Category: Politics

What did we spend and what did we learn from the Mueller Investigation?

by philg

My Facebook friends are talking about the Mueller Investigation recently wrapping up (Wikipedia page on Special Counsel investigation (2017-2019)). Samples:

We don’t need investigative journalism or the Mueller report to implicate Trump. The evidence is already out in the open.

If you are wondering why Muller’s office issued no more indictments before releasing their report and thinking this lack of indictments somehow clears Trump and family read this thoughtful analysis of what may actually be Muller’s strategy. [link to a speculative article]

James Comey weighs in, leaving out an obvious, galling point. There is already more than enough evidence right now to indict and convict “Individual 1.” No doubt Mueller is surveying a Kanchenchunga of offenses. Mr. Trump’s top goons are already doing time in jail. It is a grotesque travesty of justice that the head of the operation — the unindicted coconspirator — instead gets to pretend to be president. With his well-cooked books, there is little question that Mr. Trump would be in jail and should be jail, right now, were it not for an idiotic Department of Justice policy that shields the president. The situation is so bad that many regard Mr. Trump’s clinging to office as the only way he can stave off jail time. He really has no exit path, other than trading his wardrobe for an orange jumpsuit. Didn’t think it through.

My favorite:

Can’t wait to wrap my eyes around the Mueller report–but I haven’t been doing much heavy reading lately. Would any of my comic artist buddies on my friends list consider adapting it to a graphic novel?

Is there good data on what this two-year investigation cost taxpayers? In addition to the direct expenditures, I think the cost in lost productivity from Americans posting about it on Facebook has to be many $billions.

(Back of the envelope: 150 million adult Americans who care about politics. Average of 1 hour spent talking or listening on this subject. Median wage $20/hour. Total: $3 billion.)

Wikipedia describes the purpose of the investigation:

counterintelligence investigation of the Russian government’s efforts to interfere in the 2016 presidential election. According to its authorizing document, which was signed by Deputy Attorney General Rod Rosenstein on May 17, 2017, the investigation included any possible links or coordination between Donald Trump’s presidential campaign and the Russian government as well as “any matters that arose or may arise directly from the investigation.”

The page says that they indicted a handful of Russians living in Russia for alleged crimes related to the above (falsely claiming that some young Democrats wanted to raise taxes on the successful, expand central planning of the economy (e.g., through higher minimum wages and other constraints on employer-employee relationships), make welfare programs more generous, and boycott the Jews of Israel?). That’s like Abraham Lincoln freeing all of the slaves… who lived in the parts of North America that he did not control.

What about people living in the U.S. that could actually be prosecuted, as a practical matter? How many of those were indicted for colluding with Russia?

If we can get these two numbers we can divide to get the cost per indictee!

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Other than Elizabeth Warren, who would be eligible for reparations?

by philg

“2020 Democrats Embrace Race-Conscious Policies, Including Reparations” (nytimes):

Last week, on the popular radio show “The Breakfast Club,” Senator Kamala Harris of California agreed with a host’s suggestion that government reparations for black Americans were necessary to address the legacies of slavery and discrimination.

Ms. Warren also said she supported reparations for black Americans impacted by slavery — a policy that experts say could cost several trillion dollars,

The U.S. has no authoritative genealogy service. If the government is handing out $trillions and eligibility is based on being a descendant of a slave, how will people be sorted into “gets paid” and “does not get paid” buckets?

America’s greatest intellectuals don’t seem to have come up with any practical ideas in this area. See “The Case for Reparations” (Atlantic) by Ta-Nehisi Coates, for example. There is nothing about what to do when Elizabeth Warren shows up with a family legend about an enslaved black ancestor and asks for her check.

More than 40 years ago, the Malone brothers availed themselves of jobs reserved for Americans identifying as “black”. See “Boston Case Raises Questions on Misuse of Affirmative Action” (nytimes):

Philip and Paul Malone are fair-haired, fair-complexioned identical twins who worked for the Boston Fire Department for 10 years. Last month both were dismissed when a state agency ruled that they had lied on their job applications: They had contended they were black.

In 1975, the Malone twins, now 33 years old, took the Civil Service test for firefighters and failed. But in 1976, according to their lawyer, Nicholas Foundas, their mother found a sepia-tinted photograph of their great-grandmother, who, she told them, was black. In 1977, they reapplied to take the test, contending they were black.

