The True CPI Just Jumped

I recently voiced fear of coming inflation.  Yet on reflection, high inflation is already here.  While measured inflation remains low, I’ve been arguing for years that CPI bias heavily distorts official measures.  My point has always been that official measures of inflation are too high, because official measures fail to properly account for rising quality and variety of goods.  In the last month, however, all this has suddenly reversed.  Due to the coronavirus, official measures of inflation are now much too low.

How so?  Most obviously, the variety of available goods has sharply fallen.  Roughly half the products I normally buy are no longer on the shelves.  I’m hardly starving, but I’ve had to fill my shopping basket with a lot of goods I would not buy under ordinary conditions.  After many years of claiming that product variety is a great unmeasured gift, consistently compels me to admit that the loss of product variety is a great unmeasured shock in the other direction.

Variety aside, the quality of goods has also plummeted.  Most notably, shopping convenience is way down.  Back in February, I could pop into any store, swiftly pinpoint what I wanted, and buy as much as I liked without worrying about infection.  No longer.  Today’s best-case scenario is that I pay the same amount as last month for a greatly degraded shopping experience.  The actual physical quality of the goods has fallen too; I now have to settle for half-crushed bread, worse cuts of salmon, and so on.

Can’t I solve some of these problems by switching to delivery?  Yes, but that highlights yet another source of hidden inflation: outlet bias.  During the last few decades, consumers have heavily switched to innovative stores like CostCo that provide high-quality products for low prices.  Official CPI measures have failed to properly account for this transformation.  In the last few weeks, however, we’ve had outlet bias in reverse.  Stores like CostCo have been so congested (and rationed!) that many people have switched over to higher-cost, lower-quality stores they would normally avoid.

This includes delivery services like Instacart.  While I’m grateful they’re in business, Wegmans food delivered via Instacart easily costs 30% more than I’d normally pay.  The list prices are higher, there’s a delivery fee, and don’t forget the tip.  True, I don’t have to go to the store, but back in the good old days of February, I liked going to the store.  (I enjoy getting out on weekend mornings, and waiting around the house for deliveries is a drag).  Upshot: I really am paying 30% more to shop at an outlet that is inferior to what used to be available.  And I’m hardly alone.

The optimist in me says that this drastic sign-flip for CPI bias is temporary.  Yet since supply chains – especially international chains – have been seriously disrupted, much of the degradation in the quality and variety of goods that I’ve described will soon be replaced with other degradations.  You can hardly wax rhapsodic about the cheap and handy products China sells us without lamenting the many months we will have to go without.

I am well-aware that gasoline and a few other goods have suddenly gotten cheaper.  Yet overall, we have endured a rude shock.  In normal times, CPI bias means that we fail to appreciate our high and rising prosperity.  During this crisis, CPI bias means that we fail to appreciate how much we’ve lost.

Here’s to better times!

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“Papers, Please” is Now Reality

Even more than it has been, I mean.

And how much do you want to bet the “please” is a lie?

Local employers are now giving employees “travel papers” so they can prove to cops who might stop them for being out on the road that they are traveling “legitimately”. I personally know that Walmart, Family Dollar, a cattle feed producer, and other businesses have issued such papers. Probably everyone whose business is deemed “essential” enough to be allowed to stay in business is doing the same.

So far, only the New Mexico parasites have clamped down on the right to travel, but the Texas employers around here are also issuing the papers because many people cross the state line, in both directions, for work.

How long until some Blue Line Gang scum murders someone for being on the road without permission?

Some statists seem shocked by this Nazi-ish turn of events. Yet it’s their fault! Totally! Their ongoing support of the state, for their whole lives in most cases, has led directly and inevitably to this.

Who are these political thugs to decide which jobs are essential? They wouldn’t recognize something essential if they stepped in it.

Every job is essential to those who perform it, and to those who rely on it.

The ONLY “jobs” which are non-essential are government “jobs”— because they aren’t actual jobs. Some of those “jobs” are even worse than non-essential; they are actively harmful. Keep these people off the roads if you have to keep anyone off.

