Jane Austen and Game Theory

Jane Austen and economics are natural matches, since few people before or since do a better job of showing how financial matters control or affect the direction of a person's life. I wrote an article on Austen and income inequality so I got a kick out of this article on Austen and game theory by Michael Chwe.

I believe that Austen is a game theorist herself, interested in how people make choices and how people anticipate the choices of others. Like any game theorist, Austen's interest is both practical and theoretical. For example, what distinguishes game theory, and economics generally, from other social science approaches is its emphasis on individual choice. That's how economists explain behavior. For Austen, choice is an obsession.

Women, especially back in the day, have always been forced to tolerate a constraint of choices. Middle class women had little hope of earning enough to support themselves; Louisa May Alcott--spinster and extremely important source of revenue in her family--often wrote of young women's frustration when they try to use their talents to earn a living. Austen's women had even fewer choices and they were often shrewd observers or experts in gaming the system that excluded them.

Every choice had to be considered, to calculate the effect it would have on others and how these reactions would affect the women's lives. Marianne Dashwood had a wealthy father but the law excluded her from inheritance. She had to marry because a husband was the only source of income available, and anything that affected her marriage affected her ability to support herself. She was considered foolish because she ignored the consequences of her actions and their probable effect on her financial future. Austen was realistic about the realities of her time and therefore was able to be extremely perceptive regarding people's motivations. People usually act for their own benefit, for good and ill.

I would disagree a little with the author's statement that "Austen consistently argues for commensurability: the many aspects of an alternative are in the end reducible to a single feeling;" in his example Catherine is just a teenager enjoying a novel experience; she is not old and experienced enough to go through the kind of financial panic that other Austen heroines endure. Elizabeth Bennett loves Darcy but she must constantly calculate the effect her circumstances has on her chances of marriage. The feelings might be simple but the choices never are.

"Whatever The Facts..."

It's great to be a right-winger. You don't have to be truthful, honest, hardworking, or responsible. You can say any damn dumb thing that you want, and best of all someone will pay you for it. For instance, Megan McArdle:

[...This has been the most scandalicious week in living memory.  I mean, sure, none of it rises to the level of Watergate.  But while the gravity may pale in comparison, the volume is breathtaking.  So breathtaking that it's tempting to think that the administration is doing this deliberately.

In finance, there's an art known as "Big Bath Accounting" which is used to manage earnings expectations.  Here's how it works:  if you know you're going to have a bad quarter, you look around for anything else that might go wrong in the future, and you decide to "recognize" that bad news now.  Inventory looking a little stale?  Write it down, man!  Customers getting a little slow to pay?  Now would be a good time to write off their accounts as bad debt.  Is there some uncertainty in the projections about depletable assets like oil stores?  For heaven's sake, why not use the low end of the projections rather than the medium or high end? And we should really book some sort of charge to account for the risk that the Yellowstone supervolcano will explode, killing hundreds of thousands and covering the entire western half of the United States in volcanic ash, and in the process severely dampening demand for our premium line of Wyoming-themed memorabilia.
 

Corporations call this "cleaning up the balance sheet".  Accounting professors call it things I can't print because this is a family blog.
 

The theory is that there is only so much bad news people can take in all at once, so you might as well cram all the bad stuff into one action-packed earnings call.  

...

The Obama administration are past masters of this strategy on the budget, and it almost makes me wonder if they didn't decide to dump bad news about the AP phone searches and the IRS scandals while Benghazi and Sebelius were already making news.  There are only so many hours on the cable news channel, and by definition, if people are talking about one scandal, they can't be talking about another.  So while a lot of commentators are calling this "a very bad week for Obama", I sort of suspect he's having a very good week.  He's managed to get a lot of scandals off his balance sheet at what will probably be a fairly affordable political cost.

The sheer number of scandals, you see, forces McArdle to wonder, no doubt in horror and grief, what is coming next. After all, Obama might--not that she is saying he has, mind you--but he might have orchestrated an entire right-wing noise machine to manufacture a non-stop drip, drip, drip of hysteria over anything that has even the hint of a potential for scandal to the blindly partisan. And why would he do this utterly illogical, not to mention extremely complicated, course of action? 

It's not that the right is frothing at the mouth at the opportunity for even the most minute amount of political gain. It's not that the right knows that catering to the vast number of racists in its midst by dangling impeachment before them is a sure-fire way to gin up donations. And it certainly is not because the right has a bottomless hunger for any scrap, any iota of evidence that they are good and their enemies are evil. No, it's because there just have to be more Obama "scandals" out there.

