Coyote Blog

Everyone on the Left is absolutely convinced that the Brexit vote was all about racism.  In part, this is because this is the only way the Progressives know how to argue, the only approach to logic they are taught in college for political argumentation.

Yes, as an immigration supporter, I am not thrilled with the immigration skepticism that dominates a lot of western politics.  I struggle to cry "racism" though, as I confess that even I would be given pause at immigration of millions of folks from Muslim countries who hold a lot of extremely anti-liberal beliefs.

Anyway, I would likely have voted for Brexit had I been in Britain.  I think the EU is a bad idea for Britain on numerous fronts completely unrelated to immigration.  The EU creates a near-dictatorship of unelected bureaucrats who seem to want to push the envelope on petty regulation.  And even if this regulation were just "harmonizing" between countries, Britain would still lose out because it tends to be freer and more open to markets and commerce than many other European countries.

By supporting Brexit, I suppose I would have been called a racist, but it would really have been about this:

The EU is poised to ban high-powered appliances such as kettles, toasters, hair-dryers within months of Britain’s referendum vote, despite senior officials admitting the plan has brought them “ridicule”.

The European Commission plans to unveil long-delayed ‘ecodesign’ restrictions on small household appliances in the autumn. They are expected to ban the most energy-inefficient devices from sale in order to cut carbon emissions.

The plans have been ready for many months, but were shelved for fear of undermining the referendum campaign if they were perceived as an assault on the British staples of tea and toast.

A sales ban on high-powered vacuum cleaners and inefficient electric ovens in 2014 sparked a public outcry in Britain.

EU officials have been instructed to immediately warn their senior managers of any issues in their portfolios that relate to the UK and could boost the Leave campaign were they to become public....

Internet routers, hand-dryers, mobile phones and patio jet-washers are also being examined by commission experts as candidates for new ecodesign rules.

As a free trade supporter, the downside would be the loss of a free trade zone with the rest of Europe, but I am not sure it can be called a "free trade zone" if they are banning toasters.  Britain will negotiate new tariff rates with the EU, just as Switzerland and Norway (much smaller and less important trading partners) have done.

The real crime from a US perspective is the actions of our President.  Mr. Obama has told the British that by voting for Brexit, they go to "the back of the line" for trade negotiations with the US.  This is, amongst a lot of stupid things politicians say, one of the stupidest I have ever heard.  My response as president would have been to move Britain to the front of the line, offering them a free trade treaty with the US the day after the Brexit vote.  Like most politicians, unfortunately, President Obama does not view trade as a vehicle for the enrichment of individuals but as a cudgel to enforce his whims in the foreign policy arena.  Why on Earth has President Obama threatened to undermine America's strong interest in trading with the UK merely to punish the UK for not staying in the EU, a transnational body this country would certainly never join?

I am sure you have seen various rankings where the US falls way behind other western nations in terms of infant mortality.  This stat is jumped on by the left as justification for just how cold and heartless America is, and just how enlightened socialized medicine must be.  However, no one seems to bother to check the statistic itself (certainly the media is too incompetent to do so, particularly when it fits their narrative).  Statistics like this that are measured across nations are notoriously unreliable, as individual nations may have different definitions or methods for gathering the data.

And, in fact, this turns out to be the case with infant mortality, a fact I first reported here (related post on medical definitions driving national statistics here).  This week, Mark Perry links to an article further illuminating the issue:

The main
factors affecting early infant survival are birth weight and
prematurity. The way that these factors are reported "” and how such
babies are treated statistically "” tells a different story than what
the numbers reveal.  Low
birth weight infants are not counted against the "live birth"
statistics for many countries reporting low infant mortality rates.

According
to the way statistics are calculated in Canada, Germany, and Austria, a
premature baby weighing less than 500 kg is not considered a living
child.
But
in the U.S., such very low birth weight babies are considered live
births. The mortality rate of such babies "” considered "unsalvageable"
outside of the U.S. and therefore never alive "” is extraordinarily
high; up to 869 per 1,000 in the first month of life alone. This skews
U.S. infant mortality statistics.Norway
boasts one of the lowest infant mortality rates in the world. But when
the main determinant of mortality "” weight at birth "” is factored in,
Norway has no better survival rates than the United States....

In the United States, all infants who show signs of life at birth
(take a breath, move voluntarily, have a heartbeat) are considered
alive.

If a child in Hong Kong or Japan is born alive but dies within the
first 24 hours of birth, he or she is reported as a "miscarriage" and
does not affect the country's reported infant mortality rates....

Efforts to salvage these tiny babies reflect this classification. Since
2000, 42 of the world's 52 surviving babies weighing less than 400g
(0.9 lbs.) were born in the United States.

