Like I Said, Fat is Good

From msn.com:

Eating fatty foods such as red meat, cheese and butter could actually be good for your health, a new study suggests.

Researchers from the University of Ireland found that overweight middle-aged men who switched to a diet high in natural saturated fats and low in carbohydrates grew slimmer and healthier.

The diet also led to a reduction in blood pressure and glucose levels, which are associated with a lower risk of heart disease, Type 2 diabetes and cancer.

Professor Sherif Sultan, a heart specialist, said: “We urgently need to overturn current dietary guidelines.”

“People should not be eating high carbohydrate diets as they have been told over the past decade.”

The past decade? Dude, it has been four decades.

On Rolling Back Government, GOP Talking Big

When it comes to rolling back the federal government, the GOP has been talking big lately.

Donald Trump is ready to take an ax to government spending.

Staffers for the Trump transition team have been meeting with career staff at the White House ahead of Friday’s presidential inauguration to outline their plans for shrinking the federal bureaucracy, The Hill has learned.

The changes they propose are dramatic.

The departments of Commerce and Energy would see major reductions in funding, with programs under their jurisdiction either being eliminated or transferred to other agencies. The departments of Transportation, Justice and State would see significant cuts and program eliminations.

The Corporation for Public Broadcasting would be privatized, while the National Endowment for the Arts and National Endowment for the Humanities would be eliminated entirely.

Overall, the blueprint being used by Trump’s team would reduce federal spending by $10.5 trillion over 10 years.

A trillion a year? I’d be gobsmacked if all this actually transpired. Does Trump really believe he can achieve all of it? Maybe he’d settle for less and this is just his opening offer to the Democrats.

Meanwhile, the GOP House has passed some very significant regulatory reforms. First, the REINS Act.

The Regulations from the Executive in Need of Scrutiny (REINS) Act would require any regulation which would have an economic impact of $100 million or more to pass Congress and be signed by the president. If the regulation failed to do so after 70 days, it would become null and void.

The REINS Act sounds like a huge step towards restoring Constitutional government, according to which laws are voted on by the people’s elected representatives in Congress, rather than imposed on the people by unelected bureaucrats in the executive branch.

REINS sounds great to me, but law scholar Richard Epstein has some objections to the ‘factual review’ provisions that are beyond my pay grade. Epstein likes better another bill that has been introduced in the House, the Separation of Powers Restoration Act (SOPRA).

Its key provision reads that any court reviewing administrative action shall “decide de novo all relevant questions of law, including the interpretation of constitutional and statutory provisions, and rules made by agencies.” “De novo” review means that the reviewing court gives no deference to the legal opinions of either the parties or lower court judges and administrators.

This compact and straightforward provision, which should be promptly enacted, takes aim at two of the most misguided decisions of administrative law that instructed courts to take a deferential stance toward agency actions interpreting the key statutes and regulations they administer. The first of these cases, Chevron USA Inc. v. NRDC (1984), written by Justice John Paul Stevens, insisted that in all ambiguous cases, reviewing courts should defer to an agency interpretation of its governing statute. Auer v. Robbins (1997), written by the late Justice Antonin Scalia, similarly held that for an agency’s “own regulations, [its] interpretation of it is, under our jurisprudence, controlling unless ‘plainly erroneous or inconsistent with the regulation.’”

Letting the courts smack down the bureaucrats’ interpretations of law sounds great to me. But one thing Epstein doesn’t mention is that none of these bills can get enough Senate votes to override a Democrat filibuster. There’s just no way they can become law in this Congress, and the House must know that very well. Which raises the question: if it can’t become law, then what’s the point? Political grandstanding?

Given that the GOP House knows the bill can’t become law, there’s no cost to the members in voting for it. Which also means there’s no evidence they really support the legislation. Passing a dead-end bill doesn’t prove they really mean it.

Trump: Schools are ‘Flush with Cash’

I didn’t watch President Trump’s inaugural address, but he apparently made a controversial statement about America’s schools being ‘flush with cash.’ This statement was denounced by the usual assortment of fraudsters and freeloaders who are the bane of what remains of our civilization.

