SpaceX Versus the Department of Justice

by  Alex Tabarrok in

The DOJ is suing SpaceX for focusing its hiring on US citizens and permanent residents. Yes, you read that right.

Semafor: The DOJ alleges that SpaceX discouraged refugees and asylum seekers from applying to open positions and refused to hire those that did, according to the complaint.

According to the complaint, SpaceX job postings wrongly stated that only U.S. citizens and lawful permanent residents could apply for openings, and that “SpaceX’s hiring practices were routine, widespread, and longstanding, and harmed asylees and refugees.”

Under U.S. law, both asylum seekers and refugees are protected from hiring discrimination regardless of citizen status.

The lawsuit is bizarre. I am sure Elon would be happy to hire some refugees from the Russian space program. So why does SpaceX advertise that only US citizens and lawful permanent residents can apply for some jobs? Because that’s what they understand the law requires:

People “don’t understand the chilling effect of the federal export control laws” that SpaceX allegedly cited in its job listings as a reason for excluding refugees and asylees as candidates, writes Abhi Tripathi, the director of mission operations at UC Berkeley’s Space Sciences Laboratory. The International Traffic in Arms Regulations (ITAR) only allows U.S. citizens and green card holders to access information in companies that make spacecraft and rockets for national security reasons. “Employees are PERSONALLY liable with huge fines and imprisonment if the wrong info gets out,” Tripathi says. It’s unclear which positions SpaceX allegedly refused refugee and asylum applicants for.

Now SpaceX may be wrong about the technicalities of the law, the distinction, as I understand it, rests on the difference between US Persons and US Citizens, but they are 100% correct that the DoD frowns on non-citizens working for military related ventures. As a result, jobs restricted to US citizens are common in industries that interact with the military or that involve technologies which are potentially dual-use, such as jobs at SpaceX. Jobs that require security clearances are, of course, typically restricted to US citizens but so are many jobs not requiring clearances. Here, for example, is an ad for an engineer at Northrup Grumman in aerospace structures that does not require security clearance but advertises US Citizen only. The U.S. military, of course, mandates citizenship or a green card for enlistment, a policy that is shared by another federal employer—can you guess? Surprise. The Department of Justice.

Below, for example, is an ad for a recreational specialist to work for the DOJ’s Bureau of Prisons–this is not a job involving national security!–but the ad states clearly that U.S. Citizenship is Required. Most federal government jobs, in fact, are restricted to US citizens. The Federal Reserve even requires US citizenship to get an internship.

In short, it seems that SpaceX is being singled out for punishment for a practice that is widespread in the industry and often encouraged by, sometimes required by, and usually practiced by the Federal government.

“What Harvard can learn from Olive Garden?”

by  Tyler Cowen in

That is the title of my latest Bloomberg column, here is one bit from it:

One lesson is that it’s harder to convince poorer individuals to mingle with wealthier individuals in settings where the culture is shaped to align with a higher socioeconomic status. Churches, for instance, are usually free and open to all — but the poor do not seem so keen on attending religious services in wealthier neighborhoods. Maybe that’s because they don’t view the wealthier church as a “better service” (however that might be defined) but rather as an environment where they do not feel entirely comfortable or welcome.

In other words: Wealthier institutions or establishments attract a mixed customer or user base only when they give up cultural control. Taller stained-glass windows and more comfortable pews can do only so much to attract lower-income churchgoers. (An aside: One nice feature of marketing “culture” — for lack of a better word — on the internet is that it can be broadly appealing. Classical music on YouTube, for example, is not only free but also free of snob appeal.)

The business model of America’s nonprofit sector depends on producing status and reputation, both for itself and its affiliates. Many nonprofits work at creating environments of a very particular sort, both to raise money and to boost their influence. To elites, those environments are innocuous, even inspiring. But those same elites are starting to realize that what is inviting to one person is off-putting to another.

Here is a related (and very good) column from Catherine Rampell.

Why are Gender Pay Gaps so Large in Japan and South Korea?

by  Tyler Cowen in

From Alice Evans:

Singapore, Hong Kong and Taiwan are closing gender gaps in pay, seniority and parliamentary representation. Japan and South Korea, meanwhile, have the largest gender pay gaps in the OECD. Management remains 85% male. Female graduates are treated like secretaries, expected to pour the tea and run errands.

In Japan, a female graduate earns the same as a man who has only completed school. For Korean women aged 25-39, gender gaps in wages are indistinguishable between those with children and those without. In Europe, by contrast, there is a major penalty for motherhood.

Japanese businesses have lobbied again legislative change, even refusing sexual harassment training. Courts routinely deny systematic discrimination. Employers cannot even be sued for sexual harassment. Employees can only ask the Ministry of Labour for mediation. Accusations of abuse are mostly ignored.

At least part of the explanation stems from the lifetime full employment norms of Japan and South Korea, not present in Taiwan or Singapore, where those wage gaps are lower.

