Is Sexual Orientation a Choice?



libertyPresidential candidate Marco Rubio says, “I believe that sexual preference is something that people are born with,” but goes on to say, “I don’t believe same-sex marriage is a constitutional right.” Let’s consider both of these ideas from a political perspective.

First, whether people choose their sexual orientation or are born with it is irrelevant from a political perspective. As long as people’s actions are not violating the rights of others, their choices about sexual partners and any other personal matters should be of no concern to the government. So, I’ll criticize Rubio for making this statement, not because he’s right or wrong, but rather because as a political candidate he should have said that whether people are born with their sexual preferences should have no bearing on politics or government.

Second, and following from the first point, government should treat people as individuals rather than as members of a group (even group sizes as small as two), so government should not be involved in determining whether people are married at all. Rubio says the determination of who can be married should be left to the states, but really, it should be left to those people and whatever other groups they choose to belong to (such as a church) to decide.

But, the federal government does recognize marriage, in its tax laws among other things. Married people are treated differently from single people for tax purposes. The same-sex marriage question then becomes whether people should be able to choose their family units for tax purposes, or whether the government should exclude certain arrangements. Based on the principle of protecting individual rights, I would argue that individuals should be able to choose their significant others for tax purposes, regardless of gender. So once again, I’m siding against Rubio on this.

This would be a non-issue if people were treated as individuals by government. That’s the point I’d like to see Rubio make.

Do Drones Really Reduce Civilian Casualties?



Unmanned aerial vehicles (UAVs), commonly known as “drones,” have been the subject of heated debate in recent years, especially their role in combat. Without a doubt, the number of air strikes using drones has increased at an astonishing rate. Consider that in Afghanistan, Iraq, Libya, Pakistan, Yemen, and Somalia, the U.S. government has launched over 1,500 known drone strikes since 2008. This visualization of strikes in Pakistan is particularly illustrative:

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Proponents of combat drones have argued that they are wholly superior to the alternatives with regard to advancing U.S. foreign policy. For example, many claim that drones result in fewer civilian casualties than other methods. CIA Director John Brennan captured this sentiment in 2012. He stated,

[Drones have] surgical precision—the ability with laser-like focus to eliminate the cancerous tumor called an al Qa’ida, while limiting damage to the tissue around it.

Senator Dianne Feinstein claimed in a hearing that drones kill only a “handful” of civilians every year. Still others maintain that drones are much less lethal than conventional weapons.

But is this narrative accurate?

I’ll be blunt; getting a 100 percent accurate number on casualties is next to impossible. There are no official (at least not public) counts on civilian casualties and the numbers reported vary significantly. In addition, there is a major problem with official definitions of “militant” and “civilian” used by the U.S. government. A militant is classified as any military-aged male in a strike zone. This means that many civilian victims of drone strikes are never properly identified and that official estimates of casualties are likely to be biased.

Other available and credible data on drone strikes indicate that as opposed to sharp, “surgical instruments,” using drones to may be more akin to attempting open-heart surgery with a spoon.

Studies found that fighter pilots are actually more effective at reducing civilian casualties when given clear directives. Using classified data on drone strikes and casualties in Afghanistan, researchers at the Center for Naval Analyses found a shocking result. As opposed to lowering casualty rates, they found that drones were ten times (10x!) more likely to result in civilian deaths than manned strikes.

Examining issues of civilian casualties are important on a number of fronts. If government officials are truly interested in reducing the harm to innocent civilians and engaging in more “humane” forms of combat, accurate information regarding casualties is necessary. The above suggests that alternative methods may be more effective in achieving this goal. At a minimum, it suggests the current narrative requires reexamination.

Even if one is concerned only about the well-being of U.S. citizens, understanding and reducing civilian casualties remains important. Reducing civilian casualties reduces instances of “blowback,” or the unintended results of military action (I’ve discussed this on several occasions on this blog. See here and here for examples). As numerous interventions have illustrated, the resentment generated by such U.S. activity can be lethal to U.S. civilians. Civilian casualties breed resentment and anger, and are an effective recruitment tool for terror groups. These groups, in turn, may look to harm U.S. citizens both domestically and abroad.

So the narrative regarding civilian casualties and drone strikes does not appear as cut and dry as officials state. At the outset, the official definitions used by the government are likely to bias estimates of civilian casualties. Worst case, drone strikes are actually worse in terms of civilian harm than their manned counterparts. Either way, this lack of clarity is indicative of a larger need to transparency and open debate regarding the U.S. drone program.

