Minor Thoughts from me to you

Progressives are always talking about the need for a good, benevolent government to take care of citizens and protect them. Well, before I give the government any more authority, I'd like to see if they're competent at providing a basic level of physical security.

Take the case of Warren Rothman, a San Francisco lawyer. Several years ago, he worked in Shanghai. There, he was given information about a large bribe that had recently been paid. Before he could report it, a Chinese legal aid tried to kill him. The legal aide conned the local American consulate into giving him the papers necessary to have Mr. Rothman involuntarily committed to mental institution. Once there, he tried to poison Mr. Rothman.

After Mr. Rothman escaped, he discovered the consulate's role in his kidnapping and near death.

So he contacted officials at the State Department Office of the Inspector General and told them of the distressing role the acting consul and other consulate officers had played in his own drama.

Well, late last month, the inspector general's office wrote back and told Rothman, "We have determined that the appropriate office to address your concerns is the Bureau of East Asian and Pacific Affairs" - the very State Department office where the diplomats in question worked.

How's that for good government?

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It was just a few weeks ago at the Democratic national convention that Obama confidently declared that “al Qaeda is on the path to defeat and Osama bin Laden is dead.” And yet, on the 11th anniversary of the 9/11 attacks, al Qaeda struck again against our lightly guarded consulate in Benghazi, where ambassador Chris Stevens was murdered — an attack, it now turns out, the United States had ample reason to suspect was coming.

I think that foreign policy has gone from being an Obama strength to something that has to be considered an Obama weakness. Right?

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Michael Totten on foreign aid and the Arab world. I endorse this message wholeheartedly.

Egypt has nothing Americans need, not even oil.

Libya, on the other hand, doesn't only deserve American help. It needs American help.

The country is on a knife's edge. The central government doesn't control all of its territory, nor does it have a monopoly on the use of force, as a healthy and stable government should. Patches of Libya are under the thumbs of ideological and tribal militias.

Libya is in a transition phase. The country will cohere under a strong central government or come apart. If it comes apart, al Qaeda could break off a piece, as it did in Mali in April. The last thing the West needs right now is an oil-rich terrorist nest a short boat ride from Italy.

Popular sentiment in Libya toward the U.S. and the West in general is the opposite of sentiment in Egypt and pretty much everywhere else in the Arab world. That shouldn't surprise us. Gadhafi fed his cowering subjects a steady diet of anti-Americanism for decades, but most Libyans hated him. They hated him so much they hardly even bothered to protest once the Arab Spring started. They just picked up their rifles and aimed to shoot him out of his palace. They knew Americans hated him, too. He was a common enemy. It matters, and it matters a lot. Libya's relative pro-Americanism is similar at least in that way to Eastern Europe's.

It may not last. Libyans could end up joining the Arab world's anti-American mainstream. For now, though, they're standing apart from all that. They need American help against the militias, and they're worth the risk. The alternative is worse by far than anything we're seeing in Cairo.

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Meanwhile, lawmakers on both sides of the aisle are raising questions about security at the compound in Benghazi. All members of the Senate Foreign Relations Committee wrote to the State Department on Thursday asking for additional details about security at U.S. diplomatic posts and for a fuller explanation of the attacks on U.S. compounds in Libya, Egypt and Yemen.

An intelligence source on the ground in Libya told Fox News on Friday that no threat assessment was conducted before U.S. Ambassador Chris Stevens and his team began "taking up residence" at the Benghazi compound -- describing the security lapses as a "total failure."

The source told Fox News that there was no real security equipment installed in the villas on the compound except for a few video cameras.

On a scale of 1 to 10, with 10 being the worst, the intelligence source said the security lapses were a 10 -- a "total failure" because Benghazi was known to be a major area for extremist activity.

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Garett Jones talks about speed bankruptcy as an alternative to bank bailouts. I like this idea—especially if the alternative is bank bailouts.

When a corporation's assets appear to be worth less than its liabilities--for whatever reason--the economists' normal solution (as discussed last week) is for the bankruptcy judge to legally convert the bank's rigid debt claims into flexible equity claims. That's corporate bankruptcy in one sentence.

In a financial crisis, when megabanks are supposedly too big and too complicated and interconnected to wait for a formal, years-long bankruptcy process, I recommend doing the debt-to-equity conversion of the course of a weekend: I call this speed bankruptcy. I wrote a short piece on this in Fall 2008 here, a later academic version here.

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Seems like fact checkers need to do some fact checking of their own assumptions.  Paul Ryan’s speech last night included a reference to a GM plant in Janesville that closed, which Ryan used to criticize Barack Obama for failing to meet his campaign promises.  A number of “fact” checkers jumped all over Ryan’s anecdote to claim that he lied about the circumstances of the plant’s closure.

Ed Morrissey does a detailed fact check of the fact checkers' hysteria over Paul Ryan's references to the GM plant in Janesville, WI.

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Wisconsin's own Christian Schneider talks about the forces that drove GM to close the plant in Janesville, WI.

While plant closings are always complex issues, two main issues (both somewhat embarrassing to the Left) played a large role: the heavy burden of organized labor and misplaced government intervention in the automotive marketplace.