To summarise, Japan and South Korea have enshrined a system of lifetime employment and seniority pay for both blue collar and white collar workers. Firms are extremely sexist: men are treated as future managers, women are their subordinates. These inequalities are largest amongst low status regular workers. Fed up and frustrated, wives quit regular work to spend more time with their children and undertake non-regular, low paid work.

That is only part of the argument, here is the entire piece.

What should I ask Jacob Mikanowski?

by  Tyler Cowen in

Yes I will be doing a Conversation with him, here is Jacob’s self-description from his home page:

I’m a freelance journalist and writer based in Portland, OR. My academic training is in the history of Eastern Europe, but for over a decade, I worked as a critic and a science journalist. I write about art, books, movies, ancient history, anthropology, and – occasionally – food. I especially like to work on stories about the intersection of science and the humanities, photography, and people who are helplessly obsessed with whatever they’re doing.

For the past few years, I’ve been working on single project which combines all my interests: Goodbye, Eastern Europe: An Intimate History of a Divided Land – a book-length history of Eastern Europe, covering culture, politics, religion and ideology (essentially, everything which made Eastern Europe, Eastern Europe over the past 2000 years)…

I loved the book, and that led me to Jacob.  Here are some of his articles.  Here is Jacob on Twitter.  Here is a good WSJ review of Goodbye, Eastern Europe: An Intimate History of a Divided Land.

The Real UFO Story

by  Alex Tabarrok in

Erik Hoel writes that the “the UFO craze was created by government nepotism and incompetent journalism” which makes a lot more sense to me than the other explanation. Here’s a key bit:

To sum up the story as far as I understand its convoluted depths: diehard paranormal believers scored 22 million in Defense spending via what looks like nepotism from Harry Reid by submitting a grant to do bland general “aerospace research” and being the “sole bidder” for the contract. They then reportedly used that grant, according to Lacatski himself, the head of the program, to study a myriad of paranormal phenomenon at Skinwalker Ranch including—you may have guessed it by now—dino-beavers. Viola! That’s how there was a “government-funded program to study UFOs.”

Our current journalistic class, unwilling or unable to do the research I can do in my boxers in about five hours, instead did a big media oopsie in The New York Times, running the story and lending credibility to the idea the Pentagon did create a real serious task force to investigate UFO claims. The fervor in response to these “revelations” memed into existence a real agency at the DoD that now does actually study UFOs, simply because everyone “demanded answers”—which is totally understandable, given the journalistic coverage. However, the current UFO task force is staffed by, well, the people willing to be on a UFO task force. According to the Post:

And who was in charge, during the Trump administration, when the Pentagon created a UFO Task Force to investigate incursions of unknown objects over America?

Stratton—who believes the ghosts and creatures of Skinwalker Ranch are real—officially headed up these Pentagon investigations for years.

The “chief scientist” of this Pentagon task force was Travis Taylor, who is and was a co-star of “Ancient Aliens” on the History Channel. He currently stars on “The Secret of Skinwalker Ranch” on the same network.

This official embedding makes it difficult to break the veneer of legitimacy unless you know the whole story, simply because there’s likely a lot of coordination by professional UFO enthusiasts behind the scenes, which is why you’ll occasionally read stuff about how anonymous sources from other insiders confirm the accounts.

See also my previous post on Uri Geller and the government’s Stargate Project.

That was then, this is now, concentration of notables edition

by  Tyler Cowen in

[John] Napier’s continental sojourn had embraced the years 1564 to 1571, the year of the Ridolfi Plot.  During his absence Galileo, Shakespeare, Caravaggio and Kepler had been born, Michelangelo, Calvin, Nostradamus and Stifel had died, Pope Pius V had excommunicated Queen Elizabeth I, Mary, Queen of Scots, had been forced to abdicate and was under comfortable house arrest in England, her infant son, James VI, had been made king, Edinburgh had suffered a terrible plague, his father had remarried, and Scotland had been thrown into civil war, with Merchiston playing a pivotal role.

A lot happened in the 1770s as well.  That above paragraph is from Julian Havil’s quite good John Napier: Life, Logarithms, and Legacy.  Napier of course also was obsessed with the Book of Revelation, in addition to being one of the discoverers of logarithms.

Did the U.S. Really Grow Out of Its World War II Debt?

by  Tyler Cowen in

The fall in the U.S. public debt/GDP ratio from 106% in 1946 to 23% in 1974 is often attributed to high rates of economic growth. This paper examines the roles of three other factors: primary budget surpluses, surprise inflation, and pegged interest rates before the Fed-Treasury Accord of 1951. Our central result is a simulation of the path that the debt/GDP ratio would have followed with primary budget balance and without the distortions in real interest rates caused by surprise inflation and the pre-Accord peg. In this counterfactual, debt/GDP declines only to 74% in 1974, not 23% as in actual history. Moreover, the ratio starts rising again in 1980 and in 2022 it is 84%. These findings imply that, over the last 76 years, only a small amount of debt reduction has been achieved through growth rates that exceed undistorted interest rates.

