Henry

“Jordan Barab”:http://www.nathannewman.org/laborblog/archive/003203.shtml writes about a quite appalling story at Nathan Newman’s blog today.

bq. Last week federal immigration officials took into custody dozens of undocumented workers from Mexico, Honduras, El Salvador and Ukraine at the Seymour Johnson Air Force Base in Goldsboro, North Carolina. How did they lure them into the trap? None of your business, says the federal Bureau of Immigration and Customs Enforcement (ICE). “We’re not going to discuss how we do our business,” Sue Brown, an immigration and customs spokeswoman in Atlanta, said last Thursday.

bq. However, Allen McNeely, head of the state Labor Department’s Occupational Safety and Health division, said the workers were lured into the arrest by a flier announcing a mandatory Occupational Safety and Health Administration meeting.

bq. McNeely said one of the contractors who employed the immigrants faxed him a copy of the flier. It is printed in English and Spanish. It tells all contract workers to attend an OSHA briefing at the base theater and promises free coffee and doughnuts. … “Federal immigration officials say they have the right to round up illegal immigrants in any manner they see fit — even if it means impersonating Occupational Safety and Health Administration officials.”

Jennifer Gordon wrote an “article”:http://bostonreview.net/BR30.3/gordon.html a few months ago which explains exactly how badly undocumented workers are screwed under the existing system of workplace safety regulation. They rarely know their rights, are reluctant to complain about abuses for fear of deportation, and as a result are killed or maimed far more frequently in workplace accidents than they should be. This utterly, utterly shameful operation will make undocumented workers even less likely to contact OSHA about workplace safety than in the past – and as a result will lead to more cripplings and deaths.

Update: See also this “NYT story”:http://www.nytimes.com/2005/07/13/national/13janitor.html?pagewanted=1&ei=5094&en=a5044eb5a15dd403&hp&ex=1121227200&partner=homepage

Kelly Bedard and Olivier Deschênes have an “article”:http://www.eco.utexas.edu/papers/sem20050422a.pdf forthcoming in the _American Economic Review_ providing strong statistical evidence that service in the US military is bad for your health – but not (only) for the obvious reasons. Even apart from combat mortality, old soldiers tend to die younger; 2 million veterans from the 1920-1939 cohort (generation) died prematurely. The effects of this, measured in terms of “years of potential life lost,” were roughly as bad as those of the total number of combat deaths in World War II and the Korean War combined. Why so many dead? The authors’ evidence points to one key factor: smoking. During World War II and the Korean war, soldiers were issued cigarette rations, and could buy more cigarettes at subsidized prices. Tobacco companies donated cigarettes to the troops, in part so that soldiers would get hooked on their product, building a long term customer base. Excess veteran mortality after the age of 40 is most pronounced for lung cancer and heart disease, both of which are strongly linked to smoking. Bedard and Deschênes calculate that 36-79% of the excess veteran deaths through lung cancer and heart disease can be attributed to military-induced smoking for veterans from World War II and Korea. The military no longer supplies cigarettes to soldiers as part of their rations. However, tobacco products continue to be sold at subsidized prices at army base PXes. As Bedard and Deschênes argue, this is very bad policy indeed.

(thanks to “Erik”:http://home.gwu.edu/~voeten/ for the link).

David Kopel mounts a “questionable defence”:http://www.volokh.com/archives/archive_2005_07_03-2005_07_09.shtml#1120802297 of the changes in gun law that “Silvio Berlosconi” is trying to bring through in Italy. Kopel likes the new law, which by his account allows people to shoot down burglars, even if the burglars don’t present any immediate threat. For him, this is superior to the current law, which requires that defence be “proportional” to aggression (Kopel provides us with a couple of abstract hypotheticals of how the proportionality test might be misapplied, but doesn’t tell us whether these hypotheticals reflect decisions taken by actual Italian courts; I strongly suspect that they don’t). Still, the truly distasteful part of the post is his closing line:

bq. Given Italy’s status as a prime target of al Qaeda, further reform of Italian laws, to enable decent people to protect themselves against sudden attacks, would be eminently sensible.

What exactly would laws of this kind do to stop the kinds of attacks that al Qaeda operatives actually mount in real-world Europe, as opposed to the abstract Europe which exists in the mind of American policy wonks with too much time on their hands? How precisely are they likely to deter terrorists who put bombs with timers on trains? This seems to me to be a rather bizarre and entirely gratuitous effort by Kopel to make his argument attractive by linking it to a current tragedy and future threat to which gun use law is more or less irrelevant.