As George Will wrote at the time, by 2005, GM had essentially become a health-care company that also happened to make automobiles.

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Progressive bloggers and TV personalities are up in arms about Paul Ryan’s speech at the Republican National Convention last night. Several of their accusations revolve around Paul Ryan’s own fiscal record, and his description of President Obama’s. I asked my liberal friends on Twitter to send me an itemized list of Ryan’s alleged lies, and they kindly obliged. So far, Ryan appears to have the better of the argument.

Avik Roy fact checks the fact checkers, over Paul Ryan's convention speech.

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Deroy Murdock, with some wonderful satire.

After GOP presidential nominee Mitt Romney’s rousing and effective convention acceptance speech last week, I found myself snapping my fingers as the GOP convention’s band in Tampa played that old hit, “Living in America.” Suddenly, it dawned on me: Team Romney might be transmitting racial messages.

I consulted my copy of the definitive reference on this topic, A Black Man’s Guide to Whitey’s Racial Code, by Jesse Jackson and Kanye West (Sharpton Books, 2010). I flipped past the highly apologetic introduction by Representative Debbie Wasserman Schultz (D., Fla.). Just as I suspected, page 178 confirmed that “Living in America” was a Billboard Top 4 song by the Godfather of Soul, James Brown. This, as Jackson and West teach us, is a subtle message designed to remind Caucasians that President Obama has brown skin. Also, the song was written by Dan Hartman and Charlie Midnight. It doesn’t get any darker than midnight.

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The Dallas Morning News endorses Mitt Romney. (Not that Romney needs help in Texas...) I like the points that they made.

Romney had to survive a fractious primary by steering too far right on some issues. At his core, however, we see him as a “Chamber of Commerce Republican,” more attuned to business interests than the tea party/social conservatism that defines today’s GOP.

... Obama has cited, with some justification, recalcitrance from congressional Republicans for thwarting him. But in his first two years, when Democrats had a wide margin in the House and filibuster-proof majority in the Senate, Obama’s wounds were self-inflicted. He put his chips on a necessary but ill-conceived stimulus program and a massive health care overhaul. Left to languish were a broad-based energy bill, comprehensive immigration reform, entitlement reform and, most ominously, effective job-creation programs.

Obama’s people warned of unemployment rates as high as 8 percent without the stimulus spending, only to see rates exceed 8 percent, anyway, for 43 consecutive months — and counting. Real household income has fallen in consecutive years. Food stamp enrollment has hit record highs; the percentage of adults in the workforce approaches record lows.

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Huh. It'd be wonderful to deal with Israel as an energy exporter. Maybe then we could tell the Saudi's where they can stick their oil?

An article in the Financial Times illustrates an important theme we follow here at Via Meadia: the geopolitical and economic shifts as the new energy realities of the 21st century sink in.

As the FT puts it,

Experts are convinced that Tamar and Leviathan will not be the last big Israeli discoveries. They point to the US Geological Survey, which estimates that the subsea area that runs from Egypt all the way north to Turkey, also known as the Levantine Basin, contains more than 120 trillion cubic feet of natural gas. Israeli waters account for some 40 per cent of the total. Should these estimates be confirmed through discoveries in the years ahead, Israel’s natural gas reserves would count among the 25 largest in the world, on a par with the proven reserves of Libya and ahead of those of India and The Netherlands. For decades a barren energy island, forced to import every drop of fuel, Israel today stands on the cusp of an economic revolution, fuelled by the vast riches that lie below its waters.

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None of the initial explanations offered by the White House and State Department since the assault on the Benghazi consulate has held up. ... Administration officials also maintained that the diplomatic missions in Libya and Egypt, the site of the first attacks this September 11, were properly defended and that the U.S. had no reason to prepare for any attack. ... As it turned out, the assault was well-coordinated, with fighters armed with guns, RPGs and diesel canisters, which were used to set the buildings on fire. Ambassador Chris Stevens died of smoke inhalation.

Why isn't this a foreign policy scandal? Is the media protecting their candidate or is there another legitimate reason that the press isn't hammering the President and State Department about this?

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Michael Totten talks about the U.S. alliance with Morocco, one of the few bright spots in the Muslim world.

Compare and contrast Washington’s poisoned relationship with Cairo to the one at the opposite end of North Africa. The United States just upgraded its relationship with Morocco to the level of what’s called a Strategic Dialogue, bringing the two almost as close as possible without bringing Morocco into NATO. Americans have fewer than two dozen alliances like this in the world.

... That part of the world also needs a stable rock somewhere—not the stultifying stability provided by the House of al-Saud in Arabia, and certainly not the tyrannical sort that Moammar Qaddafi managed for a few decades in Libya. No, what the Middle East and North Africa need right now is progressive stability, the kind that slowly advances human and political development without triggering the kinds of violent reactions and shocks we’re seeing in so many places right now. Morocco is one of the few countries that's pulling it off.

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Remember how, in the wake of Hurricane Katrina in 2005, Al Gore (and many others) claimed that we were in store for ever more devastating hurricanes? Since then, hurricane incidence has dropped off the charts; indeed, by one measure, global accumulated cyclone energy has decreased to its lowest levels since the late 1970’s. Exaggerated claims merely fuel public distrust and disengagement.