Patent Trolls Suffer Setback



patent_trolls_180x270It is always good news to hear about a patent troll taking one on the chin. According to this article from the BBC, the U.S. Patent and Trademark Office (PTO) has invalidated parts of a patent claimed by Personal Audio. The patent at issue claimed all rights on “a system for disseminating media content representing episodes in a serialized sequence,” what we might generally call podcasting. The PTO’s decision can be found here. (Personal Audio was the troll that tangled with Adam Corolla last year and lost via a settlement.)

The latest action was brought by the Electronic Frontier Foundation. According to Ars Technica:

The ‘504 patent has a priority date of 1996, but as the EFF showed during its challenge to the patent office, that’s hardly the beginning of “episodic content” on the Internet. The EFF relied on two key examples of earlier technology to beat the patent: one was CNN’s “Internet Newsroom,” which patent office judges found fulfilled the key claims of having “(1) episodes; (2) an updated compilation file; and (3) a ‘predetermined URL’ for the compilation file.”

Three cheers for the EFF! This is good news for podcasters faced with burdensome litigation and troll shakedowns.

Two Reasons to Pay Off Public-Employee Pension Debt Quickly



33243450_MIn a recent op-ed in the Wall Street Journal titled “Pension Reform Doesn’t Mean Higher Taxes,” Andrew Biggs correctly pointed out that new Governmental Accounting Standards Board (GASB) rules require state and local governments across America to be more transparent about the financial health of their public-pension plans. But, as he noted, the rules do not require governments to change how they fund pensions. The new rules are accounting rules, not funding rules.

Then Mr. Biggs said: “there’s no reason” why a public pension plan should “pay off its unfunded liabilities rapidly.” Actually, there are two good reasons for paying off pension debt sooner rather than later.

First, paying pension debt sooner reduces the overall cost to taxpayers. For example, paying the unfunded liability of the California State Teachers’ Retirement System in 30 years rather than 40 years saves California taxpayers 35 percent or $83 billion. That’s a substantial saving.

If you make the minimum payment each month on your credit card, you end up paying the bank a lot more money than if you make substantially higher payments up front. Pension debt works the same way: lower initial contributions mean foregone compounded returns and a higher overall cost to taxpayers.

Second, paying a pension debt in 15 to 20 years, instead of 30 to 40 years, means less of the burden is shifted to future generations, who did not make the pension promises and did not agree to the government services.

The pension debt was accumulated by the current generation, and should be paid by the current generation. Imposing this burden on our children and grandchildren is immoral—they are not our piggy banks.

[These points are covered in more detail in my forthcoming book California Dreaming: Lessons on How to Resolve America’s Public Pension Crisis.]

There Is No Real Increase in Insured under Obamacare



Gallup has released the full results of its first-quarter survey of health insurance. It concludes that the proportion of uninsured Americans has collapsed to the lowest level ever: 11.9 percent.

20150414 Gallup1

Only the people who have employer-based benefits can be said to be paying for their own health insurance. They decreased 0.9 percentage points in the quarter.

People on Medicaid (which went up 2.1 percentage points) are simply on welfare. Lumping them in with people who have employer-based benefits is like lumping people getting welfare checks and people getting paychecks into the same group of “income recipients.” The respondents whom Gallup classifies as having “a plan paid for by self or family member” (which went up by 3.5 percentage points) are in Obamacare exchanges. Most of their premiums are paid by taxpayers, so they are mostly dependent, not independent with respect to having health insurance.

20150414 Gallup2

If we go back and compare the types of coverage in Q3 2013 to Q1 2015, we see that the proportion of those with employer-based benefits dropped from 44.4 percent to 43.3 percent; those on Medicaid jumped from 6.8 percent to 9.0 percent; and those with “self-paid” (actually, heavily subsidized Obamacare) plans spiked from 16.7 percent to 21.1 percent.

Here’s what I do not understand: The proportion of people aged 18 through 64 on Medicare increased from 6.4 percent to 7.3 percent. There are three ways to get Medicare if you are under 65: Receive Social Security Disability Benefits, suffer from End-Stage Renal Disease, or suffer from Lou Gehrig’s Disease (ALS). I cannot see how Obamacare increased any of these three situations.