Hmm, so in the US we actually try to save low-birthweight babies rather than label them unsalvageable.  Wow, we sure have a cold and heartless system here.  [disclosure:  My nephew was a very pre-mature, very low-birthweight baby who could have fit in the palm of your hand at birth and survived by the full application of American medical technology.  He is doing great today]

Those who oppose more open immigration generally have three arguments, to which I have varying levels of sympathy:

• It's illegal!  Illegal immigration violates the rule of law.  I have always thought this argument weak and circular.  If the only problem is that immigrants are violating the law, then the law can be changed and its now all legal.  Since this is not the proposed solution, presumably there are other factors that make more open immigration bad beyond just the fact of its illegality.  I am positive I could come up with hundreds of bad laws that if I asked a conservative, "should I aggressively enforce this bad law or should I change it," the answer would be the latter.
• We will be corrupting our culture.  I am never fully sure what these arguments mean, and they always seem to carry a touch of racism, even if that is not what is intended.  So I will rewrite this complaint in a way I find more compelling:  "We are worried that in the name of liberty and freedom, we will admit immigrants who, because of their background and culture, will vote against liberty and freedom when they join our democracy."  I am somewhat sympathetic to this fear, though I think the horse may already be out of the barn on this one.  Our current US citizens already seem quite able to vote for restrictions on liberties without any outside help.  If I were really worried about this, I might wall off Canada before Mexico.
• Open Immigration or Welfare State:  Pick One.  I find this the most compelling argument for immigration restrictions.  Historically, immigration has been about taking a risk to make a better life.  I have been reading a biography of Andrew Carnegie, which describes the real risks his family took, and knew they were taking, in coming to America.  But in America today, we aren't comfortable letting people bear the full risk of their failure.  We insist that the government step in with our tax money and provide people a soft landing for their bad decisions (see:  Mortgage bailout) and even provide them with a minimum income that in many cases dwarfs what they were making in their home country. 

My problem with conservatives is that they are too fast to yell "game over" after making these arguments, particularly the third.  There are some very real reasons why conservatives, in particular, should not so easily give up on finding a way to allow more free immigration.  Consider these questions:

• Should the US government have the right and the power to dictate who I can and cannot hire to work for me in my business?
• Should the US government have the right and the power to dictate who can and cannot take up residence on my property (say as tenants)?

My guess is that many conservatives would answer both these questions in the negative, but in reality this is what citizenship has become:  A government license to work and live in the boundaries of this nation.

I can't accept that.  As I wrote here:

The individual rights we hold dear are our rights as human beings, NOT
as citizens.  They flow from our very existence, not from our
government. As human beings, we have the right to assemble with
whomever we want and to speak our minds.  We have the right to live
free of force or physical coercion from other men.  We have the right
to make mutually beneficial arrangements with other men, arrangements
that might involve exchanging goods, purchasing shelter, or paying
another man an agreed upon rate for his work.  We have these rights and
more in nature, and have therefore chosen to form governments not to be
the source of these rights (for they already existed in advance of
governments) but to provide protection of these rights against other
men who might try to violate these rights through force or fraud....

These rights of speech and assembly and commerce and property
shouldn't, therefore, be contingent on "citizenship".  I should be
able, equally, to contract for service from David in New Jersey or Lars
in Sweden.  David or Lars, who are equally human beings,  have the
equal right to buy my property, if we can agree to terms.  If he wants
to get away from cold winters in Sweden, Lars can contract with a
private airline to fly here, contract with another person to rent an
apartment or buy housing, contract with a third person to provide his
services in exchange for wages.  But Lars can't do all these things
today, and is excluded from these transactions just because he was born
over some geographic line?  To say that Lars or any other "foreign"
resident has less of a right to engage in these decisions, behaviors,
and transactions than a person born in the US is to imply that the US
government is somehow the source of the right to pursue these
activities, WHICH IT IS NOT...

I can accept that there can be some
minimum residence requirements to vote in elections and perform certain
government duties, but again these are functions associated with this
artificial construct called "government".  There should not be, nor is
there any particular philosophical basis for, limiting the rights of
association, speech, or commerce based on residency or citizenship,
since these rights pre-date the government and the formation of borders.

I have advocated for years that the concept of citizenship needs to be unbundled (and here, on the Roman term Latin Rights).   Kerry Howley makes a similar argument today:

Citizenships are club memberships you happen to be born with. Some
clubs, like the Norway club, have truly awesome benefits. Others, like
the Malawi club, offer next to none. Membership in each club is kept
limited by club members, who understandably worry about the drain on
resources that new members might represent. Wishing the U.S. would
extend more memberships in 2008 isn't going to get you very far.   

