Cowering behind a border wall

Posted on November 15, 2014 by Chris Ladd — 364 Comments

Over the next few weeks we can expect to hear a lot from Republicans about border security. What we will not hear is any explanation of what border security actually looks like. That’s because border security, as used in this debate, is nothing more than a diversion.

Despite the ugly rhetoric and the long series of mistakes, there may still be time for Republicans to get out ahead of this issue and build a 21st century immigration platform that we can look back on with pride for the next few decades. Thanks to the Democrats’ nervous dithering, the door is still open, but we are running out of time. Obama’s pending executive actions are going to force the issue to the front in a way that will give Republicans just enough rope for a good clean suicide.

If Republicans are going to have any hope of navigating the trap being laid for us, we’ve got to come to terms with a few realities around immigration, starting with the meaning of “border security.” Perhaps pictures might help. This is a secure border:

belgium

This is an insecure border:

gaza

Travelling from Egypt across the border into Gaza is a miserable, nearly impossible ordeal. No legitimate commerce can be maintained across that boundary. It is guarded by steel walls with watch towers manned by armed guards. Occasionally Egypt closes all traffic crossing the border (in recent months it has been closed almost all the time). And yet it remains one of the primary methods used by Hamas to move illegal goods and weapons into Gaza. It is a tense, insecure border and a consistent security problem consuming enormous energy and money.

Meanwhile people travel back and forth across the border between Holland and Belgium on their way to the bathroom. Border security operations there cost very little, yet with the exception of Dutch families crossing into Belgium to purchase fireworks, the border is entirely secure.

These two images illustrate the problem with the empty Republican rhetoric on “border security.” Building a healthy border capable of protecting a country’s sovereignty and interests starts and ends with policy. Holland is able to protect its sovereignty without steel walls because its political policies are aligned with its physical situation. They didn’t achieve a secure border by building a better fence. They achieved a secure border by building better political arrangements.

Egypt’s border with Gaza is a costly, dangerous and occasionally deadly human nightmare because the political arrangements governing that border are absolutely insane. No fences ever built will make that border safe until some political settlement is reached. In the meantime it will remain a barrier to trade, a massive economic burden, and a flash point for potentially destabilizing violence.

Real border security comes from sound policy.

The bad news for us is that we are the destabilizing force on our southern border. Fortunately, that is also the good news, since in theory it means that we are capable of fixing the problem.

Bad policy inside the United States has broken our border security in ways that are expensive and dangerous. First, our short-sighted and utterly failed attempt to manage our drug problem has turned our border into a war zone, feeding criminal gangs in neighboring countries. Second, we have shut down almost any practical means of legal immigration while refusing to craft enforceable laws against hiring illegals.

Want to secure the border, spend less taxpayer money, improve American economic competitiveness and create a massive economic shot in the arm? Fix those two problems.

Through a failed policy of blanket prohibition, we pay people to breach our border. That bounty is roughly $100bn a year, or about eight times as much as we spend on all aspects of customs and border control.

Tear down the walls and send home the dogs. We could end that illegal trade tomorrow by adopting regulatory schemes similar to what we use for liquor, prescription drugs, or Sudafed. We could still control usage, better than we do today, and crush the black market in illegal drugs with a regulated market.

Similar to illegal drugs, we dangle billions of dollars’ worth of incentives to illegal workers while blocking any access to meet that demand through legal channels. We have hundreds of solid options available for fixing this problem, including methods that would be market based and privately enforced, involving little government involvement. We can’t get started on any of them because we are less concerned about legal immigration than we are about protecting our culture from change.

We will achieve real border security when we start making intelligent policy choices. Republicans should be well positioned to lead the way on border security since many of the best solutions are based on market mechanisms rather than big government. Unfortunately, the GOP is not only the party of markets and commerce; it has become the central political expression of aging whites terrified of losing their cultural dominance.

That’s where Republican border security rhetoric confronts border security politics. The policies that will make America more powerful, wealthier, and more secure will also make America increasingly more diverse. Too many core Republican voters are willing to live in a weaker, poorer country so long as people who speak English and look like me remain securely dominant. As long as Republicans are more interested in cultural security than border security, Republicans will not regain leadership on immigration reform.

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Posted in Economics, Immigration

About Virginia…

Posted on November 14, 2014 by Chris Ladd — 77 Comments

One of the items from my 2014 election analysis that’s caught the most flak is my assertion that Virginia may have moved behind the “Blue Wall” in last week’s election. After all, Democratic Senator Mark Warner won his election by a hair and Republicans were winning Federal elections in Virginia pretty consistently up to 2004.

