Tuesday, February 14, 2017

Don't sign the petition. A letter to the editor of the Scott County News-Graphic

One of my 2017 resolutions was to write more letters, and I hope to publish some, along with their responses, here. The News-Graphic recently published a letter I wrote. Context: the local school board election in November was basically a referendum on building a second high school to relieve the very overcrowded -- and only-- high school in the fastest-growing county in Kentucky. The board is now pro-build, an architect has been hired (the second firm, actually; the project has been in the works for years) but a citizens group is again circulating a petition to force a special election on the property tax increase. The election would cost the district $30,000 or more and the citizens group seems to deny the actual need or to subscribe to "alternative facts."

To the Editor,

I would like to express my opposition to the petition circulating to force an expensive special election on the school district in an attempt to prevent or delay the construction of the new high school, and to urge my fellow citizens not to sign it. The Kentucky State Data Center at the University of Louisville projects that 1,000 more 15-19 year olds will live in Scott County in the year 2025 than did in 2015, and that there will be almost 5,500 total individuals in that age cohort by 2035. The county would do well to put together a long-range financial plan to build several schools, and not just the ones currently on the drawing board, to make room for the almost 8,000 additional school-age students projected to be here less than 20 years from today. I am sympathetic to wanting to keep overall taxes low, and I would support a petition to stop some of the poor tax policies our county and cities pursue. But a real crisis is upon us now; not doing what is immediately necessary to alleviate the rapidly growing burden on SCHS simply compounds the errors of the past and will make future choices even more painful.

Justin Tapp

Someone else wrote a letter that I liked enough to publish an excerpt here:

As I start this letter I am somewhat sad that some of our citizens are so “tight” with their money that they want to fight against providing our future citizens and leaders a decent place and environment in which to learn. Folks, the Scott County Education Board is not asking for much money. A $150,000 house would cost the owners about $.25 or a quarter a day more. This would be about $85.00 per year,  the amount you would spend on a night out or  maybe a UK basketball ticket.

In doing a little research, I discovered that Scott Co. has the lowest tax rate in Central  Kentucky. A $150,000 house is compared as follows:

         Scott Co.--------$1023/yr

         Woodford Co---$1101/yr

         Fayette Co------$1440/yr

         Franklin Co-----$1342/yr

         Grant Co--------$1225/yr

Even with the increase Scott Co. would be near the bottom when compared to our neighboring counties.

We need an educated community. We need to be a community that supports, values and should even covet a good education for all its citizens.

Charles Adams

Saturday, February 11, 2017

Immigration is just trade by another name. @jbarro

When you buy a finished product made in Taiwan or Brazil, you purchase the factors of its production that went into making it. (See previous example with a pencil; the uncoordinated actions of thousands of people from diverse countries combine to make every single product and service we buy.) The Tawainese or Brazillian laborer cannot immigrate to the US and likely don't want to, but they provided a good or service that no one locally was able to provide at the same price (assuming you're rational and wanted to get the greatest amount of value for your dollar). Likewise, the goods and services that Americans produce are consumed abroad by people unable to find the same value at a lower price locally. (Wanting to get the most for their dollar seems to be a universal trait among humans.)

So, we Americans meet the need of others with our goods and services and others meet our needs, and everyone benefits. We're all humans, just living in different places. Restricting that flow of trade by limiting the amount of goods that can be sold from other countries (quotas) or artificially increasing the price of those goods or services (tariffs) restricts the ability to meet each others' needs. If you're legally restricted in where you can sell your product, then people who would have bought it have to settle for someone else's where they don't get as much bang for their buck and you're both worse off. Unrestricted trade alone allows us to find all the ways to create the greatest value for others.

Many economists are for open migration for the same reason. Some Taiwanese or Brazilians or Americans may not be able to send goods and services but they could do the job if they were physically present here-- think barbers, engineers, surgeons, farmhands, etc. So goes the logic, why restrict each others ability to physically provide that value? Free trade applies to right of residency as well. I may be willing to trade my spot in America for someone else's spot in Turkey. We're both humans, why not trade those spots the same way I might sell a book to a Turkish person or buy a book from them?

