Deeply Dumb

When I was a kid, my mother had file folder labeled "deeply dumb". It was for things that went beyond ordinary, thoughtless dumbness, to reach a transcendent, awe-inspiring level of dumbness. Think motivational speakers, holistic medicine, or the men's movement.

Recently I came across some of the deepest dumbness I've seen in a while. The story begins with the July 13th edition of the Wall Street Journal, which contained an editorial purporting to ratify the existence of the Laffer curve. The Laffer curve refers to the idea that the government's tax income follows a parabola: past a certain point, raising taxes will actually decrease revenue, because people will undertake less economic activity. It's a right-wing theory that nobody who isn't a conservative ideologue takes seriously, but never mind that right now. The important thing is that the editorial contained this now-immortal graph:




















It should be immediately obvious that something's wrong here. But if you contemplate the graph for a while, you'll discover that there is a wealth of dumbness concealed here, a complexity of idiocy that is not apparent at first glance. It took some of the blogosphere's best minds the better part of two days to fully comprehend the depth and richness of the stupidity contained in this one image. Here is a partial reconstruction of events:

• July 13th, 12:06 AM. Mark Thoma discovers the editorial, observes that the curve does not remotely fit the data. Produces a more plausible graph, in which the line is straight and slopes upward.
• July 13th, 9:47 AM. Brad DeLong reposts Thoma's post. This one really launched the graph into blog fame. DeLong dubs it the "most dishonest WSJ editorial ever."
• July 13th, 12:25 PM. Mark Kleiman links to DeLong and Thoma. He notes that the Y-axis of the graph does not show revenues (as a laffer curve diagram normally does), but revenues as a percentage of GDP. This means that the curve must rise from 0 to 100% rather than curving down: at a 100% tax rate, by definition revenues will be 100% of GDP (Unless GDP is zero, in which case it is undefined.
• July 13th, 1:41 PM. Matthew Yglesias pronounces this "worst editorial ever".
  
• July 13th, 1:50 PM. Kevin Drum arrives on the scene. Notes that the steep slope of the right side of the curve implies that, if you increased Norway's corporate tax rates just 4 points, to 33 percent, revenue would fall to zero.
• July 13th, 3:03 PM. Cosmic Variance adds that the curve implies that, at tax rates above 33 percent, government revenue is actually negative.
  
• July 13th, 3:57 PM. Max Sawicky applies actual statistical methods to the points on the plot, gets results that look more or less like Mark Thoma's off the cuff "reality based" drawing, whether you include the outliers or not.
• July 14th, 4:35 AM. Kieran Healy take's Max's lead, uses the whole kerfuffle to make a serious social scientific point. Questions the wisdom of calling Norway an "outlier". This eventually leads to bizarre and hilarious smackdown between Healy and Megan McArdle.
• July 14th, 1:07 PM. Hilzoy at Obsidian Wings takes a new approach, realizing that the absurdity of the original curve licenses every conceivable alternative curve that could be drawn over the data. Hilarity ensues, including a proposal for unlimited government revenue and a lolcat which is actually funny. A commenter rediscovers Mark Kleiman's neglected point that the mis-specification of the Y-axis invalidates the whole exercise from the beginning.
• July 15th, 1:09 PM. Coming back around for a final pass, DeLong gets off a crack at Megan McArdle before noting that Norway is plotted in the wrong place. If oil excise taxes are accounted for correctly, then it is not an outlier at all--it falls into the same linear pattern as all the other points.

Let's recap. The editorial defended an empirically discredited theory. It plotted data points incorrectly. It drew a wholly implausible and self-serving curve over the mis-plotted data. And it specified the axes in such away that even if the Laffer curve was a reality, even if all the data points had been correct, and even if the curve they drew was a fair model of the data points, the image still would have failed to make the point it attempted to make, because the labeling of the axes was inconsistent with the argument of the Laffer curve.

It's the wisdom of crowds, people! No individual could possibly have grasped so much dumbness at once.

Playing Seriously

Wending my way through some posts on OrgTheory, I ran across an interesting post by Omar Lizardo. He summed up something that's eaten away at me for a while as I attempt to socialize myself into academia:

I propose that one important component of success in science is the ability to not be serious about the “right” things and to be serious about seemingly unimportant things. This ability is not equally distributed: some people seem unable to not be serious about serious things. Other people are almost constitutively incapable of being serious about non-serious things; they are the ones who “don’t get” the scientific game and who think that getting into a (serious) shouting match over whether Simmel’s contributions have been justifiably neglected or whether Marx’s analysis of commodity fetishism is incoherent is the weirdest spectacle on the planet. My sense is that if you are one of those latter people and you are still in grad school, if you are “too cool” to take mere ideas seriously, you probably should be thinking about another day job.

He goes on to relate this to some comments from Bourdieu about "playing seriously".

I am, assuredly, someone who can be serious about non-serious things, even (or especially) Marx's analysis of commodity fetishism. Moreover, I enjoy being such a person, I want to be such a person, and I think the capacity to play seriously is one of the highest manifestations of the human spirit. Even in its lowest forms--such as the drunken bar argument over a sports team--I love and cherish the fact that our particular species of ape is one that can invest passion and energy in the inessential. Playing seriously is what we do in the realm of freedom.

My problem is that I feel guilty about this. This comes from my background in activism and socialist politics. As long as the inequalities of a class society persist, it feels like bad faith to be serious about the non-serious when there are plenty of serious things to be serious about. I've justified this before by arguing that since I have no talent for organizing, it's better for me to put my energy into academic work, which I'm good at, and which will hopefully be politically useful at some point. But that just feels like an act of bad faith, a way to legitimate not doing something that should be morally imperative because I don't feel like it. Maybe it would be better to do anti-war organizing badly than to do academic work well.