After looking at the numbers across several years, it’s pretty clear that I was actually too conservative. Virginia is as solidly behind the Blue Wall as New Hampshire. For the near future, Virginia is off the map of realistically competitive states in Presidential politics. Until the demographics or party alignments change, Democrats have 270 Electoral votes locked up before the candidates are even selected.

First, look at the 2014 results. This was a historically big year for Republicans nationally, so what did it mean for Virginia? The Republican wave, an off-year election, a very strong Republican Senate candidate, and dismal voter participation almost led to a Senate upset. Meanwhile Democrats lost one seat – that’s one – in the State Assembly.

To put it another way, absolutely every potential combination of forces was working strongly in the Republicans’ direction and we still failed to win Virginia’s US Senate seat or make significant gains in the Assembly. That was the pattern all over the country last week in blue states. The Republican wave moved the needle in places that are southern or rural. That’s about it. Virginia is increasingly urban. With every step toward urbanization it becomes less Southern.

This pattern has been in effect for more than a decade. Virginia Republicans had a good year in 2009 when Bob McDonnell won the Governor’s Office and Republicans won the other major statewide races but that was an isolated victory, largely a product of the Great White Freakout after Obama’s win. It’s the only time Republicans have swept Virginia’s statewide offices the past decade. Republicans have lost every statewide office in Virginia since McDonnell’s 2009 win.

The 2014 wave was not high enough to breach the Blue Wall in Virginia. That state is no longer dominated by its rural, Confederate heritage. Like Lindsay Graham said a few years ago, “we’re not generating enough angry white guys to stay in business for the long term.” This election did not change that. Virginia is off the Presidential map for Republicans.

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Posted in Uncategorized

What the Republican Party could be

Posted on November 8, 2014 by Chris Ladd — 489 Comments

The dull, purblind folly of the very rich men; their greed and arrogance…and the corruption in business and politics, have tended to produce a very unhealthy condition of excitement and irritation in the popular mind which shows itself in the great increase in the socialistic propaganda.

Teddy Roosevelt, 1906

The Republican Party is the party of commerce and markets. Across generations, stretching back to an age before Republicans were organized under that name, Republicans have channeled the political will of ambitious tradesmen, merchants and professionals. Whatever else the party has come to represent or has represented during various periods, our understanding that commerce is the engine of a successful civilization has always been its core, its heart.

Republicans have forgotten what it means to protect that heart. Swamped beneath a hopeful, but sometimes disorienting tide of social and economic change we are confronting an accelerating world with a fear often dipping into paranoia. You can win an election on the power of paranoia, but it will not let you govern. Building a more relevant, more successful Republican Party which can thrive in these conditions begins with a fundamental refocus on a simple core value.

America best achieves its promise when all of us have a fair opportunity to develop, capitalize and reap the rewards of our talents and efforts in the marketplace. We do not guarantee outcomes, but we must leverage every ounce of our energy to pry open and hold open the gates of opportunity. Regaining our grip on these values amidst endless shiny distractions will help the party recalibrate the rest of its message and its policy agenda to fit America’s rapidly evolving needs.

A commitment to free markets comes with contradictions which constantly demand balance. Adam Smith himself repeatedly warned of the dangerous tendency of unrestrained markets to descend into monopoly, corrupt influence, and then collapse. Preserving the power of markets requires constant, careful regulation; never so much as to destroy the ability of participants to make free judgments and never so little that a few powerful people might pervert them entirely, destroying the capacity of those markets to reward merit and effort.

Markets do not survive under weak or inept government. The Republican Party was originally organized to thwart powerful interests who, unhindered by a government too weak and ineffectual to provide justice, violently stole the labor and resources of an enslaved people. It took the force of a muscular, determined central government to end slavery. A century later it took a muscular, determined central government to enforce the rights of the formerly enslaved to participate freely in markets.

That battle for justice has not ended and may never end. Republicans will not regain our balance until we recognize one essential reality – government is not our enemy and it not the enemy of markets.

Why are Americans so pessimistic about our future? The profits generated by our economy are higher than they have ever been. We are living through an unprecedented run of stock market success. Only a few years after a catastrophic economic collapse, unemployment is approaching Reagan-era lows. Yet, something about this environment has Americans on edge.

