Hear those crickets? Yes, I know, things have been mighty quiet around these parts in recent weeks. I was buried in work, most of which was merely spillover from last year and which was thus not bringing in any more money despite consuming my time. This week has seen my return to the webosphere, and to writing about matters which actually hold my interest, but most of my latest writing (with the exception of this account of my return to the dark ages) has been a better fit for other outlets. A few links, then, are in order.
Over at the Center for Free Enterprise site, I've written a trio of pieces that will, as chef Paula Deen puts it, knock your socks clean off and into the dryer:
In this post, I explain why you ought to celebrate the fact that Facebook creates so much value even as it creates so few jobs.
Once you've finished reading that post, check out my argument against Korea's system of mandatory military service.
And just a few minutes ago I posted this piece on Korea's lackluster venture capital and SME sectors. The Korean government, you see, crowds out private investment for small firms, protects uncompetitive companies, and then wonders why it has neither a vibrant venture capital market nor a healthy SME sector.
Finally, I've already linked to my recent op-ed for Korea Business Central, but in case you missed it, you can read it at the link.
Back when I was a kid, my Grandparents lived in an old Idaho farmhouse which, for one reason or another, lacked a flush toilet. Oh, the home had a commode, but I recall that flushing it involved dumping a bucket of water into the tank. Why we were still doing this in the early 1980s I don't recall, but it certainly beat the other option: a proper outhouse out behind the brooder house.
I bring this up this because, several weeks ago, I mentioned to the missus that we'd probably do well to leave the water taps dribbling on the coldest days if we had any interest in preventing our pipes from freezing. Before last winter, I'd never had this experience but after the hassle of getting them flowing again on that occasion, I didn't care to do it all again.
Well, fast forward to yesterday morning, which found Seoul flash-frozen by -17° centigrade temperatures. I was in a hurry to get out of the house, as was my wife, who was starting a new job and who thus had matters aplenty on her own mind. Fast forward to 8 PM last night when I came strolling into the house, ready for a hot shower and a shave after a day at work only to find that the water taps were dead and dry.
In one of his more well-known remarks, Woody Allen once quipped that "not only is there no god, but try finding a plumber on Sunday." I'll go you one further, Woody: try getting a plumber to your house on a day when all your fellow nitwits also didn't remember to guard against frozen pipes. And so, after trying to thaw the pipes ourselves, to no avail, it appears that we're to live without running water until at least tomorrow.
I have no doubt that my grandparents would be dealing with this lack of indoor plumbing with considerably more grace and stoicism than I can muster. Growing up in this modern world, where the toilet stands ever-ready to whisk away your deposits, I daresay I've become an impatient, mollycoddled pantywaist who can't stand a few hours of diluted hardship.
Bottom line: remember to leave those taps flowing ever so slightly, lest you end up letting the yellow mellow and trucking buckets of water to flush the brown down.
Over at Korea Business Central, I am the author of the latest "Korea Economic Slice," a regular feature in which guest writers are invited to comment on current issues in the Korean economy. My intro:
If the election of Park Won-soon as Seoul’s mayor last October is any indication, the upcoming April parliamentary elections will turn on matters of social welfare and inequality. More importantly, however, these elections will be a sign of the degree to which Koreans are willing to accept the vagaries of a market economy which, while leading to unequal outcomes of wealth accumulation, is a precondition for a sustainable welfare state. Discussion of such matters could scarcely come at a more pivotal time for Korea, facing as it does an aging and declining population, a slowing economic growth rate, and reinvigorated concerns about reunification with North Korea. Unfortunately, Korea’s political class shows little sign that it understands the gravity of the moment, competing not in a battle of ideas over how to revive the economy but rather to see who can most flamboyantly give away other people’s money.
As the old joke says: if you want to save the polar bears, start eating them. For the past few decades, some Texas ranchers have taken that advice to heart with regard to endangered African critters, raising them on their huge spreads and allowing big game hunters to bag a trophy. Animal rights activists, meanwhile, appear to be more concerned with simply not hunting the animals rather than actually preserving their numbers. This segment from 60 Minutes (also above) is a great lesson in incentives, private property rights and how easy it is to be self-righteously wrong. (h/t Carpe Diem)
My friend Steven Denney informs me that PEAR (Papers, Essays, and Reviews), the Yonsei Journal of International Studies is seeking submissions for its Spring/Summer 2012 issue. The website is here if you've got something you think might interest Steve.
