Law

There are many issues to this Catalan predicament

Bob has been providing arguments to a more nuanced view. He has said that “Spanish is not all that far from being banned from public schools” in Catalonia. That is true, but to put it into context provides additional knowledge. The reality is much worse. 60% of Catalan children has the Spanish language as mother tongue (30%, Catalan language) All primary and secondary schools use Catalan as vehicular teaching language (with an hour a week of Spanish… or nothing) Basically, in practice, you are not allowed to decide in which language do you want your children to be taught. I am sure most of you will think that this cannot be true in a democratic country.

As the United Nations recognizes (21st of February, day of the mother tongue) children should be schooled in the mother tongue whenever possible. But 60% of Catalan children are denied this right by successive Catalan regional governments… 30 years and counting. This has produced a situation in which two generations of Catalan children with Spanish as mother tongue have systematically been denied the possibility to develop his potential mental abilities to the upmost, with the consequences that Tyler, in other contests, has commented regularly. They will forever occupy the lowest range of jobs in the Catalan economy. This is cultural supremacy to the core. You will not find this in any other democratic country… nor by a mile. I will leave for other time, perhaps, which characteristics the teachers and principals of the schools share.

The Spanish Constitutional Court has ruled several times against this discrimination, instructing the Catalan government to remedy the situation. To no avail. The regional government pays not attention, neither the central government or the civil society doing much. Civil society movements, very prominent in Catalonia, are basically arms of separatist parties. Still, the threat of the Constitutional Court is there, so better to get rid of this nuisance declaring independence.

That is from a guy named Felix.  Here are data from the government of Catalonia (pdf).

Here is my Bloomberg column on that theme, excerpt:

It’s easy enough to pick on unpopular taxes as the problem, but the main issue is cultural presuppositions about what government should and should not do. That’s where any real tax reform would need to come from.

Do note the plan will be harder to pull off, the more specific it has to become.

Hoping for a peaceful democratic process in Catalonia tomorrow. When democracy fails there’s only repression. Thinking of my Catalan friends

That is a tweet from Pete Wishart, Scottish MP; I ‘ve seen dozens more like it.  But is it the democratic process behind the Catalonian referendum?  Or is it rather a form of electoral terrorism?  Here are a few points:

1. Most countries we consider to be democracies have rather stringent restrictions on when referenda may be held and what they may be used to decide.

2. According to extant reports, only 40 percent or so of the people in Catalonia favor independence.  It’s not like Kurdistan where independence won almost 100 percent of the vote and not only because of selective participation.

3. Aren’t non-official referendum results always going to be slanted in favor of intense minority opinion?  That hardly seems democratic.  See #2.  Arguably the same is true for official referenda as well, though then at least turnout is more representative.  Nonetheless referenda on such big questions may under-represent the interests of the young or the interests of business (and in turn real wages), or they may favor expressive voting too much.

4. Isn’t the truly democratic procedure to let all of Spain vote on Catalonian independence?  Maybe you don’t think so, but that begs the question.

5. Is it a fundamental democratic principle that any geographic region can demand a binding separatist referendum?  Well, maybe, but it sounds closer to John C. Calhoun than the notions of democracy I am familiar with or would favor.

Overall, I don’t see any positive news in how this is developing.  Arguably the situation remains in flux, but still the word is that a unilateral declaration of independence will be forthcoming.

USA fact of the day

by on September 29, 2017 at 11:46 am in Current Affairs, Law | Permalink

Despite President Trump’s push for tougher immigration enforcement, U.S. agents are on pace to deport fewer people in the government’s 2017 fiscal year than during the same period last year, the latest statistics show.

Here is much more, by Nick Miroff.  There are many points of interest, for instance ICE removals peaked in 2012 under President Obama.

1. In 2011, 67 percent of the vessels operating in the Port of San Juan were foreign flag vessels, often Panamanian.  Of course they were not carrying cargo from the United States.  That limits the economic costs of the Jones Act, but also implies it doesn’t do much to keep up U.S. shipbuilding for military purposes.  I found this GAO report useful.

2. How can we achieve the military purposes of the Jones Act?  Some observers recommend direct subsidies, but those are much more costly and furthermore require targeting and thus a more specific brand of crony capitalism.  We tried such subsidies in the past and abandoned them due to cost.

3. China, South Korea, and Japan account for over 91 percent of the flow of new ships, circa 2015.  That is sourced from this Mercatus study, by Thomas Grennes, which is the best piece I’ve found on the Jones Act and also the source for the points to follow.

4. What counts as an “American ship” for Jones Act purposes is not always defined or enforced very rigorously.  If deep trouble were to hit East Asia, it might not be possible to expand the production of American ships very much, because of reliance on foreign components.

5. In 1960, there were 2,926 large ships in the U.S. fleet, now there are only 169 such ships.  And of those, only 91 are Jones-Act eligible.

6. Wages on American ships are five times higher than on comparable foreign-flag vessels.  The crews for the latter are often Filipino or Chinese.  Part of the Jones Act motivation is to have surge capacity on the crew side, not just on the shipbuilding side.