Philip Malone scored 69 percent and Paul Malone 57 percent, below the 82 percent standard minimum for white applicants, according to the Massachusetts Department of Personnel Administration, which monitors Civil Service tests and hiring.

The twins won appointments in 1978. They were questioned about their race last February, when their names appeared on a list of black firefighters applying for promotion, said Capt. Matthew J. Corbett, a spokesman for the Fire Department. ‘They’re Devastated’

The system under which the Malone brothers prospered for 10 years was a lot simpler than what Kamala Harris and other politicians are proposing. The Boston Fire Department was allocating jobs based on skin color, which can be observed and measured today, not ancestry, for which there is no official source.

Readers: How would it work? If people are lining up for their $trillions and all say that they are descended from slaves, who will decide whether to write a check or not?

Also, how do we decide who pays the reparations? It can’t come out of general tax revenues, can it? Why should an asylum-seeker who arrived via caravan in 2018 have to pay reparations for something that happened 200+ years prior to the caravan’s arrival? How about Native Americans? Should Sachem Elizabeth Warren have to pay for what white people did to black people?

Related:

  • “Cure for Racial Dishonesty” by Walter E. Williams: “We can learn from South Africa. During its apartheid era, it, too, had a racial spoils system. The government combated racial fakery by enacting the Population Registration Act of 1950, which racially classified the country’s entire population.”
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Why aren’t defeated American Presidential candidates snapped up by other nations?

by philg

Here’s a conundrum: in a ratio of 500:28, Hillary Clinton was endorsed by our smartest citizens (journalists, editors, and publishers) as the best qualified person, out of more than 325 million, to lead the United States government. After November 2016, however, she didn’t have any pressing job responsibilities and her family foundation was also winding down. Why wouldn’t a country of 5 or 10 million have tried to persuade her to come over and be their leader? From a statistical point of view, assuming equal intelligence and education levels, it is unlikely that a country of 10 million would have a better person available than someone who was #1 out of 325 million.

We could ask the same question about Mitt Romney, John Kerry, Carly Fiorina, Al Gore, Sarah Palin, Bernie Sanders, et al. These folks rose pretty close to the top in the American electoral system, so tens of millions of people thought that they had tremendous abilities. Why aren’t they sought-after by smaller countries as leaders?

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Financial Times: People turn socialist when they can’t afford an apartment

by philg

“Quantitative easing was the father of millennial socialism” by David McWilliams, an Irish professor (Financial Times), says that the bailouts following the Collapse of 2008 helped out older property owners, by reflating the prices of the stuff that they had unwisely purchased, on the backs of millennials.

He notes that “the worst of investments are often taken in the best of times.” (Maybe good to point out to anyone with money or income considering getting married and living in one of the U.S. states that provides for winner-take-all divorce litigation!)

He notes that average hourly earnings have gone up 22 percent in the past 9 years while property prices are up 55 percent in Houston, 67 percent in LA, and 96 percent in San Francisco: “The young are locked out.”

(The article says that 79 percent of the same folks who can’t afford apartments also think that “immigrants strengthen the US”. Certainly every landlord would agree that more demand is a good thing, but why are landless peasants happy to see another caravan of housing-seekers arrive?)

Why are people so obsessed with wealth inequality these days? The author says that “wealth inequality was not the unintended consequence, but the objective, of [quantitative easing] policy.”

The close:

For the purist, capitalism without default is a bit like Catholicism without hell. … what if the day of reckoning was only postponed? What if a policy designed to protect the balance sheets of the wealthy has unleashed forces that may lead to the mass appropriation of those assets in the years ahead?

Appropriation? Could it happen here? Elizabeth Warren has proposed to take wealth gradually, via a 2 percent tax on rich bastards (over $50 million in wealth). If they try to escape by renouncing their U.S. citizenship, she’ll hit them with a 40 percent exit tax. (Slate) Not too scary to the merely comfortable, right? Remember that income tax started out in 1913 between 1 and 6 percent and it was limited to those with incomes over $103,000 in today’s mini-dollars ($4,000/year for a married couple at the time). Once the structure is in place, the rates and thresholds can be tweaked as necessary.