That is from a new NBER working paper by Julien Acalin and Laurence M. Ball.

Thursday assorted links

by  Tyler Cowen

1. Syllabus for a new class on the economics of ChatGPT.

2. NYC home for retired playground animals.

3. The natural world that is Lower Sayreville: “A fish dropped out of the sky by its bird captor caused a power outage for a section of homes in a New Jersey town, officials say.”

4. Ben Casnocha on twenty years of MR, CWT, and also India.

5. Sixteen scenarios for how the fertility fall might end.

6. What are your most underappreciated works? Call #2 for contributions…

The Mother Church of the Common Law

by  Alex Tabarrok in

The Temple Church is a small church in London built in 1185 by the Knights Templar. It’s now hidden behind Fleet Street amid the Middle and Inner Temple, two of the four “Inns of Court”, the educational institutions and professional associations for common law barristers and judges. The Temple Church is known as the Mother Church of the Common Law both for its role in the creation of the Magna Carta and because of its location amid the Temple area.

King John used the Temple Church as his headquarters in 1214-1215 and it’s from here that he was forced to issue the first of the Magna Cartas. The real hero of the Magna Carta, however, was the knight William Marshal who negotiated the original agreement, reissued it again under his authority as regent to the boy King, Henry III, and then reissued it again–after, at the age of 70 personally leading troops into battle and defeating a French invasion–thereby cementing the Magna Carta and the rights it guarantees into British life.

William Marshall’s tomb can be found in the Temple Church.

Middle and Inner Temple were the heart of the common law for hundreds of years and the presence of the Temple Church meant that the idea of a bill of rights was always nearby. So much so that the Temple played a role in the American Revolution and not just as inspiration. Six members of the Inner or Middle Temple were signatories to the Declaration of Independence and seven were signatories to the US Constitution.

The Mother Church of the Common Law is well worth a visit if you are in London.

The Ramaswamy plan for a commodity-backed dollar

by  Tyler Cowen in

I am not convinced by it, here is one excerpt from my latest Bloomberg column:

Ramaswamy has called for the US Federal Reserve to stabilize the dollar in relation to the price of commodities, rather than to the consumer price index. That formula is unlikely to bring monetary stability (or tame business cycles) in part because commodity prices themselves are notoriously unstable.

Consider the five years leading up to 1994, when consumer prices increased more than 19% but most commodity prices fell. Or the years from 2004 to 2008, when commodity prices rose by about three times but US price inflation rates were roughly constant, in the range of 2%. In other time periods, the relationship between commodity prices and consumer inflation is murky…

I am reminded of economist Robert Hall’s 1982 “ANCAP” proposal to stabilize the dollar with a commodity basket. Hall argued that a bundle of ammonium nitrate, copper, aluminum and plywood (thus ANCAP) had proved stable in terms of the dollar in times past. He was right about that. But the rise of China and other nations brought an unprecedented commodity price boom. Had the US tried to stabilize the value of the dollar in terms of those commodities, the Fed would have had to apply significant deflationary pressure to stabilize the relevant commodity price index. Actual monetary policy would have been a disaster.

There is much more at the link.

State Capacity as an Organizational Problem

by  Tyler Cowen in

We study how the organization of the state evolves over the process of development of a nation, using a new dataset on the internal organization of the U.S. federal bureaucracy over 1817-1905. First, we show a series of facts, describing how the size of the state, its presence across the territory, and its key organizational features evolved over the nineteenth century. Second, exploiting the staggered expansion of the railroad and telegraph networks across space, we show that the ability of politicians to monitor state agents throughout the territory is an important driver of these facts: locations with lower transportation and communication costs with Washington DC have more state presence, are delegated more decision power, and have lower employee turnover. The results suggest that high monitoring costs are associated with small, personalistic state organizations based on networks of trust; technological shocks lowering monitoring costs facilitate the emergence of modern bureaucratic states.

That is from a new NBER working paper by Nicola Mastrorocco and Edoardo Teso.

Every now and then Bryan Caplan writes a short essay (and here), dumping on the idea of state capacity, suggesting instead the alternative of “state priorities,” but I don’t think his argument is coherent.  I think of state priorities as the demand side, and state capacity as the supply side.  Of course both matter.  Sometimes, in a partial equilibrium setting, state priorities will seem to be the only thing that matters.  For instance, when the I-95 bridge collapsed outside of Philadelphia, it was repaired very quickly, in part because the governor made repair a priority.  Enough resources were at hand, including enough legal resources to manage the changes in procedure.  Most systems have some amount of slack.  But when America tries to upgrade its infrastructure more generally, it is limited by both the supply side and the demand side, or in other words state capacity really matters.  It’s not just that we don’t have a Mars colony, we don’t have enough lawyers and bureaucrats to lawfully repeal a large number of regulations at once.