7. The cost of producing new ships in American shipyards is four to five times higher than in the relevant foreign shipyards.

8. Given changing share ownership, we don’t even know if “American-owned” ships, for Jones Act purposes, are necessarily American-owned or controlled.

9. John McCain introduced a bill to repeal the Jones Act as long ago as 2010.  He has argued the Act serves no useful military purpose, as it still does not leave America with a useful “surge capacity” for military purposes.  This problem remains outstanding.

10. Trump did just temporarily waive the Jones Act for Puerto Rico.  While this is to be applauded, in the short run this still won’t help very much, as the main problem is transport and infrastructure on the island, not shipping per se.

Draft animals as common property

by on September 29, 2017 at 1:27 am in Economics, History, Law | Permalink

The full title is “There Will Be Killing: Collectivization and Death of Draft Animals,” by Shuo Chen and Xiaohuan Lan.  Here is the abstract:

The elimination of private property rights can lead to inefficient use of productive assets. In China’s collectivization movement from 1955 to 1957, instead of transferring draft animals to the ownership of the collectives, peasants slaughtered them to keep the meat and hide. By comparing 1,600 counties that launched the movement in different years, the difference-in-differences estimates suggest that the animal loss during the movement was 12 to 15 percent, or 7.4–9.5 million head. Grain output dropped by 7 percent due to lower animal inputs and lower productivity.

Here are earlier, ungated copies.

That is a Twitter suggestion, and I believe this option warrants serious consideration.

The obvious candidate would be New York State, and of course New York could be given more federal funds to ease the fiscal burden.  The state would have more representatives in the House, but there would be no gain of two Democratic Senators for Puerto Rico, which might limit opposition from the Republican Party.  Puerto Rico also might be given some special dispensations regarding the Spanish language and some other cultural markers.

I am not sure how Puerto Rico would feel about such an arrangement at this point, but under many alternative arrangements a big chunk of the island’s population simply empties out, and much of it to New York at that.

On the other hand, Puerto Rico + Alberta could make 52…sorry Monique!

Addendum: As for the shorter run, here is one report of relevance:

While the federal government continues to calculate a damage estimate, responders deployed to the region are focused on logistics like getting food and water to millions of people who remain without power as temperatures hit 90 degrees and humidity hovers above 70 percent.

The administration contends that much of Puerto Rico and the Virgin Islands is so damaged that officials can’t even begin damage assessment, meaning the federal government may not know for weeks how many roads, buildings or power lines will need to be rebuilt.

“The issue is not paying for any of this,” the administration source said. “It’s like: Paying for what?”

Here is the power supply, before and after the storm.  I’ve seen informal reports that over 40 percent of the island does not currently have usable drinking water.  Or what about people who need medications or dialysis?  Here are some photos.

The authors are Prashant Bharadwaj, Leah K. Lakdawala, and Nicholas Li, and here is the abstract:

While bans against child labor are a common policy tool, there is very little empirical evidence validating their effectiveness. In this paper, we examine the consequences of India’s landmark legislation against child labor, the Child Labor (Prohibition and Regulation) Act of 1986. Using data from employment surveys conducted before and after the ban, and using age restrictions that determined who the ban applied to, we show that child wages decrease and child labor increases after the ban. These results are consistent with a theoretical model building on the seminal work of Basu and Van (1998) and Basu (2005), where families use child labor to reach subsistence constraints and where child wages decrease in response to bans, leading poor families to utilize more child labor. The increase in child labor comes at the expense of reduced school enrollment. We also examine the effects of the ban at the household level. Using linked consumption and expenditure data, we find that along various margins of household expenditure, consumption, calorie intake and asset holdings, households are worse off after the ban.

I’m not trying to talk you into child labor with this post.  Rather, you should be less confident in a lot of your moralizing about what is a good policy or an evil policy.

Hat tip goes to Dev Patel.

Failing to stem the tide of refugees arriving Europe, Italy and the rest of the European Union have agreed to pay Libya’s Government of National Accord (GNA), the UN-backed interim government that is struggling hold control of the country, to keep them from arriving in Italy and instead put them into detention camps in Libya.

The accord signed Feb. 3, provides for Italy to pay €220 million ($236 million) to the Libyan coastal guard and provide training to help them catch the vessels—primarily rubber dinghies. The Libyan coast guard will be charged with sending the boats back to Libya and putting people into camps. The political instability of Libya is such that there would be little guarantee of the conditions in which the migrants would be kept, according to Arjan Hehenkamp, general director of Médicins Sans Frontières (MSF).

Here is one story.  In Libya they understand the Coase theorem:

A security source in Libya spoke to Associated Press late last month saying: “Yesterday’s traffickers are today’s anti-trafficking force.”

I believe the size of the Coasean payments will rise.  If Libya is paid to halt migrants, and finds this a satisfactory or indeed even profitable arrangement, they also will act to…boost the supply of potential migrants.  “Producing potential migrants” will at some point become one of their more significant economic sectors.  And the larger the number of bottled up would-be migrants, the more Italy and/or the EU will pay to stop them.

Yet what is Italy otherwise to do?  I find it striking how underreported this story has been.