May be a good idea to have a thread for announcements from anyone who either (a) is in London, has friends who are likely to read CT, and wants to reassure people that they’re safe, or (b) has a friend in London whom they have news of.

“Steve Bainbridge”:http://www.professorbainbridge.com/2005/07/inside_informat.html makes an interesting argument about prediction markets.

bq. On the one hand, just as Henry Manne justified insider trading in stock markets by arguing that it improved the accuracy of stock market prices, bets by knowledgeable insiders will significantly enhance the predictive power of markets like the TradeSports contracts. Indeed, given the limits on the power of insiders to affect prices in the stock market, the effect is likely to be much stronger in prediction markets, where the ratio of activity by informed traders to that of uninformed ones is likely to be much higher than in stock markets. … On the other hand, in commercial prediction markets like TradeSports contracts, the proprietor of the market presumably has an incentive to eliminate informed insider trading. If there’s a fairly high probability that you’d be betting against somebody with inside information, who thus can’t lose, would you bet? Me neither.

Bainbridge’s argument here reminds me a little of this old “post”:https://crookedtimber.org/2003/08/05/hayekian-markets-reconsidered/ of Dan’s, which argues among other things that Hayek’s notion of the market as a knowledge-creating entity sits rather uneasily with more standard economic arguments such as efficient-market theory. But Bainbridge’s argument is somewhat different and points to a different tradeoff. If you want to use markets to make the best predictions possible on the basis of available information, you’ll want to allow insider trading, which is, by definition, trading by those with valuable hidden information. But this means that you’re likely to lose liquidity by driving out ordinary punters who don’t want to be fleeced by those in the know. And without ordinary punters, insider traders have no incentive to transact (the only reason that they would want to transact is to fleece suckers who know less than they do). The only way in which this contradiction can really be resolved is if there’s a supply of suckers out there, who are willing to make bets against people who are better informed than they are. As Bainbridge points out, this is a condition that can be satisfied. But by and large, it’s only satisfied when people have extraneous reasons to make a bet (they enjoy a flutter). Bets that aren’t “fun,” or otherwise attractive in some way aren’t likely to attract suckers. Thus, they’ll have low liquidity, and not be very useful as a source of information (this seems to be borne out by the empirics; as the authors of “this paper”:http://faculty-gsb.stanford.edu/zitzewitz/Research/Five%20Questions.pdf note, “as the wonkishness of the contract rises, however, volume and liquidity falls rapidly.”) Thus, even apart from the objections that Dan and John Q. have raised in past posts, prediction markets aren’t likely to be very useful for a very wide variety of important policy issues.

David Glenn has an “interesting article”:http://chronicle.com/free/v51/i44/44a01201.htm today about Glyn Morgan’s new “book”:http://www.pupress.princeton.edu/titles/8082.html on the justifications for EU integration. I’ve just started reading the book (it begins very nicely). Morgan sets out to discomfit both euro-skeptics and most euro-enthusiasts by making a straightforward argument for an European super-state rather than the sort of post-sovereign multilevel fudge preferred by many pro-EU types.

bq. Mr. Morgan invites his reader to imagine that foreign-based terrorists someday launch large-scale attacks in Europe, and that the United States cannot offer much help, because its own military is bogged down in China or Iraq or elsewhere. Without a unitary state and a unified military, he writes, “there would be little that European leaders could — other than fulminate about U.S. isolationism — do about it.” … “Europeans need to confront this brutal choice,” the British-born Mr. Morgan says. “Are they going to remain weak and dependent and maintain their decentralized government units, or are they going to try to become players in the world? And if they’re going to become players in the world, they need to centralize. I think presenting that brutal choice is profoundly annoying to both sides of the debate.”

Morgan will also be doing an “online colloquium”:http://chronicle.com/colloquy/2005/07/europe/ at the Chronicle on Thursday. I’ll be posting on this more when I finish the book.

An indubitable Airmiles “classic”:http://www.nytimes.com/2005/07/01/opinion/01friedman.html?ex=1277870400&en=342cb2bd52a44f4e&ei=5090&partner=rssuserland&emc=rss :

bq. There is a huge debate roiling in Europe today over which economic model to follow: the Franco-German shorter-workweek-six-weeks’-vacation-never-fire-anyone-but-high-unemployment social model or the less protected but more innovative, high-employment Anglo-Saxon model preferred by Britain, Ireland and Eastern Europe. It is obvious to me that the Irish-British model is the way of the future, and the only question is when Germany and France will face reality: either they become Ireland or they become museums. That is their real choice over the next few years – it’s either the leprechaun way or the Louvre.

