The Least Bad Presidents

EconTalk has an episode with Bruce Bueno de Mesquita Bruce on the Spoils of War

Unlike many who commented on the podcast, I like his take even if it is flawed. It is much better to skilfully avoid war than to win wars but people who rate presidents rate war presidents higher. 

A similar thing is true for domestic issues. I think that those who created the greenback and then the Federal Reserve are to be blamed for the Great Depression and not so much Hoozer, and FDR's response to the great depression was far from great and should not make him a great president.

  I will take Martin Van Buren, Grover Cleveland, Warren G. Harding over FDR and some the other so called great presidents. 

Lincoln looks like a mixed bag, he was great in that he signed the Emancipation Proclamation, but in many other respects kind of bad. Maybe most of what he did, including creating the greenback, was necessary to end slavery and maybe he would have undone most of it after the war had he lived. I will call him great but not being there it's hard to say.


Jeremiah 17:9-10 - The heart is deceitful above all things, and desperately wicked: who can know it?  

Luke 18:19 Why do you call me good?" Jesus answered. "No one is good--except God alone.

A Focus Change in Schooling

I think that we should take Arnold Kling's null Hypothesis in education and twin studies seriously. That it is very quixotic to attempt to accelerate improvement in education. (Some improvement will come due to learning more about how people learn.)

But even given that, we cannot get more out of our schools.

The way that schools are measured today is by PISA test, but maybe the PISA tests do not measure anything important. Maybe the PISA test and other tests like the SAT are too close to IQ tests to tell us much about schools.

If were true and we cannot teach children more what would you propose?  I would propse the following:

• If we cannot teach them more, we should focus on teaching the skills that will have the most impact on the student's lives. How to live a good life. How to be a good citizen. How fix you car and home. How to not get scammed. How to live on less. Etc. Over 90% of people do not need to know math beyond some basic algebra.
• 
  
• Some focus on improving the schools for parents. Like put the schools in more convent places. Make the hours more convent for parents.
• 
  
• Spend less money. The per student cost of school has gone up close to three fold since the mid 1960's with no improvement in those tests we use to measure. It seems like administration costs have swollen over the years, I think would could do it for less even with the expanded hours, I propose.

I am sure that others can come up with other ideas if they adopt the null hypotheses.

And lets stop beating up on US schools, they are as good as schools in any country.

Why I will not vote for Clinton

We tend especially in the this election to see the other side as all bad or at least to paint them that way to others, but everyone is a mix of good and evil and Hillary Clinton has done some good things in her life. For example, she did some good pro bono legal work especially early in her career and she has contributed to charity.

She may be a kind person on a personal level, I have no way to know, but we differ on the following political issues.


She and the Democratic party are very pro-abortion to the point of wanting to force taxpayers to pay for abortions.  Here is democratic convention abortion speech that illustrates the current Democrat party position on abortion. They used to say "Safe legal and rare" now they seem to think of abortion as just another birth control method that should be funded by tax dollars.


She is very hawkish. She voted for the disastrous war in Iraq. She now claims that that vote was a mistake, yet having seen the chaos caused by that mistake, she evidently supported bombing Libya and sending arms to Syrian rebels! Now you might say, surely she now has learned a valuable lesson and will do nothing like that ever again but she says she wants to enforce a no-fly zone in Syria NOW!

She strongly supports the war on drugs and putting young men, temped by profits to sell drugs, into prison. What makes it worse is that she is an occasional partaker in a drug at least as bad as the worst, that is alcohol and has been known to even get drunk and be ill-tempered when in that state.

She is for further taxpayer subsidization college. Which seems like a simple attempt to buy the votes young people. The Federal Government only run the Military academies and they are already free to those who attend. The state schools are run by the states, so they are a state issue. The problem with college is that the universities are spending way more than they need to and are accepting many students that they know have low chance of succeeding in getting a degree. They are taking way to many students in the the humanities. Further you are subsidizing the people most capable of earning money. The college students will pay directly or through taxes for their schooling. I think directly is better because it motivates the student to economise more. I would like to see the Federal Government stop guaranteeing student loans.  That has made many problems worse.