Our current President is both hostile to free trade and to immigration. But in the wake of the immigration protests this week, Josh Barro wrote a decent column this week that begs the question of how the Progressive Left can logically be hostile to trade but open to immigration-- it would seem to be a paradox at least. If Bernie Sanders blasts trade for "taking jobs from American workers" by allowing us to buy products and services from other locations, how is it any different when workers who compete for those exact same jobs abroad come into the country and do so here? There would seem to be no logical difference.

"(E)ventually, Democrats will need to be able to make a case that their preferred immigration policies serve the national interest. They're not yet positioned to do so." Other than altruism for refugees, Barro doesn't see a clear argument on the Democratic side for allowing in other workers who would compete directly with American workers, be unable to vote, and (at least initially) consume more government services than they would pay in taxes. Barro doesn't quite connect the dots to the trade and utility maximization logic above-- that's a shame. The understanding that trade makes both parties better off and more trade is better than less used to be much more bipartisan (see the US leadership in Bretton Woods, GATT, and the WTO) and, when not bipartisan, championed much more by Republicans. That's what makes Trump so problematic for the GOP. Barro is really just highlighting that the Democrats' weakness is their logical inconsistency. Trump is wrong both about the benefits of trade and immigration, but his logical consistency gives him an advantage.

So, the next time you buy a product that wasn't made here, ask yourself why. You'll likely find it's because you wanted the most bang for your buck. Likewise, the next time you criticize the President's executive orders on immigration, ask yourself why. If you find you don't want to give foreigners a chance to provide the greatest value for your dollar regardless whether the foreigner lives in Taiwan or in America, then you're with Trump. If you're sad you bought the foreign product but also sad Trump wants to keep the foreigner from coming in to make a similar product, then you've got a problem of logical inconsistency. Because immigration and trade are different types of the same activity.

Thursday, February 09, 2017

Innocents Abroad by Mark Twain (Book Review #1 of 2017)

The Innocents Abroad by Mark Twain.

Free to read on Adelaide.edu
I was eager to check out this book because I have read several books by American travelers of Europe and the Middle East in the 1800s and saw Twain's description of Istanbul referenced in Orhan Pamuk's Istanbul (one of my favorite cities). The difference between Twain's account and that of others in the same period is that Twain is the greatest wordsmith in American history. I did not know that this was one of the best-selling books of the 19th century.

Twain's trip was in 1867 and the reader is quickly struck with how fragile Americans are as travelers today. You can tour the "Holy Land" in a week and be back on your couch in days. Modern inconveniences are doing without McDonald's or maybe a lukewarm shower. In 1867, such a journey would take the better part of a year and you very might well die. There is no medicine, few baths, you will ride in a rickety ship for weeks on end in close quarters with people you might not like, you will ride various animals for long journies across wastelands, and you will be subject to robbery and trickerey. Phoning home hasn't been invented yet.

The journey is a pleasure cruise in a retired Union vessel with some of the well-to-do of America. Twain apparently sent some of his observations back to the US as newspaper articles and compiled all his notes into this 1869 work. Twain notes how many travelers eagerly keep journals the first few days, but every day on the ocean is roughly the same and they lose motivation to continue. Twain tolerates the eccentricities of his companions, some of the men seem prone to pretend knowledge on subjects they literally know nothing about. This sometimes leads to humor. Time zones are a complete mystery to one passenger who is certain that his watch has stopped working properly. Currency exchange rates also cause confusion, passengers go from thinking they're being extorted in dollars when actually being quoted a cheap price in a European currency. They overcome all.

The cruise lands in Tangiers, Morocco in its first major disembarkment. When noting the legend of Hercules' relation to Tangier, Twain remarks: "Antiquarians concede that such a personage as Hercules did exist in ancient times and agree that he was an enterprising and energetic man, but decline to believe him a good, bona-fide god, because that would be unconstitutional." (If you love those one-liners that would play just as well in the 21st century, they are hidden like nuggets in this book.) In Morocco, as in other places, the travelers call on the American Consular General. This apparently is a "god-send" for the Consul because
"Tangier is full of interest for one day, but after that it is a weary prison. The Consul General has been here five years, and has got enough of it to do him for a century, and is going home shortly. His family seize upon their letters and papers when the mail arrives, read them over and over again for two days or three, talk them over and over again for two or three more till they wear them out, and after that for days together they eat and drink and sleep, and ride out over the same old road, and see the same old tiresome things that even decades of centuries have scarcely changed, and say never a single word! They have literally nothing whatever to talk about." Note the polite picture he sketches: https://ebooks.adelaide.edu.au/t/twain/mark/innocents/chapter9.html

