Getting Paid to be Contrarian is One Thing....

Part of how you get commentary published, it seems, is coming at issues from an angle that at least some of your audience hasn't seen before. But sometimes, perhaps often, the angle tells us more about the person writing the commentary than about the issue they're addressing. Case in point, Megan McArdle's self-described counter-factual on why she would have preferred for Hillary Clinton to have won the 2008 election. The first counter-factual,

I think that Hillary Clinton would have been more cautious when dealing with Republicans, and therefore ultimately more successful in some ways. At the very least, she would not be facing the same level of vehement opposition in Congress.

Certainly there is no reason to believe that the Republicans would have opposed Hillary Clinton, ginned up fake controversies over her past or present actions, or ridiculed and sabotaged her health care reform. That is, if you ignore pretty much everything in Hillary Clinton's past, as it relates to the Republican Party. The party that is still wailing "Benghazi!" would have been deferential to Hillary Clinton? Really?

I think liberals really do not understand emotionally the extent to which the Tea Party was created by the Affordable Care Act and the feeling that its government was simply steamrolling it.

Except that the Tea Party movement did not grow out of healthcare reform. It grew out of the financial industry collapse and bail-out. It was carefully steered in the direction of healthcare reform through Republican demagoguery and strategic misinformation. There is absolutely no reason to believe that they would not have been led to oppose modest healthcare reform, or that their energies would not have been directed at other significant initiatives -- as has actually occurred with issues such as immigration reform.

(One suspects that McArdle has spent little if any time talking to actual liberals.)

From the Tea Party's perspective, you had an unpopular program that should have died in the same way, and for the same reasons, that Social Security privatization did: because sensible politicians saw that, no matter how ardently they and their base might desire it, this was out of step with what the majority of the country wanted (and no, you cannot rescue the polls by claiming that the only problem with the law was that it wasn’t liberal enough; when you dig down into what people mean when they say that, the idea that there was ever a majority or a plurality that was secretly in favor of Obamacare collapses).

Except... no. Social Security privatization died because the then-President's own party wouldn't get behind it. We're talking there about something that was easily recognized as benefiting a relative few, those privileged with "managing" our money, while creating significant risks for everybody else. While it's reasonable to say that you cannot sustain an argument that a "more liberal" plan would have been more popular, that question is moot for the same reason that the question of Social Security privatization is moot -- a "more liberal" plan would not have been voted into law. If you look at the actual content of the PPACA, other than the mandate (which we all know to be a necessary aspect of keeping private insurance companies on board while requiring them to insure people with pre-existing conditions) you'll find that the individual components of the bill are largely popular. You'll find that the most contentious aspects of the bill, such as "death panels", are Republican fabrications.

The rage was similar to what progressives felt as they watched George W. Bush push the country into a war in Iraq. That defined and animated the anti-war movement (which is why said movement collapsed when Bush left office, and not, say, when Bush agreed to a staged withdrawal of our forces).

For the most part, the anti-war movement collapsed when the war started. Whatever anti-war movement continued after that point was quite modest. Also, no, the rage and demonstrable ignorance of the Tea Party was nothing like what one saw in a typical anti-war protest, nor were Democratic politicians out, en masse, pushing misinformation or refusing to correct misinformation embraced by anti-war protesters.

Yes, those people would still have hated Republicans, even if there had been no Iraq War. But they would not have been as passionate, as organized or as powerful without it.

Who are "those people"? When I look at the Tea Party, I see a movement that has sent ripples through the Republican Party, has toppled incumbent politicians and had its own elected in their place, and has caused some of the most absurdly ignorant people to be elected to Congress since... I'm not sure when. The anti-war movement, by way of comparison, unsuccessfully advocated against the Iraq war and then... nothing? I'm not even sure where McArdle comes up with her canard that the anti-war protesters "hated Republicans", but hers seems to be a classic "hollow man" argument -- putting words into the mouths of "those people" in order to easily swat down an argument that few (if any) made, rather than having to address actual people and actual arguments. Counter-factual, indeed.

Liberals tend to write off this anger as racism, as irrational hatred of Barack Obama, or as perverse joy in denying health care to the poor, but at its root, it’s the simpler feeling that your country is making a mistake and you can’t stop it because the people in charge are ignoring the obvious.

It's not an "either, or". You (and by "you" I apparently mean, "anybody except McArdle") can recognize the actual racist statements and actions of people associated with the Tea Party, and can recognize the racism implicit in birtherism, the suggestion that President Obama is not a "full blooded" American, and the like, while also recognizing that the Tea Party is at its heart a fear-driven organization. It was quite obvious that when the Tea Party was screeching about death panels, or carrying around signs to the effect of, "Keep your government hands off of my Medicare", that they were afraid of change. It was also apparent that they were not approaching the issues in a rational manner, and that the monied interests and Republican politicians affiliated with the movement liked it that way.

Yes, a lot of money and energy was poured into the Tea Party by rich backers, but rich backers cannot create a grassroots campaign unless the underlying passion is there in the voters (paging Karl Rove and Crossroads). The Obama administration created that passion with Obamacare.

That, again, is nonsense. There's an element of truth to the notion that you can't astroturf your way into a massive grassroots movement, but what anybody but McArdle would have noticed is that the monied interests she mentions spotted an early opportunity to co-opt and direct the anger of the Tea Party movement. Those backers weren't interested in stopping the financial industry bailout. They were -- and remain -- interested in harming Obama's agenda. As with Mitch McConnell's stated goal, the priority was to try to make Obama a one-term president. They were not interested in educating Tea Party members about the issues -- to the contrary, they helped maintain a constant feed of misinformation. They would have been every bit as interested in harming Hillary Clinton's agenda.

I think that Hillary Clinton would have pulled back when Rahm Emanuel (or his counterfactual Clinton administration counterpart) told her that this was a political loser and she should drop it.