She is promising to prevent people from buying and selling to and from they want in the that see attacks free trade.

Her position on immigration is absurd. It is that we should have laws that ban people from entering the US but it you manage to sneak in and remain undetected for 2 years you should be allowed to stay. Here is my post on immigration.

Her stated position on equal pay for the sexes ignores the facts that men and women are not exactly the same. Men and to work more, at rougher more dangerous jobs and also more competitive jobs. there are many other reasons that men earn more.

Healthcare is regulated at the state level and so paying for it at the federal level make for bad incentives for state lawmakers. Already the federal Government subsidies demand for healthcare even while the states limit supply. She wants to subsidise people and limit the amount that people pay for healthcare to some percent of their income, a very bad idea.

She supports forcing people to partake in wedding ceremonies that are against their religious beliefs.

I will just throw this in, she also seems to be somewhat of a compulsive liar, even more than most politicians, for example in the wikileaks dump it was shown that she told an audience in Brazil that she was for open boarders but in the debate she claimed that she was talking about energy and seemed to be that she just thought that up on the fly. A little thought would have told her that that would not fly.

I could go on but won't.

I Kind of Liked This

For politician and most jobs principles are far more important than IQ 

The below is from an anonymous commenter:

Warren G Harding – Dolt (before you smirk look how well the country did under his normalization policy)
Calvin Coolidge - Intelligent  
T. Roosevelt - Dolt 
FDR – Dolt 
Truman - Dolt
 Eisenhower – Intelligent 
 JFK – Dolt 
LBJ – Dolt 
Richard Nixon - Genius (I think the smartest president of the modern era)
Jimmy Carter – very intelligent 
 Ronald Reagan – Dolt 
G Bush – Intelligent 
 Bill Clinton – Genius 
GW Bush – Dolt
Karl Marx – Genius for comparison

Wishful Thinking by Roberts and Deacon

Angus Deaton on econtalk  and Russ Roberts blame drug use and poor school performance by low income USAers on poverty and bad schools respectively. I do not buy those explanations.

I have known a lot of people who like to get up in the morning and start getting high (pot, THC, whatever). I have trouble relating to that because I do not have that desire at all but none of them seemed to be in any particular despair. As far as I could tell it was entertainment. So I think the opium epidemic is due to more access to opioid and people liking opioid.

Also I went to some high rated schools and some low rated schools and the only difference that I could see was the quality of the students. I think you are both putting way too much hope in schooling. I think that research shows that schools cannot really get the students to learn much more but they could improve by:

• 1. Teaching more valuable life schools. That is if you cannot get them to learn more focus on getting them to learn the more valuable stuff for their lives. Consumer and practical skills.
• 2. Change the hours of schools to better support working people. that is cover most working hours.
• 3. Focus on spending less money on administration. 

I am not happy that this is the way that it is but if you cannot solve problems that you define all wrong.

Thoughts on Trump's Success

Joseph Stiglitz pushed a story (How Trump Happened) that implies that the bad economy is the main driver of the Trump success in the republican primaries.

First I have in the past said that Trump is what many conservatives wanted all along and I still believe that is a big factor but I also think there is something else, which follows.

(Now I like President Obama as a person but, I think he has badly mishandled issues of race. He seems to me to be more decent that most politicians.)

When President Obama was elected many people hoped that he would defend the Government and whites to his black constituency but starting in the Travon Martin case and then in the Fergison case he seemed to side with the aggrieved blacks, before the evidence came in. He never pointed out that is was impossible to know if the Martin or Brown where the aggressors. He also failed to promise to blacks that he would attempt to rectify the situation from within if did turn out to be persecution of blacks so that they need not protest.

