Note on Critics of Civilization

Shrapnel from a Unabomber attack. Found on Flickr.

Came across this article in my Facebook feed: Children of Ted. The lead in states:

Two decades after his last deadly act of ecoterrorism, the Unabomber has become an unlikely prophet to a new generation of acolytes.

I don’t have a ton of patience for this whole line of reasoning, but it’s trendy enough that I figure I ought to explain why it’s so silly.

Critics of industrialization are far from new, and obviously they have a point. As long as we don’t live in a literal utopia, there will be things wrong with our society. They are unlikely to get fixed without acknowledging them. What’s more, in any sufficiently complex system (and human society is pretty complex), any change is going to have both positive and negative effects, many of which will not be immediately apparent.

So if you want to point out that there are bad things in our society: yes, there are. If you want to point out that this or that particular advance has had deleterious side effects: yes, all changes do. But if you take the position that we would have been better off in a pre-modern, per-industrial, or even pre-agrarian society: you’re a hypocritical nut job.

I addressed this trendy argument when I reviewed Yuval Noah Harai’s Sapiens: A Brief History of Humankind. Quoting myself:

Harari is all-in for the hypothesis that the Agricultural Revolution was a colossal mistake. This is not a new idea. I’ve come across it several times, and when I did a quick Google search just now I found a 1987 article by Jared Diamond with the subtle title: The Worst Mistake in the History of the Human Race. Diamond’s argument then is as silly as Harari’s argument is now, and it boils down to this: life as a hunter-gatherer is easy. Farming is hard. Ergo, the Agricultural Revolution was a bad deal. If we’d all stuck around being hunter-gatherers we’d be happier.

There are multiple problems with this argument, and the one that I chose to focus on at the time is that it’s hedonistifc. Another observation one can make is that if being a hunter-gatherer is so great, nothing’s really stopping Diamond or Harai from living that way. I’m not saying it would be trivial, but for all the folks who sagely nod their head and agree with the books and articles that claim our illiterate ancestors had it so much better… how many are even seriously making the attempt?

The argument I want to make is slightly different than than the ones I’ve made before and is based on economics.

Three fundamental macroeconomic concepts are: production, consumption, and investment. Every year a society produces are certain amount of stuff (mining minerals, refining them, turning them into goods, growing crops, etc.) All of that stuff is eventually used in one of two ways: either it’s consumed (you eat the crops) or invested (you plant the seeds instead of eating them).

From a material standpoint, the biggest change in human history has been the dramatic rise in per-capita production over the last few centuries, especially during the Industrial Revolution. This is often seen as a triumph of science, but that is mostly wrong. Virtually none of the important inventions of the Industrial Revolution were produced by scientists or even my lay persons attempting to apply scientific principles. They were almost uniformly invented by self-taught tinkerers who were experimenting with practical rather than theoretical innovations.

Another way to see this is to observe that many of the “inventions” of the Industrial Revolution had been discovered many times in the past. A good example of this is the steam engine. In “Destiny Disrupted,” Tamim Ansary observes:

Often, we speak of great inventions as if they make their own case merely by existing. But in fact, people don’t start building and using a device simply because it’s clever. The technological breakthrough represented by an invention is only one ingredient in its success. The social context is what really determines whether it will take. The steam engine provides a case in point. What could be more useful? What could be more obviously world-changing? Yet the steam engine was invented in the Muslim world over three centuries before it popped up in the West, and in the Muslim world it didn’t change much of anything. The steam engine invented there was used to power a spit so that a whole sheep might be roasted efficiently at a rich man’s banquet. (A description of this device appears in a 1551 book by the Turkish engineer Taqi al-Din.) After the spit, however, no other application for the device occurred to anyone, so it was forgotten.

Ansary understands that the key ingredient in whether or not an invention takes off (like the steam engine in Western Europe in the 18th century) or dies stillborn (like the steam engine in the 15th century Islamic world) is the social context around it.

Unfortunately, Ansary mostly buys into the same absurd notion that I’m debunking, which is that all this progress is a huge mistake. According to him, the Chinese could have invented mechanized industry in the 10th century, but the benevolent Chinese state had the foresight to see that this would take away jobs from its peasant class and, being benevolent, opted instead to keep the Chinese work force employed.

This is absurd. First, because there’s no chance that the Chinese state (or anyone) could have foreseen the success and conseqeunces of mechanized industry in the 10th century and made policy based on it even if they’d wanted to. Second, because the idea that it’s better to keep society inefficient rather than risk unemployment is, in the long run, disastrous.