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Righteous Americans develop a fondness for long prison sentences

by philg

My Facebook friends are expressing their dismay that Paul Manafort was recently sentenced to only about 4 years in prison for tax evasion. CNN describes the prison sentence as “light” in “Manafort’s light sentence shines a light on US prison inequality”.

Certainly I would expect this kind of zeal for long prison terms from executives in the American prison industry, but none of these folks owe their paychecks to the incarceration mill.

How does Manafort’s first sentence (he’s still being chased by some other prosecutors for some other crimes) compare to sentences considered fair a few decades ago?

The Growth of Incarceration in the United States says that circa 1980, the average time served in prison for an American convicted of murder was 5 years.

Japanese war criminals responsible for killing thousands rather than millions of innocent people were released after about four years (nytimes, 1949; see also the Wikipedia page on Japanese war criminals (none served more than 13 years)). The typical convicted Nazi war criminal was released after a few years (Wikipedia list of the highest-profile ones). Some of the higher level ones were imprisoned until the mid-1950s (example: Otto Hofmann, one of the architects of the death camp system at the Wannsee Conference).

Damir Dosen was “indicted for persecutions, inhumane treatment and torture as crimes against humanity and for outrages upon personal dignity, torture and cruel treatment as violations of the laws or customs of war”, pleaded guilty, and was found “responsible for crimes against humanity”. The Bosnian Serb was sentenced to 5 years and served 3.5 (released in 2003).

How about Jussie Smollett? He has now been indicted for 16 felonies as a consequence of trying to expose Trump supporters for who they really are (unfortunately he didn’t know where to find any actual Trump supporters). He could be imprisoned for up to 64 years (Vox).

Related:

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Successful criminal mastermind avoids scrutiny…

by philg

While driving back from New York City this afternoon, I briefly listened to AOC and fellow Democrats question one of Donald Trump’s former lawyers. I learned that Trump was a successful criminal mastermind who had escaped attention from the authorities and prosecutors for decades. Then he decided that the best way to keep a low profile and avoid close scrutiny of his misdeeds would be to run for and become President.

A specific part that I remember concerned the valuation of a Trump golf course. AOC noted that the management valued the course different for investment purposes than for property tax. Yet this would apparently be true for hundreds or thousands of golf courses in the U.S. (see this article for how golf clubs may be taxed based on a low valuation due partly to a belief that it is beneficial to have some open/green space: “In Pennsylvania, for instance a golf facility can apply for inclusion in the ‘Clean and Green’ Act 515 program, which preserves open space in return for a reduction in taxes.”).

Representative reaction from my virtuous Facebook friends:

Well, I was wrong about Trump. I substantially underestimated his perfidious criminal conduct, if half of what Cohen says is true, and I suspect most of it is.

Readers: Did you watch the hearing? Learn anything new?

[Separately, if you want to see what a country looks like when it can’t support any additional people with its infrastructure, try driving Boston to New York and back during what used to be the mid-day off peak. The forecast on Monday morning was for 47-knot wind gusts at Teterboro, of which 37 knots would have been a crosswind component. It would have been 1.5 hours of moderate-to-severe turbulence to get there in the Cirrus. So it was time for the Honda Odyssey to show off its immunity to crosswinds (fairly impressive!).]

Related:

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While you’re watching the cable box, the cable box is watching you…

by philg

Our Verizon FiOS service was beginning to flake out, though could usually be restored by power-cycling the router. I decided that it was time to upgrade to Gbit service so I called up the friendly sales folks to sign up for a new package.

“Let me see what channels you watch,” said the agent. “Oh! Your favorite is NBC?” He sounded surprised. Other than watching the last five minutes of the Super Bowl (one hour of clock time?), we hadn’t turned on the TV since an attempt to tape “How the Grinch Stole Christmas.”

In other words, the agent knew what we watched and how much we watched, presumably from cable box data.

Is it common knowledge that TV viewing habits are not private in a cableized world? Why aren’t folks who say that Donald Trump is establishing a dictatorship concerned? Wouldn’t it be straightforward to use cable company data to find those who #Resist (e.g., by refusing to watch Fox News) and send them to concentration camps?

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Alexandria Ocasio-Cortez takes an anti-immigration position?

by philg

At lunch on Friday, a friend bragged a bit about his daughter, a whip-smart Computer Science graduate working for one of the most prestigious Wall Street banks: “She’s making a ton of money.”