He also failed to point out that there are 340 million people in the USA 40 million of them are black and these things are bound to happen regularly, but that that does not mean whites are out to persecute blacks. It makes it worse that he has been great at understanding and presenting the statistics on Terrorism for example Obama frequently reminds his staff that terrorism takes far fewer lives in America than handguns, car accidents, and falls in bathtubs do. The same is true for whites and police killing blacks, they are relatively rare events. He could be shouting that from the house tops but no.

He failed to say "Look many whites voted for me, they are not so bad", and that if I can get to be president prejudice, while it still exists, is not holding blacks back significantly. That blacks can do well in the USA and most are.

Maybe wrongfully, but when people elect a minority they expect him put great effort in to reconcile his minority with the majority, Obama failed badly with this challenge, angering people and so Trump. 

I fear Hillary Clinton will do the same always siding with women against men. For example the pay differential disappears when you factor in hours, occupations and career interruptions but she keep pushing the issue.

Why I Think the Scandals are Small but I will not Vote for Hillary Clinton

As far as the email server, Benghazi  and the sale of access through the Clinton foundation, it seems to me that these are minor and that most politicians do those sorts of things. Way to much is stamped classified if the federal government and all the insiders know that and I am sure that all the insiders know that you do not every send anything that is important to keep secret through email.

Also my guess is that classification often is used to keep secrets from the voters.

I do not think Hillary Clinton is a bad person for doing this stuff BUT where and when do we start, and I think that we should start, punishing powerful politicians for breaking the laws they make and/or enforce?

We raise our politicians to high up. It is just a job and the President is much less important than most voters seem to thing. Further if the President is impeached it is not even the other party that takes over it is teh vice president and he gets to pick a new Vice President.

Regan should have been impeached for Iran contra, Bill Clinton for perjury, Obama for the 2014 prisoner swap.

You might think that we would be impeaching presidents all the time but we would not, after a few impeachments they would start to be more careful to not break the law and unlike the poor guys who break that law even with punishment do to poor impulse control the politically powerful mostly have great impulse control.

So why are people who would stand with Regan over Iran Contra so upset about Hillary's email server, a much smaller matter, I think mostly because they are against her for other reasons but are hoping that to take her out on a technicality.

I am against Hillary Clinton for her position on abortion. She has moved to a position on abortion where not only does she want to keep it legal but she wants or tax dollars to be used to pay for it. Democrats used to say that they wanted to make abortion "safe, legal and rare", they have dropped the "and rare".

Hillary voted for the wars in Iraq and Afghanistan and if news reports are to be believed, even after seeing chaos that ensued after the war in Iraq, she pushed for arming rebels in Syria, pressuring Egypt’s Government to give way and bombing of Libya. She is also a drug warrior, late to support allowing the states to legalize marijuana.

Her position on equalizing pay by gender plus Government funding of daycare, on college tuition and trade are also bad but it seems most inteligent insiders seem to think that she is just lying about those policies. (BTW Here is an Idea by Steve Landsburg's on how to hold Politicians accountable for there promises.)

But it looks like she will win, so let’s hope that she learned some lessons and will get our military out of the middle east and legalize drugs.

Don Boudreaux and Me on entertainment

Don Boudreaux in a post titled:  Thinking At the Margin: It’s Revolutionary writes the following:

…I agree that most people are troubled that the likes of Tom Brady and Jennifer Lawrence earn far higher pay than does any firefighter or school teacher.  But this reality reflects not people’s correct understanding of a failing economy but people’s incorrect understanding of a successful economy.  It reflects also a failure of economists to better teach basic economics to the general public.  So let me ask: would you prefer to live in a world in which the number of people who can skillfully fight fires and teach children is large but the number of people who can skillfully play sports and act is very tiny, or in a world in which the number of people who can skillfully fight fires and teach children is very tiny but the number of people who can skillfully play sports and act is large?
I’m sure that you’d much prefer to live in a world in which skills at fighting fires and teaching children are more abundant than are skills at playing sports and acting.  Precisely because saving lives and teaching children are indeed far more important on the whole than is entertainment, we are extraordinarily fortunate that the numbers of our fellow human beings who possess the skills and willingness to save lives and to teach children are much greater than are the numbers who can skillfully play sports and act.
The lower pay of fire fighters and school teachers simply reflects the happy reality that we’re blessed with a much larger supply of superb first-responders and educators than we are of superb jocks and thespians.  Were it the other way around, then while we’d be better entertained with more top-flight sporting events and movies, all but the richest amongst us would suffer significantly greater risks of being unable to educate our children and of dying in house fires and from other mishaps.

First, I think it is more relevant that people like me, as far as I can asses, spend next to nothing Tom Brady and Jennifer Lawrence get no money from me (maybe some tiny amount I do occasionally watch pro football and see ads but I rarely buy the advertised products). I have spent and am taxed much more for teachers and probably much more for firemen even though we do not need as many as we have now.

Also, It seems to me that we are lucky that beyond some moderate level of ability additional teaching ability does not make much difference.

But I have for a while had theory that people underestimate how important entertainment is to people. It seems to me that entertainment is very important to people. You see falling apart shacks with $60/month satellite or cable TV. Even in a poor country like Honduras it is surprising how much a poor a person will fork out for TV.

My interactions in my youth with heavy drug users led me to believe that they are seeking to escape boredom by using, meaning that they are willing to risk health and life for entertainment.

Also look at those medieval cathedrals with the stained glass and it seems great music for very poor people. A lot was spent and since the bible does not require it I think is more for entertainment than for devotion.

Hypocracy of Policians

It is logical for someone to be for higher taxes and yet say that I will not anti-up and pay extra taxes until everyone does. They would say, I work within the current system.

It is also logical for someone to say I am for high tariffs to keep jobs in the USA but until they are enacted I will work within the current rules have my stuff manufactured in low wage countries, as my competition will.

On the other hand it is hypocritical for Hillary R Clinton, who supports higher taxes on her income group, but does not pay extra taxes, to attack Trump for selling ties manufactured outside the USA.

It is also hypocritical for Bernie Sanders to call drug companies immoral, which he does often, for raising drug prices when they are doing what they can in the existing system while he is doing what he can in the existing system, living it up buying vacation homes and not overpaying taxes.

Peter Singer is  consistent on this sort of thing our politicians are not.

Cowen on Trump

Tyler Cowen has a great post on Trump. He draws some parallels between FDR and Trump,

I have for a while seen Trump is sort of a throw back to FDR. Very UN-libertarians both.



I also believe that FDR, Trump, Bernie, The Greek Government and some other rising European parties show that bad Central Bank Monetary policy breeds bad politics and that very high government spending in good years, like we and Europe have make fiscal stimulus problematic (whether fiscal stimulus works or not, I am not sure).

Perhaps we would be better off with free banking.

Healthcare is a State Issue in the USA

If you thought that state level politicians were completely corrupt and ruthless, and did not care about the people at all, and 50% of healthcare spending came from the federal Government (and it does), you might expect the state politicians to regulate in a way that would increase the income of the health workers in their states.

Now I do not think state level politicians were very corrupt and ruthless, but it is interesting that they seem to regulate healthcare in a way looks like was designed to exactly that.

Living on a Lower Median Income

A commenter said wives can no longer afford to not work a job in the taxed economy.

My reply:

The median income will always afford the median home.

If every wife worked for in home consumption rather than in the taxed economy the median home might be smaller and the median meal have a little less meat or fish and the median air conditioner be set a little higher in summer and heat lower in winter, median shoes a little cheaper, and people would eat out a little less but we could certainly afford it.

Drug laws and Prison Populations

People are often over or underestimate the impacts of drug laws on incarceration rates. 

