20 YEARS TODAY.  Radley Balko has some thoughts on the anniversary of Tiannenmen Square:

George Orwell said, “If you want a vision of the future, imagine a boot stamping on a human face—forever.” He’s all too right. Last century, an estimated 262 million people were murdered by their own government . That doesn’t include the hundreds of millions more killed by opposing governments during war.

Today ought to be a day to celebrate and promote human liberty, and to remember the abuses governments have heaped upon their subjects over the centuries.

So go find your own metaphor for the government tank pictured above.

Then put yourself in front of it.

THE EFFECTIVENESS of Tim Geithner.

WHAT WAS PLAYBOY THINKING?  Is it really fine to hate on conservative women?  I myself lamented the days when people really used to read Playboy for the articles.  Now they apparently don’t even read it for the porn.

GORDON RAMSAY’S FINANCIAL NIGHTMARES.  Turns out the famously abrasive Scot has gotten himself a wee bit overextended.

ON THE ROAD with the Ford Flex, and our nation’s finest humorist.

GREETINGS AND SALUTATIONS.  As some of you know, I’m the Business and Economics Editor of The Atlantic, the editor of Atlantic Business, the business section of our website, and a blogger in my own right.  I also enjoy travel, fine dinings, and romantic moonlight walks on the beach  . . .

Right now, as you might expect, I’m thinking a great deal about the de-facto nationalization of General Motors, and what this means for America.  Nothing good, I’m pretty sure.  On the other hand, our own Conor Clarke has crunched the numbers on the percentage of American companies owned by the government, and come up with some encouraging results.

A LETTER FROM A READER: “I have a friend who is a public-sector psychiatrist. She tells me that the free samples are the only thing that keeps her patients going. Yes, there are government programs BUT they refuse to pay for the latest medication, because the older stuff (which is less effective and has more side effects) is cheaper. The bean counters for drug costs are different from the bean counters for costs of mental committments, hence the first don’t care that they’re shooting up the costs of the second. Overall it winds up costing more, since a committment is lot more expensive that pills, but welcome to Michael Moore’s idea of a medical system.”

HARMLESS? An oldie but a goodie from Julian Sanchez on moral responsibility and collective action.

MY POST ON PHARMA triggered some emails complaining that drug companies spend more money on advertising than R&D. I blogged about this a while ago:

People who think that there is a gigantic pool of capital that could be sucked out of the pharmaceutical advertising budget are being misled by accounting terminology. People who rail against the pharmaceutical industry are fond of noting that about 20% of industry revenues go to marketing, with the implication that this is all wasted on advertising baldness cures during Golden Girls reruns. But just the top ten firms in the pharmaceutical industry took in about $350 billion in revenue in 2007, 20% of which is $70 billion. The entire US expenditure on advertising by all companies in all media forms totaled something like $150 billion in 2007. I know it seems like every other commercial you see is for Botox, but most advertising is not done by pharmaceutical firms.

In fact, advertising is only a small fraction of that marketing expense. Over half of it expense consists of free samples, the offering of which seems to me like an unalloyed public good.

KAPHTOR ON CUBA “I might add that the US tends to get blamed for both dictators, which just goes to show, in the minds of some people, it doesn’t matter whether we support third rate leaders like Batista, or oppose third rate leaders like Allende, when they fall to a coup within their own country, it’s America’s fault. It also doesn’t matter whether we embargo them or trade like crazy with the subsequent junta, the policy it to blame for the continuing plight of the people. And it doesn’t matter whether we gently show the dictator the door, or shake our fist at him in his dotage, we don’t get much credit.”

THE LOGIC OF COLLECTIVE ACTION Will Wilkinson asks whether it’s useful to refrain flying in order to prevent global warming. Answer: no. Any one consumer’s demand will not impact the level of carbon emitted, just as no consumer who refrains from eating meat will actually cause the amount of meat consumed to fall; the random mismatch in the supply and demand in your local market for chicken will far exceed the number of chickens you might have eaten for any time frame you choose.

So why do it? To create a cultural norm about carbon emissions, or chicken eating, says Will. I have a different intuition, which is that if you want everyone to do something, you are morally bound to do it whether or not they follow suit. I am rethinking that–but I have a sense that those sorts of illogical bourgeois committments to virtue are precisely what allow us to overcome collective action problems without coercion.