That may be true, but where McArdle sees that as a good thing I do not. Why not? Because unlike McArdle, who likely enjoys platinum quality employer-provided health benefits and sits on considerable family wealth, I actually needed to purchase insurance for my family. The PPACA permitted me to purchase insurance of a quality comparable to a good employer-sponsored plan at a fair price -- not necessarily at a cost savings over the cost of such a plan but with a more favorable pricing structure than what I had paid for COBRA coverage. Between the expiration of my COBRA coverage and the January 1 start date of the PPACA, I purchased a comparatively overpriced plan on the individual market, riddled with exclusions, and had to deal with the absurd arguments that insurance companies use to jack up premiums over "pre-existing conditions". For people not as lucky as McArdle, that's a big [Biden's Word] deal.

I’ve written before about how my Twitter feed filled up with comparisons to 1932 the night that Obama took the presidency, and it’s quite clear to me that the Obama administration shared what you might call delusions of FDR. It thought that it was in a transformative, historical moment where the normal rules of political caution didn’t apply. The administration was wrong, and the country paid for that.

So McArdle has looked down her nose at Obama from the start? And the country has "paid for" the president's pressing forward with the high-priority Democratic agenda item, healthcare reform, by actually getting healthcare reform? The horror!

That’s not to say that Republicans would have somehow been all kissy-kissy with Clinton -- they weren’t very nice to her husband, after all.

Not very nice.... That's quite a way to describe the constant attacks, inquisitorial approach to his background, and the use of impeachment as a political tool.

But I doubt she would have had the debt ceiling debacle or the deep gridlock of the last four years, because it was Obamacare that elected a fresh new class of deeply ideological Republicans who thought they were having their own transformative political movement, and they were willing to do massive damage to their party, their own political fortunes and, in my opinion, to the country in order to take a stand against “business as usual” -- business that included legislating or paying our bills.

Because using the debt ceiling as political theater, and shutting down the government, was something that the Republicans never dreamed of doing when Bill Clinton was President. That is, if we're again using the term "counter-factual" to mean, "ignoring indisputable fact." Further, if McArdle believes her own argument about the increasing polarization of the electorate, and was paying any attention to the likely outcome of the election, the difference is at most one of (slight) degree -- the odds of the Democrats holding the House were vanishingly small, and one would have expected the Republicans voted into formerly Democratic seats to be part of a new partisan wave. Predictably, McArdle offers no acknowledgement of the fact that the Democrats held the Senate, or the fact that a smaller Democratic loss in the House would not have changed the subsequent power dynamic in which House Republicans refuse not only to compromise, but refuse to legislate.

Besides, I thought McArdle was taking the position that the problem was healthcare reform, not the debt driven by the economic meltdown and financial industry bailout. Why does McArdle believe that the Tea Party would have ignored the issues that underlie their genesis, and become complacent in relation to the bail-out, but for healthcare reform? If they were so obsessed with healthcare reform, how is it that they (mistakenly?) voted into office those who chose to focus on the debt ceiling and force a government shut-down? For that matter, the Republican Party could have easily bypassed its relatively small number of Tea Party members and passed a funding bill, simply by allowing a funding bill to reach the floor -- so how is it that this isn't a problem inside the Republican Party, as opposed to one supposedly driven almost exclusively by the President's being Barack Obama instead of Hillary Clinton?

Of course, in my counterfactual, Hillary also probably wouldn’t have proposed ambitious health-care reform; she’d have done something more modest, like a Medicaid expansion.

More modest... except had McArdle been paying any attention to the Tea Party, she would have heard them complain about any program that directs money to the undeserving poor. She might have noticed the right-wing demagoguery over SCHIP, a program to insure children. She might have even noticed that Republican governors have gone out of their way -- to the point of litigating the issue to the Supreme Court -- to avoid accepting free money to expand Medicaid.

To my mind, however, that would have been a much better outcome for everyone. So there’s my counterfactual for the summer: If Hillary Clinton had won, Obamacare wouldn’t have happened, and Democrats -- and the country -- would be better off.

I'm sure that when McArdle and her husband offer their wealthy friends cocktails, perhaps with some sort of dipping sauce McArdle whips up herself in her Thermomix, that's the sort of observation that makes them chuckle. To notice how the PPACA helps actual people? That's beneath her notice. I don't personally believe that Hillary Clinton would have embraced McArdle's notion of modesty, or that she would have so easily folded on a more ambitious plan when faced with Republican opposition -- if I were to accept that counter-factual, I think we have to include the probability that Clinton would have been viewed within her own party as a failure, and would likely have faced a primary challenge after her first term. As Clinton would not have found that acceptable, it's reasonable to conclude that she would have found a way to stick to her guns.

Wealth is Not Proof of Better Genes and Values

In response to an essay about rich kids doing well in school, McArdle questions whether the answer truly lies in enriched environments,

But is that really the right explanation? The rich pulling away from the middle class is also exactly what we would see if test-taking ability has a substantial inherited component, and the American economy is increasingly selecting for people who are very, very good at taking tests. The latter is undoubtedly true, and there's some fairly strong evidence for the former, in the form of studies of adopted kids. Such studies tend to show that adopted kids bear a much stronger resemblance to their biological parents in terms of lots of things, from weight to income to test scores, than they do to their adoptive parents. Once you've hit a fairly basic parenting threshhold--food, health care, touching and talking to your kid, and not physically or sexually abusing them--the incremental benefits of more intensive parenting seem at best small, at worst unclear.

McArdle appears to be confused on a number of fronts. First, the manner in which people in our society meet, form family units and reproduce is not scientific. If this were scientific, not only would we be looking at and testing for specific criteria before approving reproduction, we would see weaker stock that we would need to exclude from contributing its genes to the next generation. We would see a marked difference between the children of the power couple, where both parents had high education and high income, versus couples where only one partner had the "power job", versus couples where one partner stayed at home, versus couples who were wealthy simply by virtue of inheritance.