According to Ansary, the reason that steam engines, mechanized industry, etc. all took place in the West was misanthropic callousness:

Of course, this process [modernization] left countless artisans and craftspeople out of work, but this is where 19th century Europe differed from 10th century China. In Europe, those who had the means to install industrial machinery had no particular responsibility for those whose livelihood would be destroyed by a sudden abundance of cheap machine-made goods. Nor were the folks they affected down-stream–their kinfolk or fellow tribesmen–just strangers who they had never met and would never know by name. What’s more, it was somebody else’s job to deal with the social disruptions caused by widespread unemployment, not theirs. Going ahead with industrialization didn’t signify some moral flaw in them, it merely reflected the way this particular society was compartmentalized. The Industrial Revolution could take place only where certain social preconditions existed and in Europe at that time they happened to exist.

Not a particular moral flaw in the individual actors, Ansary concedes, but still a society that was wantonly reckless and unconcerned with the fate of its poor relative to the enlightened empires that foresaw the Industrial Revolution from end-to-end and declined for the sake of their humble worker class.

The point is that when a society has the right incentives (I’d argue that we need individual liberty via private property and a restrained state alongside compartmentalization) individual innovations are harnessed, incorporated, and built upon in a snowball effect that leads to ever and ever greater productivity. A lot of the productivity comes from the cool new machines, but not all of it.

You see, once you have a few machines that give that initial boost to productivity, you free up people in your society to do other things. When per-capita production is very, very low, everyone has to be a farmer. You can have a tiny minority doing rudimentary crafts, but the vast majority of your people need to work day-in and day-out just to provide enough food for the whole population not to starve to death.

When per-capita production is higher, fewer and few people need to do work creating the basic rudiments (food and clothes) and this frees people up to specialize. And specialization is the second half of the secret (along with new machines) that leads to the virtuous cycle of modernization. New tools boost productivity, this frees up new workers to try doing new things, and some of those new things include making even more new tools.

I’m giving you the happy side of the story. Some people go from being farmers to being inventors. I do not mean to deny but simply to balance the unhappy side of the story, which is what some people go from being skilled workers to being menial labors if a machine renders their skills obsolete. That also happens, although it’s worth noting that the threat to modernization is generally not to the very poorest. Americans like to finger-wag at “sweatshops”, but if your alternative is subsistence farming, then even sweatshops may very well look appealing. Which is why so many of the very poorest keep migrating from farms to cities (in China) and why the opposition to modernization never comes from the poorest classes (who have little to lose) but from the precarious members of the middle class (who do).

So my high-level story of modernization has a couple of key points.

  1. If you want a high standard of living for a society, you need a high level of per capita production.
  2. You get a high level of per capita production through a positive feedback loop between technological innovation and specialization. (This might be asymptotic.)
  3. The benefits of this positive feedback loop include high-end stuff (like modern medicine) and also things we take for granted. And I don’t mean electricity (although, that, too) but also literacy.
  4. The costs of this positive feedback loop include the constant threat of obsolescence for at least some workers, along with greater capacity to destroy on an industrial scale (either the environment or each other).

So the fundamental question you have to ask is whether you want to try and figure out how to manage the costs so that you can enjoy the benefits, or whether the whole project isn’t worth it and we should just give up and start mailing bombs to each other until it all comes crashing down.

The part that really frustrates me the most, that part that spurred me to write this today, is that folks like Ted Kaczynski (the original Unabomber) or John Jacobi (the first of his acolytes profiles in the New York Mag story) are only even possible in a modern, industrialized society.

They are literate, educated denizens of a society that produces so much stuff that lots of its members can survive basically without producing much of all. We live in an age of super abundance, and it turns out that abundance creates it’s own variety of problems. Obesity is one. Another, apparently, is a certain class of thought that advocates social suicide.

Because that’s what we’re talking about. As much as Diamond and Harai are just toying with the notion because it sells books and makes them look edgy, folks like John Jacobi or Ted Kaczynski would–if they had their way–bring about a world without any of the things that make their elitist theorizing possible in the first place.

It is a great tragedy of human nature that the hard-fought victories of yesterday’s heroic pioneers and risk-takers are casually dismissed by the following generation who don’t even realize that their apparent radicalism is just another symptom of super-abundance.