Now those familiar with leprechauns will recall that they’re untrustworthy little bastards, inclined to evaporate along with the pot of gold when given half a chance. The same is true of dodgy generalizations constructed around trite metaphors, especially when they’re employed by someone who clearly doesn’t know what he’s talking about. We’ll leave aside the basic claim that a small post-industrial economy provides the right model for two largish economies with large industrial bases, and concentrate on the glaring material errors in Friedman’s account. Point One: Ireland is _not_ an exemplar of the “Anglo Saxon model.” For evidence, take a look at this recent “paper”:http://www.u.arizona.edu/~lkenwor/institutionalcoherence.pdf by Lane Kenworthy, which argues convincingly that Ireland doesn’t fit well into either the Anglo-Saxon ‘liberal market economy’ or Rhenish ‘coordinated model economy’ models. Point Two: Ireland is an _especially_ poor fit with the Anglo-Saxon model in the area of labour market policy, a fact which rather undercuts the argument Friedman is trying to make. Again, Dr. Kenworthy:

bq. beginning in the late 1980s and continuing throughout the 1990s, [Ireland] has had a highly coordinated system of wage setting (Baccaro and Simoni 2004). In addition, Ireland has higher levels of employment and unemployment protection than other liberal market economies and longer median job tenure (Estevez-Abe et al. 2001, pp. 165, 168, 170).

Finally, there’s a very strong argument to be made that it is _exactly_ the non-Anglo-Saxon features of the Irish economy – and in particular the “systematized concertation”:http://www.ucis.pitt.edu/cwes/papers/work_papers/ODonnell.pdf between trade unions, management, government and other social actors – that was at the heart of Ireland’s economic success in the 1990’s. This system, unbeloved of free market economists, set the broad parameters for wage and income tax policy, and provided Ireland with the necessary stability for economic growth. It’s now coming under strain thanks to growing inequality in Irish society, but that’s another story. As already noted, Ireland isn’t necessarily the best example for big industrial economies to follow; but insofar as it does set an example, it isn’t the kind of example that Friedman thinks it is.

Quite wonderful news; Kelly Link’s short story collection, “Strangers Things Happen,” is being “released under Creative Commons”:http://www.lcrw.net/kellylink/sth/index.htm to celebrate the launch of her new collection, “Magic for Beginners”:http://www.lcrw.net/kellylink/mfb/index.htm. I can’t even start to say how great this is; Link is one of the best short story writers of her generation, and I generally keep a couple of copies of “Stranger Things” in the house so that I can press spares on likely-sounding visitors. The stories make you want to proselytize. I’d recommend starting with “Travels with the Snow Queen,” then “Most of My Friends are Two-Thirds Water,” and then the sublimely disturbing “Water off a Black Dog’s Back” and “The Specialist’s Hat.” But more than that I’d recommend downloading the book, trying it out, and buying it if you like it (it’s a beautiful book, and easier to read on paper).

(via “BoingBoing”:http://www.boingboing.net/2005/07/01/kelly_links_gorgeous.html)

A _very_ interesting development for Internet policy geeks. ICANN, the Internet Corporation for Assigned Names and Numbers, runs key aspects of the Internet domain name system, mixing together the highly technical with the highly political. It has many opponents, running the gamut from Internet activists through commercial operators like Verisign, to the International Telecommunications Union, which has been ginning up a series of UN conferences to try to grab authority away from ICANN (the ITU is seeing its policy domain disappear from beneath its feet as telcos move _en masse_ to the Internet). One of the key uncertainties surrounding ICANN has been its relationship with the US government. Formally, ICANN runs the Domain Name System under the terms of a Memorandum of Understanding with the US Department of Commerce. While ICANN was supposed in theory to be more-or-less self regulatory, its exact relationship with the US government was both unclear and controversial, leading the US government to suggest that it would renounce control over ICANN when the Memorandum lapses “next year”:http://dcc.syr.edu/miscarticles/MM-Prepcom2.pdf . Now the US government seems to have backtracked on that commitment.
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My “post”:https://crookedtimber.org/2005/06/24/market-making-versus-market-taking-in-politics/ last week about Rick Perlstein’s pamphlet got some “interesting”:http://www.washingtonmonthly.com/archives/individual/2005_06/006592.php “reactions”:http://www.reachm.com/amstreet/archives/2005/06/26/the-next-big-idea/ (and some “wrongheaded”:http://www.janegalt.net/blog/archives/005369.html ones too). I was particularly taken with Matt Yglesias‘s reworking of Perlstein’s argument and suggestions for how it might be applied. This said, I think Matt is wrong when he claims that the argument over market-making versus market-taking isn’t really an argument between the left and the center of the Democratic party. While there’s no reason _in principle_ that the one set of disagreements should map onto the other, there’s an enormous degree of overlap _in practice_. In internecine battles over policy, New Democrat/DLC types have made hay with the claim that leftwing policies simply don’t sell in the marketplace of American politics. As a result, they tend to exaggerate the extent to which these market rules are a given, and to discount the possibility that they might be changed. A case in point, which I’ve just come across, is this “review”:http://www.ndol.org/ndol_ci.cfm?contentid=253353&kaid=127&subid=171 by Ed Kilgore of Perlstein’s “book on Barry Goldwater”:http://www.powells.com/cgi-bin/biblio?inkey=74-0809028581-0 . Kilgore criticizes non-centrists for defying