We are living through a wrenching economic transformation that has ended the middle class as we knew it, upset old notions of the purpose and rewards of employment, severely undermined the value of labor, and concentrated power, wealth and opportunity in fewer and fewer hands. Government has a critical role to play in adapting our society to this emerging reality, yet both Democrats and Republicans continue to peddle 20th century explanations and solutions while neither has any continuing relevance. Democrats are gaining ground, but only by being less frightening than Republicans. Neither party has built a persuasive agenda. Our political future is wide open, waiting for leaders who can deliver a compelling, hopeful, sensible vision.

Few today remember that Republicans were in the vanguard of every constructive effort to use government to protect the integrity of markets. A century ago President Taft signed the country’s first Federal law attempting to regulate child labor. In that era Republicans led the fight against lynching, supported women’s right to vote, pressed for Federal laws mandating equal pay for women, and passed the nation’s first conservation and environmental protection laws.

A generation ago it was a Republican President who created the Environmental Protection Agency. President Nixon also became the first President to propose replacing our complex welfare state bureaucracy with a Federal minimum income. He created new agencies to protect workers from dangerous and exploitative conditions. He came very close to passing a taxpayer-funded national health care plan that would have covered everyone.

The challenges we face today are in many ways unique, but the same commitment to limited, but intelligent government holds the key to solving them. A willingness to look honestly at the inconvenient realities around us combined with a careful refocus on core Republican values would yield new positions on these key issues and push the Republican Party back into national leadership for this generation:

Health care – Cutting edge technology and research-driven healthcare cannot be financed by bartering chickens for doctor visits. On the other hand, a centralized command economy will be a constant drag on innovation. What Republicans knew forty years ago, what a Republican Governor recognized in Massachusetts just a decade ago, and what Americans are increasingly coming to understand, is that there can be no free, just access to markets so long as a simple illness can destroy everything one has earned. Republicans must propose a simpler, less bureaucratic alternative to the Affordable Care Act which offers universal, private, tax-subsidized access to health care for all Americans.

Cultural values – A potent, persuasive, humane social conservatism is not based on religious sectarianism. It is premised on the notion that some values are too important to be commoditized. Capitalism is mankind’s greatest force for prosperity, but without constraints it will reduce every valuable thing to the price it can command in a marketplace. From parenthood, to health, to our most intimate values, social conservatism means placing intangible human values above profit.

Social conservatism based on the authoritarian imposition of sectarian religious values will fail and should fail. Social conservatism based on compassion, evidence, and the pursuit of humane values will be more modest in extent, but vastly more successful.

Safety net – A party of commerce is a party of work, struggle and achievement. Under the pressure of an increasingly automated economy, the basic shape of a successful career is changing. America today generates more profit than ever before with less demand for labor than ever before. For people who lack the family resources to support many years of fantastically expensive post-high school education, many years of career experimentation, and the economic jolts of often unplanned or unintended career changes, the rewards of this new economy are simply out of reach.

The purpose of the safety net is to hold open the doors of opportunity for everyone, regardless of poor luck, illness, or other disadvantage. Instead of demonizing the poor, we need to refocus our resources on addressing the greater investment required to access the bottom rungs of the economic ladder and reducing the bureaucracy that burdens the current system. A shift away from the welfare state toward a basic or minimum income, as first proposed by Nixon era Republicans, should be a priority.

Climate change and the environment – Climate change is real. It is driven by human carbon emissions. If ignored it promises a threat to civilization unmatched by any challenge we have ever confronted. Denial is a humiliating scandal that undermines our credibility on every other issue. Republicans should be on the leading edge of carbon reduction and climate mitigation strategies that preserve the influence of market forces and preserve the potential of carbon reduction technology to stimulate prosperity and employment.

America in the wider world – If markets bring freedom and prosperity, then those who would subvert markets with violence cannot be tolerated. In our era, no organized national military offers a meaningful challenge to our security. Our security and the continuing spread of our values abroad are most potently challenged by localized chaos. From disease, to terrorism to unrestrained immigration, it is chaos more than any organized deliberate enemy that threatens us.

America should use its influence to build a new series of international alliances with countries who share our values. Those alliances should aim to tackle the civilian challenges that so frequently drag us into military engagements. Image if the resources and energy we pour into the Peace Corps came anywhere close to what we devote to the military, and image that a force of that kind of were combined with the resources and talents of other free nations.