MARKETING GONE MAD I defend the pharmaceutical companies a lot here, and with good reason; they produce lifesaving drugs. More please! Nonetheless, one criticism I don’t see made enough is that pharmaceutical companies don’t seem to realize that they can’t sell pills the way you sell detergent. For starters, the things do have side effects that could kill people, so you shouldn’t try to persuade people to take drugs they don’t need. But from a purely selfish perspective, any company that is seen to be mixing the profit motive too closely with our health care will eventually get sentenced to death by the court of public opinion. Derek Lowe has more:

I agree that Merck is still doing some excellent science, as they always have. And they still have a lot of good people there, as they always have. Those aren’t the problems. And they’re still introducing some innovative drugs, arguably more than a lot of other companies, and that’s not the problem, either. These are all are admirable things.

And Vioxx, as I said here at the time, was not, in my opinion, necessarily a bad drug. It and the other COX-2 inhibitors have a real place in the pharmacopeia. The problem is that Merck – or, to put the usual face-saving perspective on it, Merck’s marketing department – oversold the stuff. The prospect of an aspirin-sized market was too much for them to resist, so the company pushed Vioxx just about as hard as they possibly could.

Yep, Vioxx was for all kinds of patients, all kinds of pain, all the time – and under those conditions, whatever side effects were there were finally revealed. It’s the company’s bad luck (not to mention the bad luck of their patients) that those effects were as potentially severe as they were. Even so, the increased risk of a heart attack with Vioxx use is extremely small in any absolute sense. For people with severe pain who can’t get relief with other drugs, I think a COX-2 inhibitor is absolutely worth it.

FORGOTTEN, BUT NOT GONE Ralph Nader declares his candidacy again.

I confess, I’ve never really understood the appeal of figures like Ralph Nader and Ron Paul. I vote for candidates who can’t possibly win–but only when I am genuinely unable to muster a preference between the major-party candidates. Ralph Nader voters clearly have a preference for Democrats over Republicans, and Ron Paul voters, at least those who have graduated from college already, probably mostly prefer the reverse. So why vote for the guy you know can’t win?

I know, I know–you want to move the party in the direction of Truth, Justice, and the American Way. But this is wishful thinking. The reason that those of us on the fringe–libertarians, Greens, socialist workers, or what have you–do not have more representation in government is not because there is some structural problem with the American political system, like a lack of IRV or minority party candidates. The reason we don’t have more representation is that most people just don’t agree with us. Oh, I know you can find a poll that says that voters want national health care, a guaranteed income, a carbon tax, or lower government spending. But voters like lots of things in the abstract. When you get down to the specifics of raising their taxes and restricting their choices, they tend to get balky. The Democrats cannot move significantly closer to Nader, nor the Republicans to Ron Paul, without losing more voters in the center than they gain on the fringe.

That’s not to say that you should have a preference between Democrats and Republicans–frankly, these days, it feels a lot like “So, by which of the plagues of Egypt would you like to be consumed?” But if you do, you should vote for that candidate, rather than making an expressive vote which could put your last choice into office.

IS A CAR GREENER THAN A PEDICAB? John Tierney thinks so.

WHAT’S THE MATTER WITH THE LANCET? Apparently, it is now publishing articles like this:

Rich countries are poaching so many African health workers that the practice should be viewed as a crime, a team of international disease experts say in the British medical journal The Lancet.

The provision of health services in poor countries is a huge problem that the international community should worry about. But not by declaring medical personnel the property of the state, and their migration therefore a form of thievery. There’s been a lot of talk recently about the right of entry for poor people, but even more important is the right of exit. There’s a reason that places which require their citizens to get permission to migrate are generally dreadful places to live.

Update Reader Douglas writes:

In the early “naughties” I thought it ironic that Alan Milburn as health secretary was hiring recruiting companies to bring medical staff from all over the world to the UK, and Clare Short as international development secretary was funding programs to encourage them to stay in their home countries. My tax
dollars at work!

With NHS and nationalized colleges and universities, any lack of medical staff is another example of the harvest not meeting the needs in a centrally planned economy.