But what if  Obama didn't leak the scraps of information that the right has attempted to blow up into newer if not better Watergates? Eh, it doesn't matter!

Of course, that's true even if the administration had nothing to do with the explosion of scandals, and it's all just a fantastic coincidence.  Each of these revelations would have hurt a lot more if they'd come out on their own, with nothing else to do but exhaustively explore all the nuances and implications.  Obviously, it would be better still for the administration if they'd never happened at all.  But if you have to have some scandals--and virtually all second-term presidents seem to--then all at once is the way to go.

Considering she married a guy who created fake websites to gin up outrage against the bailout of homeowners destroyed by the financial industry, McArdle has a very strange ignorance of the ways of the rat-f*ucker. Perhaps she should lean over in bed and ask her hubby about the manufacture and breeding of scandals and other political machinations.

ALEX CHADWICK, host:
Congress is moving closer to passing a bill that could steer as much as 300 billion dollars to homeowners who are hurt by the housing downturn. But some are not happy with this plan. According to a report in the Wall Street Journal today, an online site called AngryRenter.com has had more than 44,000 people sign a petition protesting the bailout package. The journal also says the site is a fake grassroots effort. With us is Wall Street Journal reporter Michael Phillips, who wrote the story. Michael, what is the essence of this here? What have you got?  

Mr. MICHAEL PHILLIPS (Reporter, Wall Street Journal): Well, the AngryRenter.com site purports to be a grassroots site coming from the public. In fact, it's a production of an organization called FreedomWorks, which is chaired by Dick Armey, the former House majority leader, a Republican from Texas. Another board member, Steve Forbes, well-known publishing magnate and others, and these are guys who are very interested in Libertarian views, free market views. And this site is the attempt of their organization to generate an aura of grassroots-i-ness for their work in opposing the bailout.

The right duly passed on links to the site because scandal and hysteria generate income for them.

However Megan McArdle is apparently utterly ignorant of the political world in which she has managed to insert, maneuver and enrich herself. The Koch brothers finance journalists because they just want to support the journalism business, and, after all, the business of America is business. The right-wing scandal industry is just a lot of nice, sincere people who are genuinely outraged about, well, anything and everything that Obama does. And Megan McArdle spends most of her time writing about how "Obamacare" will kill millions because she cares so very much about you and your family. Even if she has to make up shit to do so.

She's just special that way.

K-Lo Goes To Confession: Death And The Maiden

Father: Kathryn Jean, welcome back to New York. So, what do you have for me today? A little sloth, or maybe your talked back to your mother?

K-Lo: (muffled murmur)

Father: I beg your pardon?

K-Lo: (clearly) Sorry, Father, my veil was making it hard to talk. Just pretend I'm wearing it, okay? I don't want God to get mad at me. You know how he loves to smite. Can I start again?

Father: Yes, go ahead.

K-Lo: Bless me Father for I have sinned. It has been twenty-two hours since my last confession. Oh my God I am heartily sorry for what I have done and what I have failed to do. I have sinned against You which was really wrong but I'm sorry now, so no hard feelings, right? I took the name of the Lord in vain a few times in the course of my duties at The Corner as a Helpmeet for the Lord and any male who needs a woman to be his moral center and guiding light.

Father: And?

K-Lo: Sorry, Father, but that's it. I've been really busy with the funeral arrangements. There's just so many things to attend to and of course I'm not at my best right now with a death in the immediate family and all. Do you like my mourning outfit, Father? I figured you can't go wrong with a black suit, and maybe a piece of jewelry made out of the hair of your loved ones, like Good Queen Bess and Prince Albert.

Father: I think you mean Queen Vic---. Never mind. I am so sorry to hear of your loss and I hope we have not lost either of your good parents.

K-Lo: Oh, gosh, no, they're fine. Besides, they told me ages ago that they weren't going to die for a very long time, so don't worry.

Father: An uncle or aunt or cousin perhaps?

K-Lo: Nope.

Father: Ah, Kathryn Jean, you don't have any other immediate relatives.

K-Lo: (Bursts into loud sobs.)

Father: Katharyn Jean, is there something you need to tell me?

K-Lo: It's all the babies, Father. There are dead babies everywhere! It's so sad!