Donald Trump lies.

If you haven’t learned that yet, America, you’ve got four more cringe-inducing years to do so.

Even in his inaugural address, he couldn’t help but let loose a whooper [sic] about US public schools.

“Americans want great schools for their children, safe neighborhoods for their families and good jobs for themselves,” he said. “But for too many of our citizens, a different reality exists. … An education system flush with cash but which leaves our young and beautiful students deprived of all knowledge.”

Los Angeles Unified School district routinely has broken desks and chairs, missing ceiling tiles, damaged flooring, broken sprinklers, damaged lunch tables and broken toilet paper dispensers.

They’re flush with cash!?

New York City public schools removed more than 160 toxic light fixtures containing polychlorinated biphenyls, a cancer causing agent that also hinders cognitive and neurological development. Yet many schools are still waiting on a fix, especially those serving minority students.

They’re flush with cash!?

At Charles L. Spain school in Detroit, the air vents are so warped and moldy, turning on the heat brings a rancid stench. Water drips from a leaky roof into the gym, warping the floor tiles. Cockroaches literally scurry around some children’s classrooms until they are squashed by student volunteers.

They’re flush with freakin cash!?

Are you serious, Donald Trump!?

Well, let’s take a look at the figures. The U.S. Census Bureau publishes data on school spending, but those figures are typically incomplete and underestimate the true amount of spending. A few years ago, Adam Schaeffer of the Cato Institute found that schools usually leave important categories of spending out of their reported figures. For instance, the Los Angeles Unified School District reports spending only about $11,000 per student, but this figure does not include capital spending financed by bond issues. Here are the figures Schaeffer estimated for fiscal year 2008:

New York City: $21,543 per student.

Los Angeles: $25,208 per student.

Keep in mind that those figures are from way back in 2008. Spending now must be considerably higher; LA in particular probably now exceeds $30,000 per student. By comparison, at private schools in the LA area, the average is something like $12,000.

Schaeffer did not obtain an estimate for Detroit, but the Census reports $14,197 for 2014, which is probably an underestimate, and in any event, above the national average and well above what private schools spend.

$30,000 in LA should be enough to send a pupil to a fancy private school with a polo field and a personal Uber ride to school every morning. But put government in charge and what we get for that kind of spending is “broken desks and chairs, missing ceiling tiles, damaged flooring, broken sprinklers, damaged lunch tables and broken toilet paper dispensers.” What a disgrace.

With the possible exception of the major news media (another Trump nemesis), public schooling must be the worst-performing industry in America. Kudos to Trump for pointing this out.

Moneyball: Statistics or Steroids?

Moneyball was a best-selling 2003 book by Michael Lewis and a 2011 hit movie starring Brad Pitt. Moneyball’s underlying theme attempts to support a specific hypothesis about management science–that statistical analysis, such as econometrics, offers a more reliable guide to decision making than does gut-instinct based on experience. Hence Moneyball attributes the success of the 2002 Oakland A’s to general manager Billy Beane’s reliance on econometric analysis, and consequent disregard for the advice of his professional scouting staff.

As someone who actually teaches econometrics, I happen to know a bit about the limitations of the technique, and I therefore always believed that Moneyball oversold the benefits of data analysis. As Steve Sailer argues, the success of the 2002 A’s might have a simpler explanation: steroids.

[I]t never seems to have occurred to [Lewis] that Oakland A’s baseball general manager Billy Beane might not have drawn back the curtain on his statistical techniques for the benefit of Lewis’ Moneyball purely out of a disinterested love of advancing learning.

One possibility is that Lewis’ book served Beane’s need to permanently distract from the large role played in the success of the A’s by performance-enhancing drugs, at least since Jose Canseco arrived in Oakland in the mid-1980s. I heard from a baseball agent in the early 1990s that “Jose Canseco is the Typhoid Mary of steroids,” but in Moneyball a decade later Lewis mentioned the word “steroids” only once.

Moneyball diverted attention to obscure Oakland fringe players and away from Beane employing in 2002 a slugging shortstop, Miguel Tejada, who won the Most Valuable Player award by driving in a remarkable 131 runs.