McArdle presents the example of the marriage of Laura Ingalls Wilder (Little House on the Prairie), who she sees as intelligent and bookish, and Almanzo Wilder, who sees as being significantly less intelligent - intelligence apparently defined by academic interest and achievement. McArdle suggests that in the modern era, the couple would have had nothing in common and thus would likely not have met and married.

Laura Ingalls would quite likely have gone to an elite school, and probably graduate school, then moved to a coastal city, and eventually married another bookworm. Almanzo Wilder would be married to someone like him, a hard worker who nonetheless found school tedious and left as quickly as possible. And when their two sets of children showed up at school, their test scores would be very different.

Instead they had one child, Rose Wilder Lane, who became a very talented short-story writer (her collection, Old Home Town, is a very fine and somewhat brutal study of the Missouri town where she grew up.) They could just as easily have had a child like Almanzo, whose talents lay in other directions.

It apparently did not occur to McArdle that the outcome is not binary - that genetics are far more complex than the "Brown Eyes vs. Blue Eyes" diagrams she made in fifth grade. She could as easily argue that her example proves that bookishness is a dominant trait, and that if we pair off intelligent, bookish people with those who are not "nearly as smart as" as them, we'll have a nation full of smart people within a generation.

Second, you cannot effect significant genetic change across a culture over the course of two or three generations. If the argument is that tests became important in the mid-20th century, and that good test-takers have subsequently congregated, married, and as a result have produced a population of exceptionally good test-takers, it's fair to ask, what are the genetic components behind test-taking, and how do we measure them? When an individual takes a test prep course and sees a 10% increase in his score, is that because his genes have changed? Also, if test-taking prowess is hereditable and leads to wealth, why does the U.S. have a long history of economically outperforming nations that consistently outperform the U.S. on tests such as PISA?

Third, the fact that some aspects of personality are hereditable does not render environment irrelevant. As a group, children raised in an unsafe, tumultuous home predictably suffer long-term effects from their childhood experiences that are less prevalent in children raised in safe, stable households. When you see significant changes in a population across a generation (e.g., the rise in IQ in Irish children since 1970, or disparity in IQ between children of East and West Germany with the differences dissipating after reunification, it's not only inadequate to say, "What can we do - it's genes" - its obviously wrong and it's a cop-out. People tend to marry within their social class, and they tend to follow a career path modeled for them within their social class and family, with a potentially profound impact on their future earnings.

Fourth, the wealthy remain at an advantage even when you control for personality and intellect. When the economic outcomes for the lowest-performing children of the wealthy meet or exceed the economic outcomes for the highest-performing children of the poor, you can't deny the role of wealth. Winning the lottery doesn't change your genome, but it sure can open up opportunities that were not previously available.

I don't disagree so much with McArdle's conclusion as I do with how she reaches it,

Maybe the answer is not a quixotic attempt to somehow replicate the experience of being raised by two professionals with advanced degrees. Maybe it's to question the great educational sorting, and the barriers it has erected. Of course, I am not suggesting that we should give up on educating our kids, or that education is irrelevant to preparing people for the workforce. But we should ask whether incremental requirements are actually adding value. Because every additional year of schooling we require makes it harder and harder for those who don't enjoy school to compete in the wider world.

McArdle's argument does not support either the notion that the wealthy perform better academically because the typical wealthy child enjoys "the experience of being raised by two professionals with advanced degrees", as there are plenty of wealthy people where one or both partners lack advanced degrees, and plenty of middle class families where both parents have advanced degrees. Few impoverished families with two advanced-degree holding parents, and fewer still when you recognize that their transitory period in student family housing or at the very start of their careers isn't representative? Certainly. But none of that directly supports the genetic argument.

It would be helpful, I think, if McArdle explained what she means by "incremental articles". If I interpret that as, "Adding another round of standardized testing," or "Trying to concoct some sort of formula for rating teachers and trying to purge the lowest-performing teachers", then she's right. That sort of reform can make it "look like we're doing something", and may also be very expensive, but is not likely to materially affect outcomes - and we should examine the data, costs and benefits before expending hundreds of millions or billions on experimentation. Similarly she's correct that insisting that people get additional years of education, without any associated effort to ensure that they're getting something of value in exchange for their additional investment of time and money, is not likely to produce meaningful results. But if you look at the German or Irish experiences (or Polish, or certain American immigrant communities, etc.), you can see why its inappropriate to point to an impoverished community and say, "It's their genes" - and can find many examples of that argument being used to deny equal treatment to a population on grounds that, in retrospect, seem absurd.

Public Policy vs. Illusions and Delusions

Dave Hoffman suggests that we are "forced by the Internet to nationalize problems", and as a result it is "harder for local communities to experiment with localized solutions to threats to the moral order". I would be more impressed with the argument if the imposition of national solutions on moral issues were a new phenomenon, or if it weren't the "don't tread on me" types who weren't often attempting to impose their own moral conventions upon the rest of us. But certainly, the national media, the 24 hour news cycle, and the Internet have changed the manner and speed at which local issues can become national news.

In fact, we have not been "forced" to "nationalize problems". We live in a society in which some problems that were once treated more uniformly on a national basis have been transitioned back to local mores. For example, obscenity is judged by community standards, and states are free to impose restrictions on access to abortion that were once considered forbidden under Roe v Wade. The Hatch Act and its creation of "right to work" states started the downhill slide of organized labor. We weren't "forced" to nationalize the problem of alcohol consumption during the prohibition era, nor was prohibition a product of the Internet. The anti-kidnapping laws that followed the Lindbergh kidnapping were not driven by the Internet. Behind the determination of what is "best" handled at the state vs. federal level lies a great deal of political gamesmanship that sometimes gets in the way of the formation of good policy.