Father: Your tender feelings do you credit, Kathryn Jean, but God is here to help you with your burdens.

K-Lo: I know, Father, and I pray all the time but people still have abortions! We have to do something to save the babies! (Sobs)

Father: Kathryn Jean, you have enough to worry about right now. Let God shoulder your burden for a little while or you might become overwhelmed.

K-Lo: It's okay, Father, I have a plan to fight back against modern hedonism and sexual depravity. If we could only get people to realize that they are having an abortion then they would stop having abortions. They have no idea what they are doing! The need to be told before it's too late! (blows nose)

Father: Kathryn Jean, remember your faith and trust in God . And  your restraining orders.

K-Lo: But Father! Depravity! Death! Baby Armageddon!

Father: The people who work in abortion clinics know they are working in abortion clinics, Kathryn Jean. And you have other things to worry about.

K-Lo: But they don't know about the poor babies, Father! If they only realized that they were killing sweet little baby people they would stop!

Father: They are, indeed, all our children. So you are participating in the Priests For Life protest?

K-Lo: In a way.

Father: And that way would be...?

K-Lo: They are doing such wonderful work by naming and remembering all the poor dead babies that I wanted to do my part too. That's okay, isn't it? I mean, terms-of-probation-wise.

Father: And your part would be---.

K-Lo: Father, you are cordially invited to a funeral for my future fetus, to be held tonight in the park across the street from Mama and Daddy's apartment building.

Father: Your---.

K-Lo: Future Fetus. My baby-to-be, God and ChristianMatch willing.

Father: Your---.

K-Lo: Doesn't he deserve a funeral, Father? We can't harden our hearts to God's gift of life! He's a person, he needs a name, dammit! Oh, sorry, Father, that was for extra oomph, I don't really want to name my egg Dammit. How would he know if someone was calling his name or just cursing?

Father: Your---.

K-Lo: First we are going to have the service and then we'll have a candlelight vigil in Mama and Daddy's backyard, where they're buried.

Father: They?

K-Lo: Be sure you're careful where you step, Father, it's getting kind of crowded back there and people keep on stepping on the tiny little tombstones and knocking them over.

Father: Okay.

K-Lo: Then I can go ahead with the funeral arrangements?

Father: Okay.

K-Lo: Swell! See you tonight, Father! Oh, wait, don't you want me to say a Hail Mary or something?

Father: Okay.

K-Lo: Gosh, Father, you're kind of quiet. Are you feeling okay?

Father: Actually, Kathryn Jean, I am feeling a little unwell and will probably stay home and rest tonight. Be a good girl and give my best to your parents.

K-Lo: Sure thing, Father. Although I was hoping to ask you to be godfather to Jonah Junior. I'd be honored if you would say yes. And I'm running out of people to ask.

Father: That's---very kind of you, Kathryn Jean.

K-Lo: No problem, Father. Children need good Catholic influences in their lives. I'll text you with the details. And I'm going to live-Twitter the funeral so you can follow along if you want.

Father: Thank you. Now run along, young lady.

K-Lo: Don't you have any advice for me Father? You usually do.

Father: No, I don't think that would be any use. Useful. I can't think of anything useful to say.

K-Lo: No problem, Father. See you soon!

Useful Idiot

The two most notable things about Megan McArdle's work are the weakness of her arguments and the grateful fervor with which they are received. The first has nothing to do with the latter, of course; weak or strong, numerate or innumerate, moral or immoral, one can always find a small chorus of supporters for her arguments. It's difficult to be a follower unless someone tells you what to do and the right is very grateful to their leaders for sparing them from the burden of free will and choice.

Which explains why McArdle keeps revisiting the Elizabeth Warren well, despite her embarrassing Elizabeth Warren-related failures in the past. Warren is an official enemy of the right and especially the financial industries. She disavows allegiance to the elite instead of sucking up to it in the hope of enriching herself, which is so alien a concept to McArdle that she is certain Warren must be dishonest. If Warren is right then McArdle is wrong and we all know how McArdle feels about that.

And to make all these matters worse, Warren succeeded where McArdle failed; making a name for herself in the financial world, within touching distance of trillions of dollars whirling around in virtual space like the world's best snow globe, only with money instead of glitter and McArdle on her hands and knees instead of a snowman.

Elizabeth Warren Wants the Fed to Get Into the Student Loan Business 

How foolish of Warren to want the government involved in the government-backed student loan business.