Police officers, specifically– your “job” is not essential by any stretch of the imagination. It is harmful and parasitical. You are a drain on society. The same goes for every bureaucrat, politician, and whatnot. YOU are the vermin who need to be out of a “job”, now and forever. Let the productive people work while you rot in a hole in the ground.

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Open Borders: Now Do You See What We’re Missing?

In Open Borders, I never claim that immigration restrictions make life in the First World bad.  I don’t try to scare people into supporting more immigration, a la, “Without more immigrants, we’re doomed.”  What I claim, rather, is that immigration is a massive missed opportunity.  While life is fine the way it is (or was, until a month ago), there is no reason to settle for “fine.”  If there is a dependable way to dramatically improve our lives, we should seize it.

What then are we missing?  The standard and correct answer is: tens of trillions of dollars every year; see Clemens’ classic “trillion-dollar bills on the sidewalk” article.  Allowing human talent to move from low-productivity countries to high-productivity countries greatly enriches mankind.  A mind really is a terrible thing to waste.  Until recently, though, these tens of trillions of dollars of unrealized gains have been awfully hard to visualize.

Now, human tragedy provides crystal clarity.  If you examine almost any American population center today, it doesn’t look bad – just empty.  Enormous economic sectors – restaurants, entertainment, retail, and much more – have suddenly shut down to fight coronavirus.  As a result, tens of millions of folks are stuck in their homes, wasting their talents, and contributing little to the world.  An optimist would correctly remind us that we’re hardly starving, and we have Netflix.  Yet an optimist should also gladly acknowledge that it would be awesome to suddenly recover all that we’ve lost.  If the virus vanished overnight, a Niagara Falls of missing productivity would be unleashed.

Imagine, though, if we’d never known anything better than what we have today.  If you claimed that we were missing trillions of dollars of gains, most people would be deeply pessimistic.  Some would bemoan the fate of grocery stores if restaurants were legalized, or warn that releasing tens of millions of homebodies into the workforce would lead to catastrophic unemployment.  The main mental block, though, is that people would have trouble visualizing a straightforward way to make us trillions of dollars richer.

If you can get over this mental block, if you can see what we’ve lost, then it’s only a small step further to see what we’re missing.  If people were free to take a job anywhere on Earth, humanity would have more agriculture, more manufacturing, more services.  We would have more restaurants, more homes, more elder care.  We would have more doctors and more janitors, more meal delivery and more cars to deliver the meals.  If coronavirus can eliminate 90% of the restaurant business, open borders can add 90% to the restaurant business.  You’ve seen the former with your own eyes, so you should have no trouble seeing the latter with the eye of the mind.

To be fair, you could demur, “We’ve shut down most of the domestic labor market to prevent the spread of a horrible disease.  Similarly, we shut down most of the international labor market to prevent something similarly horrible.”  The difference, of course, is that the coronavirus is all too real, while the horrors of immigration are speculative at best.  Indeed, on inspection they’re largely imaginary.  And while many will now be add infectious disease to the list of social ills to blame on immigrants, that argument too makes little sense.

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OFCCP vs. Oracle

Three days before Barack Obama left office, his Department of Labor served a complaint against Oracle America, Inc., alleging gross systemic discrimination in both its hiring practices and its pay practices.

Specifically, it claims that Oracle discriminates against non-Asians in hiring for sixty-nine job titles, and discriminates against women, Asians, and African-Americans in pay for eighty job titles.

DID ORACLE DISCRIMINATE?

Is it strange that Oracle allegedly discriminates both in favor of and against Asians?

The OFCCP (the Office of Federal Contractor Compliance Programs) is the program at the center of this complaint; it is involved because Oracle is a government contractor. The only points supporting OFCCP’s claim are statistical analyses.

The complaint mentions exactly zero employee complaints, and it doesn’t even try to say that there is evidence that Oracle intended to discriminate.

It is difficult to determine and compare the myriad factors involved in assigning appropriate compensation, and the statistical analyses OFCCP conducted likely fall short. Economically speaking, any mutually agreeable level of compensation is appropriate, and in a free market, compensation will tend to be equitable.

SHOULD THE OFCCP HAVE THIS POWER?