They will never succeed in reducing humanity to a pre-industrial state but they–and others who lack the capacity to appreciate what they’ve been given–can make enough trouble that the rising generation will, we hope, have a more constructive, aspirational, and less-suicidal frame of mind.

What Anti-Poverty Programs Actually Reduce Poverty?

According to the Tax Policy Center,

The earned income tax credit (EITC) provides substantial support to low- and moderate-income working parents, but very little support to workers without qualifying children (often called childless workers). Workers receive a credit equal to a percentage of their earnings up to a maximum credit. Both the credit rate and the maximum credit vary by family size, with larger credits available to families with more children. After the credit reaches its maximum, it remains flat until earnings reach the phaseout point. Thereafter, it declines with each additional dollar of income until no credit is available (figure 1).

By design, the EITC only benefits working families. Families with children receive a much larger credit than workers without qualifying children. (A qualifying child must meet requirements based on relationship, age, residency, and tax filing status.) In 2018, the maximum credit for families with one child is $3,461, while the maximum credit for families with three or more children is $6,431.

…Research shows that the EITC encourages single people and primary earners in married couples to work (Dickert, Houser, and Sholz 1995; Eissa and Liebman 1996; Meyer and Rosenbaum 2000, 2001). The credit, however, appears to have little effect on the number of hours they work once employed. Although the EITC phaseout could cause people to reduce their hours (because credits are lost for each additional dollar of eanings, which is effectively a surtax on earnings in the phaseout range), there is little empirical evidence of this happening (Meyer 2002).

The one group of people that may reduce hours of work in response to the EITC incentives is lower-earning spouses in a married couple (Eissa and Hoynes 2006). On balance, though, the increase in work resulting from the EITC dwarfs the decline in participation among second earners in married couples.

If the EITC were treated like earnings, it would have been the single most effective antipoverty program for working-age people, lifting about 5.8 million people out of poverty, including 3 million children (CBPP 2018).

The EITC is concentrated among the lowest earners, with almost all of the credit going to households in the bottom three quintiles of the income distribution (figure 2). (Each quinitle contains 20 percent of the population, ranked by household income.) Very few households in the fourth quinitle receive an EITC (fewer than 0.5 percent).

Recent evidence supports this view of the EITC. From a brand new article in Contemporary Economic Policy:

First, the evidence suggests that longer-run effects[1]”Our working definition of “longer run” in this study is 10 years” (pg. 2).[/ref] of the EITC are to increase employment and to reduce poverty and public assistance, as long as we rely on national as well as state variation in EITC policy. Second, tighter welfare time limits also appear to reduce poverty and public assistance in the longer run. We also find some evidence that higher minimum wages, in the longer run, may lead to declines in poverty and the share of families on public assistance, whereas higher welfare benefits appear to have adverse longer-run effects, although the evidence on minimum wages and welfare benefits—and especially the evidence on minimum wages—is not robust to using only more recent data, nor to other changes. In our view, the most robust relationships we find are consistent with the EITC having beneficial longer-run impacts in terms of reducing poverty and public assistance, whereas there is essentially no evidence that more generous welfare delivers such longer-run benefits, and some evidence that more generous welfare has adverse longer-run effects on poverty and reliance on public assistance—especially with regard to time limits (pg. 21).

Let’s stick with programs that work.

Do Tariffs Cancel Out the Benefits of Deregulation?

In June, the Council of Economic Advisers released a report on the economic effects of the Trump administration’s deregulation. They estimate “that after 5 to 10 years, this new approach to Federal regulation will have raised real incomes by $3,100 per household per year. Twenty notable Federal deregulatory actions alone will be saving American consumers and businesses about $220 billion per year after they go into full effect. They will increase real (after-inflation) incomes by about 1.3 percent” (pg. 1).

David Henderson (former senior economist in Reagan’s Council of Economic Advisers) writes, “Do the authors make a good case for their estimate? Yes…I wonder, though, what the numbers would look like if they included the negative effects on real income of increased restrictions on immigration and increased restrictions on trade with Iran. (I’m putting aside increased tariffs, which also hurt real U.S. income, because tariffs are generally categorized as taxes, not regulation.)”

But what if we did include the tariffs? A recent policy brief suggests that the current savings from deregulation will actually be cancelled out by the new tariffs. As the table shows below, the savings due to deregulation stack up to $46.5 billion as of June. However, the tariffs imposed between January 2017 and June 2019 rack up to a dead loss of $13.6 billion. By the end of 2019, however, the dead loss will rack up another $32.1 billion. If the currently planned tariffs are put into effect on top of the already existing ones, then we’re looking at a dead loss of up to $121.1 billion.