Really, I asked. She won’t need a car in Manhattan so let’s say that she can spend half of her after-tax earnings on rent. Within a 20-minute walk of her office, how big of an apartment would she get? “Not even a one-bedroom,” he replied. The young energetic works-all-the-time college graduate has to share an apartment. So, she’d have an objectively higher standard of living if she were a programmer for the State of Indiana? “Yes.”

Let’s look at what happens when a big rich employer moves into this environment.

“Ocasio-Cortez and progressives score a victory in Amazon fight” (CNN):

Ocasio-Cortez hailed the Washington Post report on Friday as a victory of the citizen over the corporation, when she tweeted a link to the Post article and added: “Can everyday people come together and effectively organize against creeping overreach of one of the world’s biggest corporations? Yes, they can.”

Let’s also consider “Ocasio-Cortez leads immigration rally outside White House” (The Hill):

Rep. Alexandria Ocasio-Cortez (D-N.Y.) on Tuesday used a pro-immigration rally outside the White House to call for permanent residence for people in the U.S. with temporary protected status (TPS).

“We are a nation that turns peril into promise,” Ocasio-Cortez said. “We are here to make sure that all TPS recipients become permanent members of the United States of America.”

Also “ALEXANDRIA OCASIO-CORTEZ SHEDS TEAR, SAYS ‘WE ARE STANDING ON NATIVE LAND’ AS SHE CALLS TO DEFUND ICE” (NBC):

Representative Alexandria Ocasio-Cortez on Thursday called on Congress to cut funding to U.S. Immigration and Customs Enforcement (ICE) and accused the agency of criminalizing Latinos in the United States, which she called “native land.”

I wonder if everyone’s favorite member of Congress has figured out that the immigration of Amazon into Manhattan is likely to be a net negative for most of her constituents. Plainly, property owners will be better off. There will be more demand for office space, retail space, and apartments.

What about renters? Consider the school teacher, age 32, who has been working for NYC Public Schools since graduating college at age 22 and has earned an online master’s degree. If I’m reading the salary schedule right, this puts the teacher at $87,160 per year. If the teacher has no children, earning $87,160 is above the eligibility limit for public housing.

Why is the teacher better off after Amazon moves in? The teacher’s salary is set by union contract and won’t go up. Amazon was forecast to pay an average of $150,000 per year. This is great news for the teacher’s landlord, who now has 25,000+ new potential renters earning $150,000 per year. Why is it great news for the teacher?

If we consider the teacher a “native” and the Amazon workers “immigrants,” I wonder if this is the same situation as the immigration question on which Ms. Ocasio-Cortez takes the opposite view.

An extra 50 or 100 million immigrants plus children of immigrants is wonderful news for property owners (the government will pay to rent a migrant family an apartment), the health care industry (more customers and the government will pay for nearly all of them!), folks who work in the welfare industry, etc. But for a renter with low skills, the immigrants will drive up the cost of an apartment and drive down the market-clearing wage.

Readers: Is Alexandria Ocasio-Cortez being inconsistent here in advocating for migrants to come through the southern border and for Amazon to stay out of Queens? Does the own vs. rent dichotomy explain most of the disagreement in New York City on whether Amazon HQ2 was a positive or a negative?

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Wall-o-nomics: Calculating the cost of refugees to the U.S. economy

by philg

The proposed Wall/fence that dominates the news right now is at least partly about economics. People who make it across the border are then entitled to make an asylum claim and live in the U.S. for years of administrative processing and, if successful, live in the U.S. forever. They can collect welfare while doing this. Their children and grandchildren born on the U.S. side of the border can collect welfare as well. Advocates for an open border (“A wall, in my view, is an immorality.” — Nancy Pelosi) say that taxes paid by migrants exceed the welfare cost. Let’s look at this…

A reader of an earlier post cited “The Economic and Social Outcomes of Refugees in the United States: Evidence from the ACS” (NBER) as evidence that we are running a profit on our refugee industry:

“By the time refugees who entered the U.S. as adults have been here for 20 years, they will have paid, on average, $21,000 more in taxes to all levels of government than they received in benefits over that time span, according to a working paper released Monday by the National Bureau of Economic Research that examined the economic and social outcomes of refugees in the U.S.”