Josh Marshall argued that suggesting that school shootings might not occur or might be less lethal if small children were trained to mob a gunman, or if schools were not a "feminized setting … in which helpless passivity is the norm" represents the discussion "quickly veering from the merely stupid [Megan McArdle's "mob the gunman" suggestion] to a pretty ugly kind of victim-blaming [Charlotte Allen's 'feminized settings' argument]". McArdle's suggestion is at best impractical and unrealistic, but to be fair to her she was comparing her own bad idea to ideas that she deemed worse - she admitted that her idea might not work, but had a better chance at preventing school shootings than the ideas she was criticizing. Marshall's criticism of Allen's comment is fair. Let's also throw in Mike Huckabee's blaming the shooting on a lack of prayer in schools.¹ That is blaming the victim, and it is ugly.

Hoffman appears to project his own discomfort with firearms onto people like Marshall,

I didn’t grow up with guns in the house, and the idea of allowing a child of mine into a school where the teachers are armed is horrifying. Worse, I think, is the concept that we ought to militarize children – to teach them that they are all on their own, and the state is powerless before the forces of chaos in society.

Marshall did speak of the growing militarization of our society. His comment is a bit cryptic, but he appears to be suggesting that fear of violent crime is resulting in people "seriously or [like McArdle] half in jest - pushing for a use of force race to the bottom".

Marshall's point is valid - even as violent crime has plummeted, fear of violent crime and terrorism has led to an expanded police and military presence in spaces that were far less secure during times when crime rates were significantly higher. I think part of the issue is that the more rare an event becomes, the more attention becomes focused on its increasingly rare occurrence. Marshall is making a public policy argument, that we should take a step back and try to figure out if the militarization is good for society, a good use of manpower and resources, or if it's likely to be effective before we expand it into new areas of society, such as public schools. Hoffman isn't actually addressing militarization - "teach[ing children] that they are all on their own, and the state is powerless before the forces of chaos in society" is not militarization - but more importantly he's not even arguing about how public policy should be formed.

My intervention here is to just to point out that the problem we actually have here is one of discourse – we are forced by the Internet to nationalize problems. This makes it much, much harder for local communities to experiment with localized solutions to threats to the moral order. If a community in, say, Connecticut wanted to ban assault weapon clips (because it made them feel safer – [(]let’s put to one side data on efficacy!), Glenn Reynolds would lead a charge against the liberal fascists. Indeed. Heh. Yes. If a community in Tennessee wants to arm its teachers (because it makes them feel safer – let’s put to one side data on efficacy!) Josh Marshall and Andrew Sullivan would call them out as conservative fascists. Or loonies. Or winners of the Moore award. And we’d all get to pat ourselves on the back, but no one would actually get the benefit that law is supposed to provide, which is the helpful illusion that we’re more civilized than we actually are, and that we’re actually doing something to push back against the tide.

The thing is, people like Marshall don't "put to one side data on efficacy" because they are interested in facts. They are interested in what works. Hoffman takes several potshots at Marshall,² but all the while misses that the McArdle "rush the shooter" comment was neither a serious policy proposal nor reasonably characterized as a proposal "offered by gun proponents". McArdle was in fact pointing out that some of the proposals being advanced in response to the school shooting, such as banning certain types of firearm or magazines of a certain capacity, would not have prevented the shooting. McArdle tends to get ridiculed in some corners because she has a history of making arguments that are not well-thought out, but her essential approach here is the same as Marshall's. She's not interested in making people feel safe. She's pointing out that your feelings have little to do with what actually does or does not make you safer.

At a basic level Hoffman is correct about a culture clash, although it's not s binary as he suggests. He's correct that a measure that to one person or community might serve as a "helpful illusion that we’re more civilized than we actually are" might differ from, or even be the opposite of, what another person or community would deem a "helpful illusion." If Hoffman wants to argue that communities should be able to create their own "helpful illusions", let's assume within reasonable constraints, he's only going to run into issues where those illusions start to impinge upon the rights of others. There already are schools that allow any teacher with a CCW permit to bring a gun to school.

The problem is that Hoffman is trying to impose his standard for "helpful illusions" onto a policy debate - an attempt to determine what may or may not actually work to prevent (in this instance) school shootings, and the extent to which arguments for measures that offer only illusory benefits are worth implementing, particularly when other civil, social and legal issues are implicated. The policy discussion does not "reduce[] our ability to try out different versions of the good life, and thus diminish[] our capacity live together in peace". In fact, if properly conducted, the policy discussion avoids imposing "helpful illusions" on a nationwide basis, instead implementing only those policies that can be reasonably expected to work, while leaving localities to form their own "helpful illusions" within the aforementioned parameters.
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1. There is a natural human tendency to try to explain away tragedy - to find a way to believe that a horror that happened to somebody else could not happen to you. Huckabee put himself into the same column as the TV ministers who blame local and national tragedies on homosexuality, feminism and the like - and they know exactly what they are doing when they exploit tragedies in that manner.

2. I found Hoffman's essay through a link provided by Jonathan Adler, a call for tolerance that, in context, is rendered odd by his hollow man arguments about mythic "liberal bloggers" who are having a "fevered reaction" and are in "a frenzy" about Megan McArdle's "what if kids mobbed the gunman" column. Adler's a law professor, so I assume he has enough familiarity with the Socratic method to understand that scorn, derision and ridicule, as unpleasant as they can be, do not constitute a frenzied or fevered reaction.