* * *

For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.

Google Agonistes



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News reports on Tax Day suggest that the European Commission wants to nail Google Inc.’s scalp to the wall as punishment for committing alleged antitrust (competition) law violations. At issue is the way in which the company assigns priorities to the links consumers see when they “google” generic search terms like “booksellers”, “cameras”, and “watches”. The links that rank highest are to the sellers of goods and services who have paid Google for advertising space on its search engine.

More recent stories in the Wall Street Journal suggest that the core of the EU’s lawsuit is based on complaints from Nextag, Bizrate, LeGuide and other companies offering comparison-shopping services saying that they have been “crushed” by Google’s online search engine. Additional charges may be looming on the horizon contending that Google’s Android cell phone operating system likewise unfairly favors Google’s own apps over those available from other sellers.

Unlike U.S. antitrust laws, which supposedly are intended to attack “monopolies” (sellers of products having, in consumers’ eyes, no close substitutes) and other commercial enterprises enjoying and exercising so-called market power (defined as the ability to raise prices above competitive levels without losing so many sales that the higher price becomes unprofitable), European law worries more about ambiguous “market dominance.”

There is no question that Google has captured a large, perhaps dominant share of the search engine “market”, if such a relevant antitrust market can be defined and defended in the matter now before the European Commission. The important question that antitrust law enforcers are supposed to ask, though, is, do the actions of a market-dominating firm actually cause measurable, substantial harm to consumers by forcing them to pay higher prices than they would otherwise pay?

The U.S. antitrust authorities have answered that question already. At the end of an 18-month-long investigation of many of the same practices now being challenged in Europe, the five-member Federal Trade Commission (FTC) voted unanimously not to issue a complaint against Google. News reports about the FTC’s decision focused on one leaked memorandum written by lawyers working in the Commission’s Bureau of Competition – its legal staff – recommending prosecution of Google for violating Section 5 of the FTC Act (1914), which authorizes the agency to ferret out and sanction defendant firms determined to be engaging in unspecified “unfair methods of competition.” But after considering all of the evidence gathered during its internal investigation of Google, including the recommendations of the professional economists working in the FTC’s Bureau of Economics, the commissioners decided that the legal and evidentiary case for suing Google was too weak to warrant moving the matter forward. The path to dropping those charges likely was smoothed by the relatively minor changes to its search engine Google adopted voluntarily two years ago.

Truth in advertising: I served as a staff economist and, later, as a special assistant to the Director of the FTC’s Bureau of Economics for about five years during the late 1970s and early 1980s. That experience taught me at least two relevant lessons: first, that the lawyers and economists there disagreed frequently; second, and what is more important, that the FTC’s investigations of and decisions to prosecute alleged anticompetitive behavior often were instigated by the accused firm’s competitors seeking advantages in the “halls of justice” that they were unable to capture in a free and openly competitive marketplace. Moreover, once an investigation had been launched, the commissioners were pressured by special interests, including politicians representing congressional districts and states with salient stakes in the outcomes of the antitrust law enforcement process.

For instance, it is well known that Netscape was instrumental in convincing the Antitrust Division of the U.S. Department of Justice to sue Microsoft Corp. for developing and then “monopolizing” the web browser “market” by integrating its Internet Explorer application into the Windows 95 PC operating system, thereby making it more difficult (costly) for Netscape to attract users to Navigator, that competitor’s own web browser. Microsoft ultimately was found guilty by a federal court of acquiring and exercising an unlawful monopoly of web-browsing applications and penalized accordingly. In another instance, U.S. Senators from Ohio, home to Office Max’s headquarters, blocked a prospective merger between Office Depot and Office Max. Opposition from public officials in Bartlesville, OK, where Marathon Oil Corp. was based at the time, succeeded in blocking Mobil’s takeover, fearing that Marathon’s headquarters’ operations would be downsized and moved to New York City. I could continue to bore readers with similar examples.

The bottom line here is that the initial U.S. investigation of Google, which ended without action by the Federal Trade Commission, as well as Google’s encounter with the European Commission, where it faces a fine of up to $6 billion, almost surely are not motivated by concerns about protecting consumers from abuses of monopoly power or of market dominance, but rather are guided by the self-serving interests of Google’s competitors. (Brussels may pay more attention to such special pleading because competition laws there actually give enforcement agencies more elbowroom to protect competitors, authority that plainly reduces consumers’ welfare.)