Should students get the same loan rates as banks at the discount window?

 

Senator Elizabeth Warren (D-MA) has just introduced a new bill, the Bank on Students Loan Fairness Act, to offer student loans at the same rates that the Federal Reserve charges big banks through its discount window lending program. At the moment, that rate is about 0.75%. The rates on federally guaranteed student loans, meanwhile, is set to double to 6.8% this summer.

"Some may say we can't afford this proposal," said Senator Warren as she introduced the bill. "I would remind them that the Federal Government currently makes 36 cents in profit for every dollar it lends to students . . . meanwhile, the banks pay interest that is one-ninth of the amount that students will be asked to pay. That's just wrong. It doesn't reflect our values." 

"Some explain that the banks get exceptionally low interest rates because the economy is still shaky and banks need access to cheap credit to continue the recovery." She sighed loudly. "But our students are just as important to the economic recovery as our banks, and the debt they carry poses a serious risk to that recovery." [my bold]

Note that this is Megan McArdle's reporting, not a quote from someone else. The woman does not have the faintest idea of how to be a journalist. This post is far more journalistic in style than most of her posts but even when she tries she cannot be professional. She doesn't know how, or maybe  just can't overcome her biases long enough to write an impartial news item.

Maybe obtaining your journalism training from a Koch institute isn't the best way to develop professional skills and ethics.
 

It's probably true that some say banks need low interest rates to keep the economy growing. But no one except possibly a lunatic has told Elizabeth Warren that banks are getting 0.75% at the discount window as a thank you for all the hard work they're doing helping the economy. Discount window loans are cheap for three reasons: the borrowers have assets and income that are easy to seize, the loans are quite short term, and the banks are required to put up collateral.

Elizabeth Warren did not say that banks are getting 0.75% at the discount window as a thank you for all the hard work they're doing helping the economy.  She said, "Now some explain that the banks get exceptionally low interest rates because the economy is still shaky and banks need access to cheap credit to continue the recovery." Those two sentences are not the same, in word or meaning, which means McArdle is, SIGH, not telling the truth once again.
 

As you'll have discovered with your own mortgage or car loan, the shorter the term of the loan, the lower the interest rate. You will also have discovered that loans secured by collateral, like your car loan or mortgage, carry lower interest rates than loans such as credit card expenditures, which are secured by nothing more than your heartfelt promises to pay. You may even have noticed that the more durable the collateral, the more attractive a rate your banker will extend on it.

So it is with loans to other people, and businesses. Banks get a very low rate because they're borrowing for very short periods of time--often overnight, always less than a year. The Fed correctly figures that the bank is unlikely to go out of business by next month--and anyway, they're putting up collateral, which is unlikely to lose all its value in such a short period of time.

This jaw-dropping bit of elision is more comprehensible when you remember that McArdle is doing her best to forget that 2008 ever happened. The banks were likely to go out of business, which is why they were bailed out in the first place. But these are unfriendly facts, the kind that make a person question her every assumption, and therefore must be repressed.
 

Students, on the other hand, are borrowing for a decade, and the only thing they're putting up as a guarantee is their character. How good a collateral is their character? In 2011, 9.1% of borrowers had defaulted on their student loan within the first two years of the payment period.

McArdle took out a student loan for $100,000, which paid for the MBA that is the basis for her claim of economic literacy. Her English degree wouldn't have gotten her gigs at The Economist or The Atlantic, and probably wouldn't have gotten her a place at the aforementioned Koch institute. She is repaying every penny of her loan and by God you will too.

The interest paid by the folks who don't default is the only thing keeping this program from hemorrhaging money. Elizabeth Warren proposes to cut that interest rate to less than the rate of inflation. 

Of course, this isn't really a serious proposal, in the sense that it has any chance of getting passed. Elizabeth Warren is a very smart woman who knows how the financial system works; she's very well aware of why student loans are expensive relative to the Fed's discount window. And I presume that she is aware that the CBO will score her bill as costing rather a lot of money.

But passing this bill probably isn't the point. Rather, it's a populist values statement: we like students, we don't like banks. As such, it's probably going to be quite effective. But only among people who don't know much about the banking system.