Class and Income Rigidity in the United States

I don't want to pick on Megan McArdle, as I think her heart's in the right place on this one, but.... In an effort to explore inequality, some time back, Megan McArdle argued,

The old aristocracy was, I think, at least dimly aware that it wasn't quite fair for them to have what they had by mere virtue of being born to the right parents. But in the new aristocracy, it is rarely enough to just get born to the right parents; you also have to work very hard. (Higher earning men are now more likely to work more than 50 hours a week than are men in lower earnings quintiles.)

Has McArdle ever worked at a job that paid by the hour?

When Eric Erickson made a fool of himself by arguing that he worked three jobs, it wasn't just his white T-shirt that was intended to send the message, "I'm just a working guy". It's typically those who work in hourly jobs who can legitimately claim to be working multiple jobs. Why? Because their employers have only so many hours of work to offer, and when the schedule fills up you can only get more hours by changing jobs or moonlighting. If your a non-exempt employee, such that you're entitled to overtime, your employer also has a strong incentive to cap your work week at 40 hours, leaving you with more time to find and work a second job - not that you would find that to be an ideal use of your time, were you in that position, but if you need the income that's how you'll get it.

When the economy is booming, a lot of the workers that McArdle suggests aren't "work[ing] very hard" in fact put in ridiculous hours. I know some people in the construction trades who were working seventy or more hours per week during the boom. Some now have difficulty finding full-time employment, and an even harder time finding employers who are willing to pay overtime. They didn't get lazy - the economy changed.

As for those hard-working white collar types, one of the big reasons why they work more than forty hours is that they are exempt and thus their employers can require them to work more hours without paying them any additional money. Yes, some people who are chained to their desks do work very hard. Others put in a lot of face time. Others do work that's pretty mundane and could easily be distributed to other workers, but for the fact that hiring additional help would increase the employer's costs. (Perhaps McArdle has forgotten the Bush Administrations expansion of jobs that could be classified as exempt, and has overlooked the frequency with which employers are accused of cheating workers out of overtime pay - it's a big deal.)

In speaking of poverty and income inequality, McArdle argues,

I don't care about income inequality. I care about the absolute condition of the poor -- whether they are hungry, cold, and sick. But I do not care about the gap between their incomes, and those of Warren Buffett and Bill Gates. Nor the ratio of Gates and Buffett's incomes to mine. And I'm not sure why anyone should.

McArdle's examples seem a bit odd. I can't recall hearing anybody argue that either Gates and Buffett are undeserving of their wealth. On the one hand, McArdle seems to recognize that the two issues are unrelated - and in fact that inequality of income and wealth is what allows some entrepreneurs and investors to come out on top. But on the other she appears to be suggesting that if you're concerned about anything beyond absolute poverty, you're engaging in some form of class resentment whereby you want to strip wealth away from people like Gates and Buffett. The disconnect is highlighted by the fact that McArdle wants people to have equal economic opportunity, independent of their economic status. If McArdle's statement is meant to be, "As long as there's a reasonable path from poverty to wealth, I don't care about income inequality," fair enough. But if her statement is taken literally, surely she is aware that there is a tipping point at which income inequality will pretty much lock the class structure in place.

Despite her implication that professionals work harder than hourly workers, McArdle does recognize that there's a lot more to the picture than that. She suggests, in my opinion quite rightly, that higher wage earners are apt to give their children better education and better opportunities, and in many cases "the actual skills required to earn more money than everyone else". I read a comment a while back, I believe from one of Donald Trump's children, describing how he had proposed attending a college that would have allowed him more time to pursue sports or hobbies. He was told to go to the best college he could get into. Did he necessarily get a better education there? Perhaps, but probably not. But "The Donald" has a very clear understanding of the value of branding. Trump provides an example of how somebody can benefit not just from family money, but from entering the same business as their parent. Trump's father was a successful real estate developer in New York City, so it's far from a surprise that Trump became a real estate developer in New York City. And with some hard work, luck, no small amount of ego and force of personality, along with dad's money and connections, Trump succeeded (and failed) on a much larger scale than his father. The lesson to be inferred is less that Trump received an unfair advantage, and more that children will often follow a career path consistent with that modeled for them by their parents. And yes, if you learn the ins and outs of any job from somebody who already holds it, you're more apt to succeed in that job.

Children of the wealthy are also more likely to get a level of support unavailable to the rest of us - a job at their parent's firm to help establish them in their parent's profession. Yes, about forty percent of sons at some point work for one of their father's past employers, but it should go without saying that at the bottom end of the labor pool that is more likely to establish you as a lower-end wage earner than to help propel you to the top 1% (where the number of sons working at dad's current or old employer approaches 70%).¹

Also, it's not like the top 1% through the remaining 32% of their children to the wolves. A couple of "sons of bankers" come to mind, one of whom was sharp as a tack but uninterested in banking. His father put him through law school and funded his founding of a law firm. Another was not very bright or motivated. His father bought him a commercial janitorial services company. It's much easier to enter into a profession, or to succeed as an entrepreneur, when your path to success is greased with family money.

The benefits of having wealthy parents can't be avoided and, even if you believe it should be, it's difficult to impinge a cure that would not be worse than the disease. But let's recognize that if Donald Trump's dad were a shift manager at a restaurant, Trump would be a success if he became a general manager. He would be a phenomenal success if he became a successful restauranteur - but probably still somebody we wouldn't have heard of. Trump moved from third base to home plate - but unlike most of the rest of us, he started on third.

While McArdle professes some level of surprise that although "Ivy League colleges threw open their doors to the bourgeois masses, and cut back on the Saint Grottlesex crowd," inequality persists, perhaps she should consider both that the Ivy Leagues have not eliminated preferences for the children of alumni, and that the number of people who can attend Ivy League schools remains insignificant - even though the signal drawn from attendance is massive. Using McArdle's own anecdote from another piece, quoting Bryan Caplan's finding that "Super-elite credentials matter much more than your academic record",

You see this in Washington all the time -- a friend who went to a lesser-known state school said he could always tell the people he wasn't going to like when he met them at cocktail parties, because the minute he told them where he'd gone to school, they became extremely interested in going to get another drink or find the cheese dip. This is one of the smartest, most consistently interesting and original, most talented writers I know. Having actually attended one of those elite schools that apparently make you fascinating, I can attest firsthand that statistically, the elitists were vanishingly unlikely to be as interesting as the person they abandoned because he'd gone to a state college.

