Revising Gladwell’s “Revisionist History”

Does the American Dream exist? Are poor but highly skilled individuals able to achieve their full potential? These questions are at the heart of recent episodes of Malcom Gladwell’s new podcast, Revisionist History.

In “Carlos Doesn’t Remember,” Gladwell examines the idea of “capitalization,” or how well America makes use of its human potential. Americans typically believe people are able to climb the ladder to success through hard work and determination, but Gladwell uses the story of one smart, low-income student to express doubts about American meritocracy.

“Carlos” is a bright but low-income student in Los Angeles, who secured a spot at an elite private school thanks to entertainment lawyer Eric Eisner’s YES program. The episode is a stark reminder that low-income students—even the most talented ones—face large barriers to success. Gladwell calls Carlos’ journey a “one in a million shot.” He identifies two large obstacles that smart, low-income students must overcome, but fails to discuss the best solution to these problems: school choice. The public education system traps students like Carlos in underperforming schools that Gladwell likens to concentration camps, but choice policies could help more poor students like Carlos access good schools.

The first barrier to success is a lack of advocates for talented, low-income students. But must it take an Eric Eisner to discover such kids and help them capitalize on their potential? The underlying assumption is that advocates will not be parents or teachers, but only rare, outside forces.

Really? Most parents want the best for their children, and work hard to give them opportunities for success. The problem may well be that wealthier families can access private institutions or choose expensive homes zoned for high-quality public schools, while low-income families are relegated to cheap addresses assigning them to subpar schools. Low-income parents, as Gladwell and others imply, are not necessarily uninformed or uncaring. They just lack the resources of wealthier families.

School choice policies help to give parents those resources. In The School Choice Journey, Thomas Stewart and Patrick Wolf show that given choices, low-income parents transition from passive clients to active consumers, seeking out information on options for their children.

Government Unions and Dysfunctional Government

Why is government so often dysfunctional? Why is it, in contrast to the voluntary sector of society, so often slow, inefficient, wasteful, and counterproductive? Peter Schuck explored the question at length recently in his book Why Government Fails So Often. Chris Edwards offers a shorter and more libertarian analysis in a recent Cato policy study. But maybe these two new stories from the past few days shed some light on the question, first from Washington, D.C.:

Metro officials fired a senior mechanic just weeks after the L’Enfant Plaza smoke incident last year, alleging that he failed to properly inspect a tunnel fan, falsified an inspection report, and later lied about it to investigators.

But now, the largest union representing Metro workers is fighting the transit agency to have the mechanic reinstated.

Seyoum Haile, a 13-year Metro veteran, was terminated one month after the January 2015 incident that resulted in the death of a passenger — but arbitrators said he should be suspended instead, and now the Amalgamated Transit Union Local 689 is suing to get him back on the job.

Meanwhile, in Miami:

National condemnation has been swift today after video showed Charles Kinsey, an unarmed black behavioral tech trying to help an autistic patient, holding his arms in the air before a North Miami Police officer shoots him. But Miami’s two most prominent police union chiefs have now leaped to the officer’s defense. 

John Rivera, who leads the Dade County Police Benevolent Association, says the officer was actually trying to protect Kinsey because he believed the autistic man, who was holding a toy truck, had a gun — but then he accidentally shot Kinsey instead. 

For more on the consequences of government employee unions, see here and here.

Tim Kaine Scored Poorly on Cato Report

Presidential candidate Hillary Clinton has named Senator Tim Kaine as her running mate. Kaine was governor of Virginia from January 2006 to January 2010. I assessed Kaine on Cato’s fiscal report card in 2008, and he received a low grade of “D.”