Immigration – Across our history one of the greatest drivers of our success is our constant influx of ambitious new immigrants. One of the more depressingly self-defeating themes of our history is our consistent fear and suspicion of these new arrivals. Our current immigration policy makes elective immigration to the US nearly impossible for almost everyone who desires it. That is costing us enormously.

Our counter-productive fear of the cultural changes these new migrants bring continues to hobble our efforts to incorporate these new neighbors and open the doors of opportunity to their contributions. Republicans, as the party of commerce, are the natural allies of immigrants. We must end our opposition to legalization and take the initiative on drawing up new, rational, enforceable laws that will make orderly, legal immigration a practical possibility for far more people from around the world.

Drug prohibition – Prohibition is a catastrophic failure which grows more expensive every day in terms of money, deaths, and political instability in neighboring countries. We must find a more intelligent way to limit the damage of drug addiction without a blanket prohibition.

Rationalizing the tax code – America imposes one of the highest corporate tax rates in the world. When combined with state and local taxes many businesses face rates that approach half their earnings. Meanwhile, wealthy hedge fund managers who in many cases are involved in no productive activity can earn million dollar salaries while paying taxes on a capital gains rate, allowing them an effective tax rate often lower than middle-income workers.

Money we give in tax breaks to homeowners for their property taxes and mortgage interest, even on multiple homes, is significantly greater than what we spend on food stamps each year. Exceptions, exemptions, loopholes and their accompanying complexity are an invitation to mischief and a punishment to honest taxpayers. We have less need for lower taxes or higher taxes than for a clearer, simpler, more honest tax code.

Needless to say, none of these items are on currently the Republican policy agenda. Worse, it is entirely unclear what the Republican policy agenda actually consists of apart from opposition to a template of Democratic proposals and pandering to paranoids.

A garden must be tended. Republican hero Teddy Roosevelt, like generations of Republicans since, recognized that restraining the excesses and failures of capitalism is essential to preserving the power of markets. Commerce depends on competition, and competition is weakened when fewer and fewer of us are allowed in the ring. These policy shifts will be essential to a new generation of Republican dominance, but we cannot begin to put concrete reality behind any coherent, practical vision while clinging to the soft comfort of denial. Before any slate of potential policy goals can receive any useful treatment, Republicans must collectively gather the courage to participate in a world of facts.

When that happens, when Republicans rejoin the debate over America’s future with eyes wide open, the party will once again be positioned to lead the way toward a wealthier, freer, most just America. The way is open, at least for now, if we are ready to take it.

No society can surely be flourishing and happy, of which the greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged.

Adam Smith, The Wealth of Nations, Book 1, Ch. VIII

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Posted in Republican Party

A reality-check on the 2014 results

Posted on November 6, 2014 by Chris Ladd — 227 Comments

For Republicans looking for ways that the party can once again take the lead in building a nationally relevant governing agenda, there is one vital takeaway from this year’s election. It starts with a graphic.

Behold the Blue Wall:

The Blue Wall is block of states in which no Republican Presidential candidate can realistically hope to win. Tuesday that block finally extended to New Hampshire, meaning that at the outset of any Presidential campaign, a minimally effective Democratic candidate can expect to win 257 electoral votes without even really trying. That’s 257 out of the 270 needed to win.

Arguably Virginia now sits behind that wall as well. Democrats won the Senate seat there essentially without campaigning in a year when hardly anyone but Republicans showed up to vote and the GOP enjoyed its largest wave in modern history. Virginia would take that tally to 270. Again, that’s 270 out of 270.

This means that the next Presidential election, and all subsequent ones until a future party realignment, will be decided in the Democratic primary. Only by sweeping all nine of the states that remain in contention AND also flipping one very solidly Democratic state can a Republican candidate win the White House.

By contrast, Republicans control a far more modest Red Fortress, which currently amounts to 149  electoral votes. This election saw Georgia fall out of that shrinking and increasingly brittle base, after losing our previous lock on North Carolina and Virginia in recent years.

A few other items of interest from the 2014 election results:

– Republican’s failed to pick up a single Senate seat behind the Blue Wall. Not one. The only GOP candidate to win a Senate seat behind the Blue Wall was the party’s last moderate, Susan Collins of Maine.

– Behind the Blue Wall there were some new Republican Governors, but their success was very specific and did not translate down the ballot at all. None of these candidates ran on social issues, Obama, or opposition the ACA. Rauner stands out as a particular bright spot in Illinois, but Democrats in Illinois retained their supermajority in the State Assembly, similar to other northern states, without losing a single seat.