However, when Oracle filed a countersuit on November 27, 2019, (yes, the case is still going on), its press release discussed none of those points. Instead, it focused on the unconstitutionality of the Department of Labor acting as “investigator, prosecutor, judge, jury, and appellate court.”

Of course, such arrangements are not limited to the Department of Labor; they have become unfortunately common throughout the Federal bureaucracies. This is despite the blatant violation of the Constitutional separation of powers, arguably the most basic fact of American civics. For most of us, as soon as we started learning about the US Government, we learned about the separation of powers, and how the Founding Fathers designed the system with the famous checks and balances that prevent tyranny.

How well has that tyranny prevention worked out so far?

Oracle argues that the situation is not only unconstitutional but also statutorily illegal. It remains to be seen how the suit and countersuit will turn out; typically, it takes extremely deep pockets to win such a fight against the feds. Oracle may yet come out on top, but so far, it appears that the checks and balances have failed to protect Oracle — a company that provides over 100,000 jobs and many billions of dollars of services to the economy each year.

COULD THE FREE MARKET HANDLE THIS?

The OFCCP has not made a compelling case for the existence of systemic discrimination within Oracle; its claims are prima facie incongruous and based exclusively on ambiguous data. Indeed, it appears that it has inserted itself into a situation in which no one has complained, no one has objected, no one has said that their compensation was not appropriate for their labor or that they objectively should have been hired when they were not.

But, what if there really were discrimination?

And, is there a better way to handle it than the intra-DoL system, or even the Constitutional system?

My interest is in how this situation would play out in a free market. Let’s consider it.

A free market, with total freedom of association, would probably have no claims of hiring discrimination, because no one would be compelled to hire or retain anyone against their will. Of course, a reputation for discrimination could easily lead to a loss of revenue, as a consumer base that opposes discrimination would likely choose to take their business elsewhere.

Furthermore, formal anti-discrimination regulations could be voluntary. Associations or organizations could prescribe standards for avoiding discrimination, as well as regular audits to ensure compliance, and consumers could choose to patronize only those companies that subscribe to sufficiently stringent standards and pass the audits.

HOW WOULD THE FREE MARKET HANDLE THIS?

What would happen with a discrimination claim in a free market?

Let’s say that Oracle is certified as discrimination-free by the standard-bearer anti-discrimination association. In this scenario, a prospective employee believes that Oracle has discriminated against him in the hiring process, or a current employee believes (despite mutual agreement) that Oracle has discriminated against him in his compensation.

He could discuss it directly with the appropriate people in Oracle, or he could take it to the anti-discrimination association that certifies Oracle as discrimination-free.

If his claim has merit, the association would need to ensure that Oracle settles the claim swiftly and fairly, or have its discrimination-free certification revoked. To do otherwise would risk the association’s reputation and tarnish the value of their certifications.

IS THERE ANOTHER WAY TO LOOK AT THE SITUATION?

Of course, this is just one way it could play out. The best part about the free market — wait, is there a single best part? —  is that one person can’t conceive of all the remarkable ways that collaboration and competition can make the world a better place.

On the other hand, you may have noticed some similarities between how a discrimination claim would work in a free market, and how it works with a state-run system. Part of that is because the free market is impossible to get away from completely, and part of it is because my imagination is likely affected by the status quo. The main benefits of the free market vis-a-vis the state-run system are the lack of coercion (in both funding and association) and the opportunities for innovation.

CONCLUSION

In summary, it appears that the Constitutional system isn’t working (since we have unconstitutional bureaucratic judicial pipelines all over the place), and those pipelines don’t work too well either (since they use sketchy math to find problems where no one involved sees a problem). So, do you think a free market system would work better? How do you think it would function? How would you design it?

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Yes, the COVID-19 Panic Does Call for Drastic Measures

As an old saying goes, it’s not the fall that kills you, it’s the sudden stop at the end.

The world’s politicians are innovating on the fly (pun intended) by trying to combine the fall — the COVID-19 epidemic — with the sudden stop, bringing life and commerce to a halt through draconian travel restrictions, business closures, etc.

