Wednesday's interesting reads

"The Reformers Who Ruined Politics" WSJ op-ed (from yesterday, actually):

"The Founding Fathers would have had no trouble detecting the absurdity of having political actors determine what does or doesn't constitute free political speech. The First Amendment was written precisely to deny politicians such control...

If this campaign proves anything, it is that more reform on the post-Watergate model will only compound the McCain-Feingold-Clinton-Obama folly. The rules themselves are the scandal, empowering the powerful and making it harder for voters to judge the indebtedness of candidates to individuals or interest groups.

The better path is more simplicity and transparency, so office seekers can raise whatever amount they can from whomever they want so long as it is reported immediately on the Internet. It's time we reclaimed politics from the reformers who ruined it."

"The myth of the rational voter" Pittsburgh Tribune-Review by Don Boudreaux (HT: Don Boudreux):

"Many of us enjoy believing that our troubles are caused by foreigners. Many of us enjoy believing that if the rich pay higher taxes, middle-class and poor people will be better off. We resist rejecting these beliefs even if the evidence before us suggests that they are mistaken.

Unlike in private affairs, where actions taken on mistaken beliefs typically and directly harm the person taking such actions, when people vote their mistaken beliefs in elections, they don't suffer personal repercussions of their poor choices and they enjoy the personal gratification of voting according to their beliefs.

With no direct and obvious feedback telling a voter with mistaken beliefs that his beliefs are, in fact, mistaken, a voter who cherishes his mistaken beliefs has little incentive to abandon these beliefs. So, according to Caplan, it's no surprise that politicians successfully pander to economically ignorant voters. "

He's talking about the book by Bryan Caplan called The Myth of the Rational Voter. I'm really looking forward to reading it.

"The Right to Vote and the Right to Leave" by Arnold Kling at Econlog:

"I think that there is a case for skepticism about democracy. The right to vote is not worthless, but people get carried away with the romance of it, as if the 'voice of the people' has magical qualities."

This was one of my principle arguments here when I debated some guys about "illegal" immigration. I asked them over and over what they would do if the majority were to decide their religion is against the law. How about a supermajority (presumably one that could effect an ammendment to the constitution)? What about when the majority said that helping escaped slaves was against the law or that Jim Crow laws were OK? I don't have a lot of confidence in the majority in referedum-type matters. I'm not saying I think they will most likely get them wrong (in fact, I think they will most likely get them right). I just don't think they should have a place, especially when the majority limits the freedoms of the minority.

"Do you inherit skills?" on Free exchange at economist.com:

"A series of fascinating papers by Ralph and Todd Stinebrickner look at the experience of Brea College in Kentucky. Brea College offers low income students free scholarship, room, and board. Yet nearly 50% of its students fail to graduate. Messrs Stinebrickner do not find credit constraints compel most students to drop out. What seems to be significant factors: lack of academic preparation and limited encouragement from family members. This suggests your family’s attitude toward education may be more meaningful than their bank balance. "

I posted the following comment:

"I wonder how much of the performance of schools in low-income and inner-city schools has to do with the relative educational enthusiasm of the kids' parents. If the kids are in a low-income school, it’s likely that the parents have low incomes, in part at least, because they don’t have much education. In my limited experience, it seems that people who don’t value education, don’t seek it, and, consequently don’t have (much of) it. So if the parents don’t value education, it’s more likely, I’d imagine, that their kids don’t either. Because kids go to school based on where they live and if you’re low-income, chances are your neighbors are low-income too, the kids probably go to school with plenty of others in the same situation (ie parents who don’t value education much so their kids don’t value education much either). Basically you get a situation where the kids have very few influences in their lives who support them in gaining education, because neither their peers at school or their parents at home value education. Personally, I wonder how much of the problem with our educational system actually lies in the schools themselves. I’m sure they deserve a part of the blame (like free trade’s impact on income inequality), but are we simply looking for a scapegoat so we don’t have to blame ourselves?"

"Chambliss would try to override farm bill veto" by Taylor Rushing for The Hill (HT: Club for Growth):

"Sen. Saxby Chambliss (R-Ga.) told White House officials Tuesday morning that if President Bush vetoes the farm bill, he’ll work to override it.

'Our goal has been to write the best bill for farmers and ranchers all across America. I told the White House this morning, if they do veto it my goal is going to be to override them. We're trying to write the best bill we can to generate those votes.'"

I haven't always been a fan of my state's senate delegation, and this is partly why. Not that most, if not all, senators don't behave the same way, but I hate the idea of putting the interests of one group ahead of others. Why not write the best bill for taxpayers across America and consumers and farmers throughout the world? Saxby's up for re-election this year, so he needs to bring home the bacon for his agricultural constituents. I can only imagine of what political favors will be written into the bill that will "generate" the necessary votes.