Maybe if economists start putting clap emojis in their work, people will finally get that tariffs aren’t good for the economy.

Demographics & Inequality: 2018 Edition

Every year, economist Mark Perry draws on Census Bureau reports to paint of picture of the demographics of inequality. Looking at 2018 data, he constructed the following table:

Once again, he concludes,

Household demographics, including the average number of earners per household and the marital status, age, and education of householders are all very highly correlated with American’s household income. Specifically, high-income households have a greater average number of income-earners than households in lower-income quintiles, and individuals in high-income households are far more likely than individuals in low-income households to be well-educated, married, working full-time, and in their prime earning years. In contrast, individuals in lower-income households are far more likely than their counterparts in higher-income households to be less-educated, working part-time, either very young (under 35 years) or very old (over 65 years), and living in single-parent or single households.

The good news about the Census Bureau is that the key demographic factors that explain differences in household income are not fixed over our lifetimes and are largely under our control (e.g., staying in school and graduating, getting and staying married, working full-time, etc.), which means that individuals and households are not destined to remain in a single income quintile forever. Fortunately, studies that track people over time find evidence of significant income mobility in America such that individuals and households move up and down the income quintiles over their lifetimes, as the key demographic variables highlighted above change, see related CD posts herehere and here. Those links highlight the research of social scientists Thomas Hirschl (Cornell) and Mark Rank (Washington University) showing that as a result of dynamic income mobility nearly 70% of Americans will be in the top income quintile for at least one year while almost one-third will be in the top quintile for ten years or more (see chart below).

What’s more, Perry points out elsewhere that the new data demonstrate that the middle class is shrinking…along with the lower class. Meanwhile, the percentage of high-income households has more than tripled since 1967:

In short, the percentage of middle and lower-income households has declined because they’ve been moving up.

The Paradox of Trade Liberalization

From a brand new study in the Journal of International Economics:

Using household survey data for 54 low and middle income countries harmonized with trade and tariff data, this paper offers a quantitative assessment of the income gains and inequality costs of trade liberalization and the potential trade-off between them.

A stylized yet comprehensive model that allows for a rich range of first-order effects on household consumption and income is used to quantify welfare gains or losses for households in different parts of the expenditure distribution. These welfare impacts are subsequently explored by deploying the Atkinson social welfare function that allows us to decompose inequality adjusted gains into aggregate gains and equality (distributional) gains.

Liberalization is estimated to lead to income gains in 45 countries in our study, and to income losses in 9 countries. The developing world as a whole would enjoy gains of about 1.9% of real household expenditures, on average. These income gains are negatively correlated with equality gains, such that liberalization typically entails a trade-off between average incomes and income inequality. In fact, such trade-offs arise in 45 out of 54 countries, and are primarily the result of trade exacerbating income inequality. By contrast, consumption gains tend to be more evenly spread across households.

While trade-offs are prevalent, our findings also suggest that liberalization would be welfare enhancing in the vast majority of countries in our study: in a large part of the developing world, the current structure of tariff protection is inducing sizable welfare losses. Explaining what drives these patterns is beyond the scope of this paper but an interesting avenue for future research (pg. 16).

I’m sure this offers a bit of a conundrum for those who have conflated concerns over inequality with caring for the poor.

Does Trade Promote Economic Growth?

Earlier this year, I did a literature review for class on the effects of trade on poverty. One section in particular focused on the link between trade and growth. A new Peterson Institute working paper by Douglas Irwin performed a similar service and I’m disappointed that I hadn’t come across it in time for my own paper.

So what are his conclusions?

The findings from recent research have been remarkably consistent. For developing countries that are behind the technological frontier and have significant import restrictions, there appears to be a measurable economic payoff from more liberal trade policies. As table 1 reports, a variety of studies using different measures of policy have found that economic growth is roughly 1.0–1.5 percentage points higher than a benchmark after trade reform. Several studies suggest that this gain cumulated to about 10–20 percent higher income after a decade. The effect is heterogeneous across countries, because countries differ in the extent of their reforms and the context in which reform took place (pg. 21).


Glad to know my own research was on point.

What Would the World Look Like Without FDI?