And then, two years later, Tejada knocked in 150 runs.

A couple of years after Moneyball hit the best-seller lists, Tejada was mentioned in Canseco’s memoir Juiced: Wild Times, Rampant ’Roids, Smash Hits & How Baseball Got Big.

In 2009, Tejada pleaded guilty to perjuring himself to Congress regarding steroids.

Econometrics is a great subject. But when it comes to explaining the success of the 2002 A’s, I find chemical enhancement more relevant than the fact that Billy Beane hired a Yale grad with a laptop.

By the way, back in 1998, students asked me what I thought about the fact that Mark McGwire had just broken the home run record. I replied that McGwire must be taking steroids. The students expressed shock at my reply, and seemed appalled that I would disparage McGwire’s achievement.

Oh well. Young people often have their delusions shattered.

Idiocracy is Real

The cited article tries to reassure by noting that the predicted decline in average IQ is only 0.3 points per decade, so that none of us would notice any substantial change in society during our lifetimes. The IQ decline does become significant, however, if the trend continues for centuries, which was in fact the premise of Idiocracy. The film specifically envisioned a dumbed down society emerging after a period of 500 years. Sustaining a loss of 0.3 points per decade for 500 years would reduce average IQ by 15 points, or almost exactly one full standard deviation–a very significant change. Losing a full standard deviation would cause the population to produce only a minuscule percentage of people smart enough to be, say, a physician or an engineer.

Europe Failing to Protect Citizens

Notwithstanding what some might believe, the primary function of government is not to pay for your medical care. No, government’s Job One is the so-called Protective Function–defending the lives, liberties, and property of citizens from what John Locke called the “invasions of others.” Reading the news this morning offered some evidence, albeit anecdotal, that government is not performing the Protective Function as well as it should, at least in Europe.

Consider the following two stories, which nearly caused me to spit out my coffee this morning. The first comes from the British press.

Most of the outrage in the Daily Mail article is focused on asking how this guy could have been allowed to enter Britain from the Netherlands. But more remarkable to me is the fact that this guy apparently sawed off a woman’s head and then was released from prison after only six years. How can a guy who commits such a crime ever be allowed back into society?

I know there is a Rousseau-like strain of libertarian thought that believes everybody is basically good, and so punishments meted out by government are the problem and not the solution. But if government were to retreat from it’s protective function, society would have no choice but to mete out vigilante justice. That vigilante world would not exactly conform to the libertarian’s idealistic standards of justice and non-violence.

I’m not saying we should go back to the draconian punishments of Georgian England, in which a theft of more than 12 pence could bring the death penalty. But six years for beheading is absurd.

Now here’s the second coffee-spitting story from this morning: Suspended sentence for firebombing a synagogue.

A German regional court in the city of Wuppertal affirmed a lower court decision last Friday stating that a violent attempt to burn the city’s synagogue by three men in 2014 was a justified expression of criticism of Israel’s policies.

Johannes Pinnel, a spokesman for the regional court in Wuppertal, outlined the court’s decision in a statement.
Three German Palestinians sought to torch the Wuppertal synagogue with Molotov cocktails in July, 2014. The local Wuppertal court panel said in its 2015 decision that the three men wanted to draw “attention to the Gaza conflict” with Israel. The court deemed the attack not to be motivated by antisemitism…

The court sentenced the three men – the 31-year-old Mohamad E., the 26 year-old Ismail A. and the 20-year-old Mohammad A.—to suspended sentences. The men tossed self-made Molotov cocktails at the synagogue. German courts frequently decline to release the last names of criminals to protect privacy.

So the German government seems more concerned with protecting the privacy of convicted firebombers than with protecting the lives and property of innocent citizens.

Particularly perverse is the court’s conclusion that a political motive is somehow exculpatory. If anything the political motive makes the crime more insidious than if it were merely a random act of drunkenness. Political violence is something that civil society cannot tolerate and still remain civil.

In Europe, what does one have to do nowadays to receive a stiff prison sentence, post something ‘hateful’ on Facebook?