Here are the number: "Among sentenced prisoners under State jurisdiction in 2008, 18 percent were sentenced for drug offences and only 6 percent were incarcerated for drug possession alone."

Here is 538 on the same: "Releasing Drug Offenders Won’t End Mass Incarceration"

Here are some Federal Bureau of Prisons statistics.

Nevertheless reducing state prison populations by 18% and federal prison populations by about 50% would be a big improvement. Also some crime is due to the high price of drugs that would be very cheap if they were legal.

I also think our sentences are too long for most other crimes. Restitution should be used for property crime, home imprisonment with ankle bracelets and supervision should used for those who committed violent crimes but are low risk to commit again (an argument can even be made for more corporal punishment over prison see here: http://www.overcomingbias.com/2011/06/in-favor-of-flogging.html). Long sentences are not a good replacement for good enforcement and are expensive.

Again I would completely legalize all drugs and enable the sale of medicine (except antibiotics for which I would require a prescription and/or a test to get.) with out requiring a prescription.

What I expect Parents would Demand from Schools if they were not Run by Government

Expecting parents and students to select the schools that provide the Best Educations through a voucher program is like expecting food stamp recipients to use free market judgement to select the healthiest food in the supermarket.

I am against vouchers because but I do think we should experiment charging he non-poor for each child that they put in Government schools based on their income but..

I would expect parents to select schools that serve their wants most. Like:

1. School that are open 7:00 am-6:00 pm for daycare before and after classes.
2. Schools open in the summer.
3. Schools that handle most problems on site without calls to parents.
4. Schools that do not charge too much. (IMHO we in the USA spend way to much on schooling.)
5. Schools that teach what the parents want on religious issues like evolution.
6. Sports.
7. An middling education. (In Korea children go to school from 8:00 am to 10: pm, we are not that schooling crazy in the USA.) Schooling adds less that most people think.
This would be good.

Also it is a wonder that private schools flunk anyone at all but they do.

The Stationary Bandit Model of Government

KEVIN D. WILLIAMSON has an article at the link were he discusses the stationary bandit model of Government.
The Public Sector: Standing in Our Way until We Pay Up


To me it looks like Government in most of the developed countries conform pretty well to the stationary bandit model, with the bandits being the median voter, but with lots of scams mixed in by which the median voter is scammed by the politicians.

The median voter is like the mob demanding things, but the politicians are like corrupt accountants messing with the books to hide what is really going on. Intelligent, high SES Democrats are happy with the Politicians scamming the people (things like hidden matching FICA) because they think it is for the good. They think what the voters do not know allows for more charity for the poor (the average US citizen thinks he pays into SS and that everyone gets out of SS in direct potion to what they pay in, even though the low earners get more that double high earners per dollar they were taxed). Intelligent Republicans do not like it so much but know fighting it too much is a losing proposition.

Retire Earlier Die Earlier?

Surprisingly people seem to die earlier when they retire earlier (link below) and this seems especially true for blue collar workers. This weakens the argument that waiting longer to retire is very hard on the blue collar workers.
http://www.freakonomics.com/2012/05/17/retirement-kills-a-new-marketplace-podcast/

http://www.webmd.com/healthy-aging/news/20051020/early-retirement-early-death

http://www.medpagetoday.com/PrimaryCare/PreventiveCare/1980

Comments on Washington Post Story Linking Trump to Fascism

This is how fascism comes to America

I am unhappy about Trumps success but it seems ridiculous to call him Fascist.

Who you call fascist of course depends on what you call fascism.

Democrats agree highly with the fascist model of economics, that is that Government should guide and push that economy, that Gov. should be allowed to push business around to provide for the people but that does **NOT** make them close to Fascists. They are not into persecuting people, not even white males, for what they are and though they are nationalistic when it comes to trade and Government charity (SNAP, TANF, SS, Medicaid, Medicare etc.) but they are not dangerously so.