I’M WORKING FROM HOME this morning, and the cable news channel is crammed with E*Trade ads along the lines of this one:

It just occurred to me how odd it is to see ads in the style of the late 1990’s “Make a fortune in the stock market with [insert financial services firm here”. The Dow is in the doldrums, and more to the point, you would think that people would be tired of get-rich-quick schemes based on rising asset prices. But perhaps they never do.

THE EYE OF THE BEHOLDER Incidentally, there’s a pretty interesting discussion in the comment thread of Tyler Cowen’s Cuba post at Marginal Revolution. Tyler says:

A simple checklist would start with the question of whether an apologist has visited both the Dominican Republic and Cuba. And a non-communist Cuba could have done much better than the DR. It is a fascinating place for visitors, but right now the quality of life in Cuba isn’t close to that of the DR or for that matter Honduras, the second-biggest Latino mess in the hemisphere. While we’re at it, let’s not forget northern Mexico or even central Mexico. It’s time to stop apologizing for communist dictatorships; are you really so taken with the idea of confiscating property as to overlook decades of tyranny, impoverishment, and human misery? Yes I am familiar with the UN social indicators; I say you need to visit each of these countries, preferably speaking Spanish, and then report back to me.

A couple of commenters claim that they have visited Cuba, and it looks a lot better than Northern Mexico. It’s pretty unambiguously clear to economists that quality of life is higher in Northern Mexico, which is the richest part of a country that has a per-capita GDP three times higher than that of Cuba. So why the difference?

Possibilities:

1) Sample error: they visited the nicest parts of Cuba, and the nastiest part of northern Mexico.

2) The economists are wrong: per-capita GDP is missing important components of quality of life; a more egalitarian distribution of a little income makes people, on average, better off than a much higher GDP unequally distributed.

3) Deep poverty is much more picturesque than moderate poverty. Poor countries have their old colonial buildings still standing, because no one had the money (or the reason) to tear them down and put up something bigger. The countryside is dotted with adorable houses made out of natural materials and natives wearing colorful traditional garb. Animals graze in verdant fields, besides teams of sowers and reapers. Middle income countries are smoggy, and almost everything looks like a cheaper, shabbier version of what you get in the US. Scenic landscapes are despoiled by cinderblock buildings with hideous tin roofs, or trailers; cities are choked with boxy modern buildings that look something like our housing projects. The genteel decay that looks gothic and intriguing on an old Victorian mansion just looks seedy when it’s eating away at badly poured concrete. Affluent Americans underestimate the utility value of things like having personal space, or an automobile.

4) Cuba was relatively wealthy in 1959; it therefore has more of the markers, like old majestic buildings, that we associate with wealth.

Obviously, 2 is true to some degree, but not enough to explain why you would think Cuba is better off than northern Mexico. Northern Mexico could be a lot more unequal than Cuba and still provide a better standard of living to its citizenry. Especially since a lot of big improvements in third world poverty come not from transfer payments, but from fixed infrastructure like electricity, sanitation, and decent roads; higher per-capita GDP simply provides more of those things. I’d put a lot of emphasis on 4, and especially 3; I have no idea what role 1 might play.

HOPELESS IN HAVANA

I wanted to blog something about Cuba last week, but frankly, I was too stunned. “Castro-supporting leftist” is one of those stereotypes that I doubted could be found in the wild any more–until Castro stepped down and the Castro apologists crawled out from under their rocks. “Okay, dictatorship bad, but–universal health care! And he really stood up to Uncle Sam, which is, like, totally awesome!”

Leave aside the extreme dubiousness of the proposition that Castro has, in fact, made his countrymen better off. This is like listening to those conservatives one occasionally encounters in the darker corners of the movement who drop gems such as “Well, I don’t excuse Pinochet, but Chile wouldn’t have a privatized social security system without him.” I’ve never managed a snappy comeback to this because my jaw is always too firmly glued to the floor. Chile’s Social Security system is really pretty great. But it’s not so fantastic that it’s worth purchasing via a reign of terror. Neither is universal health care–particularly when the free clinics are short of medicine and equipment, making them worth about what you pay for their services.