This will not end well.

Want to eliminate ‘perverse incentives’? Abolish the Corporate Income Tax

Democrats in Congress recently engaged in some political grandstanding that reveals the typical twisted economic logic of liberalism. They want to tax “excessive” employee pay.

The bill, from Rep. Lloyd Doggett, D-Texas, and Sen. Jack Reed, D-R.I., is meant to stop senior employees from getting huge bonuses that their companies can deduct from their corporate tax bill each year.

Under current law, companies can deduct employee salaries from their taxable income as long as those salaries don’t exceed $1 million per year. Democrats say companies are getting around that limit by paying out millions in bonuses that they also get to deduct from their tax bill.

Doggett said the bill would require companies to pay taxes on those millions in bonus awards.

Yeah, well, maybe first Lloyd Doggett and Jack Reed can explain why it’s any of their business how much a company voluntarily pays its employees. Top talent does not come cheap, and if the shareholders and their representatives on the Board of Directors are OK with paying top dollar, it’s their business and nobody else’s.

“Our tax code has a perverse incentive for companies: the more you pay your executives, the less you’ll pay in taxes,” Doggett said. “It is wrong to compel working families and small businesses to foot part of the bill for lavish executive bonuses.”

This deceptive rhetoric is intended to convey the false impression that the executive incomes are being unfairly subsidized. But in fact, by using bonuses to reduce their tax liability, firms are properly restoring the tax treatment of executive pay as a legitimate business expense. The way the corporate tax is supposed to work is that business expenses are fully deductible–and that should include paying for corporate talent just like any other resource.

Doggett’s objection to the fact that “the more you pay your executives, the less you’ll pay in taxes” is absurd because the same can be said of every other business expense. The more the firm pays its manual laborers, the less it pays in taxes. Does that mean the firm has a perverse incentive to pay its manual laborers too much? No, because any overpayents would have to come at the expense of corporate profits.

Doggett talks about wanting to get rid of a perverse incentive, but his bill would have the opposite effect–it would give firms a perverse incentive to employ less scarce executive talent than they should optimally use. Doggett’s bill singles out executive pay for a special tax that does not apply to other business expenses. That gives firms a perverse incentive to skimp on executive talent in favor of other resources that are taxed at a relatively lower rate. Doggett and Reed propose to get rid of a perverse incentive while actually creating one.

Moreover, if Democrats were really serious about removing perverse economic incentives, they would render this debate about taxing executive bonuses altogether moot by abolishing the corporate income tax altogether. The corporate income tax creates a hugely destructive perverse incentive by double-taxing future consumption.

It works like this. People earn income in order to pay for consumption. People have the option, however, of taking their consumption now, or saving their income to consume in the future. Current consumption is taxed only once, by the personal income tax. But future consumption gets taxed a second time by the corporate income tax.

You save your money by purchasing stock that you hope will pay you a dividend so you can consume more in the future. But before the company can pay you that dividend out of its profits, the profits get taxed by the corporate income tax. So now you’ve effectively paid taxes a second time on the same income you earned originally. This double taxation of future consumption creates a perverse incentive for people to favor current consumption since it is only taxed once. That is, people will save less, which reduces capital accumulation, and lowers the growth and efficiency of the whole economy.

Of course, the Democrats are not serious about eliminating perverse incentives. Doggett and Reed know they can never get this bill passed in a GOP Congress. They’re just engaging in political grandstanding. Sad.

Settled Science: Right-Wingers are Hotter

A recent study published in the Journal of Public Economics, a pretty prestigious journal, finds that rightist politicians are better looking.

[R]esearchers showed respondents photographs of political candidates in Finnish municipal and parliamentary elections, members of the European Parliament, U.S. candidates for Senate and governor, and candidates for Australia’s House of Representatives. They asked participants to rate the photographs on a five-point scale. The results suggested that politicians on the right are more beautiful on all three continents.

This isn’t the first study to find that conservatives are more attractive. A few years ago, a UCLA study found a similar result. At least the result held for female politicians, but not male.