The first question that comes to mind: Why do McArdle and her friend keep going to those parties? (The answer, of course, is obvious: They're hobnobbing with rich, powerful people and it benefits them to "see and be seen".) The second question is, why does her friend keep dropping the name of his undergraduate institution into discussions? It's truly difficult for me to believe that, as a matter of course, the people at these parties are changing the subject from his scintillating conversation and saying, "This is a nice conversation and all, but unless you went to Harvard or Yale I have to move on to more important people or, if you went to a state college, the cheese dip."²

When McArdle observes that middle class parents would be horrified if their children, like those of the bottom quintile, had only a 17% chance of achieving a household income of $90,000 or more, she's correct. But that also highlights how she misses the boat on income inequality. The more education your parents have, the more wealth they have, the more business and political connections they have, the more they can do for you - even if simply by example³ - to land you among the nation's highest wage earners. If you truly don't care about income inequality, and truly don't care if the bottom drops out on the middle class, you cannot credibly claim to be concerned about the associated collapse of opportunity to rise.
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1. Admittedly the figures are from Canada, but I expect that the experience is about the same in the U.S. and U.K.

2. Unless, perhaps, these conversations involved his lobbying various political insiders for a nomination to the Supreme Court, but that's another story.

3. Most will do much more than act as role models.

Some Things, You Shouldn't Have to Explain

Following up on the much-maligned essay by Gene Marks, Megan McArdle offers what I think is a reasonable interpretation of Marks' thesis: it's much harder than most people think to transition from being poor to being middle class. McArdle tends to oversimplify, but at the same time she acknowledges the general reality of the situation:

[Poor people] could be middle class if they made a series of hard choices. But those choices are really hard - much harder than they are for the people who are already there. Chances are, you would also have a hard time making those choices.

Some people find it very easy to point to a child in poverty and say, "If you acted like a middle class kid you would escape poverty," never mind your parents, peers, schools, support system.... Marks simply reveals that when those who have enjoyed lives of comparable privilege speak of "acting middle class" they are describing taking a level of action and initiative at least an order of magnitude greater than what a typical middle class child must do to stay in the middle class - in simple terms, struggling against the odds vs. coasting.

I had a client many years ago, abandoned to his elderly grandmother's care by his drug addict parents, caught at the age of seventeen selling crack, and in court as an adult (at 17 you're an adult in Michigan for criminal prosecution). The image that sticks with me is when, at his sentencing, I described to the court why I believed probation was appropriate and referred to him as intelligent. His reaction telegraphed that nobody had ever used that word to describe him. Out of control, troublemaker, and the like, sure. But intelligent? Nobody noticed. Nobody was looking.

Why Shouldn't The Government Be The Senior Creditor

I'm sorry. Although I support the creation of a new bankruptcy chapter for companies deemed "too big to fail", and I support proposals to keep "too big to fail" from being an excuse in the future to bail out companies that should go through bankruptcy or otherwise be allowed to fail, I find myself completely unable to get worked up about the idea that certain Chrysler and GM creditors are getting a raw deal in bankruptcy.

The concept seems to be this: Even though the auto companies survive solely on government bailout funds, and can make their way through bankruptcy only with the government guaranteeing their debt and warranties and providing additional cash support, and even though the creditors objecting to the proposed distribution would be receiving far less but for the government bail-out, and even though to give them more increases the government's future exposure through the Pension Benefit Guarantee Corp., it's hideously unfair that the government is using its position to bring about a settlement that doesn't provide a greater transfer of taxpayer money to cover the private losses of GM and Chrysler investors.

Why are these people so willing, eager, to regard taxpayer dollars as meaningless. No, that's not quite right. As a justification for a wealth transfer from the taxpayers to investors who made a poor investment. What if we had a perfectly reasonable law that, when a major business falters and is deemed "too big to fail", but cannot obtain the private capital it needs to maintain its operations, in the event of bankruptcy any loans or other aid it receives from the government to get it through the crisis must be paid back to the penny before any other creditor may receive a distribution? How would that be unfair? Yet in the context of GM and Chrysler, the deal being offered to creditors is far more generous.

With all due respect to those who pretend that nobody can bid against Fiat for Chrysler because nobody has had time to figure out what Chrysler is really worth, how hard is it to beat a bid of $0? What reason is there to believe that Obama would be anything but pleased with a higher bid, a bidding war, or a bid from a domestic company? Seriously, Chrysler was privately held by Cerberus Capital Management, a company that deems itself a turnaround specialist, and I don't think they would have hesitated to provide a detailed prospectus to anyone who was willing to outbid Fiat. I also don't accept that Fiat is the only company that noticed Chrysler was for sale, and spent a bit of time kicking the tires and looking under the hood.

I expect that the legal challenges to the proposed resolution of Chrysler's bankruptcy will fail. I agree that what we're doing here (and, outside of the bankruptcy process, with major financial institutions) is far from ideal. I am anything but thrilled with the prepackaged bankruptcies we're looking at, and would very much have preferred to keep GM's ownership in private hands. But this notion that keeps rearing its head, that it's unfair not to give investors, financial industry employees, and others a windfall at taxpayer expense - where their investments would be worthless or they would be out on the street without government intervention - just doesn't move me.