We don’t yet know what the COVID-19 death toll is going to be. In the US,  based on current numbers, it looks like we’re going to see quite a few more deaths than occurred in the 9/11 attacks, more even than from the usual seasonal flu, but not nearly as many as predicted by the “I know the word exponential! I know how to draw a hockey stick on graph paper! Quick, hide under the bed, or COVID-19 WILL GIT YEWWW!” social media crowd.

What we’ve not yet seen is anything remotely justifying the declarations of dictatorship coming from politicians at all levels of government.

Everyone from mayors to governors to the president himself is getting in on the act, claiming authority to shut down businesses the politician doesn’t consider “essential” — and at the federal level to centrally plan and manage those businesses’ operations — to clear the streets of anyone and everyone whose activities the politician hasn’t listed as “approved,” etc.

On the back end, those same politicians are trying to figure out how to cushion the economic blow of their own authoritarian stupidity with bank and corporate bailouts, individual stimulus checks, and other voodoo rituals that threaten to turn a short, mild recession into a Greater Depression.

I do agree that the situation calls for drastic measures, and I have one to offer:

I propose a 90-day total quarantine, effective immediately, on all elected or appointed government officials.

By “total,” I mean they are to be restricted to their homes without telephone or Internet access, and physically restrained if they try to leave, have a communication device smuggled in, or speak to anyone through an open window.

As compensation (and to keep ringers from smuggling out proclamations), the taxpayers should provide for grocery delivery.

Three months without politicians exploiting panic to enhance their own power would reduce both the short-term death toll and the long-term problems of economic recovery.

Alternatively, we could all just start ignoring them and their edicts and get back to living again whether they like it or not.

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Don’t Let Politicians Use Pandemic as an Excuse for Dictatorship

By invoking the Defense Production Act, which “authorizes the President to require acceptance and priority performance of contracts or orders and to allocate materials, services, and facilities to promote the national defense or to maximize domestic energy supplies,” US president Donald Trump has declared himself America’s economic dictator.

He’s also moved to seal the nation’s borders, even as governors and mayors have banned public gatherings, ordered businesses to close or severely curtail operations, sealed off neighborhoods, and even in some cases — San Francisco comes to mind — ordered the entire populations of cities to remain indoors.

And we’re letting them do it.

Why? Because they say it’s about “public health.”

If this was about public health,  obvious vectors for the spread of COVID-19 like the Transportation Security Administration and its airport security screening lines would have been among the first things shut down.

Your neighborhood tavern, where people are seldom closely packed unless one is trying to sweet-talk another back home, is closed. TSA agents are still making airline passengers line up to be groped and coughed on.

If it was about public health, America’s non-violent prisoners would have been released to make more room for “social distance” between the remaining prisoners, reduce staffing needs, and prevent the virus from raging through captive populations.

Some prisons and jails are releasing some inmates or refusing to take in more. But not nearly as many prisoners are being released as Americans are being made prisoners in their own homes.

If this was about public health, government would be letting the market produce, and set prices for, essential goods instead of trying to seize control of production and suppress “price gouging.”

This isn’t about public health. It’s about political power. And things are getting very ugly, very quickly.

Vladimir Putin WISHES he had the power that American politicians have seized in the last couple of weeks.

Latin American dictators are green with envy at the enthusiasm with which Americans are surrendering our freedoms.

Pardon my French, people, but WTF?

A month ago half of us didn’t trust Donald Trump, half of us didn’t trust Nancy Pelosi, and many of us trusted neither. Now all of a sudden most of us seem to be practically begging both of them, and their henchmen, to order us around.

That’s not going to contribute to the public health. It’s not going to shorten the COVID-19 outbreak. It’s just going to crater our economy and leave us less free after than we were before.

If we force the politicians to knock this nonsense off now — by ignoring their orders until they run to the front of the parade by countermanding themselves — we might get off light. A short recession, maybe, and perhaps even some politicians who are scared into respecting our rights a little bit more, for a little while.

If we keep going along to get along, we’re more likely to end up thinking of the Great Depression and Stalin’s reign as versions of “the good old days.”

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