Even more bizarre were arguments along the lines of “Well, Cuba only has about a hundred political prisoners . . . ” Only? That’s a lot of prisoners of conscience for a small island nation. Moreover, it fundamentally misunderstands the problem with dictatorship. The Cuban government doesn’t need to use force to punish any but the most glaring and vocal dissenters, because it has widespread powers of economic coercion. As a Russian co-worker once told me, “Americans have a silly idea about communism. It wasn’t that if you told a joke about Brezhnev, the secret police would arrest you–it was that you’d lose your job. And in Russia, there were no other jobs.” When the government controls your paycheck, your housing, and your ration card, it doesn’t need to put you in jail; you are in jail.

Nor is it much of an excuse that Bautista was awful; dictatorships almost never follow stable governments with sensible leaders who command the support of the majority of the population. Allende was a disaster who was rapidly driving his country down the road to economic ruin–and yet, still not a good reason to staff up the secret police and make his supporters disappear. There are some things for which there is no excuse. Pinochet’s regime was one of them. Castro’s is another.

At any rate, I was reminded to deliver this rant by Mahalanobis, which has a good post on life in Havana.

OAKLAND’S GUN BUYBACK didn’t work out quite as planned: “Fortunately the buyback did manage to get some guns off the street, too bad they were turned in by a bunch of senior citizens from an assisted living facility. ”

THERE IS A GOD Today’s Chris Muir cartoon is a must-read.

CONFESSIONS of a Language Addict: “I don’t know whether Breton will hang on, though I’m not overly optimistic. And if it doesn’t, I’m certainly not prepared to shrug my shoulders and mouth platitudes about the progress of civilization and how it’s all for the best. On the other hand, it’s not all for the worst. Truth be told, without the nationalization and globalization that threaten Breton culture and even make people uneasy about the status of French culture, a kid from rural Michigan would never have seen the Breton culture to mourn its passing – or gone to Brittany to study French!”

SWINGING FROM THEIR OWN PETARD

As longtime readers of the blog know, I’m related to the Swing Voter, aka my mother. Her vote is an infallible indicator of who will win the general election. We had dinner last night, and somewhat to my surprise, The Swing Voter is completely outraged by the New York Times story–she vows to no longer take the Times, nay, not even for the Sunday crossword. She is also now thinking seriously about voting for McCain just to spite the New York Times.

I found myself offering a tepid defense of what really is a pretty indefensible story: to wit, that reporters in cases like this usually know more they can tell, because so many sources refuse to go on the record. The Swing Voter was unmoved. She feels like the Times, and the sort of people who staff the Times, feel that they are entitled to manipulate the election in order to get teh “right” results–that such a story would never have run about a Democrat. No doubt the folks at the Times would strenuously disagree–but it matters that people feel that way. I seriously doubt my mother is the only one.

A CLARIFICATION The debate over whether people want higher taxes on themselves is, I think, slipping back and forth between two debates: a normative and a positive one. I started out with a positive claim:

What most of us are really in favor of is higher taxes on other people. If we wanted higher taxes on ourselves, we’d give the money to charity.

This is simply observationally true. People do not voluntarily give money to the government; polls show that most people support raising taxes on only a small fraction of the electorate. (Yes, yes, they’re rich. Okay, and? The observation still holds: most people want other peoples’ taxes raised, not their own. Whether this desire is justified is irrelevant.)

Henry Farrell, and others, stepped in to complain that I, like, totally didn’t understand that people behave different collectively than individually. This does not, in fact, negate my point; it supports it. Most people are not concerned with remedying the injustice of their own high income; they want large public goods that can only be secured by taking a lot of money from other people. They are willing to kick in their own money if they have to in order to secure the coalition, or because they think this is fair. But they are primarily concerned not with their own contribution, but with that of others. This will not be a surprising observation for anyone who has ever lived in a group house.

This does, however, raise an interesting normative point, into which I have now been sidetracked without quite noticing: should you, if you think that your taxes are too low, voluntarily give that money to the government? The answer, I think, is yes, for reasons that I’ve laid out in previous posts. But that is separate from the positive observation I stand by: people are more interested in levying taxes on others than they are in paying taxes themselves.