What would happen if foreign direct investment (FDI) simply disappeared? Or, more specifically, what would “a hypothetical world without outward and inward FDI from and to low- and lower-middle-income countries” look like? A brand new study tries to quantify this hypothetical. They find,

On average, the gains from FDI in the poorer countries in the world amount to 7% of world’s trade in 2011, the year of our counterfactual analysis. Second, all countries lose from the counterfactual elimination of FDI in the poorer countries.  Third, the impact is heterogeneous. Poorer countries lose the most, but the impact varies widely even within this group – some lose over 50% and some very little. The impact on countries in the rest of the world is significant as well. Some countries lose a lot (e.g. Luxembourg, Singapore, and Ireland) while others (such as India, Ecuador, and Dominican Republic) lose less. Pakistan and Sri Lanka actually see an increase in their total exports due to the elimination of FDI.

Figure 1 Percentage change in total exports from eliminating outward and inward FDI to and from low- and lower-middle-income countries

There’s more:

On average, the gains from FDI amount to 6% of world’s welfare in 2011. Further, all countries in the world have benefited from FDI, but the effects are very heterogeneous. The directly affected low- and lower-middle-income countries see welfare changes up to over 50% (Morocco and Nigeria), while some of the remaining 68 countries, such as Ecuador, Turkmenistan, and Dominican Republic are hardly affected. A higher country-specific production share of FDI leads to larger welfare losses, all else equal.  Intuitively, a larger importance of FDI in production leads to larger welfare losses when restricting FDI. A larger net log FDI position leads to larger welfare losses. Intuitively, if a country has more inward than outward FDI, restricting FDI will lead to larger welfare losses, as FDI is complementary to other production factors and therefore overall income increases more than FDI payments.

Figure 2 Welfare effects of eliminating outward and inward FDI to and from low- and lower-middle-income countries (%)

The authors conclude, “Overall, the analysis reveals that FDI is indeed an important component of the modern world economic system. The results suggest positive payoffs to policies designed to facilitate FDI, particularly those concerning protection of intellectual property.”

How Does Occupational Licensing Impact Immigrants?

From a recent working paper out of the Center for Growth & Opportunity:

We use two sources of data—the Current Population Survey (CPS) and the Survey of Income and Program Participation (SIPP)—to explore the differences in occupational licensing between natives and immigrants. Each dataset provides unique advantages, allowing us to paint a clearer picture of how occupational licensing differs between natives and immigrants than would be possible by using either dataset alone.

Though the CPS and SIPP differ in some key ways, where comparable our results are quite similar between the two datasets. We find that immigrants are significantly less likely to have an occupational license than natives; this gap is larger for men than for women and is especially large for the highest education level. The wage premium from having a license may not differ between natives and immigrants when controlling for English language ability, suggesting that though immigrants are less likely to have a license, they seem to benefit at least as much as natives from having one. Licensed workers tend to work more hours per week than otherwise similar unlicensed workers, so the wage premium understates the earnings premium.

Using the CPS, we find that the native/immigrant licensing gap declines with years since migration, consistent with immigrants assimilating toward natives. We also find large differences in licensing rates by region of origin; in particular, women from the Caribbean, Southeast Asia, and Africa have a higher probability of having a license than otherwise similar natives.

Using the SIPP, we find that a lack of English language proficiency lowers the probability that an immigrant has a license, even when controlling for other individual characteristics such as education level. Utilizing the richer set of occupational licensing questions available in the SIPP, we find no evidence to suggest that license characteristics differ between natives and immigrants, and thus we find no evidence that natives and immigrants are acquiring different types of licenses.

Our results suggest that occupational licensing disproportionately affects immigrants, especially male immigrants, those lacking English proficiency, and the most educated group. Indeed, insofar as occupational licensing helps to protect incumbent (largely native) workers in an occupation from competition, it is unsurprising that immigrants are particularly impacted (pg. 18-19).

They also find, “Skill-based immigration would favor immigrants with high levels of education. Our results indicate that it is precisely this group that exhibits the largest licensing attainment gap with natives. Increasing the flow of immigrants from this education level may lead to substantial occupational mismatch for this group of immigrants if they face difficulty in acquiring licenses needed to work in their pre-migration occupations” (pg. 20).

Regressive regulations like this are low-hanging fruit that can easily be changed.

More on Free Trade

From Art Carden over at Forbes:

A new paper forthcoming in the journal American Economic Review: Insights estimates the effect of trade with China on American consumers and shows us what we stand to lose if we don’t end the trade war.