They started the project by feeding portraits of 434 members of the 111th House of Representatives into a computer modeling program used by researchers in their field. Loaded with a database of hundreds of scans of faces of men and women, the FaceGen Modeler allows researchers to measure how much the details of any one face approach the average for either gender.

The model compared each representative’s face to the norm on more than 100 subtle dimensions, including the shape of the jaw, the location of eyebrows, the placement of cheek bones, the shape of eyes, the contour of the forehead, the fullness of the lips and the distance between such features as the bottom of the nose and the top of the lip. Armed with these dimensions, the researchers were able to arrive at an amalgamated score assessing the extent to which the face exhibited characteristics common to men or to women. Theoretical values ranged from -40 (highly male-typed) to +40 (highly female-typed).

“We weren’t looking at hairstyle, jewelry or whether a person was wearing make up or not,” Carpinella said. “We wanted to get an objective measure of how masculine or feminine a face is, based on a scientifically derived average for male or female appearance.”

In addition to party affiliation, the researchers took into account each politician’s DW–NOMINATE score, a scale developed by political scientists that uses voting records to determine how conservative or liberal a lawmaker is.

[…]

[A] telling difference emerged among female politicians. The faces of Republican women rated, on average, twice as sex-typical — or feminine — as those of Democratic women.

The authors of the J. of Public Econ. piece offered some possible explanations for their results. As is the wont of economists, they looked to income.

Numerous studies have shown that good-looking people are likely to earn more, and that people who earn more are typically more opposed to redistributive policies, like the progressive taxes and welfare programs favored by the left.

I rather doubt that income explains very much of this phenomenon. Looks do correlate with income, but higher income people, while more fiscally conservative, tend to be more socially liberal. A majority of high income households–those above about $150,000 or $200,000–vote Democrat. The authors’ income explanation is purely speculative, and I doubt the facts would support it. The authors do, however, mention another explanation that seems more plausible–that people’s looks determine their ideology.

[G]ood-looking people are often treated better than others, and thus see the world as a more just place. Past studies have found that the more attractive people believe themselves to be, the lower their preference for egalitarianism, a value typically associated with the political left.

So people who are not good looking will gravitate to the political left. This interpretation was even endorsed by liberal blogress Lindy West, in response to the UCLA study.

American conservatism is profoundly tied up with the old-fashioned gender paradigm in which husbands are active providers and women are passive nurturers. In that paradigm, a woman’s job—the core of her femininity—is to make herself as pretty as possible…

I can imagine that liberalism actively attracts people who are shut out of that old-timey paradigm, because once you find yourself outside of it, it’s easier to call bullshit on the whole thing. The women who can’t “pass” for hot are forced to consider why. Maybe this is far-fetched, but I feel like people who feel less welcomed by the system are more likely to question the system.

People who are not good looking are more likely to end up as romantic failures. Having lost according to the rules of the game, they endorse a politics that seeks to change the rules by undermining social norms, mores, standards, and institutions. Sometimes you really can tell a book by its cover.

The Latest Government Entitlement: Sex

Last summer I speculated that the welfare state had expanded beyond the point of diminishing returns.

[I]s there no responsibility too small for liberals to leave to the citizenry? One suspects that liberals would willingly relieve their dependent political clients of the very last of life’s responsibilities, thus reducing them to the equivalent of kept zoo animals.

Well, turns out that liberals did manage to find another personal responsibility they could relieve people of. Getting laid.

The Greens’ plans consists [sic] of patients obtaining a medical certificate confirming that ‘they are unable to achieve sexual satisfaction in other ways, as well as to prove they are not able to pay sex workers on their own’.

Modern government sure does love to empower medical doctors as the gatekeepers for the welfare state’s panoply of free shit, as if the docs are all omniscient sages. But after all, what do docs know about whether or not somebody can ‘achieve sexual satisfaction’? Last time I checked, they don’t teach pickup artistry in med school.

In any event, it is worth considering the different socialist models the government might use to deliver its sex entitlement, and their various implications.

