Universal Income

A basic income (also called basic income guarantee, unconditional basic income, universal basic income, universal demogrant, or citizen’s income) is a proposed system of social security in which citizens or residents of a country regularly receive a sum of money unconditionally from the government. (Wikipedia)

When I first heard about “universal income,” I laughably dismissed it as extremely naive leftist thinking that was so patently ridiculous that it bordered on satire. The government gives everybody a standard amount of money? Where does that money come from if not the very people it is being given to? Wouldn’t such a policy totally destroy any incentive to work? And then who is going to pay for it?

However, I have since learned that the idea has some interesting substance to it, and it has actually been promoted by several prominent conservative and libertarian thinkers throughout history. Discussion of the old concept has seen much revival across the Internets lately due to global economic trends and the emergence of experiments in various places that have been providing interesting results.

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Help Make Sure The Government Moves Ethanol Regulation In The Right Direction For Once

Last month, the EPA proposed reducing the ethanol mandate in 2014, due largely to unexpected decreases in fuel demand that would force producers to mix increasing percentages of ethanol into a smaller pool of fuel, with potentially dangerous consequences for older engines. News reports are calling it a victory of Big Oil over Big Ethanol, but regardless it’s a good piece of common sense finally coming out of government energy policy that has ignored the consequences of coddling ethanol for far too long. Commentators on the left and the right seem to agree.

Well, the regulation is now up for public comment until January 29, 2014. A quick perusal of the viewable comments shows plenty of pro-ethanol voices pushing to undo the rule, although contra the “Commenter’s Checklist” many of them don’t seem to have actually read the (long and wordy) proposal itself, which explains the rationale for the proposal and makes multiple requests for reasoned or knowledgeable arguments to change them.

I call on all citizens interested in sound energy policy to petition the EPA to keep or even further reduce the proposed mandates, so that we may finally begin to turn the tide against this boondoggle that has damaged the environment and economy for all of us in order to benefit a smaller set of connected energy interests. Read the Proposal And Submit Your Comments Now!

I believe this proposal is not likely to be overturned anyway, but the more voices rise up in support of the reduction, the easier it will be to carry the momentum to Congress to officially do away with the mandates altogether. And while I have no love for the special interests of oil companies either, I am not too concerned about their incidental benefiting from this proposal; electric cars and solar power have their days numbered, anyway.

Here is my comment. I used the multiple uncertainties stated in the report to strengthen my case. Please do not copy and paste it but feel free to use it as a basis for referencing relevant sections of the proposal to write your own. I encourage others with more knowledge about some of the specific environmental and economic costs of ethanol policy to elaborate on those in their comments, and to try to explain how those costs justify the regulation’s waiver authority and how those costs conflict with the regulation’s stated objectives.

I fully support the proposals to lower the RFS levels for 2014, and I fully support the broad interpretation of the waiver language required to justify it. In fact, I believe a broader interpretation that these requirements may “severely harm the economy or environment” would result in requirements that were lowered to 0.

Regarding the objective of “enhanced energy security,” the recent unexpected surge in domestic oil production has already provided far more security than these renewable fuels may ever do. Regarding the objective of “reductions in greenhouse gas emissions,” I believe there is significant uncertainty that ethanol even leads to a net reduction when all the costs and externalities are taken into account. Regarding the objectives of “economic development and technological innovation,” I believe the recent increases in gas mileage and the rise of electric vehicles are contributing more and have the potential to contribute to more innovation and development. Finally, I believe goals of energy security must be balanced with food security. When unpredictable drought strikes, every portion of the food supply that is diverted into fuel exacerbates supply and price shocks for the remaining portion, increasing the potential to “severely harm the economy” as increased food prices increase hardship and poverty both here and around the world.

I would also like to note that reducing the RFS requirements to 0 would fully satisfy the stated desire to “minimize the need for adjustments in the statutory renewable fuel volume requirements in the future,” as it would be unnecessary to reduce the standard further from 0. However, as such a severe reduction is unlikely, please consider the following recommendations regarding the proposed volumes.