"The Good News You Missed on Food Prices" by Steven Malanga for Real Clear Markets (HT: Club for Growth):

"You probably missed the many media stories over the years about what a bargain food has become, or maybe there simply weren’t many such stories. But one result of these very moderate increases in food prices is that we are paying less, sometimes considerably less, relative to our purchasing power today for a whole range of products, including many staples...

These differences are significant enough once you add them all up that they have helped produce a sharp decline in the percent of household income that the average family is paying for food. Since 1984 the BLS has tracked the impact of spending on dozens of categories—from groceries and energy to apparel, health care and entertainment—on family budgets. In 1984 the average family spent 9.3 percent of its after-tax income on food at home, but by 2006 (the latest year statistics are available) that percentage had fallen to just 5.9 percent of after-tax income. Even with the recent price hikes, Americans are spending on average about a third less of their family income on food than they did in 1984, and since food is a staple that everyone purchases, the gains have benefited families across the income spectrum. Among families in the lowest income quintile, spending on food has shrunk from 38 percent of after-tax income to 21 percent since 1984. Those in the second lowest quintile are spending 10 percent of family income on food, compared to 17 percent in 1984.

None of this is surprising to anyone who has spent considerable time in supermarkets over the years, or has watched how food retailing has changed. Consumers have an array of new stores to pick from that offer bargains on food, like warehouse clubs. Technology has driven up productivity in the food distribution network, cutting the cost of deliveries and keeping stores in-stock but not overstocked. The most successful food retailers today operate with net margins that are less than one percent of sales."

David Leonhardt (via Tyler Cowen) had this to add:

"Price increases are simply more noticeable — more salient, as psychologists would say — than price decreases. Part of this comes from the notion of loss aversion: human beings dislike a loss more than they like a gain of equivalent size. If you have to sell your house for less than you bought it for, you’re really unhappy. You hate that ground chuck now costs $2.83 a pound, but you didn’t notice that oranges are 31 percent cheaper than they were a year ago.

There is also something particular to inflation that aggravates loss aversion. Price increases are obvious. But price declines are often hidden. The cost of an item stays about the same for years, while everything else gets more expensive and nominal incomes rise...

Back in the mid-1990s, a committee of academic economists concluded that the Consumer Price Index overstated inflation. To take just one example, years would often pass before the index included new products — like cellphones — and therefore it missed the enormous price declines that occurred shortly after those products entered the mainstream."

Russ Roberts alluded to this problem with the way inflation is calculated in this podcast about style where he talked about inflation numbers are often distorted by product improvement.

"Environmentalists' Wild Predictions" by Walter Williams at Townhall.com (HT: Club for Growth):

"Here are my questions: In 1970, when environmentalists were making predictions of manmade global cooling and the threat of an ice age and millions of Americans starving to death, what kind of government policy should we have undertaken to prevent such a calamity? When Ehrlich predicted that England would not exist in the year 2000, what steps should the British Parliament have taken in 1970 to prevent such a dire outcome? In 1939, when the U.S. Department of the Interior warned that we only had oil supplies for another 13 years, what actions should President Roosevelt have taken? Finally, what makes us think that environmental alarmism is any more correct now that they have switched their tune to manmade global warming?"

"Would-Be Caregivers, Beware" by Phillip Shishkin for the WSJ:

"Tammy Barnes, an unemployed mother of three, used up her $12,000 in savings last year pursuing a career in nursing. But after completing a course offered by Advanced Medical Training Institute, in Marietta, Ga., Ms. Barnes can't get a nursing license or a job, because Advanced isn't accredited by Georgia's nursing board...

As job openings for nurses have grown, established nursing schools haven't been able to keep up with the demand. According to a recent study, U.S. colleges turned away about 40,000 qualified applicants for nursing programs in 2006.

For-profit schools have rushed into the market..

[S]tate nursing boards will issue permits to practice as a registered nurse or a licensed practical nurse only to those students who train in certified programs and pass a state nursing exam."

I partly blame her for not doing some of her own due diligence, I blame the operators of some of these schools for misleading students, but I mostly blame the whole program that keeps people like Tammy Barnes from being a nurse. It's no wonder you have nurse shortages when you grant a monopoly to the people who determine who can become a nurse. There are arguments against having any restrictions on becoming a nurse, but I'll agree for now that we should want our nurses to have a minimum knowledge of nursing. Why couldn't that be proven with a test alone? Why does one have to attend an accredited school, especially if accredited schools can't handle the volume of students who want to become a nurse? If, after students pass an exam, employers want to offer them jobs, why shouldn't they be allowed to work?