bq. the commonsense view, based on extensive political experience, that Democrats can best meet the contemporary rightwing challenge by occupying the abandoned political center and peeling off moderate, independent, and even Republican voters.

Kilgore argues that Reagan and his allies won through fortuitous circumstance rather than ideological zeal, and contends that those who believe otherwise are afflicted with a variety of religious messianism

bq. Indeed, the left’s new fascination with the conservative movement, and with politicians like Goldwater and Reagan, can best be understood as reflecting a powerful desire to believe that ultimate success does not require, and may actually prohibit, ideological flexibility, submission to public opinion, or the responsibility to achieve actual results. A period of losing may well precede the day of victory, in this view, and the left’s current leaders may, like Goldwater, never enter the promised land themselves. But someday, if their people remain faithful and refuse compromise with impurity, an Aaron will arise, and redemption will be at hand.

Now, like all caricatures, there’s a little truth to this, but only a little. The “net-roots” whom Kilgore disparages as zealots in fact showed an extraordinary degree of flexibility in embracing a candidate last year whose views they didn’t share, but whom they thought might win. But the problem in Kilgore’s article goes deeper than this. By recasting the debate as one between unrealistic ideological purists (bad) and those who are willing to make political compromises and move towards the center (good), he completely fails to address Perlstein’s underlying argument. Perlstein’s real claim, if I understand it rightly, is that long term political success doesn’t come from adapting your party to a political marketplace in which the enemy has set the rules of competition. It comes from a concerted effort over time to remake those rules yourself. This doesn’t have to be pie-in-the-sky wishful thinking. Nor does it have to be something which is antithetical to ND/DLC types’ policy goals. Matt’s suggestion for a new kind of family and childcare politics is a good example of an initiative that could help remake the rules of debate, and that both leftists and centrists could get behind. But it _does_ require people like Ed Kilgore to stop using the current rules of the political marketplace as a stick to beat the heads of leftists, and to start thinking creatively about how those rules might be changed. So far, I’m not seeing much evidence that they want to do this.

An interesting story in the “Chronicle”:http://chronicle.com/temp/email.php?id=kvt034h8b46fjlf16jbtzmxjeg9v0e6l (link should work for 5 days or so) on the ethics of scientific research. The National Academy of Sciences has decided to publish a paper describing the vulnerability of the nation’s milk supply to terrorist attack (yes, it’s a serious paper), despite a letter from the Department of Health and Human Services saying that publication would provide”a road map for terrorists” and not be “in the interests of the United States.”

bq. In their paper, Mr. Wein and Mr. Liu describe how the milk industry is vulnerable because individual farmers send their product to central processing facilities, thereby allowing milk from many locations to mix. Terrorists could poison the supply by putting botulinum toxin into one of the 5,500-gallon trucks that picks up milk daily at farms or by dropping the toxin into raw-milk silos, which hold roughly 50,000 gallons each. Pasteurization would destroy some but not all of the toxin, and a millionth of a gram of toxin may be enough to kill a person.

The authors’ reasons for making these findings widely known (and the National Academy’s for publishing them) seem legit. There are safeguard measures that could be taken to make this kind of attack more difficult; for instance the simple step of locking milk trucks and tanks. While the government has issued voluntary guidelines recommending that milk suppliers take these precautions, it’s been unwilling to require them by law. In essence then, the government seems to be relying on voluntary compliance and security-through-obscurity, neither of which provide much protection as any system administrator worth his or her salt will tell you. As one of the paper’s authors notes, “Using Google, … it would take you all of 30 seconds to pull up these things.” It doesn’t seem at all unreasonable to raise a public stink about this, in the hope that it will provoke a serious response.