Regarding cellulosic biofuels, I believe the proposed requirements are too optimistic due to the stated “common delays” in production ramp-up. Furthermore, even if the range of volumes (8-30 million ethanol-equivalent gallons) is as accurate as possible, I do not believe the Mean value of 17 million should be used, which implies there is a 50% chance that production will be below this value. It is inappropriate to mandate a level with such high odds of failure. I believe the 25th percentile of 12 million is the most appropriate of the options presented in Table II.C-2.

Regarding biodiesel production, I believe the proposed requirement of maintaining the 1.28 billion level is reasonable but perhaps even optimistic due to the likely expiration of the significant $1/gallon tax credit and the stated lack of estimates of production and demand if the credit is not extended.

Regarding ethanol production, I believe the estimates are too optimistic. I believe it is hasty to entirely dismiss E0, which has increasing demand as evidenced by the website pure-gas.org, as well as the record increases in electric car sales, which are essentially equivalent to “E0″ as far as ethanol consumption is concerned. I also believe it is imprudent to assume that the very recent “conditions that have led to” the favorable “price relationship” of E85 over E10 will “continue in the future,” due to the historic relationship and a complete lack of explanation of what those new conditions may be and why we should expect it to become a long-term trend (or if it is even a trend at all since data was only available from two states). I also believe it is quite likely that non-ethanol fuel demand will continue to trend lower than currently estimated, and it should be remembered that the whole reason these standards are being lowered is that fuel demand has been overestimated in the past.

For all of these reasons I would support the 25th percentile of 15,084 million gallons as the most appropriate of the presented potential approaches, although I certainly would suggest even lower values for increased security, economic, and environmental benefits to the United States overall.

It is also important to note that a reduction in minimum production requirements does nothing to affect “maximum” production, or rather the potential for higher production levels if consumers demand it. If these renewable fuels are truly cleaner, cheaper, and better as claimed by proponents in many vigorous but shallow comments, reducing the minimum should have no effect as consumers could and would still rush to demand higher volumes via FFV/E85. If, however, these fuels have significant risks in supply, demand, and/or externalities, reducing the minimum could prevent severe negative effects on both the economy and the environment.

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What The Pundits Are Still Missing About Bitcoin

Pundit Joe has changed his mind from thinking Bitcoin is completely useless to admitting that it’s at least very useful for buying drugs. Pundit Matt still thinks that’s not really very useful at all.

I don’t blame their narrow impressions; until recently I didn’t grok much more than that (besides the currency’s limited supply, which has no appeal to non-libertarian/Austrian types). But now that I understand Bitcoin a little better, I think pundits like Joe and Matt are still completely missing some of the more revolutionary and universally appealing aspects of the elegant but complex protocol behind the surging cryptocurrency. Bitcoin potentially solves several key weaknesses of the modern financial system that are more easily understood at the extreme ends of the scales.

Bitcoin is a quick, safe, and cheap way to transport very large sums of money. I’m not personally familiar with how hard it is to, say, instantly transfer thousands of dollars to a relative on another continent, although trying to do it with cash is clearly difficult. I don’t how long it takes for wired funds to settle, or how much it costs, or what banks you have to go through, or what information you have to provide. But I’m highly confident that it’s much easier with Bitcoin (especially on a Sunday) – essentially, you just enter the address and wait a few minutes for the next mine block to verify it. It’s difficult to overstate the possible value of lowing these barriers.

Bitcoin is a quick, safe, and cheap way to transport very small sums of money. This end of the spectrum I understand better. The light bulb went on for me when I saw redditors randomly tipping each other in cents and realizing there was basically nothing else like it. Credit cards have enabled the e-commerce explosion, but the overhead of transaction costs rules out tiny purchases. Even with miner fees for quicker verification, Bitcoin obliterates the current system’s minimum viable transaction level, which I think is bound to unlock a whole platform of previously infeasible business models.

Of course, the nearly feeless nature of Bitcoin transactions could appeal to retailers doing business of all sizes; it’s just easiest at the very large and very small levels to see the strengths of cryptocurrency’s cheap, instant, and secure transfers over the weaknesses of the existing system’s expensive, slow and insecure transfers.