Trump is just a little more nationalistic than the Democrats are and about the same on economics, though he is for less charity and more for work, and more for building great projects.

Trump is also just a little bit more nationalistic on immigration, Hillary and crew are hardly for open open borders.

Being pretty pro-freedom myself I am happy with neither but I do not think that we are about to plunge in Fascism.

Price Controls

We all know that price controls are the worst of policies (look at Venezuela), (begin sarcasm) except when it comes to wages (end sarcasm).  Few people would defend price contols except when it comes to minimum wages.

Wage subsidies are better than minimum wage laws, and this is part most people miss, probably at less or the same cost. If you think about the money needs to come from somewhere and the underground economy need to be policed which is a similar cost to dead weight loss of taxation.

But politicians like minimum wage laws because if the voter does not think about it for a minute, it seems free to him. So how corrupt are the politicians who either know better or are purposefully ignorant?

The system selects for corruption.

Even Tyler Cowen, Who Tries Hard to be Fair, Is Piling on Trump.

Even Tyler Cowen who tries hard to be fair to everyone is piling on Trump. But I do not see much difference between Trump, Cruz, Sanders, Kasich and HRC. Sanders seems to me the most deceptive but that is mostly because he makes more concrete policy proposals. HRC seems to like to have the US Government involved in wars, Middle-East wars, drug wars, she talks like she wants to start a war on men. We give her a pass because we are confident that she is lying and will govern pretty well, just like Bill did but Trump is most likely lying to and in politics with so rationally ignorant voters wanting stiff from Government, a candidate's lying looks like a feature not a bug.

I will vote libertarian to signal to the Politicians that I am against the wars especially, Middle-East wars and the drug war.

Noah Smith, Bernard Sanders and Poverty in Japan

Noah Smith writes a pertinent article but seems to miss a big point:

Japan's Growing Poverty Defies Glib Explanations

The fact of growing poverty in Japan shows that poverty is not causing the things Democrats say are caused by it, but that a third factor is probably causing both relatively low income in the USA and the problems associated with the same.

Once again I will link to a story about he poorest country in the USA and point out that you see none of typical problems there.

And to this about a guy who lives in San Fransisco on $7,000/year  he evidently needs no living wage.

The Amish and Mennonites have low income too, without the problems associated.

These show that it is not about money or schooling, considering the groups above like to drop out of school early, though it might be about education (most of which occurs out of school).

I know some guys who so much more desired to sit home and drink or get high to working that more income would have negative social effects. I would like it if the country worked a little better for them but the solutions Democrats propose do not fit with that purpose.

I also know some people who manage to get along well on very little and so who do not get along very well on much more.

I have known folks on assistance who really needed it and benefited from it, so I am not all one way but let's not be naive.

The whole subject is fascinating to me.

BTW Bernie Sanders talks at lot about taking money from the rich and spending it on the middle-class and much less about spending it on the relatively poor, is that because he recognizes the above points? Maybe it is not just that they do not vote.

Robert Frank on Luck and Dilligence

Robert Frank on Luck and Diligence

I like Robert Frank and I want to agree with him and I like a progressive consumption tax but I think he is badly off on Education and infrastructure.

I just read that USA infrastructure is good, better than it has ever been.

AND middle of the pack for the industrialized countries. That matches with my experience also. How much does the U.S. spend on infrastructure compared to the rest of the world?

It's in the middle of the pack. Between 2001 and 2011, annual public investment averaged 3.3 percent of gross domestic product, according to the Organization for Economic Cooperation and Development. The average OECD nation spent 3 percent of GDP over the same period.

AND anyway transportation is only 3% of the federal budget doubling spending on it would not be that big a deal.

AND further more, roads should be paid for with the gasoline taxes and airport with usage fees to the airlines.
  Frank and I really disagree on education. I think school spending should be cut in half. Spending above 1965 levels seems to not have much effect.