In “Estimating US Consumer Gains from Chinese Imports,” economists Liang Bai of the University of Edinburgh and Sebastian Stumpner of the University of Montreal and the Bank of France study price data from the Nielsen Homescan panel to find that trade with China reduced the prices Americans paid for consumer tradables by 0.19 percentage points per year. You can download a draft of the paper here.

Bai and Stumpner argue that about a third of the consumers’ gain from trade with China comes from greater product variety while the other two-thirds come from lower prices for the goods people were already buying.

Another way to put it is that inflation was lower–prices didn’t rise as rapidly–because of trade with China…The direction of the result won’t surprise economists, who have argued for centuries that international trade helps a country’s citizens by making it possible for them to get more with every hour of their hard-earned labor.

Scott Lincicome of the Cato Institute weighs in as well:

Trade and globalization have provided undeniable economic benefits for the vast majority of American families, businesses, and workers. Most obvious are the consumer gains. Several recent studies have found that freer trade with China, for example, has generated, through increased competition and lower prices, hundreds of billions of dollars in U.S. consumer benefits — benefits that, according to economists Xavier Jaravel and Erick Sager, are the equivalent of giving every American “$260 of extra spending per year for the rest of their lives.” Consumer gains from imports, in general tilted toward the poor and the middle class, are especially tilted toward them when it comes to goods that are made in China and sold at stores like Walmart. The magnitude of such benefits also debunks the well-worn myth that free trade is mainly about cheap T-shirts. Indeed, trade’s consumer surplus is a big reason that Americans today work far fewer hours to own far better essentials than at any prior time in U.S. history.

Then there are trade’s overall benefits for the economy. A 2017 Peterson Institute paper calculated the payoff to the United States from expanded trade between 1950 and 2016 to be $2.1 trillion, increasing U.S. GDP per capita and per household by around $7,000 and $18,000 — with benefits, again, disproportionately accruing to households in the bottom income decile. The U.S. International Trade Commission, moreover, found in 2016 that U.S. bilateral and regional trade agreements such as NAFTA generated small but significant annual increases in GDP, as well as in employment and real wages among highly skilled and less skilled American workers. As the American Enterprise Institute’s Michael Strain has noted, trade-skeptical populists who downplay this impressive macroeconomic boost ignore that, as our current economic moment attests, a small bit of extra GDP growth can mean big things for lower-wage, lower-skill workers in terms of employment and possible government assistance.

Trade and globalization also support American companies and workers, even in manufacturing. The Commerce Department, for example, has estimated that almost 11 million jobs depended on exports of U.S. goods and services in 2016, and foreign direct investment in the United States — the necessary flip side of our oft-maligned trade deficit — supported millions more. Meanwhile, American companies that adapt and thrive in today’s economy most often do so by making use of imports and global supply chains. The San Francisco Fed, for instance, recently estimated that almost half of U.S. imports are intermediate products purchased by American manufacturers to make globally competitive finished goods; the country’s biggest exporters, therefore, are also its biggest importers. Numerous other studies have found that the vast majority of the value of an American company’s assembled-abroad product (such as an iPhone, assembled in China) accrues to the U.S. company, including its workers and shareholders — not to the place of final assembly (despite what a gross bilateral trade balance, which attributes an import’s full cost to its final export source, might say).

…My 2017 survey of the academic literature on over a century of U.S. protectionism pre-Trump showed that, with very few exceptions, it imposed immense economic costs on American consumers, workers, and companies (more than $600,000 per year for every U.S. job created) while also failing to open foreign markets or resuscitate protected American firms and workers over the longer term. In case after case, the jobs still disappeared, and the companies either went bankrupt or came back to the government for more help. And it’s happening again: Though American steel consumers are paying much higher prices than their global competitors, U.S. steel-industry stocks lag far behind the S&P 500 index. For these and related reasons, economists of the Left, Right, and center continue to oppose tariffs overwhelmingly (93 percent of a recent IGM Economic Experts Panel of dozens of top economists, to be exact), and they support freer trade and globalization.

Say again: free trade is good.

CBO on the Minimum Wage

I’ve talked about the minimum wage a lot here at Difficult Run. The following comes from the Congressional Budget Office’s July report. It pretty much captures one of the major trade-offs of minimum wage hikes.

The people who get the wage increases will obviously be better off. Not so for the 1.3 million (at $15 an hour) who lose their jobs.

So the question boils down to this: are we willing to make that trade?