Naturally, these advantages attract illicit activities among its early adopters, but as far as I’m concerned that’s beside the point. And cryptocurrencies like Bitcoin, or whatever later supplants it, still face downside risks like scalability, the opportunity cost of relying on electricity, or the third-party add-ons necessary to encourage common adoption (Bitcoin transactions themselves are inherently secure, but storing the result is definitely not.)

But there are enough fundamental advantages that I don’t think optimism is only for the cranks and crackheads. The utopian dreams about ceding power from governments and bankers to the common man may be a little, well, utopian, but to dismiss the whole thing entirely risks sounding like the old doubters of the newfangled Internet who said “no online database will replace your daily newspaper.” Sometimes you just have to wait for the pundits to figure it out.

(Full disclosure: I currently possess 0.00001726 BTC as well as an undisclosed amount of USD.)

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Bitcoin Resources

I have a set up a page for links I have discovered or bookmarked about Bitcoin at

postlibertarian.com/bitcoin.

(Disclaimer: Includes a shameless referral link for buying them to try to capitalize on the euphoria, not that I expect anyone to use it and at this point I have not bought any myself.)

I think it’s especially fun to track predictions, many of which are being proved true or false rather quickly. Let me know if you have any more or better resources than the ones I have at the link above.

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Is Cutting Food Stamps “Unchristian”?

Congress is currently debating how much to cut food stamps in the new omnibus Farm Bill, and whenever liberal websites write about it, they invariably generate upvoted comments about how “unchristian” it is to “cut funding for a much needed social safety net program that provides for the least among us,” or quoting Matthew 25 for its condemnation of alleged Christ-followers who among other things did not feed the hungry.

The implication is that conservative Christians who oppose food stamp benefits are hypocrites who oppose their religion’s teachings for the sake of selfish politics. Now I myself have not spared harsh words for conservatives who hypocritically oppose poor welfare programs while supporting welfare for rich farmers, and I also agree that many conservative Christians who vigorously oppose programs like SNAP do not seem to share an equivalent concern for personally trying to help those who rely on them (although I think there are growing numbers who have a more holistic understanding on both accounts). However, I am not convinced that the moral implications of the government program itself are so clear.

First, blanket statements about cuts being “unchristian” force a gray issue of degrees into an unrealistic black and white world of “feeding the poor” vs. “not feeding the poor.” In the absence of deeper reasoning, someone who was more cynical might be forgiven for wondering if such arguments would be trotted out to oppose any possible cuts to any possible level of benefits. But Jesus did not say “I was hungry and you cut back my bread ration by a couple slices”; surely there is some level of benefits that might be so generous that there would be no moral quandary involved in a slight reduction? I think discussing where currently proposed levels and cuts fall on that continuum requires more nuance and depth.

But even if we could assume there is a proper “Christian” level of food stamp benefits that we can identify, there is a more fundamental issue – conflating the distinction between voluntary giving and forced giving. Maybe this matters for the Christian; Jesus said, “I was hungry and you fed me,” not “I was hungry and the Romans taxed you to feed me.” And what about taxpayers supporting these benefits who are not Christians? Jesus definitely didn’t say, “I was hungry and you had the Romans tax your rich neighbor to feed me.” Political opponents of the “Religious Right” seethe whenever they try to “impose their morality” on others via laws about sexual behavior, yet such progressives seem to have no issue imposing others to be more moral in their financial behavior by forcing them to be more generous. Is this really any better?

Finally, even if we in theory decided that the ends of enforcing such generosity was worth the means and we could determine an acceptable level that met everyone who had need, we would still have to deal with the practical effects of reality that might undermine our good intentions. What about the disincentives that are harder to monitor from such a distance? What about the crowding out of private generosity – if my tax dollars are already facelessly, namelessly feeding the poor, am I less motivated to feed them myself (and maybe get to know them and help them improve their situation)? What about the irritating politics that seem to inevitably show up whenever government gets involved, like cities that ban feeding the homeless on your own because they can’t regulate the food you’re giving away? How “Christian” is that?