Finally, you'll be doing yourself a favor to read this piece by the always-insightful Mark Pennington on "'The Left' and Public Choice Theory." (h/t Cafe Hayek)
Over this long, Lunar New Year weekend, I had the great good fortune to have lunch with Steven Denney. Steve's an ambitious young graduate student over at Yonsei University, the sort of fellow who makes the rest of us look bad with all of his get-up-and-go. As one would expect, he blogs at not one but two sites (here and here) and I seem to recall him mentioning that he had another site - focusing on North Korea - in the offing.
While Steve and I share many interests, our worldviews are a study in contrasts. As an illustration, Steve sent me two recent articles by former U.S. Secretary of Commerce Clyde Prestowitz, both of which - to my mind, at least - are filled with needless hand-wringing about the supposed decline of U.S. manufacturing and the eventual implosion of all that makes America worth a damn. As tough as it is for me to get through a Prestowitz article (for a Secretary of Commerce, he sure seems to have slept through a surprising number of economics courses), I figured I'd offer a few comments here rather than simply starting an email thread with Steve.
In the first article, from December 2011, Prestowitz argues that trade deficits are important and, further, that the United States must take steps to reduce its current account deficit:
The opportunity lies in the size of the $500 billion U.S. trade deficit. Just halving it would create 2.5 million jobs without the need for tax reductions, further deficit spending, or further quantitative easing. Indeed, taxes could even be raised without fear of job loss. President Obama should see this as a Godsend. He can have his cake and eat it as well by increasing jobs and reducing the federal budget deficit.
Prestowitz never explains how he arrives at the "2.5 million jobs" number, nor can I imagine how anyone would prove such a figure, so complex an organism is the global economy. More likely, government efforts to reduce the trade deficit would create some jobs, even as such actions destroyed others, all while punishing consumers and making the U.S. economy less competitive in the long run.
More importantly, though, a current account deficit equals a capital account surplus - that is, more investment is flowing into the United States than is flowing out. To bemoan the trade deficit, therefore, is to also lament the willingness of foreigners to invest in America. Of course, a sizable chunk of this "investment" is in the form of U.S. government debt (as well as corporate debt, real estate, facilities, etc.), which troubles budget deficit hawks like myself, but if you're a person who believes that the U.S. government should be engaged in greater deficit-financed stimulatory spending right now then you should also celebrate the U.S. trade deficit.
For more on trade deficits and (supposed) Chinese currency manipulation, I highly recommend this Econtalk podcast.
The second, and more recent, article finds Prestowitz lobbying for a defined U.S. national economic strategy as a way to counter the mercantilist tendencies of countries like China. Not surprisingly, I ain't climbing aboard Prestowitz's Industrial Policy Express, even if he could prove that China's export-promotion orientation helps the Chinese more than it hurts them. Rather than rehash my views on this matter, however, I'll merely direct readers to this 2010 piece in which I laid out my skepticism of politically-designed industrial policy. Briefly:
...to paraphrase PJ O'Rourke, a successful industrial policy requires that bureaucrats and politicians know more about everything than we do, and requires them to make smarter decisions than we can. And it demands that a state official make those wise and knowledgeable decisions without regard for his political or financial self-interest.
As it happens, the current issue of The Atlantic has a superb article by Adam Davidson which touches on these very issues. It is, in short, the best piece I've read on U.S. manufacturing and employment in recent memory. Indeed, it's one of the magazine pieces I've read on any subject in a long while. It's specific, nuanced, and I can't recommend it highly enough. Rather than offering my comments on it here, however, I'll simply get out of your way and let you get to reading it.
Via two different sources come two curious new insights on American history:
The first is that Abraham Lincoln apparently walked around for several years never knowing that a watchmaker had inscribed his pocket watch with a secret message on its innards. From How to be a Retronaut comes the story and the image:
According to North Korea's ever-reliable Central News Agency, Kim Jong-il - he of the pompadour hairdo, numerous holes-in-one on the links, and despot extraordinaire - has died. Reports of Kim's demise have proven premature in the past, but given that the North's main news organ is confirming the death, I suppose we can take it as given.
Death has seldom come to a more deserving person. In addition to putting North Korea's economy firmly into the crapper, Kim and his father (Kim Il-Sung, founder of the nation) oversaw a network of concentration camps, kidnapped Japanese and South Korean citizens, and regularly engaged in state-sponsored terrorism (bombing civilian airliners, shelling South Korean towns, etc.). Outside of North Korea, few people responded with anything short of "hallelujah" to Kim's death.
But.
The trouble in North Korea may have only just begun. Kim Jong-il's son, Jong-eun, is the heir apparent, but he's young and untested. Moreover, as I wrote last year, a dynastic power transfer in North Korea increases the risk that the ruling coalition breaks down, inciting internal - and perhaps international - strife.