– Republicans in 2014 were the most popular girl at a party no one attended. Voter turnout was awful.

– Democrats have consolidated their power behind the sections of the country that generate the overwhelming bulk of America’s wealth outside the energy industry. That’s only ironic if you buy into far-right propaganda, but it’s interesting none the less.

– Vote suppression is working, but that won’t last. Eventually Democrats will help people get the documentation they need to meet the ridiculous and confusing new requirements. The whole “voter integrity” sham may have given Republicans a one or maybe two-election boost in low-turnout races, while kissing off minority votes more or less permanently.

– Across the country, every major Democratic ballot initiative was successful, including every minimum wage increase, even in the red states.

– Every personhood amendment failed.

– Almost half of the Republican Congressional delegation now comes from the former Confederacy. Total coincidence, just pointing that out.

– Democrats in 2014 were up against a particularly tough climate because they had to defend 13 Senate seats in red or purple states. In 2016 Republicans will be defending 24 Senate seats and at least 18 of them are likely to be competitive based on geography and demographics.

– Republican support grew deeper in 2014, not broader. For example, new Texas Governor Greg Abbott won a whopping victory in the Republic of Baptistan. That’s great, but this is a race no one ever thought would be competitive and hardly anyone showed up to vote in. Texas not only had the lowest voter turnout in the country, a position it has consistently held across decades, but that electorate is more militantly out of step with every national trend then any other major Republican bloc. Texas holds a tenth of the GOP majority in the House.

– Keep an eye on oil prices. Texas, which is at the core of GOP dysfunction, is a petro state with an economy roughly as diverse, modern and complex as Nigeria, Iran or Venezuela. It was been relatively untouched by the economic collapse because it is relatively dislocated from the US economy in general. Watch what happens if the decline in oil prices lasts more than a year.

– For all the talk about economic problems, for the past year the US economy has been running at ’90’s levels. Watch Republicans start touting a booming economy as the result of their 2014 “mandate.”

– McConnell’s conciliatory statements are encouraging, but he’s about to discover that he cannot persuade Republican Senators and Congressmen to cooperate on anything constructive. We’re about to get two years of intense, horrifying stupidity. If you thought Benghazi was a legitimate scandal that reveals Obama’s real plans for America then you’re an idiot, but these next two years will be a (briefly) happy period for you.

This is an age built for Republican solutions. The global economy is undergoing a massive, accelerating transformation that promises massive new wealth and staggering challenges. We need heads-up, intelligent adaptations to capitalize on those challenges. Republicans, with their traditional leadership on commercial issues should be at the leading edge of planning to capitalize on this emerging environment.

What are we getting from Republicans? Climate denial, theocracy, thinly veiled racism, paranoia, and Benghazi hearings. Lots and lots of hearings on Benghazi.

It is almost too late for Republicans to participate in shaping the next wave of our economic and political transformation. The opportunities we inherited coming out of the Reagan Era are blinking out of existence one by one while we chase so-called “issues” so stupid, so blindingly disconnected from our emerging needs that our grandchildren will look back on our performance in much the same way that we see the failures of the generation that fought desegregation.

Something, some force, some gathering of sane, rational, authentically concerned human beings generally at peace with reality must emerge in the next four to six years from the right, or our opportunity will be lost for a long generation. Needless to say, Greg Abbott and Jodi Ernst are not that force.

“Winning” this election did not help that force emerge. This was a dark week for Republicans, and for everyone who wants to see America remain the world’s most vibrant, most powerful nation.

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Posted in Election 2014, Election 2016

First glance at 2014 results

Posted on November 5, 2014 by Chris Ladd — 116 Comments

Data. My God there is so much data. It’s going to take some time to pull this apart and unfortunately time is at a premium. Here are a few observations and some of the numbers I’ll be combing over.

New Republican Governors in three deep blue states, Illinois, Massachusetts and Maryland, is a very promising development. This is where interesting policy is made. If there is going to be a truly national resurgence of the party its likely to start there.

Republican coat-tails in those blue-state Governors races were short and weak. Whatever Republican “wave” there was Tuesday, it stopped at the big blue wall. Republicans did well in some of the battlegrounds, but failed to win a single Senate race in a blue state. If the Presidential map in 2016 looks like the Senate map 2014, we’ll all be saluting President Clinton. Again. This election did not shift the national dynamic at all.