From Morocco, they north to France. There is little about Europe's treasures that impress Twain, he glosses over the tours that become monotonous and focuses on the misadventures of his companions. In Paris, they find that no barbers give shaves, or at least none that they can cajole to shave them. They get shaved by some wig-makers or people of some other trade in tortuous fashion.
Twain writes rather disdainfully about the endless collection of relics, fake relics, that are displayed in museums and on tours across Europe. They've seen all the various shards of the cross and other imaginable relics that the Catholic Church sold as indulgences and continues to make money in Twain's time, while he remarks the faithful peasants are kept quite poor. Twain remarks that Jesus ranks pretty low in the Roman Church hierarchy, much more attention seems given to Mary, Peter, and more.

The band continues traveling to Milan and on to Rome. As Twain wanders the streets of Europe, he notes the different rhythm than in the US, and again writes something for the 21st century:
"Afterward we walked up and down one of the most popular streets for some time, enjoying other people’s comfort and wishing we could export some of it to our restless, driving, vitality-consuming marts at home. Just in this one matter lies the main charm of life in Europe — comfort. In America, we hurry — which is well; but when the day’s work is done, we go on thinking of losses and gains, we plan for the morrow, we even carry our business cares to bed with us, and toss and worry over them when we ought to be restoring our racked bodies and brains with sleep. We burn up our energies with these excitements, and either die early or drop into a lean and mean old age at a time of life which they call a man’s prime in Europe. When an acre of ground has produced long and well, we let it lie fallow and rest for a season; we take no man clear across the continent in the same coach he started in — the coach is stabled somewhere on the plains and its heated machinery allowed to cool for a few days; when a razor has seen long service and refuses to hold an edge, the barber lays it away for a few weeks, and the edge comes back of its own accord. We bestow thoughtful care upon inanimate objects, but none upon ourselves. What a robust people, what a nation of thinkers we might be, if we would only lay ourselves on the shelf occasionally and renew our edges!"

There are other tales of hygiene hijinx, such as bathhouses with no soap. One can only imagine what this travel would be like for a woman. Twain finds Venice to be full of melancholy and decay, not quite the tourist destination it is today. He is definitely not impressed with the Medici mausoleums and other Italian displays, and everyone grows quite tired of Michaelangelo by the time they reach the Vatican in Rome. There is a humorous scene where the Americans troll their guide in Rome who is eager to show them something written by Colombus and a statue/bust of Columbus:
"“Ah — Ferguson — what — what did you say was the name of the party who wrote this?”
“Christopher Colombo! ze great Christopher Colombo!”
Another deliberate examination.
“Ah — did he write it himself; or — or how?”
“He write it himself! — Christopher Colombo! He’s own hand-writing, write by himself!”
Then the doctor laid the document down and said:
“Why, I have seen boys in America only fourteen years old that could write better than that.”
The doctor put up his eye-glass — procured for such occasions:
“Ah — what did you say this gentleman’s name was?”
“Christopher Colombo! — ze great Christopher Colombo!”
“Christopher Colombo — the great Christopher Colombo. Well, what did he do?”
“Discover America! — discover America, Oh, ze devil!”
“Discover America. No — that statement will hardly wash. We are just from America ourselves. We heard nothing about it. Christopher Colombo — pleasant name — is — is he dead?”
“Oh, corpo di Baccho! — three hundred year!”
“Ah — which is the bust and which is the pedestal?”
“Santa Maria! — zis ze bust! — zis ze pedestal!”
“Ah, I see, I see — happy combination — very happy combination, indeed. Is — is this the first time this gentleman was ever on a bust?”