That is unfortunate, because global warming is a real problem, and we do need to address it. Warming will increase some extremes (it is likely that both droughts and fires will become worse toward the end of the century). But warming will also decrease other extremes, for example, leading to fewer deaths from cold and less water scarcity.

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Adam Ozimek looks at two recent school choice studies and comes to a very interesting conclusion.

Furthermore, this type of evolutionary progress will be hard for studies that compare the performance of any existing schools to capture. New schools will have a lot of learning to do, and the best schools will evolve to be the best over time as they learn what works best and how to best serve local populations and labor markets. But by the time this evolution has produced it’s biggest gains the system will be closer to competitive equilibrium, where [one] would expect the public schools that survive to perform as well as the private schools that survive. At no point in this process will comparing charters or private schools and public schools reflect the largest gains of school choice. At some points you would expect zero difference.

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I started paying attention to how anti-GMO campaigners have distorted the science on genetically modified foods. You might be surprised at how successful they've been and who has helped them pull it off.

I’ve found that fears are stoked by prominent environmental groups, supposed food-safety watchdogs, and influential food columnists; that dodgy science is laundered by well-respected scholars and propaganda is treated credulously by legendary journalists; and that progressive media outlets, which often decry the scurrilous rhetoric that warps the climate debate, serve up a comparable agitprop when it comes to GMOs.

In short, I’ve learned that the emotionally charged, politicized discourse on GMOs is mired in the kind of fever swamps that have polluted climate science beyond recognition.

Well. The anti-science idiots exist on the left too. Worse, this kind of idiocy kills people, since it keeps people from planting GMO crops, thereby keeping crop yields lower than they have to be, and making food more expensive.

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Marginal Revolution University. If I can make the time, I'll be signing up for some classes.

We think education should be better, cheaper, and easier to access. So we decided to take matters into our own hands and create a new online education platform toward those ends. We have decided to do more to communicate our personal vision of economics to you and to the broader world.

You can visit www.MRUniversity.com here. There you can sign up for information about our first course, Development Economics, which is described by Alex.

Here are a few of the principles behind MR University:

1. The product is free (like this blog), and we offer more material in less time.

2. Most of our videos are short, so you can view and listen between tasks, rather than needing to schedule time for them. The average video is five minutes, twenty-eight seconds long. When needed, more videos are used to explain complex topics.

3. No talking heads and no long, boring lectures. We have tried to reconceptualize every aspect of the educational experience to be friendly to the on-line world.

4. It is low bandwidth and mobile-friendly. No ads.

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Here is a brief review of the literature: Robert Book discovered that reported Medicare’s administrative costs per patient (not as a percentage of the bills) were actually higher than private insurance. A Milliman study concluded that when all costs are considered (including the cost of tax collection) Medicare’s cost as a percent of total spending is 66% higher than private insurance. Ben Zycher concludes that a government run system would have higher administrative costs than a private system. And Tom Saving and I showed (based on CBO numbers) that Medicare has not been more successful that the private section in holding down costs — as Krugman, Robert Reich and others have claimed.

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Veronique de Rugy is worried that Romney / Ryan's talk about "protecting Medicare" means that they won't really push to reform it.

The only way to ensure that Medicare is there “for my generation, and for my kids and yours,” reform it. If when Representative Ryan says “protect” and “strengthen” he means “reform Medicare,” great. Reform can take many forms, obviously. But, then we can believe Ryan when he says “ladies and gentlemen, our nation needs this debate. We want this debate. We will win this debate.”

She lays out all of the reasons why Medicare desperately needs to be reformed, if it's to survive at all. It's worth a read, especially if you're not convinced about the necessity of reforming Medicare.

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Yuval Levin fact checks a Paul Krugman column about Paul Ryan's speech and about Medicare reform. Yuval demonstrates (with copious links to evidence) all of the ways in which Paul Krugman is wrong about Medicare, wrong about Ryan's plan. It's the best single summary of everything wrong with Medicare that I've seen yet—and it explodes quite a few myths about Medicare's affordability, sustainability, and efficiency.

Here's a small taste.

To begin with, many of Medicare’s most significant administrative costs are just covered by other federal agencies, and so don’t appear on Medicare’s particular budget, but are still huge costs of the program. The IRS collects the taxes that fund the program; Social Security collects many of the premiums paid by beneficiaries; HHS pays for a great deal of what you would think of as basic overhead, but doesn’t put it on the Medicare program’s budget. Obviously private insurers have to pay for such things themselves. Medicare’s administration is also exempt from taxes, while insurers pay an excise tax on premiums (which is counted as overhead). And private insurers also spend a great deal of money fighting fraud, while Medicare doesn’t. That might reduce the program’s administrative costs, but it greatly increases its overall costs. Some administrative costs save money, after all: The GAO has estimated that a $1 investment in pre-payment review of claims, for instance, would save $21 in improper Medicare payments.

It's worth reading the entire thing. Especially if you think Medicare doesn't need to be changed.

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