One response is to argue away the hyper-individualism about forcing one person to give food to another by claiming that citizens of the United States are all part of a community with a long-standing tradition of supporting each other and caring for our neediest members. A decent family looks out for each other; many of those dynamics extend to a church community; why not an entire country, especially for those who consider it a “Christian nation”?

I guess I can see the idea being presented, and I wouldn’t go so far as to say it’s without merit. But I don’t think I’m convinced it applies to that degree. For one thing, it seems a little vague and hand-wavy; how do you decide that a “Christian nation” should mandate feeding its poor but not, say, mandate sex within marriage? For another, the dynamics of a support network within a family or even a church inherently depend on familiarity that allows and even requires expectations, responsibilities, and accountability – the sorts of things that tend to be considered faux pas for humongous top-down government programs that lack the capacity for such local familiarity and even compete with the very organizations and voluntary involvements that can sustain it.

Another possible response would be to ask if there is some contradiction between a support for ending government actions that harm people and a support for cutting government actions that help people. Or, to be more specific, if I want to end government farm subsidies because they end up hurting people, should I not also oppose cutting food stamps because that will end up hurting people also? And if the answer lies in my philosophy about government (the freedom to spend your own money vs. giving people the ability to eat?), is that merely an indictment of the morality of a philosophy that is OK with hurting people? Or does that theoretical question depend on how much programs like SNAP actually help people in practice, especially once we properly consider long-term effects and opportunity costs?

Like most things, it’s a complicated issue. Unfortunately this makes me conflicted about supporting organizations like Bread For The World, which are doing an amazing job lobbying to fix corrupt and harmful food aid practices but also seem to treat any reduction in food stamps as a tragic sin. My own uncertainty is compounded by my regretful (but hopefully transient!) lack of familiarity with food stamp recipients, forcing me to rely on statistics and the dangerous stereotypes by either side. I’m trying to increase my understanding of the opposing arguments, in case I’m missing something important, but I’m not yet convinced that cutting food stamps is “unchristian,” and I definitely don’t think it’s a slam-dunk.

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How Partisans Abuse Polls

Back during the Great American Gun Control Debate of 2013, the liberal side loved to cite polls showing 83-91% of Americans supporting universal background checks. Republicans opposed it even though a majority of even their own constituents appeared to support such a thing. Similarly, during the government shutdown, the progressive side continually trotted out polls about 72% of Americans opposing a shutdown to prevent Obamacare from going into effect. The point is to emphasize how “out of touch” those extreme obstructionist conservative / Tea Party / Republican / GOP types are.

But it should not surprise you that this strategy cuts both ways. You didn’t hear too many Republicans talking about the above polls. But whenever liberal columnists or politicians talked about their shutdown polls, you almost never heard them also talking about the 70% of Americans who opposed raising the debt ceiling. And now, as Rand Paul is trying to leverage Janet Yellen’s confirmation to get a vote on his Audit the Fed bill, all the people who will likely bloviate about how stupid that is will probably not mention the polls that show 74% of Americans wanting to audit the Federal Reserve.

Both sides of the partisan demagoguery are quite adept at cherry-picking the views of the American people to support whatever they’re trying to do at the moment – not that there’s anything groundbreaking in pointing that out. But that does lead to some deeper thoughts about our continually growing democratic republic. Why are a vast majority of the American people continually thwarted in getting the things they tell poll-makers they want, whether it’s background checks or a balanced budget or a rise in the minimum wage?

Well, it’s important to note that most Americans do get what they want regarding a whole host of issues that have been settled for a long time; by definition, it’s only the rare currently contentious issues that get noticed. But what about those?

The conventional answer might be that the constitutional system of checks and balances was built to prevent the tyranny of majority mob rule. This is true, although some of the issues above are not really failing because they run into the Bill of Rights. The cynical answer might be that the corrupt system of lobbying and special interests play an outsized role in determining policy. There is probably truth to this as well, along with messy realities of Americans not really knowing what they want and changing their minds and definitely not pressuring Congress enough to really try to make some of these things happen.