The better argument is that we should have let Ford and GM enter bankruptcy last fall, without federal support, and let the market deal with it. It's highly questionable whether, three or five years down the road, this will look like the best use of the taxpayer money we're pouring in, with the short-term goal of saving jobs and perhaps allowing viable companies to emerge from the ashes of their former selves. Will it still look like it was a good idea to keep the companies going, in order to prevent huge numbers of their employees from becoming jobless in the middle of a difficult recession? It's hard to know - there is a serious price to worsening or perpetuating the recession. But while I hope I'm wrong, I don't think it is ever going to look good in terms of "dollars spent per job saved".

If We Find Ways To Make Torture Work, It Will Work!

Well, duh. It's valid to state that it's dangerous to argue "torture doesn't work" because we may eventually find ways to make it work. It's the same point It's similar to premising arguments against the death penalty on its cost - if your opposition is in fact based on moral grounds, what do you do if we find a way to avoid the expense currently associated with death penalty trials and appeals? Switch gears and say, "No, really, ignore what I said before..." and try to salvage some shred of credibility? The response to that is to say "It's not likely that we'll find a way to avoid those costs, so I'll take the risk", but that doesn't exactly vindicate you on the moral front.

In terms of torture, Megan McArdle argues,

I've long said that we shouldn't waste time arguing that torture doesn't work. For one thing, the evidence for those arguments seems empirically shaky, especially since many people employing them insist on arguing that torture basically never works, rather than that it doesn't work very often and therefore has a bad cost-benefit ratio. For another, arguing that something doesn't work isn't necessarily an argument for not doing it--it could just as easily be an argument for improving our technique. And if advances in brain scanning research let us develop a reliable lie detector, as seems possible in the relatively near future, then torture will work very, very well.

Superficially the argument is the same - we can use torture to get answers and we'll know they're true because the bran scan lights up in a particular way. We're assuming, I guess, that we'll find a way to fit a water board inside a PET scanner. Perhaps the torture would be administered by remote control, via a robot, so that the technician could avoid being exposed to undue levels of radiation. And how would we conduct studies to determine whether the torture was interfering with the results of the scan? Trial and error?

At risk of falling into my own trap, let's talk brain scans. Eventually we may develop a waterproof version of the PET scanner that does not expose people outside of the device to radiation (I'm assuming we're not too concerned about the person inside the device), and have gathered enough information from its use to screen out any effects on the brain scans due to torture. Well, that seems like it would be a lot of unnecessary, costly work because if we do have an effective lie detector that works off of brain scans... why would we actually need to torture?

Assuming you have a working lie detector test, do you need anything more sophisticated than "yes or no" questions to get virtually any information you require? If you have a bit of intelligence to work with, it's even easier. If we're imagining this sophisticated brain scanning lie detector technology, it may be that we don't even need an answer - we may be able to determine the answer to a binary question by the way the suspect's brain lights up just from hearing the question. It's much easier to apply a lie detector to a binary question than to a narrative, where truth may be mixed with fiction, and both may be mixed with pleas for mercy. ("He's telling the truth that there's a plan to bomb a U.S. military target, or that he wants us to 'please stop', maybe both.")

Let's also not forget what a lie is - it's deliberate deception. If I think I know the answer but am wrong, my "honest" answer will "pass" the lie detector test, but you will nonetheless get bad information. Let's say I'm an evil terrorist mastermind. A couple of things I might do:

• Feed misinformation into the heads of people I will set up to be captured. They are caught, information is elicited and... it's all bad, but the "lie detector" says they think its true.

• Occasionally brainstorm plans with my colleagues, from the pedestrian to the ludicrous, with no actual plan to carry them out. If somebody is captured, they "spill the beans" on all the plans, they think they're real (or may be real), and the government that obtained the information will spend thousands of man hours chasing shadows.

Why wouldn't that work?

The reason it's difficult to debate on moral issues is that your opponents either don't see things the way you do, or simply don't care about the morality. Religions have a pretty simple way of resolving the moral dilemma - morality is what God tells you to do, and you can't question God. If the answer is, "I disagree," or "I think the tangible benefits outweigh the moral cost," or "I don't care," how can you really respond? Keep repeating yourself?

It's the difficulty of making a moral case that leads people to try to sidestep that issue, raising arguments of morality and efficacy. And yes, if you're not willing to change your position if the arguments you make are undone yet pretend that your opposition is based upon something other than morality, you're risking that a solution will be found and that you'll lose your credibility. Sure, you can raise the argument honestly - "I oppose torture on moral grounds, but consider the following..." - but you're still not making the case for what you believe to be the best reason to oppose torture. So do make the moral case. But at the same time, it's fair to point out that the type of technology we're prognisticating that might make torture "work" should also make it unnecessary.

Is It "Unfair" To Let Detroit Collapse

Leave it to a conservative. In comments, CWD raises the question of whether it's fair to allow domestic auto makers to fail given the gargantuan financial industry bailout. Oh, I kid CWD. He actually argues, quite correctly, "I've pretty much always been opposed to the idea that we have to do something stupid and wasteful again just because it wouldn't be 'fair' not to do so".

Certain ideologues who favored the financial industry bail-out, while opposing an auto industry bailout, are engaged in some interesting contortions to avoid admitting their hypocrisy. Charles Krauthammer tells us that one's okay but not the other, because the financial industry is a "utility" - directly analogous to the electrical company. Except the government is not regulating the financial industry in the manner that it regulates utilities - is that something Krauthammer wants? Nor was it ever likely that the entire economy would shut down absent a bailout of the financial industry. It's not clear what would have happened, and fear has played a big role in the size of the bailout and the inadequacy of oversight. And I don't recall the federal government rushing in to save California from brownouts and rolling blackouts back in the glory days of Enron, or rushing in to update the electrical grid after the 2003 blackout.