I found:

Governor Kaine has campaigned vigorously to raise taxes and fees to fund higher transportation spending. In 2007, Kaine helped pass a large revenue package that included tax and fee increases, higher penalties for driving infractions, and the creation of regional taxing authorities within Virginia. The Virginia Supreme Court struck down the unelected tax authorities, and citizens hated the new driver penalties so much that they were repealed. Kaine supported a few tax cuts in 2007, including an increase in the bottom threshold of the individual income tax and a repeal of the estate tax. But in 2008, he is promoting an even bigger transportation plan that would increase taxes and fees by $1.1 billion annually, and he is advocating higher state borrowing to fund education and transportation. On spending, Kaine promoted a big increase in his first budget, but has favored greater restraint since then.

In Kaine’s first year, general fund spending jumped a remarkable 17 percent. But spending was flat the second year, and then declined 14 percent during Kaine’s final two years as the economy entered recession. Richmond Times-Dispatch columnist Bart Hinkle gives Kaine credit for the spending cuts, but notes, “it’s clear that Kaine would much rather have preferred to balance the state budget by raising taxes.”

That was probably true of many governors at the time facing declining revenues from the sour economy. But thanks to balanced budget requirements, general fund spending across the 50 states was cut 9 percent those two years that Kaine was cutting.

Politifact says that Kaine tried unsuccessfully to raise taxes by $4 billion, which is a lot of money for a mid-sized state. Researching Kaine two and half years into his term, I included net proposed tax increases of $1.1 billion in my report. I included only one of his proposed transportation funding packages because I didn’t want to double count. Politifact may have included multiple transportation packages in its tally. Also, my report did not cover Kaine’s $1.9 billion proposed income tax increase in 2009, which the Washington Post discusses here.

Hinkle calls Kaine an “affable ideologue.” That’s a good description of Trump running mate Mike Pence as well, whose fiscal ideology of spending restraint and tax cutting earned him an “A” from Cato.

Attention Encourages Terrorism

Now a study has attached numbers to what we’ve known for a long time: giving attention to terrorists encourages terrorism. A study by Michael Jetter, professor at the School of Economics and Finance at Universidad EAFIT in Medellín, Colombia, and research fellow at the Institute for the Study of Labour in Bonn, Germany, finds a clear link between the number of news articles devoted to an initial terrorist incident and the number of follow-up attacks. A New York Times article about an attack in a particular country will increase the number of ensuing attacks in the same country by between 11 percent and 15 percent.

The simple solution is disallowed by our fundamental law of free speech. But consumers can demand less aggrandizement of terror incidents from the media and politicians. The practice in journalism of declining to name rape victims could be extended in modified form to terror organizations and leaders.

There is no reason to keep information about terrorists and terror groups secret, but more muted references to them will decrease the success of attacks by reducing the awareness of potential recruits, for example. Potential terrorists are susceptible to discouragement through diminished public information because many have a room temperature IQ (on the Celsius scale).

In our edited volume, Terrorizing Ourselves, Chris Preble, Ben Friedman, and I included two chapters that relate to this topic: “The Impact of Fear on Public Thinking about Counterterrorism Policy: Implications for Communicators,” by Priscilla Lewis, and “Communicating about Threat: Toward a Resilient Response to Terrorism,” by William Burns.

Why Congress Rejected an H-1B Recruitment Requirement

Several senators recently introduced a bill that would delay the hiring of H-1B high skilled foreign workers in order to give Americans extra time to apply, saying it would make the program “consistent with Congress’s original intent.” But the lack of this provision was no oversight. The authors of the H-1B law wanted the visa to be able to rapidly respond to U.S. labor market needs, not get bogged down in regulatory red tape.

The Immigration Act of 1990 created the H-1B visa. Previously, there was just one H-1 category for skilled professionals that was uncapped and had no labor restrictions. The 1990 act imposed a cap for the first time and required that H-1Bs be paid the “prevailing wage” for their occupation in the area of employment. The theory was that U.S. businesses would have no reason to prefer foreign workers if they had to pay them as much as they paid Americans.

Although the bill did have several restrictive measures, the absence of a recruitment mandate was intentionally left out for a very good reason. 