Simple-minded slogans for simple-minded people. She knows her audience. McArdle ignores the whole issue of crushing student debt. She ignores Warren's statements on investing in people or her concern that a generation of new workers saddled with out-of-control debt will harm the economy. No, the problem is that Warren is a liberal demagogue, as McArdle's commenters insist, and therefore doesn't like banks. And liberals will applaud because unlike McArdle, who comes "from a family of academics who are actually intellectually intimidating," they know nothing about anything.
 
Edit: Weird html thing corrected.

Value(s)

Bangladesh may or may not need tougher workplace safety rules, but it's entirely appropriate for Bangladesh to have different—and, indeed, lower—workplace safety standards than the United States.   Matthew Yglesias

 [...S]hould we lean on US and European corporations to impose our safety standards on Bangladesh? Or any safety standards? I don't think that answer is obvious, even if we concede that the Bangladeshi government is inadequately responsive.  Megan McArdle

The lives of the poor mean nothing to the callous rich.

Photograph of Bangladeshi factory workers from Hullabaloo.

What's Wrong With Everyone Else

You can call it tribal loyalty, authoritarianism, insecurity, political expediency or personal enrichment, but in the end it's just another round of Megan McArdle's favorite parlor game, What's Wrong With Everyone Else.

Why Gay Marriage Will Win, and Sexual Freedom Will Lose

In the future, gay marriage will not only be legal, but practically mandatory.

You know what's wrong with liberals? They think they are so tolerant with their gay marriage and right to privacy but they'll be sorry because they are wrong, wrong wrong.

[...]In some sense, the sexual revolution is over . . . and the forces of bourgeois repression have won.

That's right, I said it: this is a landmark victory for the forces of staid, bourgeois sexual morality. Once gays can marry, they'll be expected to marry. And to buy sensible, boring cars that are good for car seats. I believe we're witnessing the high water mark for "People should be able to do whatever they want, and it's none of my business." You thought the fifties were conformist? Wait until all those fabulous "confirmed bachelors" and maiden schoolteachers are expected to ditch their cute little one-bedrooms and join the rest of America in whining about crab grass, HOA restrictions, and the outrageous fees that schools want to charge for overnight soccer trips.

You know what's wrong with gays? They want to have what Megan McArdle has, when they are not Megan McArdle. They keep butting into Megan McArdle's group demanding to join in with her inner circle of specialness without sucking up properly first. They won't tell her she is always right and is smarter than anyone else, or help her career by supporting conservatives, or vote for lower taxes, or anything. They don't deserve to be in her group.

Not that all married people are special, mind you. Those suburban schlubs certainly aren't special, they're whiny and boring.  They have expensive children and crabgrass and rules and regulations to follow. Not like McArdle, who lives in a charming Victorian rowhouse in a nearly desirable neighborhood in an exciting, vibrant city. Her imported car is cute and hip, not boxy and boring.

You know what else is wrong with liberals? They think they'll get to have a life of "permanent infatuation" and continue their 'licentious, "anything goes"' immoral ways. But they won't, because there are pendulums and circles and ovals that are actually tracks that go around and around. Victorian morality will return and the liberals will be left behind. Already the elite, whom are all Republicans, are staying with their wives more and more!

But even though the liberal elite are wrong, so are the non-elite, who are not getting married, evidently because "progressive academics of the 1970s" told them not to. It seems poor women have children because they are post-modernists who have moved beyond bourgeoisie morality in favor of serial partners and indiscriminate parenthood, not because they have difficult, chaotic lives. After all, one of the other things wrong with the poor is that they just make bad decisions. It's not that the difficult life led to the bad decisions, because as Mr. Matthew Yglesias would tell us, we are all equal on the playing fields of the Lord.

McArdle, who blogs about economics, does not mention the money factor in all of their moral calculations. Poor women can't afford to marry. Middle class women can't afford to divorce.

She does, however, note that it's a shame that people no longer shame unwed mothers, but she is very hopeful that this will change in the future, as the track is rounded or pendulum is swung or whatever. Because another thing that is wrong with liberals is their desire for "carefree sex," and if everyone can marry "they," whoever "they" are, will stop defending sex and children outside of marriage and there goes that pendulum again. So when gays can marry, heterosexual elites will no longer defend sex outside of marriage and gays will be forced to live lives of suburban quiet desperation, when they are not repressing public morality to ensure they are not left for a younger man.

Finally, there's something wrong with the kids out there today who are putting off marriage. McArdle put off marriage but she is discussing what is wrong with everyone else, not what is wrong with Megan McArdle, which is nothing, so there.