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The Logical Fallacies of Blaming Anti-Vaxxers For Your Whooping Cough

I don’t have strong feelings about vaccinations. My disdain for the smug hubris of the Smart People makes me sympathetic to accusations that they understate the risks, and I do find the alleged huge increase in recommended vaccines a little unsettling. Yet my desire to be reasonable and moderate innoculates me against much of the hysteria, and I am not convinced there is non-cherry-picked causation for the recent increases in autism diagnoses, especially because as far as I understand the whole thing was literally started by a guy who was paid by lawyers to make it up so they could do lawsuits about it.

I generally stay out of the fray due to my lack of knowledge, but the other day I came across a particularly poor anti-anti-vaccination piece that displayed the very logical fallacies it attributed to its opponents, and I couldn’t help but comment. Julia Ioffe, writing in the New Republic, indignantly describes her excruciating experience with pertussis (a.k.a. “whooping cough”), blaming it all on the rising crop of folks who refuse to vaccinate their children against such things.

If you don’t think very hard, her accusation makes sense. “Since the introduction of a pertussis vaccine in 1940,” the disease “has been conquered in the developed world… Until, that is, the anti-vaccination movement really got going in the last few years.” Now cases are on the rise again!

For herd immunity to work, 95 percent of the population needs to be immunized. But the anti-vaccinators have done a good job undermining it. In 2010, for example, only 91 percent of California kindergarteners were up to date on their shots. Unsurprisingly, California had a massive pertussis outbreak.

Oh no! The anti-vaxxers are ruining the herd immunity that has kept us safe since the 1940′s! Now she has the whooping cough; “thanks a lot, anti-vaccine parents.”

But hold on just a minute. It doesn’t surprise me that places “with high concentrations of conscientious objectors” seem more likely to have outbreaks; the un-vaccinated are more likely to get the disease. But does it follow that those un-vaccinated children are also more likely to give that disease to adults like Julia Ioffe?

I don’t think it does. Other journalists have politely pointed out some logistical and technical reasons these children probably aren’t to blame. But the above link doesn’t highlight the fundamental logical flaw in Julia’s accusation that made me suspect she was wrong all along.

Julia asserts that un-vaccinated children are destroying herd immunity. This may be true, but if you’re not careful you’ll think she’s implying that this destroys immunity for everyoneas if 95% of us have been working hard to hold up this giant edifice but now that these 5% are walking way it’s coming crashing down on all of us!

Remember, herd immunity is how the vaccinated protect the small percentage who can’t be vaccinated because they’re too young or weak or whatever. If fewer people are vaccinated, it may make an outbreak more likely, and it may hurt the ones who can’t be vaccinated. But – unless I’m missing something here – it should have no effect on the 90% are still immune!

Is Julia really implying that un-vaccinated children somehow destroyed her own immunity? Of course not. She freely confesses that she was not immune: “I was vaccinated against pertussis as a child, but the vaccine wears off by adulthood, which, until recently, was rarely a problem because the disease wasn’t running rampant because of people not vaccinating their kids.”

But this makes no sense. Julia has subtly switched from claiming that the majority of the population was protecting a minority to claiming that a minority of children are no longer protecting the majority of adultsThe only way to salvage her accusation that these kids gave her whooping cough is to imply that adults like her are both immune (contributing to herd immunity) and not immune (getting the disease) at the same time! But if most adults like her aren’t immune, then there wasn’t any herd immunity in the first place.

If, say, 80% of the population is walking around with worn-off pertussis vaccines, having no immunity to the disease, and some of the 20% who are children stop getting the vaccine, it makes sense that there might be marginally more favorable conditions for more outbreaks, especially if children tend to congregate more in schools and the like. But what right does one not-immune person have to criticize another not-immune person, just because they more recently joined the pack? That’s like blaming your apartment eviction on your roommate because he just stopped paying the rent, even though you haven’t been paying it for years!

A slight decrease in children getting the vaccine can only mean a very slight increase in the total non-immune population, which apparently was probably already a vast majority! How does she know that a small percentage of non-immune children are so much more to blame than the vast majority of non-immune adults all around her?

