Economic Interests

In the Times Room for Debate, Ilyana Kuziemko and Michael Norton, proffessors at Princeton and Harvard respectively, argue that the "recurring tendency of lower-income Americans to vote against their own economic interests" -- defined as "redistributive policies" -- has three explanations.  First, "Erroneous beliefs about the current degree of wealth inequality" -- Americans believe the richest 20% amongst us own only 59% of total wealth rather than, as the currently estimated, as much as 85% . Second, "Americans show a robust pattern of overestimating the probability that they will one day be rich." Finally, "individuals near the bottom of the income distribution may be wary of redistribution because it could help those just below them leapfrog above them." This is illustrated by data which shows that Americans making the closest to minimum wage are "the least likely to support increasing the current minimum wage."

It is hard to take this with any seriousness. The notion that the difference between 59% and 85% has any meaningful impact on political-economic opinions is dumb. The suggestions that the poor prefer to be exploited in that hope that they will one day get to exploit and that they would cut off their hands to spite the very poor, are both stupid and nasty.

The simple truth is that most people -- excluding, perhaps, Ivy League professors -- prefer the dignity of earning their keep.  Lower-skilled jobs are, far more than others, absolutely dependent on the strength of the economy. In other words, lower income Americans correctly understand their economic interests lie more in pro-growth, rather than redistributive, policies.

Republicans are often condemned as being anti-intellectual. In their defense, it is worth remembering the distinction -- opposition really -- illustrated here, between intellectual and intelligent.

Reading the Torah

Writing in Haaretz, Rabbi Shai Held divides the world "between those who acknowledge that they read selectively, and those who do not - or who, given their assumptions, simply cannot." He believes the Torah can be just as well read advocating "universal humanism" as "radically particularistic chauvinism." Given that we "have to decide" the manner in which we read, the most "urgent religious question" is: "How do we build religious lives in which our care for others is intensified rather than attenuated?"

Rabbi Held's philosophy undermines his intention. Religion which acknowledges it reads selectively subverts itself. The statement "The Torah can justly be understood advocating chauvinistic nationalism, but I prefer to read it humanistically," simply does not carry the power of "Those who read the Torah as advocating chauvinistic nationalism pervert it's teaching." As Rabbi Held does acknowledge that "no religious thinker could embrace" a view which puts "human beings rather than God at the center of the universe," it is hard to see how he understands otherwise his view that the fundamental teaching of the Torah -- Revelation -- is whatever a human being decides it is.

Better is the traditional teaching, amplified by Strauss, that we have to choose between Reason and Revelation.

Why Stimulus Cannot Work

A Journal Op-Ed presents research from George Mason economists Garett Jones and Daniel Rothschild, that shows stimulus didn't work, in part, because it was implemented poorly and wastefully.  The truth is readily apparent upon any reflection that even an efficiently executed stimulus program could never have worked.

As explained by the President, stimulus is meant to "break the vicious cycle where lost jobs lead to people spending less money, which leads to even more layoffs.".  Stimulus is meant to work by creating a virtuous cycle where stimulus payments lead to people spending more money, which leads to more hiring, which leads to even more spending.  This will only work to the degree that businesses confuse stimulus-driven spending with actual economic signals and hire.  The more aware businesses are of what the government is doing, the more they will inevitably hold off hiring until they perceive it to actually be working.  The more managers hold of hiring, of course, the less effective the stimulus.

Further, stimulus is more effective the more the economy is being impacted by the vicious cycle, when people are spending less because they fear working less, and will spend more when they expect to work more.  Stimulus will necessarily be less effective if people are saving more for other reasons independent of job prospects.  In this particular, people are saving more and spending less because they are fearful for their retirements.  American's largest investment tends to be their homes which are not, now, worth what they were.  In addition, policies debasing the currency debase also people's savings.  Finally, people are recognizing that government may not be able to fulfill its social security and pension commitments.

In other words, sensible entitlement reform and bringing the deficit under control to restore confidence in the government's ability to keep its commitments, strengthening the currency and allowing the housing markets to work themselves out stand to work where keynsian stimulus will simply not.