Veterans Administration Model. In this scheme, the government owns the brothels, and the prostitutes are unionized government employees, almost impossible to fire. The sex workers get fat and lazy and offer poor service. Clients endure long wait times for service. The government brothels are forever plagued by scandal, with abused clients, and funds unaccounted for. Poor sanitation makes the brothels incubators for disease.

U.S. Public School Model. The market includes both privately owned and government-owned public brothels. Clients by law can visit only the public brothel assigned to their district. Public brothels vary enormously in quality and safety. In affluent areas, public brothels approach private brothels in quality, but in poor areas, public brothels are unspeakably squalid. People willingly pay a housing premium to live near a relatively good public brothel, and brothel quality gets incorporated into housing prices.

Canadian Single-Payer Model. The brothels are privately owned, but clients pay nothing out of pocket. Instead, sex bills get sent to the government for payment. The government, however, cannot afford a completely open-ended brothel liability, so brothel services and prices have to be tightly regulated. A panel of government ‘sexperts’ sets annual brothel quotas for each of the various sexual services: oral sex, BDSM, etc. The government imposes price ceilings on brothel services, resulting in shortages of services. Clients go on waiting lists, sometimes waiting months for sex. When people can’t get the sex they need, they sometimes resort to paying out of pocket for foreign sex holidays. Everybody complains, but government propaganda convinces the rubes that the system nonetheless works far better than would a free market in sex.

Food Stamp Model. Here the government gives individuals each period a swipe card topped off each month with a fixed amount of money. The swipe card can only be used to pay for sex. This restriction is to make sure that people don’t waste the money on stuff like meat, books, or gym memberships. Inevitably, a black market develops in which people sell their sex vouchers for 50 cents on the dollar, then use the cash to buy soda pop, cheetos, and heroin.

So which system do the German Greens propose to use?

‘Municipalities could discuss appropriate offers on site and grants they would need.’

Sounds like single-payer except administered locally and funded with block grants.

Is Illinois Circling the Drain?

Illinois has a greater burden of unfunded government liabilities than almost any state, and Illinois’ position looks more precarious with each passing day. Economic growth is slow and taxes keep rising in order to finance the bloated public sector. The combination of high and rising taxes and little job growth is causing people to flee the state. As people flee, the tax base shrinks, increasing the burden on those who remain, and creating a vicious cycle in which ever more people have the incentive to leave. Shockingly, the state’s population has fallen over the last two years by over 70,000, the equivalent of a small city. Default beckons.

At wirepoints.com, Mark Glennon sounds the alarm on Illinois’ fiscal crisis.

The most recent news marks a death spiral in full swing. Population is shrinking, the tax base is eroding and the state’s revenue is declining, all while the underlying causes remain unaddressed and debt soars for the state and most of its municipalities.

One credit rating agency last week finally conceded that death spiral, at least tepidly. “A self-reinforcing cycle of population loss and economic stagnation could greatly complicate Illinois’ efforts to stabilize its finances,” Moody’s  wrote.

Glennon reports a rather disturbing statistic.

[A] recent RealtyTrac study found a stunning 500,000 Illinois homes — nearly 20% of houses in the state — with seriously underwater mortgages. That is, the mortgage balance exceeds home value by at least 25%.

Ironically, the underwater mortgages are probably serving to reduce the exodus from the state, because homeowners who are underwater can’t sell without getting the bank to approve a short sale.

In the comment section, reader “nixit” makes a further point about Illinois’ population–the fastest growing demographic consists of elderly people who don’t work or pay taxes.

Persons 65 years and over, 2015 = 14.2%
Persons 65 years and over, 2010 = 12.5%

Assuming 65 is the age of retirement, that’s an additional 200,000+ residents that are no longer on Illinois’ tax rolls because their retirement income is not taxed. And that’s a conservative estimate as I’d bet there are more retired folks under 65 than folks over 65 that are still working.

And the percentage increase I noted above is the largest increase among any age group in the state. In a nutshell, the fastest growing segment of the Illinois’ population doesn’t pay state income taxes. You don’t need to leave the state to negatively impact state revenue, just retire.

The good news is that neighboring states like Indiana will benefit from Illinois’ demise. Not living in Illinois is just one more thing to be thankful for.