If I had to guess, I'd also put late marriage on the endangered list. I married at 37 myself, so I'm not judging, here. But if we want childbearing to take place inside marriage (and I think we do), then the average age of first marriage can't get higher; it probably shouldn't even stay so high. As that average age rises, you get two unwanted phenomenon on the tails of the distribution: babies born to unmarried parents at the low end, and couples who want children but can't have them on the high side. So the current upper-middle-class tendency to push marriage later and later while people finish their educations and get settled doesn't seem very stable to me--even before we consider the difficulty of finding a mate to match your settled life, which Keith Humphreys has dubbed The Problem of Grandma's Lamp.

Of course, predictions are hard, especially about the the future. Nonetheless, here is mine: whatever the Supreme Court decides, gay marriage will soon be legal throughout the land. But this will not mean that we drive ever onwards towards greater sexual freedom--rather, it will mean quite the reverse. The sexual revolution is over. And the revolutionaries lost.

It's very sad that Megan McArdle has led such an unstable life, with her premarital fornication and living in sin with various and assorted men who came and went or came and stayed and her putting off marriage until late in life when she is much less likely to reproduce.

If it were anyone else, it would be downright wrong.

The Sorrow And The Pity

It is time for my blogging hiatus to come to an end; I can ignore war, bombings, and economic malfeasance but Matthew Yglesias blogging about pizza must not pass by unnoticed.

It seems someone told Mr. Yglesias that it is possible to create good pizza at home with some special equipment, and Mr. Yglesias is all astonishment in response. Why should anyone want to make pizza at home when he can buy excellent pizza anywhere?

You might have noticed a slight switching of pronouns right there; "we" became "he" because our Thought Leaders feel free to speak for the less educated and therefore less wise masses. Fortunately we have Mr. Matthew Yglesias to think for us all and tell us what to do, and even more fortunately it seems that the entire world wants exactly the same thing as Mr. Yglesias, at least when it comes to pizza. So we can safely assume that if Mr. Yglesias does not want or need to make pizza at home, nobody else should either. QED.

The issue is that while great pizza is fairly simple to make, cooking it properly requires an expensive piece of capital equipment. Your oven can't get nearly hot enough to cook a pizza correctly. To do it, you need a pizza oven. To install a good pizza oven in your house would be a waste of both money and space. It just doesn't make sense to construct one unless it's going to cook a lot of pizza. And while pizza is delicious, for the sake of your health you should probably try to avoid subsisting on an all-pizza diet. The superior strategy is to let someone else install a pizza oven in his commercial establishment. Then you show up occasionally, and in exchange for money he'll give you pizza. Then with all the money that his pizza oven helps him collect, he and the members of his staff can purchase adequate nonpizza sustenance to stay alive and well. It's a triumph of the division of labor and good old fashioned commerce. For the roughly $200 that Alt wants you to spend on equipment to turn your grill into an ersatz pizza oven, you could just buy 16 margherita pizzas at my favorite D.C. pizza establishment. And, again, for reasonable adults the financial cost of purchasing excellent pizza at a restaurant is not the operative factor in limiting pizza consumption. In the scheme of things, pizza is pretty cheap.

Now of course, to each his own. If what you want is some home-cooked pizza, I'm sure this is a great way to do it. But it's a bit nuts. And excessive focus on the issue obscures one of the great economic triumphs of our time—the enormous increase in the availability of quality pizza all around America.
 

Ah, the wonder of the American economic system, the greatest in this or any other world. Mr. Yglesias has money--lots of money--and other people have pizza--lots of pizza. One demands, the other supplies, and through the miracle of economic progress a brand new baby financial transaction is born.

But there's a tiny little glitch in this system. When "we" open up our wallets to pay for that pizza, we are forced to use our own money, not Mr. Yglesias's money. Mr. Yglesias's bank account has a lot more money than our bank account and despite the fact that he has told us to just buy pizza instead of making pizza, we usually choose a less expensive option, such as making pizza at home or not having pizza at all. Despite our desire for and the availability of pizza, "one of the great economic triumphs of our time," we are not, actually, Mr. Matthew Yglesias, and therefor his advice and wisdom is inapplicable to our wants and needs.