1. The Democrats were debating single payer while this bill, which they dread, nearly passed (and still has some chance of passing).  This was not a random mistake, rather it reflects a more general tendency of the Democratic Party to focus on the wrong kind of expressive values, in a manner which does not seem remediable.  We need to re-model what they are, and build this kind of un-educability into the new model.

2. One lesson of Graham-Cassidy failure is that American health care, at the state level, is a race to the bottom not to the top.  Recall that the Canadian health care system also leaves key decisions to the provinces + block grants, but American Progressives love the results.  Most observers know the American states would not copy the Canadian provinces in their policies, and it is not only because fiscal equalization is weaker to the south.  The reality is that spending much more on health care would not make most American states much more desirable places for most people to live in.  If it did, Graham-Cassidy would be a better idea than in fact it is and a race to the top would ensue.  Better health care would brighten up states all around, attract more population, and increase the revenue going into governor’s coffers.

Democrats and Republicans both find this inadequacy of state-level outcomes difficult to accept, though for opposing reasons.  Democrats hate having to recognize that all the extra health care spending might be mainly redistribution rather than remedying a market failure or providing a broad-based social public good.  Republicans hate to see that giving states control over health care policy, and allowing them to revise Obamacare, won’t improve those states and probably would make most of them worse.

Of course my points #1 and #2 relate.  I agree Graham-Cassidy is a bad idea, but every time I hear the critics say it is heartless, or would “take away” people’s health insurance, or “kill people,” what I really hear is “If we let everyone vote again on Obamacare, with a real time balanced budget constraint, they wouldn’t vote for nearly as much health care next time around.”

Which is why you should not be obsessing over single-payer systems.

Across the board, pondering Graham-Cassidy, including its failure, should make you more pessimistic about economic and social processes.

That is the title given to my latest Bloomberg column.  Excerpt:

The new Britain appears to be a nationalistic, job-protecting, quasi-mercantilist entity, as evidenced by the desire to preserve the work and pay of London’s traditional cabbies. That’s hardly the right signal to send to a world considering new trade deals or possibly foreign investment in the U.K. Uber, of course, is an American company, and it did sink capital into setting up in London — and its reputational capital is on the line in what is still Europe’s most economically important city. This kind of slap in the face won’t exactly encourage other market entrants, including in the dynamic tech sector that London so desperately seeking.

I should note that I prefer London cabs, because of their higher quality service, noting that the people most hurt by this ban are from lower-income groups.

Another Cost of Global Warming

by on September 22, 2017 at 9:52 am in Economics, Law, Science | Permalink

This paper documents a small but systematic bias in the patent evaluation system at the United States Patent and Trademark Office (USPTO): external weather variations affect the allowance or rejection of patent applications. I examine 8.8 million reject/allow decisions from 3.5 million patent applications to the USPTO between 2001 and 2014, and find that on unusually warm days patent allowance rates are higher and final rejection rates are lower than on cold days. I also find that on cloudy days, final rejection rates are lower than on clear days. I show that these effects constitute a decision-making bias which exists even after controlling for sorting effects, controlling for applicant-level, application-level, primary class-level, art unit-level, and examiner- level characteristics. The bias even exists after controlling for the quality of the patent applications. While theoretically interesting, I also note that the effect sizes are relatively modest and may not require policy changes from the USPTO. Yet, the results are strong enough to provide a potentially useful instrumental variable for future innovation research.

From a paper by Balázs Kovács, here. Hat tip Kevin Lewis.

Brazil fact of the day

by on September 22, 2017 at 2:03 am in Current Affairs, Law | Permalink

Brazil, for example, has only 1/14th the number of guns per person that the U.S. does, but many more murders.

That is from Noah Smith, mostly about how to reduce crime.

I will be doing a Conversation with Doug in early October, although with no associated public event, just a later podcast and transcript.  Here is Wikipedia on Doug:

Douglas Irwin is the John Sloan Dickey Third Century Professor in the Social Sciences in the Economics Department at Dartmouth College and the author of seven books. He is an expert in both past and present U.S. trade policy, especially policy during the Great Depression. He is frequently sought by media outlets such as The Economist and Wall Street Journal to provide comment and his opinion on current events.[1][2]

Prior to Dartmouth, Irwin was an Associate Professor of Business Economics at the University of Chicago Graduate School of Business, an economist for the Board of Governors of the Federal Reserve System, and an economist for the Council of Economic Advisers Executive Office of the President.

Doug has a very exciting new book on the history of trade coming out, which I covered here.  Here is Doug on Twitter.  Here is Doug’s recent WSJ Op-Ed on Steve Bannon, trade, and the history of America’s greatness.

So what should I ask Doug?  Your grace and wisdom are always appreciated and never in short supply.

Japan (America) fact of the day

by on September 20, 2017 at 2:21 am in Law, Medicine | Permalink

So consider the amount of standard daily doses of opioids consumed in Japan. And then double it. And then double it again. And then double it again. And then double it again. And then double it a fifth time. That would make Japan No. 2 in the world, behind the United States.

That is from German Lopez at Vox.