has become the get out of jail free card for every utopian dreamer. In the case of economics, any doubts about endless credit creation is waved away with the line, “things are different.” In other words, everyone is supposed to just take what economists say on faith.

Economics is the religion of modern times. In a previous age, rulers would have a holy man or a shaman to endorse his polices. Today, the economists provide this role. In Obama’s first term, Christine Romer was trucked into the White House to tell Obama and the country that the math” said a reckless spending spree was just what the economy wanted. That’s when the “multiplier effect” got loose in the conversation. Since then every minor economic shaman has some theory about a multiplier effect.

The nuttiness is on full display at this site. These guys have built out a series of interactive charts to show various “multipliers” and the impact of the current fads in the faith. For the record, they are making sport of the whole idea by showing the nonsense of it all. The fact is, government spending fueled by debt is great until you run out of people willing to lend you money. Then you become Detroit. Quantitative easing, which is just credit creation at below market rates is just a clever way to disguise it.

By pumping the extra money into assets like stocks, purchasing power is destroyed slowly, rather than in hyper inflation like you see with old fashioned money printing. At some point, the new money will leak into the real economy. Americans have been getting poorer slowly, but seem to be figuring out what has happened to them.Adjusting for inflation, the government share of the economy has more than tripled in the last forty years, per capita and adjusting for inflation.

 

 

In addition to the growth of the state at all levels, the amount of debt, both public and private, has exploded: At every stop along the way, modern economics has told our rulers that this was the right policy. The result is a massive, incompetent government systematically beggaring the public. More critically, it has allowed for the transfer of social capital to massive global companies and financial institutions. The price of cheap goods is living among strangers who you don’t dare trust as neighbors.

 

It’s the Money

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A topic that never gets the attention it deserves is the role of credit money in the modern technological economy. More important, the role of this new money, built for a technological society, is having on the old economy, where most everyone lives and works. Outside of Silicon Valley, Washington and New York, most people exist in the late-industrial age. Their money, however, is designed for the post-industrial, technological age where information and network positioning is the basis of value.

The current setup with the dollar as the reserve currency pegged to nothing more than the hopes and dreams if the Federal Reserve is a new thing in history. In fact, it is one of the truly new things in the last thousand years. Since the Louvre Accords formalized the currency arrangements we have today, debt of all types has exploded. You see it quite clearly in this article from the Free Press about Detroit’s woes. Right in the mid to late 1980’s, Detroit went from a declining debt path to a skyrocketing debt path.

The article, of course, does not address the role of credit money and instead tries to shift the blame to its favorite bad guys. The truth is, the unfolding debt crisis has very little to do with policy decisions made by Mayors, Governors or even Congress. It is the result of the shift change in the currency arrangements of the world. The old market restraints, based on the bond issuer’s ability to pay, have been changed to a system where restraint is based on the ability of the system to absorb new debt.

Many people recognize the debt problem, but they don’t understand the underlying cause, instead falling on old chestnuts like “Fiat Currency!” Our economic elites think the answer to the debt crisis is more debt. Some of it is narrow self-interest, as debt creation offers profit opportunities. Others are just true believers who get misty eyed whenever someone mentions capitalism. Then, of course, most people struggle to understand a a shadow banking system with its trillions in complex derivatives.

Cities like Detroit certainly suffer from a collapse of human capital, but that’s not the cause of their debt problems. In the old system, where an ability to pay would have been a restraint on debt issuance, the city would have had to cut services long before the debt load became dangerous. In a system that is hungry for debt, there’s no shortage of people willing to take the Detroit paper. This has allowed the global financial system to loot American cities by offering debt these cities can never repay.

The bankruptcies of American cities are just a tremor, one that everyone will ignore, as these can be papered over by new debt from states. The looming pension problem will be a much bigger tremor, as there will be no way to pay the debt owed to baby boomers retiring from the civil service. At some point, probably in the next decade, the great credit expansion will reach some natural limit that no one currently understands and then we get the real crisis. Detroit will look like good times.