And of course, all this hand-wringing keeps me from doing academic work too, and instead causes me to procrastinate by writing posts like this.

Your Ruling Class At Work

In the July 15^th New York Times, Louis Uchitelle has an excellent piece about some truly disgusting people. They're the richest Americans, emblems of what Uchitelle calls the “new gilded age”. Read the whole article here, and marvel at billionaires who compare themselves to Derek Jeter and pine for the days before there was an income tax.

Other bloggers have already noted that the people in this story—like Citigroup CEO Sandy Weill and hedge fun honcho Kenneth Griffin—come off as egotistical jerks. But there's a deeper lesson here about how irrational capitalism can be.

Apologists for capitalism like to say that without massive income inequality, people wouldn't have any incentive to work hard or take risks. This implies that money is the only thing that motivates people. But how many doctors, or lawyers, or CEO's, would say that they're only in it for the money?

As to the last category, Uchitelle's article would suggest that the answer is “not many”--unless, that is, they're trying to come up with reasons why they shouldn't have to pay high taxes. Take Griffin. First he says he's not working just for the money:

Kenneth C. Griffin, who received more than $1 billion last year as chairman of a hedge fund, the Citadel Investment Group, declared: “The money is a byproduct of a passionate endeavor.”

Mr. Griffin, 38, argued that those who focus on the money — and there is always a get-rich crowd — “soon discover that wealth is not a particularly satisfying outcome.” His own team at Citadel, he said, “loves the problems they work on and the challenges inherent to their business.”

Surely, then, Mr. Griffin wouldn't mind if we took just a little of that billion dollars to fund pressing social needs? Think again:

“The income distribution has to stand,” Mr. Griffin said, adding that by trying to alter it with a more progressive income tax, “you end up in problematic circumstances. In the current world, there will be people who will move from one tax area to another. I am proud to be an American. But if the tax became too high, as a matter of principle I would not be working this hard.” [emphasis added]

As a matter of principle? So, even though you don't really do it for the money, high tax rates would violate your deeply held moral belief that billionaires shouldn't have to share their loot with the common people? Stay classy, economic royalists.

To be fair, there are a few people in this story who don't come off as grotesque elitists. Former American Airlines chief Bob Crandall argues that massive inequality is a bad thing and makes the sensible point that “The way our society equalizes incomes is through much higher taxes than we have today. There is no other way.” And Costco's James Sinegal observes that, despite Mr. Griffin and his “principles”, CEO's would probably work just as hard if they made “$10 million instead of $200 million.” But as long as they can grab more money, they will.

I don't think this argument applies only to CEOs. Many of the highest paid jobs in our society are things that people do because they are intrinsically enjoyable, not because they are high-paying. (Conversely, the most dangerous and unpleasant jobs often pay the least.) The reason income is so unequal is not because of some objective truth about the workings of “the market”. It is simply that the rich have the power, and the poor do not. The only way to change that is to agitate and organize. And that's why, as much as this article made me want to throw up, it also made me happy—because if you wanted to provoke a populist backlash in favor of taxing the rich, you couldn't do much better than these jackasses.

Anti-Capitalist Folk Instincts?

Michael Moore's “SiCKO” is, in certain respects, a perfect political movie. One film isn't going give us single-payer universal health care in this country, but this one might just move us a little closer to it. In its portrayal of a perverse health care system that places profits before patients, “SiCKO” manages to do the two things that any effective piece of agitprop must.

The first, of course, is to inspire outrage. And there is plenty of outrage to be had. The guy who had to decide which finger he could afford to get reattached; the old folks living in their daughter's storage room because they sold the house to pay medical bills; the woman whose daughter died because the hospital refused to treat her. At various points in the movie, I was teary-eyed with rage.

But it's not enough to just upset people. This is a common mistake made by leftists—middle class white ones especially. They think that people will rise up if they find out how much they are being screwed. But it turns out that many people are perfectly aware that they are being screwed; they just don't think there's anything they can do about it. So after you get people riled up, it's vitally important that you show them how things could be different.

And that's where SiCKO really shines. Health care was really a brilliant choice of subject. Not just because, as many reviewers have pointed out, insurance companies make an excellent villain. The genius of it is that when it comes to our awful health care system, things not only can be better, they are better in every other rich country in the world. The strongest part of the movie was the parts talking about the Canadian, British, and French systems, which guarantee free health care to everyone. It really is that simple—just rip off the French!

Maybe that's why Moore's message is finding such a receptive audience. Even Oprah waxed social democratic after seeing it. Boing Boing (via TPM Café) reports that even in Texas, the movie can inspire spontaneous organizing. Meanwhile, the movie has apparently scared the crap out of the health insurance industry. And on right-wing TV, they’re reduced to arguing that universal healthcare causes terrorism. Unfortunately, SiCKO has not yet inspired any of the leading Democratic candidates to come out in favor of true single-payer universal coverage instead of some partial compromise position (Dennis Kucinich does support single payer Medicare-for-all, however).

It's also worth noting that this movie is about a lot more than health care. Some of the more perceptive critics have noticed that Moore is just using health care as an entry point to a much broader social democratic vision. He wants to promote a vision of the country in which people look out for each other—and the government looks out for them—rather than our current ethos of ultra-individualism. That's why Matt Yglesias—who is no socialist—suggests that the reaction to the movie is a sign of the “anti-capitalist folk instincts” of many Americans. “The crux of the matter”, he argues, “is that ordinary people think that if there's a sick person, and you're in a position to help the sick person, that you ought to help the sick person. This is what us socialists might call the principle of solidarity.

Is this right? Do Americans have “anti-capitalist folk instincts”? And if so, how do we tap into them and direct them toward political action?