The crew ascends Mount Vesuvius, inspects the ruins at Pompeii, and devise a clever escape from their quarantines in Athens. (Americans definitely don't can't comprehend the ubiquity of 1800s quarantines today.) Then, it's onto Istanbul and Asia. Twain does not have many deep observations about Istanbul. Twain notes the cultural diversity of the city and that Armenians are known Christian liars. The crew crosses the Black Sea and visits Sevastopol too close to the end of the Crimean War for that not to be somewhat somber. The Americans then travel back through Turkey down to Smyrna (Izmir). Twain remarks about this point of his interaction with Russian ladies, their long names and endless charms. So, Russian ladies impress him as much as anything else in Europe or the Holy Land and I'd say that's about right. Smyrna is just a short train ride to the ruins of Ephesus, and Twain seems actually impressed with it as well. He notes the long list of international historical figures who have come through Ephesus from Alexander the Great to the Apostle Paul to many others. He retells the Legend of the Seven Sleepers, it seems like one he wish he'd written himself.

From Smyrna, the group treks south toward Damascus. They have to telegraph ahead to US Consulates in Damascus and Beirut to arrange transport, make sure there are enough horses, etc. It's a 13 hour horse trek to Damascus, and Twain suffers from a bout of cholera while there. Through the Levant, the crew is always hounded by beggars asking for "bakhshish." The poverty and the culture of begging foreigners for money seem quite embedded. Palestine is much smaller than Twain imagined. He makes a good point that there have been many books published by American Christians describing their trips to the Holy Land, but each describes Palestine according to its denomination's desires. None seem to remark that the events of Jesus' life take place in an area the size of an American county. The Holy Land trek inspires Twain to write an awful lot of biblical commentary, retelling the Bible stories with his own insights and dry wit. If you like it, it goes on for quite a while. Eventually, the American travelers exit the future Israel out of the port at Joppa.

There is a stopover in Egypt and the pyramids that Twain didn't seem keen to write about. "We suffered torture no pen can describe from the hungry appeals for bucksheesh that gleamed from Arab eyes and poured incessantly from Arab lips. Why try to call up the traditions of vanished Egyptian grandeur;...?" He ends the description of that rather quickly, and the crew then voyages home and through another quarantine. Twain wrote a newspaper immediately upon return that apparently sparked controversy among his crew mates. "The pleasure cruise was a funeral excursion without a corpse." But Twain has since grown fonder of the memories of the voyage in the year since he traveled. He survived to tell the tale, at least.

I give this book 5 stars out of 5. What book doesn't have flaws, but this is basically an American classic written by the classic American English wordsmith.

Monday, February 06, 2017

Trade achieves peace and cooperation better than formal diplomacy could ever dream.

One of my favorite videos to show to my students is Episode 1 of Milton Friedman's Free to Choose where he visits Hong Kong, Scotland, and his local farmer's market. Trade unites the nations and languages in a particular way that often goes unappreciated, as illustrated by this two minute clip. This is Friedman's adaptation of Leonard Read's essay "I, Pencil."

Note the concluding quote:
"Literally thousands of people co-operated to make this pencil. People who don’t speak the same language, who practice different religions, who might hate one another if they ever met! When you go down to the store and buy this pencil, you are in effect trading a few minutes of your time for a few seconds of the time of all those thousands of people. What brought them together and induced them to cooperate to make this pencil? There was no commissar sending out orders from some central office. It was the magic of the price system: the impersonal operation of prices that brought them together and got them to cooperate, to make this pencil, so you could have it for a trifling sum.

That is why the operation of the free market is so essential. Not only to promote productive efficiency, but even more to foster harmony and peace among the peoples of the world."

This is why I'm glad so many of the Trump "Make America Great Again" hats are made in China. This is why the US is a charter member of the World Trade Organization. This is why both the State Department and US Trade Representative work for trade deals-- they benefit all countries involved. This is why the Clinton Global Initiative does work to help entrepreneurs in developing countries develop products for export. This is why Hillary Clinton privately dreamed of a hemispheric common market even while bashing trade publicly. This is why people in the USSR have higher standards of living than before the Iron Curtain fell. This is why the EU banished tariffs between member countries. I could go on.

The people who had lived through World Wars I and II understood we needed more trade to grow and be peaceful, not less. They built institutions and wrote policies to facilitate that and ensure it for their grandchildren. When we neglect trade or threaten to restrict it we dishonor their memories, their knowledge, and we jeopardize peace.

Saturday, February 04, 2017

Trade benefits the poorest of the poor. Isn't that a Progressive ideal?

Freer trade sends jobs to the places that need the jobs the most.

"General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A. or pay big border tax!" Trump tweeted.