Related excerpt:   

The achievement decline cannot be blamed on inadequate spending. Between 1960 and 1995, annual per pupil spending in the United States rose from $2,122 to $6,434 in inflation-adjusted 1995 dollars.3 By 1999, the United States was spending an average of $7,397 per K–12 student. Spending in other industrialized countries averaged $4,850. Only Switzerland, at $8,194 per pupil, spent more than the United States.4 In industrialized countries, student scores on the Third International Mathematics and Science Studies tests are uncorrelated with spending. Though per capita U.S. spending is high and the academic achievement of its fourth-graders is above average, its eighth-graders score in the middle of the pack, and twelfth-grade achievement is consistently among the lowest of the countries studied.
Even Franks example:
and if they do that and I don't do that, then my kid goes to the school with a metal detector out front.

That is bad students not bad schools. I went to schools with metal detectors and they were good schools with some bad students. You cannot get away from bad students! In the "bad school" that I went to teachers would bend over backwards to help any student who showed a little interest I think because so few students did.

Here is a related blog post by me.
 
Also I think we could get to a progressive consumption tax by removing the cap on the IRA and removing the penalties for early withdrawal and taxing people on any earnings not put in the IRA plus any withdrawals from the IRA.

Finally we USAers are a great and wild and diverse lot. We are not all northern Europeans and the northern European model does not even work so well in Italy, Spain, Portugal and Greece. My mothers family is from Sicily and they brought with them a little of Sicilian attitudes and paranoia. Those attitudes seems to hang on through the generations. Those types of attitudes make the northern European model not work. As it seems to not even work so well for Arabs in Belgium and France.

I say considering the mix of people we have the USA does incredibly well. Much better than the Northern European model would work here. Continued immigration may eventually make it fail even in Northern Europe.

The Trouble with the Minimum Wage

It looks like companies that are effected by a rise in the minimum wage, mostly being in competitive industries, raise their prices enough to cover almost the entire difference on labor costs. That means that the disemployment effects are due to people a little buying less from those businesses. therefore the disemployment effects are very small.

Never the less I am against minimum wage because I believe that even a very small increase in unemployment is very bad easily outweighing the benefit to those whose wages increase. I believe that the nonmonetary benefits of having a steady job are large. Also many people already work for less that minimum wage so...

If you, Like Trump, Are Concerned About Trade with China and Mexico there is Something You Can Do

If you, like Donald Trump are concerned about trade with China and Mexico and the trade deficit there is something you can do. You can buy VIGI. VIGI is an exchange traded stock fund with very low fees that invests in foreign Dividend Achiever stocks. The expense ratio is only one quarter of one percent so Wall Street is not getting much of a cut.

(To qualify as a Dividend Achiever, a company must have increased its dividend payout each year for the last 10 or more consecutive years and meet certain liquidity requirements.)

Why will this work?

When Foreigners buy more assets in the USA than USA citizens buy assets in foreign countries they are buying less goods and services and that is what produces a trade deficit. Essentially they sell goods and services to us and use some of the many that they make to buy assets.



So the deficit is a result of foreigners buying more US assets (stocks, bonds, T-bills, etc.) than US citizens buy foreign assets. The balance of payments is always nearly equal so if we buy more assets they will have to buy more goods and services. (There is some cash held outside the USA but it is a small amount and most of it is needed long term and it is not significant and is eroded by inflation.)

Interestingly, though foreigners own more assets in the USA (stocks, bonds, T-bills etc.) than US citizens own in foreign countries, US citizens receive more returns (dividends and interest) than foreigner receive on US assets. This shows that foreigners have been bidding up the price of US assets.

If you think that you cannot afford to buy even a little bit of stock ready this.

Bernie Sanders and the AMA

It is mind boggling to me that the likes of Bernie Sanders trot around the country talking about the high cost on healthcare and education (2 state issues BTW) but he never talks about the what is driving the costs up.