Uncreative Destruction

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Libertarians and conservatives love tossing out Schumpeter’s gale, the observation that new stuff destroys and replaces old stuff. The automobile destroyed the buggy whip business, but created whole new industries for the repair of cars. That’s fine and largely true, but Marx, from whom Schumpeter stole the idea, was also right. Capitalism will, if allowed to operate unfettered, destroy itself. It’s why Buckley said “The trouble with socialism is socialism. The trouble with capitalism is capitalists.”

We are seeing this maybe in the cable TV business. Every home in America has cable or satellite now. There’s no growth in that business. The cable companies and content providers are trying to wring out more money by raising fees and charging more for the product. The response is people cutting the cord. News reports claim that the number of homes dropping TV has gone from under two million to over five million in the last few years. I know a few people who have pulled the plug. I’m considering it.

Some like to argue that the new services are driving the cord cutting. Why pay for cable when you can get Hulu or Amazon? Well, those services are pretty crude, so it’s unlikely that they are driving the trend. Instead, it is people responding to the declining quality and rising cost of cable television. There’s also a cultural element. If you are white, television is now an endless assault on your dignity and patience. You can only be called a racist for so long before you accept it and turn off the television.

The reason you need government to prevent consolidation in the marketplace is to not only protect customers, but to protect markets. In the case of natural monopolies, like power and gas, the state has to provide the role the market would play in setting prices and protecting consumer rights. By allowing cable companies to bundle channels and monopolize whole areas of the country, the cable business is in trouble. In other words, the market needs to be protected from itself in order to survive.

Another area where uncreative destruction is creeping into the discussion is cell phones. This is a huge scam based on cheap credit. That iPhone really costs something like $800, but the phone company finances it over the two year contract. With the juice you pay $1500 a year to send pointless texts to friends. You also get to carry around a devise that tracks your every movement and sells that data to marketing companies who beam ads back to that phone.This is good for Apple and Google, but very bad for you.

Some call this late stage capitalism, but I think they just think the term sounds clever, so they say it without thinking about it. In reality, this is late stage democracy. Once the voter rolls expand to cove all adults, the system becomes a bust-out. The elected officials no longer care about voters or public good. They are hired men paid for by a donor class who controls politics, by controlling the parties. It’s not an accident that politicians that lose election end up in cushy six figure jobs as lobbyist and consultants.

Failing Up

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In the 17th century, European elites told themselves and their subjects that it was providence that put them in charge. For most of human history, blaming God for the rulers has been a popular option. The alternative is some system where rulers are determined through merit. Exceptional warriors have often risen to the top of their society. Wealthy merchants would graduate into the ruling class either through bribery or marriage.

In modern times, western elites have no use for God and they are allergic to discussing nature as it applies to humans. Instead we have this make-believe meritocracy. The first step is to go to the right prep schools so you can get into the right college. Then it off to graduate school for networking and rubswabbery. Once those credentials are obtained, then it is getting the right jobs to fill out the resume and make the right friends.

Finally, if you worked the system correctly, you get into that top tier, where all of sudden the floor becomes impenetrable. You have made the club and unless you harm the reputation of the club or call into question the logic of the club, you are in the club for life, no matter what you do. That’s why government service has become the ticket to great wealth. It’s like having your own private toll booth on the highway. You get paid by simply being there. The managerial elites is a collection of toll takers.

Today we have this story about the perpetually wrong Larry Summers possibly getting the job of Fed Chairman. This was the guy who did the hatchet job on Brooksley Born over derivatives. She was the person who tried to blow the whistle of Long Term Capital, a trillion-dollar hedge fund that was about to go bust due to creative accounting. LTC had powerful friends in the managerial class, so they were saved by the government and the whole matter was swept under the rug. Again, that floor never gives way.

Everything Summers said back then turned out to be completely wrong. The single biggest economic event of the modern era and he was totally wrong. Yet, he is held up as an expert. Granted, it is economics, a profession with no right answers, only models of right answers. Still, you would think getting the one big thing wrong would have some impact on his career. That’s never how it works in the managerial state

He’s far from being an exception. In fact, he is the norm. There are whole professions that now have become inoculated against their own failures. The intelligence community got it all wrong at the end of the Cold War and they totally missed the rise of Islamic extremism, but they just get more money and power. We are rocketing toward a police state, because the people in charge are staggeringly incompetent. They just keep failing up.