We suspect that we are not the only people in the world who are not Mr. Yglesias, and would perhaps not benefit from his economic wisdom. Perhaps we live in the Hinterlands of the US, not Dupont Circle, and a good pizza is hard to find. Perhaps we enjoy making pizza; it is fun to be self-sufficient, gustatorally speaking, and we can make a very decent pizza with a pizza stone, a long resting time, and filtered water. The possibilities are endless. But it does not seem to occur to Mr. Yglesias that the rest of the world is not just like him, only with less money and maybe a bit more hair, depending on the region.

Most of the rest of the world did not come from a wealthy family of writers, and by happenstance become a writer themselves. They do not live in million dollar homes or go to Harvard or prep school. Most people do not have very many options in life due to circumstances out of their control. The fortunate few who are relatively wealthy are still nowhere near as wealthy as Mr. Yglesias.  Most people are forced to think about bodily harm and poverty because they are one workplace accident or job loss or illness away from such dire economic circumstances. Mr. Yglesias is not and cannot imagine what it would be like to be one of these anxious masses.

Which is odd because we don't have to be poor to have empathy for the less fortunate. We just have to have a little imagination, a little curiosity, and a little emotional development. Our parents teach us to think about others, to consider others' needs and wants and pains as well as our own.  Or perhaps our parents and the rest of our society teach us that there are different rules for the valuable and the, uh, less valuable.

And that is the how and why of Matthew Yglesias's latest oopsie, his statements that showed a callous disregard for the consequences of his policies and philosophies. If people don't want to work in an unsafe factory in Bangladesh they can just find some other job. After all, unsafe American jobs are available and highly paid (he says), so surely unsafe Bangladeshi jobs must simply be another option in the marketplace that one can take or leave. Just as Mr. Yglesias's wallet is Everyman's wallet, his economic options are Everyman's options.

Safety rules that are appropriate for the United States would be unnecessarily immiserating in much poorer Bangladesh. Rules that are appropriate in Bangladesh would be far too flimsy for the richer and more risk-averse United States. Split the difference and you'll get rules that are appropriate for nobody. The current system of letting different countries have different rules is working fine. American jobs have gotten much safer over the past 20 years, and Bangladesh has gotten a lot richer.

Because they are poor, Bangladeshis must accept unsafe working conditions. A risky job is better than no job, right? There are rules for the rich and there are rules for the poor. It's just the way it is.

Megan McArdle agrees. After all, nobody can do anything ever. Why should we invade other countries with our safety standards when they make our goods? We invaded Iraq, and look how that turned out.

You can argue that the workers shouldn't face those terrible tradeoffs, but absent an immediate revolution, they do. Should we shut down a factory that provides jobs, and great danger, or should we let it continue to operate, even though it may harm future workers who may not really grasp the risks? I don't know the answer to that in my own country. How can I answer it for Bangladesh? 

Even if we allow that the Bangladeshi government is thouroughly captured by the garment interests, it doesn't therefore follow that our intervention will be an improvement . . . just as you can think that Saddam Hussein was a horrible dictator who was dreadful for his country, and still think that the Iraq War was a bad idea.

What Erik Loomis is proposing is left-wing economic imperialism. It's not as bad as the version where you invade a country and take their stuff, but it has many of the same deep problems. We are susbstituting our choices about the safety and employment tradeoff for the judgement of people who are closer to the situation, and far more invested in the country. Maybe they're terrible people, but even so, this is just inherently problematic--something that the left understands quite well when Westerners start questioning the choice of economic systems, or left-wing strongmen, in the developing world.

Watch out liberals, safety regulations lead directly to Pinochet.

 

Resigned But Not Happy About It

Someone's pissed.

The Pope’s Resignation By Maggie Gallagher

Peggy Noonan writes about the shock of learning the Pope will resign. I’ve been mulling it over the past few days. With deep gratitude to Pope Benedict and with recognition of his humility and that he probably knows better than I do about what’s best for the Church (he is the Pope after all) — still, I don’t like it. I’ve been trying to figure out why. And I think it is this: The Pope is not just a leader of a religious organization, he’s our father. I don’t want our father to resign from that position. It feels like abandonment.

Not saying I’m right, mind you. Just naming what I suspect a lot of us feel about why this feels shocking. God bless him.

She didn't actually say "Bless his heart" but it was close.

I love the fake humility. What happened to God's will, or even the Pope's infallibility? No, Ms. Gallagher knows better. He should have stayed. Instead the pope abandoned her, just like all the other men in her life. And here she is, once again, alone.

Bless her heart.