MORE ON VOLUNTARY TAXATION

Henry Farrell fires back with the delightfully titled McMuddled:

Umm, no. I sent her Tom Slee’s book, which uses the analogy of shopping at Walmart to demonstrate that vulgar revealed preference arguments do a very bad job of capturing situations of interdependent choice. This is something that is quite clearly laid out in the extended Alex Tabarrok description of Slee’s argument which I quoted in my original post. What’s at stake here isn’t shopping; it’s interdependence. When choices are genuinely interdependent, behaviour doesn’t necessarily tell us anything about the ‘true’ preferences of the actors in question. What it does tell us about, (if we think that actors are behaving rationally) is what actors think the best reply to other actors’ strategies is in a given strategic situation. I’d like it very much if Megan – and others who use similarly poorly-thought-through arguments – would read about and absorb this basic lesson of game theory. It complicates the analysis of social situations in some very useful and fruitful ways.

We seem to be talking at cross purposes. Henry seems to be treating tax revenue, rather than the things it purchases, as the collective action problem.

I concede that there is a collective action problem in providing actual public goods, like the military and statues of politicians on horseback; that is why I am not an anarchist, or even a minarchist. There is also a collective action problem in setting up a tax system in the first place; people will not participate if they think other people are not participating. This is one of the many problems with the budget of Eastern Europe.

But if you think that you have more money than is fair–money that the government should, by rights, be using for some more noble purpose–then there is no collective action problem. You can send the money to the government. They will spend that money on either actual public goods, or things that you think should be paid for out of the common weal. (Or at least, they will do this to exactly the extent that they would if you plus 20 million of your fellow citizens were forced to send them money via a new tax bill.) There is no strategic value to withholding the money from the government; your fellow citizens are not going to say to themselves, “Oh, Henry’s paying extra, so I guess it’s okay if I vote for McCain.” There is no interactivity here. You, alone, can secure more public goods by putting your extra dollars in the treasury–exactly as many public goods as your dollars will secure if you vote for a politician who extracts that tax money, plus the same amount from other similarly affluent people, via the tax code.

I suspect that Henry is trying to get, not at an actual collective action problem, because there isn’t one, but the moral intuition that we appear to have evolved in order to resolve these collective action problems at the small group level. We refuse to contribute unless everyone else does out of the sense that it’s unfair for us to do it alone. But it seems to me that if you believe that there are serious distributional injustices in our society that your extra tax dollars ought to be out there resolving, then those distributional concerns should override your resentment at those you feel are shirking their duty. There is simply no strategic benefit to withholding your extra taxes when the tax base numbers in the millions. Essentially, if you think your taxes should be higher, but won’t contribute unless everyone else also does, then you are saying you are willing to punish the neediest members of society for the sins of its more affluent members.

Which just takes us back to where I was before: people aren’t interested in increasing their own taxes; they’re willing to pay to increase other peoples’ taxes. These are not the same thing.

REGRETS, I HAVE A FEW . . . BUT THEN AGAIN . . . TOO FEW TO MENTION A reader sends along a link to this article from Cato’s Michael Tanner on Obama, saying “As a fellow ‘libertarian tepidly for Obama’, I ask myself more and more if it’s a sound position. This latest Cato makes me cringe a little more . . . ”

Obama’s rhetoric about trade, and his insanely bad economic “patriot act” have certainly given me pause. But do I have buyer’s remorse? No. For starters, I clearly prefer Obama to Hillary as president; on the assumption that there’s a very good chance that Generic Democrat will win the election, the primary outcome suits me.

In the general? I might not vote for Obama; I will not vote for McCain. There are some things more important than the economy, and free speech is among them. Yes, I don’t like Obama’s stance on the Second Amendment, but the difference is, the president has little wiggle room right now on the second, while McCain might do serious further damage to the first, or the fourth. I dislike the steps Obama is willing to take in order to achieve his goals of economic equality. But these are as nothing to the notion that citizens have to be protected from information because Big Daddy John thinks we’ll get bad ideas in our heads.

Moreover, Obama is running left right now to try to win the nomination. I expect he will tack right in the primaries . . . and he will probably have to govern as the fellow in the general election, because that will be his actual mandate.