Bullshit Jobs

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This story article was linked on Marginal Revolution. In the comments, a fellow named Bill points out that rent-seeking inevitably leads to worthless occupations. The source story is one of those snarky rants that have become popular with Millennials. They like that blend of pointless irony and dismissive disgust with reality. It seems like a strange affectation, as it implies a combination of naivete, obliviousness and solipsism. Of course, there is the strong possibility that millennials are in fact naive, dumb and solipsistic.

Economists will naturally reject the the assertion that there are “bullshit” jobs, because it lies outside their belief set. No profession is controlled by its tools like economics and since they have not tools to measure culture or biology, those things are left out of their models. That’s a story for another day. The important bit is that even in the private sector, loads of worthless jobs are created because they favor the state. Or, those jobs exist because they favor some cultural push by the state, like diversity training, for example.

One place you see this is in sports entertainment. In the days before cable, the sideline reporter did not exist. The reason is two-fold. One is women don’t know much about sports and therefore were not in the sports business. The other reason is no one would pay to have these bunnies on the field. The money was not there to do it.The job of sideline reporter is not a lot different than that of cheerleader. They pretend it is a real job, but it’s not. The girls come and go, because they are just not that important.

Government created cable monopolies have changed all that. ESPN can tax 100 million homes through their cable bill, which they do for about $8 a month. According to people who track this stuff, ESPN is watched by 20% of cable homes. That means the other 80 million homes are paying $80 bucks a year so ESPN can hire T&A to strut along the sidelines. ESPN is a great marketing machine, but it is mostly a rent-seeker. It spends a portion of its $9 billion in revenue bribing politicians and cable operators.

There is nothing new about rent-seeking. Government is the monopoly of force in a society, which means they can force people to do stuff and not do stuff. In a democracy, bribing elected officials so they will force people to do stuff that favors your business, is as old as democracy itself. Ben Franklin was a rent seeker. he got government contracts for printing and he got them by buttering up government officials. That’s how it works.

Franklin is a good example of how rent seeking can have unintended consequences down stream from the event itself. Franklin was a printer. His government contracts did not keep his presses running full time, so he he used the excess time to print fliers, newspapers and almanacs. In a way, government contracts underwrote the birth of the newspaper business in the colonies. Sports oligopolies and cable oligopolies are rent seekers that are altering the very nature of media, as a consequence of their rent seeking.

Put another way, rent seeking creates make work. Economics can understand the first part, but they struggle to understand the second part. they certainly don’t grasp the cultural impact of the second part. The legions of people in make work jobs want to keep those make work jobs. The employees of government contractors, for example, are the most effective lobbyists for more government. Northern Virginia, the home of government employees, media and political operators, is a billion dollar lobbying machine now.

Anyway, here is one of my all time favorite bits on the bullshit job theme.

Higher Ed

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One of the more frustrating debates in modern America is the one over student debt. It seems like the mere mention of the subject turns smart people into blithering idiots. The president has come forth with a “new” proposal to address student debt. The gist of it is a laundry list of government created metrics that schools will have to post for public view.  The assertion is that this will “empower” students to make better choices, thus avoiding debt for worthless degrees.

That sounds nice and maybe would impact student choices at the fringes. Without proof that students are making mistakes because they lack this knowledge, it falls into the realm of wishful thinking. I think it is easy to prove that this information is easily attainable. Thirty years ago when I was a student we were regularly given information about future earnings, job prospects and debt consequences. Only willful ignorance kept English majors from knowing they were not going to get a six figure job out of college.

Today, the Interwebs makes it easy to know just about anything about everything. Not only can you easily learn what you can expect in salary with a given degree, you can break it down by region and get some sense of lifetime earnings. Granted, that takes effort and it people have a way of gaslighting themselves on these things. But, they would do that with whatever the government is going to provide. You cannot get around the fact that white people have to be brainwashed into believing college is a requirement.

Now, it would be nice, if like calorie counts on menus, the realities of college were printed on the front of the brochure. Everyone loves convenience. Like those calorie counts, however, there’s no evidence it changes behavior. That’s what makes this post from the former Half Sigma blogger so weird. His enthusiasm is misplaced. His casting it as a “conservative idea” is the sort of sloppy thinking we see on the Left. There are plenty of dumb ideas with the conservative stamp of approval.