I’m very interested to see final turnout numbers, particularly in the states that were most aggressive in limiting voting. Clearly, Republicans in this era thrive on poor turnout. How poor was it and why?

Texas isn’t just Republican, it has shifted off the map to become a sort of Baptist Iran. It’s unclear whether the Obama Administration will step in to stop Gov. Abbott from developing nuclear weapons, but they should look into it.

Though Abbott was at the top of the ballot and got all the attention, whack-job Lt. Governor Dan Patrick will now be the most powerful political figure in the country’s second-largest state. The righteous need not fear. The rest of you might want to make some alternate plans.

Most interesting phenomenon of the night – the massive vote gap between winning Republican Governors in the blue states and the other Republicans in the same states who statewide races. Needs more research.

What will life be like for Mitch McConnell for the next two years? That is going to be the worst job in the world.

Finally, Republicans probably collected enough Senate seats on Tuesday to avoid falling into super-minority status in 2016, when they get their turn behind the 8-ball. They’ll be defending 22 seats in 2016, and at least 18 of them are likely to be competitive. They needed this cushion.

Posted in Election 2014

Look at the average age of that crowd

Posted on November 4, 2014 by Chris Ladd — 64 Comments

If you’ve been wondering why Wendy Davis and the rest of the Texas Dems seem so cheery while getting drubbed, look at the average age of that crowd:

 

 

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Posted in Texas, Uncategorized

Porn and the future of labor

Posted on November 1, 2014 by Chris Ladd — 91 Comments

Porn is free. Accelerating advances in communications technology combined with changing social norms have transformed the market for pornography, leading to the sudden collapse of business models that just a few years ago were generating tens of billions in revenue.

Porn businesses were some of the boldest early innovators in Internet technology. Now they are on the leading edge of a post-employment economy, demonstrating what life may be like for millions of middle-earning professionals from realtors to accountants in an economy dominated by accelerating technological advance. The fate of the porn business like so many other industries gutted by advancing technology demands that we adapt our economic and political assumptions to the requirements of a freeware economy.

Live by technology, die by technology. Porn has always been, first and foremost, a technology business. It started with the availability of reasonably affordable movie cameras in the 20’s and accelerated with the invention of cheap Super 8 cameras in the 60’s. Throughout its history porn has thrived on a do-it-yourself business culture. It was never well suited to corporate mass production and as a result the age of the porn conglomerate is proving to be eyeblink-short. Solid metrics are elusive, but industry revenues appear to have dropped by about half since 2007. Fewer than 20% of porn consumers pay for content.

Even without a solid revenue model the supply of porn is exploding. Not all economic activity strictly follows the conventional laws of supply and demand. Porn has always been influenced by factors beyond economics.

The menial labor performed by ‘porn stars’ did not involve a lot of professional development. Their status and their money were derived almost entirely from their willingness to flout social. When those social norms weakened so did their economic value.

As it turns out, lots of people possess the skills required to have sex in front of a camera. Technological innovations mean that you likewise no longer need specialized skills or even connections to produce, edit, and distribute the product. Click, upload, share. Welcome to the porn business.

The same blindness to consequences that inspires garish tattoos and giant, ear-stretching piercings has led millions of people to record and share their own porn. Since there was never much effort or quality in the business to start with this flood of DIY performers has overwhelmed the business. Porn industry spokesmen often blame piracy for their woes, but the simple fact is that industrial porn producers have little value to offer.

With declining value has come pressure on workers to endure more dangerous and less lucrative conditions. New safety regulations in Los Angeles have led to the inevitable rise of porn outsourcing to more dubious locations. Wages in the industry have collapsed to the point that the few actively working porn performers earn as much as a construction worker. Earnings by a handful of top ‘stars,’ sometimes as much as $300,000 a year, seldom match what a successful attorney brings in. The age of the Porn Star as a counter-cultural social icon is over.

Money is still being made in the porn industry but it is increasingly concentrated in two centers. Giant, monopolistic aggregators deliver value in the form of reliable traffic. Business models in this industry are anything but transparent, but they appear to earn their money from advertising while allowing individuals to post material for free, very much like the YouTube model. Copywrited material occasionally appears, but it is swamped under an endless tide of naked amateurs posting their own work with little or no financial expectation.

Other producers are earning money from what might be regarded as artisanal porn. Like individual artists manufacturing specialty cheeses or hand-made soaps, niche pornographers of a dizzying, often nauseating, variety attract a still-vibrant audience willing to spend money to satisfy a fetish. Markets there are small but loyal and creativity still pays.