U.S. and European antitrust laws supply companies with an alternative means of “competing” with their more efficient rivals. Rather than building a “better” mousetrap that promises to serve consumers well and produce more sales, election-minded politicians who represent your interests will carry your water to Washington or Brussels if you file an antitrust lawsuit. Taxpayers, not you, will then shoulder most of the expense of litigation; even if you lose the case, competitors’ time and money will be deflected from their core business activities toward fending off the charges. You win either way.

The EU’s pending antitrust case against Google forces us to recognize that it is well past time to grasp public choice scholarship, which calls for more widespread appreciation of the uncomfortable truth that antitrust bureaucrats and politicians are no more selfless or public-spirited than any other ordinary human being. As such, they can be relied upon to respond to the demands of special pleaders.

[Revised 18 April 2015]

Employers Do Not Systematically and Persistently Pay Women Less than Men for Equally Valuable Work



EqualPayEqualWorkThe quality of economic journalism in the United States is terrible. Day after day, journalists write about the causes and consequences of economic conditions and events without understanding the underlying economics of the situation, and their articles are, as a rule, simply bunk. Here is an example.

I have not examined the actual report whose findings are described in the article, but I am familiar with many studies of the same question that economists have conducted over the years. Moreover, I myself have made many applied econometric studies in a variety of areas, and I know how delicate the findings of such studies are to a variety of details—sample period, sample size, sampling method, data collection details, model specification, estimation methods, and so forth. I know, too, that the best studies—those with the best data, most sensible model specification, and most exhaustive set of controls—have found virtually no difference in the amounts that men and women are paid for doing the same work. The key is “doing the same work,” which is another way of saying “providing equally valuable services to the employer” in the sense of adding equally to the employer’s net income.

In any event, even if one had never immersed himself in such econometric nitty-gritty, he would have excellent grounds for skepticism. First, to say that women earn less than men is not the same as saying that the same employers pay men more than equally value-productive women. Earnings reflect many choices by women who work as well as by employers who hire.

Simple example: suppose that there are only two employers. The first hires 10 men and 5 women, paying each employee a wage of $50 per hour; the second hires 5 men and 10 women, paying each employee a wage of $40 per hour. For all employees in this two-firm economy, men will earn an average of $46.67 per hour, and women will earn an average of $43.33 per hour. Yet there is no sex discrimination; by construction, every employer pays men and women exactly the same wage. If one employer pays a higher wage than the other, one may presume that the higher-paying employer is hiring employees with greater value-productivity.

If such were not the case, he’d be a very poor manager, because by paying, say, just $44.00 per hour, he could replace all of his current employees by hiring away those currently working for the lower-paying employer and save $2.67 per hour for each worker, or $40.05 per hour for his entire labor force, which would be a $40.05 contribution toward increasing his net income. Why would any employer forgo substantial additional net income simply to persist in sex discrimination in wage payments (which, by the way, has been illegal since enactment of the Equal Pay Act of 1963)?

Even if some employers tried to practice such discrimination, the employers who had no yen to sacrifice net income for the pleasure of such discrimination would be able to profit by hiring away the discriminators’ workers. Given that many employers in today’s economy are themselves women, a world of systematic sex discrimination in wage payments would be one in which the female-operated firms, which presumably would not practice such discrimination, would be substantially more profitable than male-operated firms on average, yet I know of no evidence that they are.

If sum, the so-called gender gap is almost certainly a myth, a persistent misapprehension kept alive by leftists—feminist ideologues and politicians posturing as special friends of women—who wish to use the power of government to benefit members of their political constituency. If employers truly discriminate between equally value-productive male and female employees, however, they do so only in cases that are few and transitory, because the systematic, persistent conduct of such discrimination is inconsistent with everything we know about how people make decisions in labor markets and about what we presume business owners in general are trying to do, namely, make profits.

 

ADDENDUM: I’ve now taken a quick look at the underlying report, and it’s much worse than I’d imagined. It’s not even an exercise in multiple regression analysis, but a series of comparisons that control, so to speak, for only one variable (e.g., education level, occupation) at a time. This isn’t even up to the pathetic standard one normally sees in such studies. Horrible. Really, folks, there is a large, fairly sophisticated literature on this issue in the field of labor economics. The journalists ought at least to speak to some serious investigators in this heavily researched area before they publicize such shoddy, tendentious “research” as if it were the real deal.