And, in the event that Kim's death has made you optimistic about Korean reunification happening sooner rather than later, I will refer you to this piece from last year. Be careful what you wish for.
Over at CFE Korea, I've got a handful of new posts to occupy your time:
In this post, I add a few thoughts to the Korea Herald's debate topic of the week ("Should There Be a New Tax for the Rich?"). And as it happens, I had just last Saturday written this post about the so-called "Buffett Tax."
Local protests against the KORUS FTA are dwindling, but they haven't completely run out of steam. My latest comments on the protests are here.
Finally, I found this Bloggingheads.TV conversation on the Italian debt crisis (between Robert Wright and Franco Pavoncello) to be informative and entertaining.
Go find your dictionary and look up the phrase "pleasant surprise." If your dictionary is worth its space on the shelf, the definition will read: "A fifteen year-old, low-budget Australian film which turns out to be the most insightful, hilarious commentary on eminent domain abuse in recent cinematic history." Next to the entry will be a screenshot from The Castle.
Released in 1997, The Castle is the story of the Kerrigans, a family of rustic boobs (to use the most charitable description) who live right next door to the Melbourne Airport in a house which, as son Dale proudly boasts, is worth almost as much as the day they bought it. The family, while short on class and sophistication, nevertheless exudes a close-knit warmth and a pride in their humble home. Indeed, they exemplify the old adage that a man's home is his castle, hence the film's title.
Everything in the Kerrigan household is going along swimmingly until a real estate assessor shows up one day to do a valuation on their property. Soon thereafter, father Darryl receives a notice that his land has been "compulsorily acquired" to make way for extensions to the neighboring airport. What follows is one man's battle to keep his home in the face of a legal system which frustrates common sense at every turn. His initial confrontation with a government employee is but a taste of things to come:
Bureaucrat: "There is an ironclad agreement between federal, state, and local governments and the airport commission [which states that you must vacate the property]."
Darryl: "Yeah, well where's the agreement with Darryl Kerrigan, 3 High View Crescent, Coolaroo?"
And then there's this scene, wherein Darryl is astonished to discover that it's up to him to prove why he should be allowed to keep his home:
Libertarians (and other free market types) who start talking about the rule of law and the importance of private property rights are often derided as being tools of the wealthy, interested only in maintaining ill-gotten privileges - which only shows how little these critics have considered such matters. These institutions are not mere conveniences of the plutocratic class. Rather, the protection of private property - as part of a consistent rule of law - is a chiefly a protection of "the common man" against attempts by the state, often captured by privileged special interests, to seize by force what it cannot get via persuasion. Thus, in The Castle, it is Airlink, a sorta-private, kinda-public Big Corporation (read: private money combined with state force), that is out to take the Kerrigan's land.
The Castle has taken on new relevance in the last decade as American cities have used - and abused - eminent domain to force people out of their homes not in order to build roads or schools, but rather in the interest of increasing local tax revenues. Indeed, in 2005, the United States Supreme Court put its own stamp of approval on such thuggery when it ruled in Kelo v. City of New London that a Connecticut town government had every right to forcibly take someone's home and hand it over to the pharmaceutical company Pfizer. In addition, the NBA's New Jersey Nets will soon relocate to Brooklyn, where their new arena was built using much the same methods. Yet, as this video from Reason.TV shows, none of this is new:
Throughout The Castle, Darryl Kerrigan repeatedly argues that "you can't just steal my home," to which judges and lawyers reply in confusion that he's being compensated. So why the all the fuss? Of course, if I walk into the Apple Store and offer them $50 for a new iPad, the store employees will understandably refuse to sell. If I force them to take the money and then walk out with the iPad, I'll be arrested for theft. No judge would accept, as my defense, the argument that Apple had been compensated for the iPad. For an exchange to be voluntary, both sides must agree to the terms, otherwise we're dealing with a form of theft (i.e. the difference between $50 and the actual retail price of the iPad). The same is true of eminent domain when land-owners object to moving at the prices offered by the government. That this may inconvenience certain parties (the government, private construction companies, etc.) does not change the fact that, at root, this is theft pure and simple.
As further credit to the writers of The Castle, the film manages to be a biting commentary on the importance of private property rights without ever forgetting that its first order of business is to be a comedy rather than a preachy docudrama. Whether you've never seen it before, or whether you were enraged by decisions like Kelo (or maybe you just want a solid comedy for next Saturday night), track this film down and give it a look. You won't be disappointed.