Conceptually,
for whatever reason, most of us are in a place where we think labor
market access and citizenships ought to be bundled. A Malawian can't
come work here, we think, without the promise of a club membership,
which is nearly impossible to get. This is an incredibly damaging
assumption for two reasons: (1) memberships are essentially fixed in
wealthy democratic societies (2) uneven labor market access is a major
cause of global inequality. Decoupling the two leads to massive gains,
as we see in Singapore, without the need to up memberships.   

Here's
another way to think about it: Clubs have positive duties toward their
members, including those of the welfare state. But the negative duty
not to harm outsiders exists prior to clubs, and denying people the
ability to cooperate with one another violates their rights in a very
basic way. Our current policy is one of coercively preventing
cooperation. In saying "we can't let people into this country unless we
confer upon them all the rights and duties of citizenship," you are
saying that we need to violate their right to move freely and cooperate
unless we can give them welfare benefits. But that's backwards.

The Heritage Foundation has an interesting study out on the population that lives below the poverty line.  While we typically get lots of headlines like "A million more people in poverty,"  the real headline should be "Poverty ain't what it used to be."  Create a mental image for yourself about poverty then read the first part of the article.

I won't repeat the studies points -- you can read them at the link or you have probably seen the study already linked around the blogosphere (e.g. Captains Quarters, Cato-at-Liberty, Reason, Maggie's Farm).  Reading the descriptions, its clear that most of our visual images and assumptions about US "poverty" don't line up well with this list.   This is by design.  Progressives who want more transfer payments and more government interventionism work hard to create a stark mental image of poverty through anecdotes, and then try to apply that mental image to a much larger population based on a very different definition of poverty than in this mental image. 

However, this approach may be set to backfire.  By defining poverty broadly to try to pump up the numbers, they are at risk of people losing sympathy for the poor.  I can see the progressive reaction now -- they are going to say (correctly) that buried in these numbers are a hard core of people who are really destitute.  And they are correct.  But they only have themselves to blame for burying these folks in a larger group whose lives don't match our mental picture of poverty.  And the poverty numbers aren't the only place where this approach is taken. 

I am sure you have heard the commercials that say something like one in six kids in America are hungry.  It's a crock.  There are at most perhaps 2-3 million people in this country who are really destitute.  The Census department found that only 6% of the people below the poverty line, about 2 million people, reported they sometimes did not have enough food to eat.  Sure, that sucks.  Which is why I volunteer with my kids at the local food bank.  But it's way, way short of the numbers activists try to use to justify huge new government programs and transfers.

Other thoughts

One issue not discussed, but covered in other studies, is the transience of people in the bottom quintile of income.  Most of us imagine the same people in poverty survey after survey, and again that is probably true for the hard core of 2-3 million.  But many of the rest move out of poverty over time.  In particular, we have had a huge influx of immigrants (legal and illegal) over the last several decades.  These folks are all counted in the poverty numbers.  Many immigrants arrive below the poverty line, and then work their way out of it. 

In a related post, Brad DeLong looks at what life was like even for the well off in 1900, and one can easily come to the conclusion that being poor today might be better than well off in 1900.  I made a similar point in this post, when I compared the life of the very rich in 1850 to the middle class today.  All of this is empirical proof that wealth is not zero-sum, as assumed by progressives, but is created and expends.  My post of the zero-sum wealth fallacy is here.

I've made the point for a long time that our poor are better off than the middle class in most countries of the world.  This living space comparison is an example - our poor typically have more living space in their homes than the middle class in Europe, or the well-to-do in many other countries.  But there is always that issue of income inequality that is raised, to which I typically answer "so what?"  If the poor are better off in the US, does it matter if the rich are really, really better off?  Note sometime the language that is always used in income inequality discussions.  You will hear folks talking about the "share of total income" as if income is a spring bubbling up in the desert, spewing a fixed amount of wealth, and the rich are the piggy folks up front getting more than their fair share of this limited resource. 

Leftish studies love to show how the US economic model is so much more heartless than those wonderful Europeans.   Below is a typical chart they use, and it will bring us full circle to our original point about measuring poverty.

Wow, those heartless damn Americans!  Letting those children suffer.  But wait, we talked earlier about definitions of poverty - how do they define poverty here?  It turns out that poverty is defined as income 50% or less of the median income in that country.  Yes, you heard that right -- the standard for poverty changes country to country.  So the US has the worst results here because in large part, since it has the highest median income of any country in this survey, it has been given the highest poverty line.  Of COURSE we will have higher poverty numbers if you give us a higher poverty bar.  The honest way to do this study would be to set an absolute poverty line and apply it to each country on a purchasing power parity basis.  But of course, the progressives would not like the results of such an honest study.