David Brooks is more poetic in his explanation of the difference,

This is a different sort of endeavor than the $750 billion bailout of Wall Street. That money was used to save the financial system itself. It was used to save the capital markets on which the process of creative destruction depends.

Well, no. In the same sense that Brooks contends that keeping the big three from collapsing would retard "creative destruction", so does the choice to prop up large financial institutions instead of letting them fail, or letting them be carved up and sold off in smaller pieces. There's no sense in arguing the glory of "creative destruction" if you're going to simultaneously exempt from its forces the institutions that supposedly drive it. Also, isn't "creative destruction" about more than destruction - what does Brooks propose will be created in the place of the destroyed automobile industry? (One wonders, also, why Brooks isn't spending any time describing how his employer might avoid "creative destruction", beyond suggesting that it should get a bailout if Detroit is rescued.)

In an interesting series of posts at the Atlantic, Megan McArdle takes on the question of fairness, asking in some earnestness if an auto industry bailout means that the government should also bail out companies like Kodak. But that's a slippery slope argument, already implicated by the financial industry bailout. If we can draw a line before bailing out the auto industry, we can draw a line afterward. McArdle correctly argues that the bailout is unlikely to change "business as usual" at a domestic auto company or the UAW. True, but that's not a distinction from the bailout of the financial industry, which is now preparing to shower its workers with generous bonuses and pay dividends to shareholders courtesy of the U.S. taxpayer.

There are also fundamental differences between allowing a company like Kodak to fail because it didn't sufficiently anticipate and respond to the rise of digital technologies and its effect on the sales of photo chemicals, and allowing the auto industry to fail. Sorry, Kodak, but you represent a much smaller, less vital part of our economy. And unlike a context where a dinosaur is allowed to dwindle or die because it didn't respond to the market calling for a different product, this is a failure in competition between companies offering similar products. Suggestions to the contrary aside, assuming for example that GM fails, a post-collapse consumer is going to buy a roughly equivalent car from one of the remaining auto makers.

Hype green technologies all you want, but the consumer's choice is more likely to be driven by gas prices than by the availability of hybrid or flex fuel technologies, and the Japanese auto companies sell trucks and SUV's with gas engines in order to meet that demand. If the big three fail, cars will continue to be made, but the profits from those sales will flow to foreign companies and the instinct of those companies, faced with economies like the one we're in, will likely be to shutter U.S. plants ahead of those situated in the countries where they are based. High tech jobs in the auto fields will filter out of the U.S., so we need to ask ourselves whether those are the jobs we want to lose? (And that's before considering the jobs and businesses that would collapse across the country in the event of an auto industry collapse. No matter how much you hate unions, it's insane to be hoping for the death of the Big Three.)

I'm less concerned about an unlikely future where this leads to our bailing out Kodak, than I am of GM coming back in thee years, or maybe three months, begging for more cash - can we offer this bail-out without doing exactly what Henry Paulson and GW are doing with the metastatic financial industry bailout?

McArdle is correct in suggesting that any bailout should return a net gain to society, and that it is not clear that the current proposal would do so. Would bankruptcy? The fallout from bankruptcy for GM itself may be worse, but what if you instead used that bailout money to soften those consequences, or held it in reserve to potentially help a stripped-down, post-bankruptcy GM? I'm not big on the Thomas Friedman model of trying to force the Big Three to reinvent their vehicle line-up in his preferred image. The priority needs to be on creating viable companies, not on forcing them to incorporate technologies into their fleets that will either require massive government subsidies or price their vehicles far above competing models.

The WSJ proposal that if we're bailing out the auto industry to the tune of $25 billion or more, existing shareholders should be wiped out, seems to be on the mark. If we prefer a bail-out to bankruptcy, make it "bankruptcy lite" - a more efficient, industry focused version of bankruptcy, but with pretty much the same goals in mind. Not long-term stewardship, micromanagement, or redesigning vehicle fleets by committee. If you want to impose green reforms, do them legislatively and impose them on all new vehicles, so that the "new GM" can compete on equal ground. Perhaps more importantly, it isn't clear that an auto manufacture could survive bankruptcy - that they could maintain the cash flow necessary to stay in operation if they're unable to obtain and maintain enormous lines of credit. A specially legislated "bankruptcy lite" might bring about the benefits of bankruptcy without killing the company or impairing its ability to sell cars.

Something that seems to get lost in the noise, particularly the anti-union, "those workers get paid too much" noise, is that it's not only the labor cost differential that makes it hard for the Big Three to profitably sell smaller, cheaper cars. Take a look at vehicle sales in recent years. If domestic auto makers could avoid the discounting they have to offer to make their "comparable" cars competitive with cars from companies like Toyota or Honda, this would be much less of an issue. Instead, the labor cost differential is magnified by the need to offer discounts and incentives to people who are prepared to pay close to MSRP for a "comparable" quality vehicle.

Some painful truths. It isn't clear at this point that a financial industry-style bailout (no strings attached, here are billions to spend on whatever you think is best) would do more for the auto industry than forestall their collapse by a period of months or maybe years. It does not appear that, left to their own devices, the domestic auto manufacturers will get it together to manufacture vehicles that compete in terms of quality, design, or economy (in what I personally regard as an inevitable return to high gas prices) before they again hit a financial wall. But it isn't clear that any bailout, bankruptcy, or "bankruptcy lite" will turn them into viable companies - the context is created for that possibility, but these are sick giants with a corporate culture that has largely fought, tooth and nail, against the type of evolution that is required. Their progress over the past few years gives some hope, but it's only a modest beginning.

But doing nothing, if it leads to the collapse of one or more of these companies, will almost certainly deepen and prolong our recession while effectively ceding a big money, high tech manufacturing industry to foreign companies. So all said, at this point I would argue for "bankruptcy lite", for any of the Big Three that feels it cannot otherwise survive, and otherwise let market forces prevail.