The only thing left to support Julia’s accusation is that the general resurgence in whooping cough outbreaks seems to correlate with the recent increase in the anti-vaccination movement. But now we’re back to the very correlation-causation fallacy that the anti-vaccination movement is accused of falling for in the first place. It must simply be natural to look for someone to blame, and whether it’s autism or pertussis, the attraction of the fallacy seems to play no favorites.

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How Welfare For Conservative Farmers Kills Ethiopians

I’ve been reading Enough: Why The World’s Poorest Starve In An Age of Plenty. I was afraid it might ignore economic and political realities to express naive wishes that we could all just share more, but it actually dives deep into some of those economic and political realities. Among other things, the authors (two long-time Wall Street Journal correspondents) explain how African farmers were left behind by the Green Revolution.

The book recounts efforts to increase yields for Ethiopian farmers in the early 2000′s, leading to a bountiful crop. But unlike previous successes in Central America and Asia, even that good crop paradoxically led to another famine.

First, there was no infrastructure to store or transport the surplus crop to other parts of the country, so it all came on the market in the same place at the same time. Predictably, prices crashed below the cost of production.

Second, there were no commodities markets to allow farmers to lock in prices for the next season, and third, there were no government subsidies to provide price supports. This all left the farmers both unable and unwilling to plant nearly as much the next year, which just happened to have a drought. Cue severe food shortage and calls for food aid.

But it gets worse. The food aid undermined what was left of the fragile market. The free-marketer in me wanted to believe the power of market incentives must have been inspired somebody in the country to try to transport surplus grain to make a profit. A few pages later, I learned that indeed some traders did, but they were met by “free” food aid that made their efforts worthless. There were even traders trying to store up extra grain to sell later at higher prices, but American food trucks rolled right past their storehouses, cornering the market.

It would be sad enough if the food aid was coming from well-intentioned charities. It would be even worse if it was coming from well-intentioned government programs. But what makes it so incredibly tragic is that the food aid essentially comes from the American farm lobby that needs the government to buy up a good chunk of their product, which it then tries to give away to other countries as good-looking aid.

Part of this story could be used to support government involvement in building infrastructure to help goods move or even subsidizing farmers to keep production high enough in the face of low prices to avoid famine. But the irony is that even any theoretically perfect attempt by the Ethiopian government to improve their country’s agriculture would have been completely undermined by the reality of the American government’s extravagant subsidies to its own farmers. The deeper irony is that these extravagant subsidies go to farmers who are generally staunchly conservative and presumably opposed to other farms of welfare.

Congress is currently working on a new farm bill, which is apparently supposed to have a new Five Year Plan for subsidies and price supports and other goodies. I don’t even know what’s up for debate on those aspects because the only news I can find about the bill involves disagreements about cuts to the food stamp program. Now I have few qualms about cutting food stamp benefits; even the recently reduced-from-a-temporary-increase maximums ($347 for 2) are higher than my wife and I spend on food in an average month. And I find the ubiquitous anecdotes of fraud more convincing than pat reassurances that such fraud is rare and taken care of.

But at least that welfare goes to people who are generally poor and only has costs in money and perhaps poor incentives. The welfare to farmers involves hundreds of thousands of dollars in transfers to already-wealthy farmers that essentially get the government to pay them to haphazardly dump their wares on disrupted foreign markets, exacerbating famines and almost certainly killing many people.

I wrote my Congressman to express my disapproval of such policies, although I don’t know if the farmer part of the bills are even up in the air at this point. I can even see an argument for some farmer subsidies, although I suspect Ethiopia might succeed just fine without them if it had the roads and the commodities markets to help. (In a cruel twist of fate, Enough explains how developed countries pressure developing countries to refrain from using such subsidies anyway, in spite of – or more likely, because of – the fact that they themselves are using far more extravagant subsidies on their own farmers, who understandably don’t like the competition.)

So I think it’s perfectly reasonable for conservatives to highlight the recent doubling of food stamp rolls for the poor and all of the problems that entails, but my patience grows thin for any who do not also highlight the welfare for their own farmers that is quite literally killing even poorer people on the other side of the world.

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