Yuval Levin offers some good questions in this posting at NRO. He does not mention it, but government standards turn the regulated into rent seekers. It is axiomatic. In this case, the universities suddenly need to bribe politicians to get the standards they want. As Levin points out, it is not clear what should be measured and by whom. That opens up the door to all sorts of shenanigans. The best way to ensure rational markets is to eliminate the number of intermediaries between the supplier and consumer. Another government agency to set standards is just going to make this more dishonest that they are now.

That’s the fundamental problem with higher education debates. Everyone is trapped in the old paradigm of government financing. No one ever asks why tuition has risen at five and six times inflation since the government got into the student loan business. The two markets that have seen the greatest amount of government intervention are higher ed and health care. In both prices have rocketed up, basic service levels have declined and massive amounts of debt have been accumulated. That’s called a clue

The Dullness Of James Pethokoukis

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Everyone gets that mass media aims for the lowest common denominator, which means it is aimed at the dullest people in society. That means having some not-so-smart person reading their parts, pretending to be something other than a bubble-head. Having a blond airhead do the weather is fine as everyone including the woman knows the score. Having an ex-beer league jock do sports is OK, because he is a fan talking to fans. The point of the performance is to be fun and pass on a few bits of useful information.

Where things go wrong is when these actors and actresses start pretending to be actual experts in the field. In sports, there is a flood of fake nerds jabbering about statistics, despite not being able to do basic math. They watched the movie Money Ball and started reading fangraphs. Pablo Torre is a good example. He has a degree in sociology from Harvard (Yeah Affirmative Action!) which means he maybe took statistics for liberal arts majors and probably has no aptitude for mathematics.

Another example of this type is James Pethokoukis. His job is to cover economics as a reporter. That’s a perfectly useful role, until he starts opining about economics as if he knows something about subject. He also carries on like the “E” in STEM fields stands for “Economics.” The guy has never run a lemonade stand and has no training in math, statistics, finance or economics. He went to school for journalism, which is right up there with majoring in gym, and has worked exclusively as a reporter.

What in the world is he doing offering opinion on tax policy? It’s fine if he is asking people who know something about tax policy for their opinions. That’s perfectly reasonable and something expected from modern reporters. He could opine on the fact that there are many experts with different opinions on tax policy. Again, that’s a useful hing for which he is qualified. He is not a tax expert. To make it more ridiculous,  he quotes another fake nerd, Ramesh Ponnuru, who has been wrong about everything for two decades.

So, what about his opinion?

Declining fertility rates in the West are a major problem. There’s not been a lot of research into the subject as our elites have been obsessed with ending child birth for as long as anyone has been alive. Going back to the early part of the last century, Western elites have been predicting a Malthusian moment when population numbers exceeded earth’s ability to support us. The Population Bomb was a famous book that predicted doom for mankind unless population was controlled. The prediction was all wrong, of course.

One thing we know is that tax policy has nothing to do with declining fertility rates in the West. Fertility rates plummeted in Poland after the end of the Soviet Empire. Fertility rates plummeted in Quebec after taxes were lowered. In America, white fertility declined, while black fertility remained constant. There’s simply no evidence to claim a causal relationship between taxes and baby making. Yet, Pethokoukis. sees a pretty graph and thinks the answer is a return to Bush Era social engineering through the tax code.

That’s always been the problem with libertarian conservatives. An article of faith among libertarians is that taxes need to be efficient. That means tax policy should not reward one activity over another. Ideally, taxes effect all goods and service equally. Imposing special taxes on the childless is pretty much the opposite of libertarian dogma. So-called conservatives have ingested this argument and now embrace the materialist assumptions of libertarians and Marxist. They’re all eating at the same trough.

That last bit gets at the heart of what vexes the West. Progressives wage a culture war, while the so-called Right responds with economic arguments. The Left starts from the assumption that people are infinitely malleable. They can get the culture they want, by use of the right incentives. The so-called Right starts from the same assumption as argues that they can get the corresponding results with the right economic incentives. It’s the two faces of the Janus that rules over us. It’s two heads with one body of thought.