So if we believe the expert economists at NBER and don’t dig into the paper, we make a profit of $1,050 per year on every refugee who arrives as an adult. The Federal deficit of $779 billion for FY2018, therefore, could be wiped out if we simply admitted 741,904,761 adult refugees, e.g., by asking most adults in India or China to move here and spin an abuse yarn.

When we dig a little deeper, though, it seems that the economists have had their thumbs on the scales (or somewhere else?). An “adult” is defined by the researchers as 18-45, but refugees are admitted without any age limit. A disabled 70-year-old has the same right to asylum as an able-bodied 22-year-old.

Suppose that all refugees were actually aged 18-45 and the economists had gotten the rest of the analysis correct. Would refugees yield a net profit? They’re paying more than they’re taking so they’re not “takers,” right? The Abstract reveals one question to explore: “After 6 years in the country, these refugees work at higher rates than natives but they never attain the earning levels of U.S.-born respondents.” Even for this cherry-picked age subset, the idea is that we’ll become richer overall by having lower earnings on a per-capita basis (and of course anyone in the U.S. income inequality industry will have an uglier statistic to wave around). Can that work?

The paper looks at six government welfare programs: “There are six social insurance programs that account for the majority of government payments to U.S. citizens: welfare, Supplemental Security Income (SSI), Social Security, food stamps, Medicare, and Medicaid.”

What if we subtract the cost of these programs from the total cost of running local, state, and federal government and then see if $1,050 per year per person will pay for the remainder? If we budget the above subset of welfare at $2 trillion per year and subtract from about $7.5 trillion per year in total spending (source) we get $5.5 trillion. Divide by a population of 328.4 million (popclock) and we find that it takes $16,748 per person to fund our government minus these headline welfare programs.

Each refugee paid a net $1,050 per year and consumed an additional roughly $15,700 in government services (roads, schools, libraries, police and fire protection, etc.). Over a 20-year period, then, the refugee took approximately $314,000 from other taxpayers.

Did the economists even begin to do a full cost accounting, though?

As of 2012, there were 79 Federal means-tested welfare programs (Heritage). The NBER looked at only 6.

Since the refugees never get to the median U.S. income, the typical refugee never gets above the 400 percent of poverty disqualification threshold for Obamacare health insurance subsidies. The typical refugee would also be eligible for public housing, a program that can be worth $60,000+ per year per family in the NBER’s home town of Cambridge, Massachusetts and yet they didn’t think it was worth including.

If we assume $5,000 per year in health insurance subsidies and $20,000 per year in public housing subsidies per refugee, over a 20-year period the best-case refugee now costs $814,000. That best-case refugee showed up during his or her core working years.

Once across the border, of course, the best-case refugee or asylum seeker should live for longer than 20 years. Would it be fair to round up the total cost to $2 million? Therefore if $5 billion is spend on an immoral wall/moral fence it has to stop 2,500 migrants in order to pay for itself in pure economic terms?

[Of course, there is more to life than money. We might have other reasons for wanting an open border, e.g., superior morality, loneliness if the U.S. population remains stuck near 330 million, etc.]

Readers: Did I miss anything? Or is $814,000 over 20 years a reasonable estimate? Also, how can people imagine that someone who pays a net $1,050 per year in tax is going to be of any real help in keeping the U.S. government going?

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Why did Trump have to declare a National Emergency?

by philg

“Trump Declares National Emergency to Build Border Wall” (nytimes):

President Trump declared a national emergency at the border on Friday to access billions of dollars to build a border wall

Suppose that he wants to spend $4.4 billion per year on wall construction. That’s 1/1000th of the $4.4 trillion federal budget. It is 0.6 percent of the ordinary annual budget for the military of which Mr. Trump is Commander in Chief.

What would have stopped President Trump from directing military personnel to go down to the border area and install some fences, using the budget that he already has available? Why must it be an emergency? If the Commander in Chief decided that the military should build some new fences around various bases, that wouldn’t require declaring a national emergency, would it? How is this different?

Based on my reading of The Line Becomes a River: Dispatches from the Border, all that Trump would need to do to shake loose significant money is have the Border Patrol stop flying Eurocopters all day every day (a lot of this seems to be evacuation of the dehydrated, something that could be accomplished for $100/hour instead of $10,000/hour if done with SUVs).

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