Seven of 10 Doctors See Effects of Climate Change on Patients!



Healthcare_ClimateChangeJust within the past couple of weeks, we’ve seen Congressional Republicans join with Democrats to buy into the idea that the federal government knows how to pay doctors for “quality” and “value.” It is the main concept behind the misconceived Medicare “doc fix” bill that the Senate will consider this week. If adopted, it would add $141 billion to the national debt in ten years and increase federal control of the practice of medicine.

So, if we are going to surrender even more of this power to the federal government, it might be interesting to see what the Obama administration thinks is important:

“The challenges we face are real, and they are clear and present in people’s daily lives,” said senior presidential adviser Brian Deese in a telephone conference call with reporters on Tuesday. Seven in 10 doctors are seeing effects on their patients’ health from climate change that is “posing a threat to more people in more places,” Deese said. (Bloomberg Politics)

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Another Urban Legend? The Middle Ages Were the “Dark Ages”



Victory of ReasonAs the culture wars intensify in America, let’s consider some of the roots of these contentious conflicts.

With the “Age of Enlightenment” of the 17th and 18th centuries, a “modern” narrative was invented to explain the history of the West, the wider world, and humankind’s place in the universe. This narrative claimed that liberty, democracy, republicanism and religious tolerance could only be achieved through an “Enlightenment project” of secularism taking control of both the public square and the commanding heights of society and that the abandonment of metaphysics and religious tradition were essential for human progress. Proponents of this narrative then included Denis Diderot, Voltaire, Jean-Jacques Rousseau, Edward Gibbon, and David Hume, and in the 19th century such writers as John Draper and Andrew Dickson White. With some exceptions, this worldview came to dominate western elite and popular thinking. However many historians have since increasingly challenged this narrative as fundamentally fallacious. Such historians as J.G.A. Pocock, Dale Van Kley, Derek Beales, and Jonathan Israel have discarded the claim of an exclusively secular “Enlightenment” and shown that there have been multiple and far more causal Enlightenments, based in various Catholic, Protestant and Jewish traditions. In addition and since the 1970s, historians of science Ronald L. Numbers, David V. Lindberg, and James R. Moore have refuted the erroneous and indeed propagandistic, secular claims of Draper and White that Christianity and science are adversarial.

Indeed, it has been these religious traditions that were primarily responsible for the revolutionary economic, legal, technological, and cultural changes that have uplifted the West, and that such changes began well before the 17th century. Sociologist Rodney Stark has shown that it was the Judeo-Christian tradition that produced all aspects of progress in the West, including the ideas of objective morality and truth, free-market capitalism, reason and science, natural law, individual liberty and the abolition of slavery and infanticide, civic virtue, and the rule of law. (Among his many notable books are The Victory of Reason, The Triumph of Christianity, How the West Won, and For the Glory of God.)

In “The Secular Theocracy,” I have also discussed the “Enlightenment project”‘s hypocritical and intolerant crusade that “exalts a sovereign and powerful state that pervades all of life and compels obedience not just to its mandates but to the secular nationalism of the Zeitgeist itself, for which the populace is forced to conform to and fund.”

Stark and others have further shown that the “secular Enlightenment” narrative rests upon numerous historical falsehoods that today are still taken for granted and commonly taught in schools. The following video discusses one such fallacy—why the Middle Ages were not the “Dark Ages,” including the “urban legend” that people then believed in a Flat Earth:

Despite Weak U.S. Employment Numbers Overall, Healthcare Jobs Continue Steady Climb



Last Friday’s very weak jobs report from the Bureau of Labor Statistics (BLS) was greeted as bad news, but it disguised more good news for the heath sector: Job growth in March kept its steady pace. Obamacare’s healthcare jobs boost appears to be trending nicely despite weakness in February.

Almost one in five of the 126,000 jobs added in March were in health care, as shown in Table 1. Ambulatory facilities continued to add jobs at a faster rate than hospitals, while nursing and residential care facilities lost jobs.

From March 2014 through last month, health jobs grew at 2.49 percent versus only 2.24 percent for non-health jobs, as shown in Table 2. Jobs in ambulatory settings accounted for seven of ten health jobs created in the last twelve months.

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