He would rather focus on talking about getting the very rich to pay for them rather than reducing the costs but the very rich do not consume enough for you to move sufficient consumption from them to everyone else to make a huge difference. He is a con artists like almost all politicians, he is probably cosy with the AMA.

BTW The more the Federal government pays for healthcare and education the more the states are motivated to regulate on behalf of the in state providers, pushing up costs.

One of the Problems with Federal Government Provision of Health Insurance and Schooling in the USA

Here in the USA health and education are state Government issues not federal issues.

The state governments regulate the healthcare industry and run the schools including at the University level, so if he federal Government pays for most of the healthcare and education there is an incentive for the states to do what they can to push up costs because most of the money comes from other states.  And what do know, surprise, surprise, that is what we see. USA spending is much more than other countries on healthcare and schooling.

To address the problem of high costs of schooling and healthcare at the federal level the President and congress need to take over the regulating of healthcare and take over the running of the schools. Alternatively they could mandate that the states provide healthcare and college free and provide any funding proportionally to the population.

This would require that the Constitution be amended.

A Reply to Dean Baker on Social Security

Dean Baker objects to means testing Social Security here. 

 

But, why not do the sensible thing and give all citizens above some age the same benefit? If I understand their Government speak correctly, that is what the Government part of the pension system in Australia does.

Social Security is already progressive see here, so why try to keep the voters deluded, thinking it is not welfare?

You could set the payment at $200/week/person, that would give the neediest a raise. I think this would reduce the total cost by about 30% which would mean that you could lower the tax allowing the citizens to spend that money when they choose to rather than in their older years. My Grandmother told my father spend the money when you are young and can still enjoy it.

Social Security is welfare program that was disguised as a Ponzi scheme to make it past the voters. Time to admit to them that it is and has always been a welfare program.

Another Difficulty with Implementing Single Payer Health Insurance in the USA

Another Difficulty with Implementing Single Payer Health Insurance in the USA is that if economists like Milton Friedman are correct the states are causing much of the high cost. Worse with the federal Government already paying for 50% of health care, state and local politicians have an incentive to push up medical costs in their states. This will only get worse if all medical spending is done through the Federal Government.

Is It Too Late to Implement Single Payer Health Insurance in the USA

It seems to me that it is probably too late to implement single payer health insurance in the USA.

• Because health care spending is now up to about 18% of GDP and...
• Because the industry has gotten so big there are a lot of people working in the industry, to some extent they will fight single payer.
• Because the industry has gotten so big the taxes to cover it  would have to big, and contrary to what Bernie says taxes are different from health insurance premiums. That is because if you quit paying your health insurance premiums you do not get the benefit but, if you work less or for less money and so no longer pay the taxes to cover your medical bills you are still covered in single payer (and people do that especially wives) and that expense is shifted to other tax payers.
• You cannot shift consumption from the very rich to consumers of health care because the rich do not consume enough.
• Of course you could cover everyone with what gov. spends today by cutting low benefit care but the AARP will have your head.

So IMHO it is too late!

Immigration

I would like the USA to return to the free immigration policies of the past (like when my grandparents immigrated). Then incoming immigrants where checked for communicable diseases and if clean they were granted entry.

BUT seeing that:

• There is a large percent of voters who are anti-immigration and a larger percent who are against illegal immigration. 
• It seems absurd to have a law that you have no intention of enforcing.
• The illegal immigrants who have been here the longest are better off than those who would have wanted to come but did not come because they did not want to come illegally.
• The illegal immigrants who have been here the longest are better off because they have had a chance to earn more money than those in Mexico.
• The illegal immigrants who have been here the longest are better off because they have had a chance to learn some English which might help them get a better job in Mexico.

So suppose we deport illegal immigrants starting with those who have been here the longest and for each one deported we let in a person from the queue. Or maybe we let in two people from the queue for each illegal deported.

This seems to be a reasonable compromise between pro and anti immigration voters.

Also, perhaps we should start a guest worker program.