Can’t help but think this amnesty is a bad deal for 98+% of citizens. I’m most concerned about knock-on migration, rather than the direct effects.
I think it is an especially bad deal for U.S. citizens who will out-use the welfare state in the future.
I define the welfare state as all the usual programs, plus much of government employment, including useless non-combat, non-logistics military positions.
The welfare state is a zero sum game. It probably has a net effect of lowering potential GDP. If 12 people want food stamps, a 23 year old psychology major can’t have $90k-per-year Social Media Coordinator position. All the money is stolen.
When you increase the future burdens on The State, like Obama just did, you lower per capita transfers that future poor Americans can get. Essentially, it’s bad for any victim group that uses the welfare state a lot. It’s not Chinese engineers that are going to flood in, it’s people with 20th percentile productivity, who’ll be a net-stress on hospitals, police, food stamps and schools. On the average, their grandchildren will be net-stresses too.
My assumption is that taxes:GDP is really really hard to move much. More illegal immigration will just cause marginal son-of-a-steel-worker democrat-voters to turn Tea Party. The Democrats are setting themselves up great for the 2080s (or at least some quasi-successor party bearing the name Democrat), but it will take longer than they think to Elect a New People, because said election so-harms their true base.
Even if I am wrong and even more illegal immigration by Latin America’s least-productive workers so-swings electoral dynamics that taxes/GDP increases enough to keep up with the net increase in the welfare-state load, a lot of people loose. I’m thinking of the ~50% of adults who pay income taxes…do they count though?
Update: Molyneux on the Obama Amnesty
A friend sent me a link to augur.net last night. It’s a decentralized prediction market start up. Unlike past prediction markets like intrade, these guys are going to try and set their market up using Bitcoin so it will be anonymous and hard for the bullies in U.S. government to shut down. I take this to also mean that Americans will be able to trade in the market, which won’t be the case with Sumner’s new NGDP market project.
I don’t know anyone on the team, and I haven’t even finished reading their theory paper yet, but so far it looks pretty cool. I particularly like that they’re using Bitcoin. If the government would just be reasonable and take a cut of the action (which is their right, as the uber neighborhood boss) we wouldn’t need Bitcoin, but for whatever reason its OK to bet on meaningless things like horses or football or spinning wheels, but not alright to bet on election outcomes or macro economic events, where the betting would yield socially useful signals. It’s possibly the government’s weirdest prohibition.
I just hope these guys aren’t based in the U.S., the safest place for them would be Russia or China (what a weird world we live in) but if I had to guess I’d say they’re in the Bay Area and if successful, will have their lives ruined.
Between direct consulting gigs, job interviews and a trip to San Francisco, I’ve flown a good deal in 2014. Right now I find myself on the tarmac at Laguardia, trapped with 50 other souls in a puddle jumper with some lady and her wretched squalling hellspawn.
There’s one on every flight.
I’m not much of a microeconomist, but the present way that Airlines deal with babies puzzles me. Every airline I’ve traveled on charges nothing for babies! I would gladly pay $50 an hour for a baby – free seat. I imagine others would be willing pay enough for airlines to offset their costs if they were to forbid babies on some on their flights.
Hi all, I know a lot of people in the U.S. and Brazil have been frustrated that they can’t get synthetic NGDP market forecasts lately. I confess that I don’t completely understand why the system is crashing so often, but I believe that the root cause is that my code is not capable of recovering from certain types of connection problems with my Amazon web server. I think that some times the traffic will be too high, which causes R to time out while it’s trying to open the text file that hold the current day’s intraday prices. I confess to not knowing what I am doing, but I am learning. I will fix it.
My hope is that if I port my web scraper into Python, from R, and maintain separate servers for 1.gathering intraday prices from financial websites and 2. updating the forecast and hosting the web pages, that this will increase stability. A hurdle to fixing things is that I am quite busy with a fantastic new job in a cool new city, and the fact that because things were so stable this summer, I sort of forgot the details of the R scripts that run everything. I don’t know when I will do the rebuild, but in the mean time I will continue to make remedial efforts to post forecasts. They may not always be real time, but I have my personal desktop computer running a backup web scrape, starting tomorrow, so if the gods are good I’ll have a viable backup.
My goal was to have forecasts for Japan and the UK running by the end of 2014. This is looking less likely, mostly because I’m having a hard time finding prices. If anyone is aware of real time data sources for Japanes or British inflation indexed bonds, normal bonds, REITs or other Japan- or UK-specific asset prices, please email me at justinpirving [that sign you use for email] gmail.com or leave a comment.
Thanks for barering with me.
1. Brazil is number two biggest traffic source for the site. I am honored.
I was going to write a post on what I think of Scotland leaving the UK, but then I came across this commentary by Pat Buchanan and now need only point you to it: What Would Brave Heart Do?
Here’s my favorite quote from Buchanan’s piece:
The call of blood, history, faith, culture and memory is winning the struggle against Economism, the Western materialist ideology that holds that the desire for money and things is what ultimately motivates mankind.
The point of life isn’t to maximize GDP, it’s to see that one’s genes and memes are replicated on into the future. Scottish independence puts the current citizens of Scotland (the people who own Scotland), and the super organism that is Scotland (genes and culture in the flesh), on a better footing for meeting life’s true imperative. It also meaningfully weakens Labour, which can’t be bad.
The only downside to independence is that it leaves the UK slightly militarily weaker in a world full of threats.
Today I saw a silly article: Uber car service twists sharing economy into sucker’s economy.
It’s a childish argument, the gist of which seems to be that Uber should either overturn the laws of scarcity or just give rides to the first person who pings them in times of extreme supply scarcity or demand surging.
It’s almost not worth going over as I’m just preaching to the choir. Economists figured this shit out in the early 1800s, if not earlier. Still, it bothers me to see the knaves and fools go after Uber, which is a rare instance of a tech company providing a truly disruptive and world-improving technology, rather than just hijacking our ape brains as say, Facebook does.
One of the great features of Uber’s dynamic pricing is that there will nearly always be a ride available at some price. In Manhattan and got a pregnant wife about to give birth in The Blizzard of the Century? For $1500 maybe you can get a ride to the hospital. Having that option seems to make the world a better place.
I’m a lot less of a libertarian than I was in my youth, but still think that “price gouging” is socially beneficial in times of stress.
For a compelling discussion of the matter, listen to Russ Roberts and Mike Munger work through the issues in this EconTalk podcast.
My market-driven nominal GDP forecasting system says that markets expect something like 3.8% nominal growth in the next year.
That’s the average forecast from the 10 best models I could build, they take into account changes in asset prices over the last year (lags going back 3 and 4 quarters proved the most accurate, out of sample). If assets became overvalued, it happened over a year ago.
To my mind, that’s pretty good evidence that financial markets as a whole haven’t gotten ahead of the nominal economy.
Markets are probably not greatly undervalued either. The Fed’s likely to keep nominal growth going along at 3.0%-4.0% indefinitely.
Personally, I’m buying stocks with any free cash that I get.