The President has loudly proclaimed victory over Ford's keeping its plants in states like Kentucky and Michigan rather than moving to Mexico. But who is helped and who is harmed in this arrangement? Obviously, Ford keeping its operations as they are may have kept workers at that plant who otherwise would have been laid off. But, even being laid off, these workers would qualify for trade adjustment assistance, a program by which the federal government provides extended unemployment insurance provided the workers take courses in other trades that would help them find work elsewhere. This is in addition to anything else Ford was offering workers it might lay off, which usually involves a decent severance package. These workers live in America where we have general rule of law, 24-hour electricity, clean water, decent public education, and a solid social safety net that includes things like Medicaid, which is expanded to 138% of the federal poverty line in Michigan.

What about the Mexican villagers who were expecting this factory to be a boon to their economy and provide jobs for their young people? The BBC World Service did a story on the village of Villa de Reyes and its depression: Trump's Ford Deal Dashes Mexican Villagers' Dream. Constructing the plant had created much-needed low-skilled jobs for those in poverty. Rising incomes from jobs at the factory would have brought more private investment to the area. Instead, it's a broken dream. They don't see it the way Trump does. One would-be worker says it best:
"They accuse Mexicans of taking their jobs. But now they're coming in and taking away ours."

As I wrote before, I find all the anti-trade rhetoric by Progressives like Bernie Sanders during the campaign against trade to be highly problematic. As Ezra Klein wrote here, using data from World Bank economist Branko Milanovic: "Even the very poorest Americans — those at the 2nd percentile of income in the United States — are at the 62nd percentile globally." If having an income greater than $17,000/year in the US puts you in the upper 90% of the entire world, shouldn't Progressives be happy when jobs are created in areas like San Luis Potosi, where GDP/capita is around $8,400 USD / person? The Trump Republican answer is "But we're Team USA, they're Team Mexico," and that's called nationalism which walks a thin line from being racist. The President does not understand that Adam Smith and others proved long ago that the pie is not fixed, trade makes both parties better off, and two parties don't engage in a trade unless they both benefit. This is why freer trade has been a hallmark of official US diplomacy since before WWII.

Most Americans around large cities don't think twice about driving to shop at a grocery that just happens to be in a different county or township. What if we built walls to restrict that commerce, or forbid businesses from moving across the line? That would seem absurd and terribly restrictive on the economy. (Some on the Left have actually advocated for this restrictions in US cities under a version of their "Economic Bill of Rights.") Further, what if we built a wall to keep residents from moving? That would seem like Berlin before 1989. Perhaps my argument ad absurdum annoys you, but I find it to be precisely where the logic of the Bernie Sanders-led Left and nationalist Trump-led right both lead-- and I reject it as harmful to all parties.

I encourage you to read the BBC report, watch the video, and see it from Mexico's perspective. In my next trade post, I'll look at how trade and the price system (also called capitalism) does more for international relations and peace than any formal process of diplomacy can do.

Friday, January 27, 2017

Some trade is better than no trade, so...

...the more trade, the better. That has actually been the official position of the US government, along with much of the West, since WWII and the Bretton Woods conference that led to the creation of the IMF, World Bank, the Global Agreement on Tariffs and Trade (GATT) and later the WTO. That effort was spearheaded by John Maynard Keynes who decried the restriction of global trade during and after WWI in his Economic Consequences of the Peace. I'm going to write a few posts on the benefits of trade and the dangers of logical inconsistency and political posturing on the issue. Adam Smith may have fired one of the most well-defined blows against Mercantilism over 200 years ago, but Mercantilism always finds a way to rear its head.

I don't blame Progressive voters if they were confused a little yesterday. Nobel Laureate and self-proclaimed Progressive economist Paul Krugman, who has used his column in the NY Times to criticize the TPP and conservative commentary on issues such as free trade, yesterday suddenly lashed out at any talk of a tariff on Mexican goods:

Unfortunately, political campaigns over the last 30 years have devolved into arguments that capitalize on mercantilist ideas, and the Left's attack on Republicans for "outsourcing jobs to ______" (first Mexico, then China, etc.) are now embraced by a President who states that these countries "steal our jobs."  Arguments that are politically expedient, convincing voters that jobs are "lost" to trade, appear to not actually be believed by those who use them-- except apparently in the case of Trump. I believe Krugman is an example of one who may use the argument but understands its consequences, the same way he will talk about job creation under Democratic versus Republican presidents, even though he has written a book, Peddling Prosperity, about how such comparisons are nonsense.