Just 3 years prior to the introduction of the 1990 Immigration Act, Congress created the H-2A visa for seasonal farm workers and mandated that H-2A employers make “positive recruitment efforts” of U.S. workers prior to hiring foreign workers. Regulators translated this to mean that a farmer needed to spend 60 days advertising and accepting referrals of U.S. employees from state employment offices.

If H-1B crafters wanted to impose a recruitment requirement, they knew how. Indeed, the lead cosponsor of the 1990 bill, Sen. Alan Simpson, was also the author of the H-2A language. “Congress also expressly determined,” wrote immigration attorney Angelo Paparelli just after the enacting regulations were announced in 1991, “that the H-1B ‘attestation-like’ procedures… should be a speedy streamlined process with no recruitment requirement.”

The senators who drafted the 1990 act had a very specific reason in mind when they declined to include such language. Unlike the H-2A, H-1B jobs are not limited to “seasonal” positions, meaning that any recruitment would typically have to take place while the job was open. This means that an H-1B recruitment requirement would have guaranteed that companies would be losing productivity throughout the period.

Wasteful Spending for Trump to Cut

Presidential candidate Donald Trump says that he will balance the federal budget while also cutting taxes. Given that the gap between federal spending and revenues is more than $500 billion and rising, he is going to need lots of spending cuts to make that happen.

In his big speech last night Trump said:

We are going to ask every department head in government to provide a list of wasteful spending projects that we can eliminate in my first 100 days. The politicians have talked about this for years, but I’m going to do it.

That’s great. Here are 10 “wasteful spending projects” (with annual costs) that Trump should put in his 100-day elimination plan:

  • Farm subsidies, which enrich wealthy landowners and harm the environment, $29 billion.
  • Energy subsidies, which have been one boondoggle after another for decades, $5 billion.
  • The war on drugs, which wastes police resources and generates violence, $15 billion.
  • Federal aid for K-12 schools, which generates huge bureaucracy and stifles innovation, $25 billion.
  • Excess pay for federal workers, especially gold-plated retirement benefits, which should be cut 10 percent to save $33 billion.
  • Housing subsidies, which distort markets and damage cities, $37 billion.
  • Community development and rural subsidies, which is corporate welfare used for buying votes, $18 billion.
  • Urban transit and passenger rail funding, which is properly a local and private responsibility, $15 billion.
  • Obamacare exchange subsidies and Medicaid expansion, which should be repealed along with the overall law, $200 billion a year by 2023.
  • TSA airport screening, which Trump said last night is “a total disaster,” and which should be devolved to local and private control, $5 billion.

Economics Will Be Our Ruination II

Economics appears to be a neutral tool, but it often subtly embeds values that we are better off surfacing and discussing. In a recent post henceforth to be known as “Economics Will Be Our Runiation I,” I pointed out how, by preferring to measure the movement of dollars, orthodox economics treats leisure as a bad thing and laments advances in technology-based entertainments.

This installment of EWBOR focuses on an interesting and insightful article recently published in the University of Pennsylvania Law Review, “An Economic Understanding of Search and Seizure Law.” In it, George Washington University Law School professor Orin Kerr shows that the Fourth Amendment helps increase the efficiency of law enforcement by accounting for external costs of investigations. Here is his model:

The net benefit of any particular investigative step can be described as P*V – Ci – Ce, where P represents the increase in probability that the crime will be solved and successfully prosecuted, V represents the net value of a successful prosecution resulting from deterrence and incapacitation, Ci represents the internal costs of the investigative step, and Ce represents its external costs.

Ci means things like the cost of training and equipping police officers and paying their salaries, as well as their own use of their time. Ce, external costs, “include privacy harms and property losses that result from an investigation that is imposed on a suspect. They also include the loss of autonomy and freedom imposed directly on the subject of the investigation (who may be guilty or innocent) as well as his family or associates.” Kerr rightly includes in Ce more diffuse burdens such as community hostility to law enforcement.