“Alex Tabarrok”:http://www.marginalrevolution.com/marginalrevolution/2005/06/krugman_beneath.html denounces Paul Krugman as an “illiberal demagogue” who has forgotten his heritage as an economist. The reason: Krugman’s claim that China is a strategic rival, and his recommendation that the Chinese bid for Unocal be blocked. Now I’m far from being an expert on Asian politics, and so won’t pronounce on the substance of whether Krugman is right or wrong on this specific issue. But I do think it’s fair to say that there’s another term than “illiberal demagogue” for someone who believes that strategic concerns trump trade interests when push comes to shove. That term is “mainstream international relations specialist.” The kind of “doux commerce” liberalism that Alex seems to favour has been out of fashion in IR theory since Norman Angell’s (somewhat unfairly) ballyhooed _The Great Illusion_ .

If I understand Alex correctly, he’s telling us that economics, which likes to portray itself as a rationalistic and impartial approach to the understanding of human behaviour, is at its core a set of normative arguments for the increase of trade and commerce, and against the pursuit of a certain kind of ‘irrational’ self-interest. I think that Alex is largely right on this – though many economists wouldn’t admit it (and one is faced with the interesting question of whether scholars like, say, Dani Rodrik, are economists under Alex’s definition of the term). But it leads to the interesting question of when economists’ prescriptions for free trade over strategic manoeuvre are in fact the right prescriptions. On the one hand, posturing and mutual distrust can lead to a downward spiral and thus to war, in circumstances where peaceful commerce might otherwise have been possible. And it may well be, as Alex believes, that you can reconstruct people’s beliefs away from war, and towards peaceful exchange by substituting the voices of liberal economists for those of “mercantilists, imperialists and ‘national greatness’ warriors.”* On the other, if one state _does_ see politics as a zero-sum game and is unlikely to be persuaded otherwise, then it may be a big mistake to concede strategic resources to that state – it may use them against you later. This is of course the reason that international trade in, say, advanced weapons systems, does not resemble a free market (whether control over oil companies is a similarly sensitive strategic asset, I’ll leave to the discussion section). Which means that if Alex wants to make a convincing case that Krugman isn’t just making a claim that runs against the usual normative biases of economists, but is actually wrong on the merits here, he needs to provide more evidence than an argument-by-assertion that China is now “moving” from war to trade. As stated above, I’m not a China expert, but from what I do know, this is very much an open debate.

* interestingly, those in international relations theory who make this sort of claim are usually vehemently opposed to economic reasoning.

Dan Nexon’s “evisceration”:http://duckofminerva.blogspot.com/2005/06/dangers-of-talking-points-rnc-defense.html of the RNC memo defending Karl Rove.

Something that I’ve been wondering about for a while. Google Ads don’t necessarily match their advertisements to websites in quite the manner that you’d expect, presumably because of the way that its underlying algorithm works. “Brad DeLong’s site”:http://delong.typepad.com/, for example, seems to have become the new in-spot for Republican and Conservative singles to hook up with each other, while “Nathan Newman”:http://www.nathannewman.org/log/ rather improbably provides a venue for union-busting specialists to connect with their core clientele in the business community. I wouldn’t at all be surprised if many of Nathan’s readers make a habit of clicking on the link to “Union-Free Labor Relations Training” on a regular basis. After all, each time that they do, a small sum of money presumably disappears from the advertising budget of a rather slimy organization, and reappears (after Google deducts its cut) in Nathan’s Paypal account. Now personally, I’ve no problems with that. But does this undermine the rationale behind using Google Ads for politically targetted advertising? Left-leaning blogs are likely to “sound” Republican to Google’s algorithm because of the frequency with which they mention Republican politicians (and Republican blogs will sound left-wing). Thus, they’re likely to attract a disproportionate number of ads which are aimed at exactly the wrong population. Many of the people who read these blogs are unlikely to want to click on the ads for any sincere motives. The same, of course, is true for right wing blogs harping on how horrible the Democrats are; again they’ll appear to be “good” bets to an automated algorithm for advertisements aimed at leftwingers, unless that algorithm is sophisticated indeed.

Unless Google changes its algorithm, I can’t imagine any easy technical way of distinguishing ‘fake’ clickthroughs from real ones, except in the most straightforward of cases (e.g. the same person at the same IP address repeatedly clicking on an ad again and again). Now this may in reality be a non-problem – I’ve seen no data on it- but in principle, Google Ads seems to me to be quite vulnerable to politically motivated attacks, which could prove quite expensive for the advertisers.