BUT, someone in this study made a mistake -- they should lose their socialist decoder card for this.  Because in a fit of honesty, they actually restated one of their charts on a relatively fair basis.  Here is the original income equality chart:

You get the point, the US sucks as always -- our poor are the poorest.  But are they?  Again, the standard in each line is the median income of that country, so it is a changing standard in each case.  But what if we restated it all to a common dollar amount.  This is where the progressives fell into a fit of honesty.  They restated this chart so that every bar is a percentage of the US median income.

Now we see the real story - except for Norway and Switzerland, our poorest folks are about on par with those in other western countries, and this is WITHOUT the crushing burden of welfare state regulation and taxation.  Further, the poor in the US are much more mobile than those in other country -- the ranks of our poor will have turned over much more than any of these other countries in 10 years.  Finally, my bet is that if you did this chart without recent immigrants, the US poor would best most every country in Europe in terms of income -- US has a lot of immigration and it is disproportionately poor vs. immigration into other European countries (note that most poverty numbers include illegal immigrants, but most official immigration numbers do not include illegal immigrants).

So, if our poor are doing just as well, then I leave it as an exercise to give any rational reason why the fact that our rich are doing much better matters one damn bit.

I originally got to this post at Carls Talk because of the cool map I put in this post.  However, I was really struck by his lament that foreign companies won't sell into Norway because it is too small.  Given that Norway has a trade surplus, you would think that given all the whining in the US about trade deficits that everything would be hunky-dory in Norway and that they would be thrilled that foreign companies wouldn't sell there.  But check this out:

When seeing Norway's GDP in the context of this map, one realizes
why Norway often is one of the last countries U.S. companies consider when
expanding to Europe.

Norway might be an unattractive market when considering expansion
because the market is so small and as a result there is little domestic
competition.  This  has enabled local players to
build monopolies or duopolies with substantial  entry-barriers in many
industries.  Furthermore, the government has sheltered the domestic
market against international competition by adding a hefty import tax
and inconvenient delivery methods on goods purchased outside the
country, rendering international online merchants at a disadvantage
when competing on price and convenience.

On the flip side, if you manage to establish your business here, you
can overcharge your customers and get away with horrendous customer
service.  The average Norwegian customer is not used to good service
and competitive prices.  Online merchants are slow.  Recently it took
four weeks before I received a book shipped to me from a local
merchant.  On a recent trip I recently purchased shoes for our kids in
the U.S.  The selection was superior, and the price:  1/4th of what the
local Norwegian merchant was charging. 

Gee, you mean there is a price consumers pay for protectionism that might offset a few job gains in sugar growing and textiles?

There is a widespread notion that the Scandinavian countries somehow have crafted for themselves the highest standard of living in the world.  This never made much sense to me, since I just couldn't believe their socialist economies could really create the wealth needed to support this alleged standard of living.  As it turns out, they can't and don't, and owe their reputation more to PR than reality:

THE received wisdom about economic life in the Nordic countries is
easily summed up: people here are incomparably affluent, with all their
needs met by an efficient welfare state. They believe it themselves.
Yet the reality - as this Oslo-dwelling American can attest, and as
some recent studies confirm - is not quite what it appears....

All this was illuminated last year in a study by a Swedish research
organization, Timbro, which compared the gross domestic products of the
15 European Union members (before the 2004 expansion) with those of the
50 American states and the District of Columbia. (Norway, not being a
member of the union, was not included.)

After adjusting the
figures for the different purchasing powers of the dollar and euro, the
only European country whose economic output per person was greater than
the United States average was the tiny tax haven of Luxembourg, which
ranked third, just behind Delaware and slightly ahead of Connecticut.

The next European country on the list was Ireland, down at 41st
place out of 66; Sweden was 14th from the bottom (after Alabama),
followed by Oklahoma, and then Britain, France, Finland, Germany and
Italy. The bottom three spots on the list went to Spain, Portugal and
Greece.

Alternatively, the study found, if the E.U. was treated
as a single American state, it would rank fifth from the bottom,
topping only Arkansas, Montana, West Virginia and Mississippi. In
short, while Scandinavians are constantly told how much better they
have it than Americans, Timbro's statistics suggest otherwise. So did a
paper by a Swedish economics writer, Johan Norberg.

So Europeans, in terms of being well-off, rank right up there with... Appalachia.  "Jimmy, you have to finish that liver - you know there are starving kids in Norway that would love to have that food."

Anyway, if this topic interests you, of true comparisons of US vs European economies, income distribution, work weeks, etc., Cowboy Capitalism is a good place to start.  (hat tip Instapundit)