President Obama's political advisor David Axelrod railed against Republican candidate Mitt Romney's support of trade in his memoir The Believer. Axelrod wrote that it was easy to characterize Romney as someone who "sends our jobs to China." Yet, President Obama supported trade deals like the Trans-Pacific Partnership that Progressives railed against. 2016 Democratic candidate Hillary Clinton held contradictory positions in her campaign. In her memoir Hard Choices, HRC wrote glowingly about her role in promoting entrepreneurship and greater trade with foreign countries while Secretary of State, but seemed to disown such talk as candidate, criticizing the TPP and joining the "he sends our jobs to China" rhetoric. Clinton summed things up quite honestly in remarks delivered in speeches that were in the Podesta email leaks (remarks from emails below unedited by me). She is against protectionism and for a hemispheric common market-- meaning no tariff barriers between countries in our own hemisphere:

*Hillary Clinton Said Her Dream Is A Hemispheric Common Market, With Open
Trade And Open Markets. *“My dream is a hemispheric common market, with
open trade and open borders, some time in the future with energy that is as
green and sustainable as we can get it, powering growth and opportunity for
every person in the hemisphere.” [05162013 Remarks to Banco Itau.doc, p.
*Hillary Clinton Said We Have To Have A Concerted Plan To Increase Trade;
We Have To Resist Protectionism And Other Kinds Of Barriers To Trade.
*“Secondly, I think we have to have a concerted plan to increase trade already under
the current circumstances, you know, that Inter-American Development Bank
figure is pretty surprising. There is so much more we can do, there is a
lot of low hanging fruit but businesses on both sides have to make it a
priority and it's not for governments to do but governments can either
make it easy or make it hard and we have to resist, protectionism, other
kinds of barriers to market access and to trade and I would like to see
this get much more attention and be not just a policy for a year under
president X or president Y but a consistent one.” [05162013 Remarks to
Banco Itau.doc, p. 32]
I highly agree with Secretary Clinton's statements above-- we need to resist protectionism and increase opportunities for trade. It would be good for Anti-Trump Progressive voters and Trump voters to understand why it is that liberals like Hillary Clinton and Paul Krugman can be supportive of trade and in opposition to tariff barriers with countries like Mexico. Gains from trade are theoretically sound and empirically proven.

Saturday, January 21, 2017

How to get started learning SQL

Last August (2016) I got a new job that required me to learn SQL immediately, specifically for MS SQL Server and SAS. Initially, however, all I had access to on my work machine was MS Access. I had a host of "learn SQL quickly" books but two stood out as the absolutely most helpful, and the ones I would give to anyone learning SQL.

Learn SQL in 10 Minutes by Ben Forta (SAMS Publishing)

Head First SQL by Lynn Beighley (O'Reilly Media)

I had digital copies to read on my iPad next to my desktops. I was able to use them well enough in MS Access and and suffering through those early days made my transition to SQL Server much easier.  Both books have datasets you can download from a website, but Ben Forta's are the easiest to get going on SQL Server and he has a message board for asking questions that he actively responds to. His book is also helpful in pointing out dialectical differences across platforms. Beighley's is written for MySQL.

Forta's book is broken down such that each lesson takes you 10 minutes (at most) to type in the code on your own and read how it works.
Head First SQL is a creative exercise, you follow a sequence that takes you through a particular project (building a match-making database). I love books that take you on a step-by-step journey to completing an imaginary project. Beighley is a creative and organized woman, the book has graphics and humor whereas Forta's is no-nonsense short examples. I recommend both approaches as complementary.

Once I had access to SQL Server, the coding exercises (obviously) became much easier. Beighley's book went a little more complicated in her sets, and it's a longer book to work through. Afterwards, I went through the free SQL Server Boot Camp course on Udemy.com and got much better at my SQL coding.

I have other books I've used in learning and practicing, particularly ones that integrate data analysis using SQL and Excel or SAS, but the best way I can recommend starting is to download these two books and get to work. You can do anything for 10 minutes.