Beyond those two business models, the porn business is dying. The forces destroying established business models in the industry offer some lessons about the future of other businesses in an age of accelerating technological dynamism.

First, information age technologies are GDP-killers. Technology has made porn free. In pure economic terms, technology has granted consumers a benefit worth tens of billions of dollars annually. That value delivered to consumers shows up nowhere in our economic data. We measure productivity by tallying financial transactions. Any value delivered by freeware shows up as a smoking hole of economic catastrophe.

There is a reality behind these grim metrics. Though consumers reap a benefit, technology-driven changes in the porn industry are in fact leading to declining levels of overall business activity. New models emerging from the rise of freeware create fewer jobs and radically concentrate the remaining profits.

Second, an old capitalist economy based on a division between labor and capital owners is being replaced by a division between aggregators and artists. Labor and industry as we have always defined them are in the late stages of their drift toward economic irrelevance. When you look closely as the activities of people who earn good money from work, rather than from capital, you find that in a surprising percentage of cases they are, in effect, artists.

Forget the fate of the old-school laborer for a moment and look at the tenuous position of the traditional middle and upper middle class professional. What prevents an accountant, realtor, attorney, radiologist, or software engineer from having her work replaced by an automated service or outsourced to a cheap replacement overseas? Each are succeeding and remaining economically relevant only to the extent that they are converting their work to a form of art, adding interpretation, customization, and personalization in a successful effort to differentiate their services from cheaper alternatives.

Finally, what the porn business is demonstrating about the future of our economy is that we are in a sense realizing Keynes’ dream of the 15-hour work week, just not in the ways that he expected. The collapsing cost of almost everything means that Americans can enjoy a lifestyle unimaginable even for a successful middle class household 50 years ago on a poverty level income. What has become more elusive is the hope of moving up that ladder.

For while our access to nearly everything has grown cheaper, requiring less work in order to gain more stuff, the radical concentration of real wealth in this new economic older threatens to create a hardened class-stratification that America has never before experienced. It may be easier to get a phone, a TV, or a good reliable car than it has ever been, but access to goods that depend on human expertise has grown vastly more expensive. Health care and education stand out as critical ingredients of basic economic mobility that have become much harder to obtain while the price of porn drops to zero.

Free porn is a measurable economic good that was unavailable a very short time ago. What we have achieved in the age of free porn is in many respects the dream of previous generations. We are living through the ultimate triumph of consumer culture, an ethic that measures human good in terms of ready access to stuff. It may sound shallow from our perspective, but it is a remarkable and meaningful human achievement that has delivered greater freedom and happiness than humans have ever known.

Our next challenge is to preserve human dignity and our basic political and economic order in an environment that no longer rewards labor and capital in traditional ways. “Hard work” the way we once defined it is an economic dead end. Creative work and the careful use of capital are the only economic pathways with a reasonable prospect of success. Everything from education to the social safety net requires hefty adaptation on a frustratingly short time frame if we are to avoid many of the dangers lurking in this otherwise promising future.

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Posted in Art, Economics, Ownership Society

The Green Party and Libertarians deserve to be loathed

Posted on October 31, 2014 by Chris Ladd — 74 Comments

GrimmIf Republican Bruce Rauner loses the Illinois Governor’s race it is very likely that the Libertarians will bear some of the blame. The State Board of Elections rejected the Green Party candidates’ petition to be included on the ballot while approving the Libertarians’, a move challenged unsuccessfully by the Illinois GOP. Now the Libertarians are getting union cash to fund their ballot effort.

What is the goal of their campaign? To be seen. That’s it. There is no Libertarian candidate on any ballot anywhere who is actually making plans to hold an office. “Third party” candidates are engaged in a sort of political cosplay, dressing up to fulfill some weird political fantasy. Unfortunately, this is not a harmless hobby.

Third party candidates have long been viewed as a harmless outlet, giving voters a form of ‘none of the above’ option on the ballot. Ever since professional asshole Ralph Nader got George Bush elected President in 2000, attitudes toward these nuisance candidates have been hardening. Political polarization has led to some unusually tight and consequential elections, drawing attention to the votes siphoned away toward symbolic futility.

In 2012, Democrat Pat Quinn won the Illinois Governor’s race by just over 30,000 votes, less than a percentage point. The Green Party candidate drained away more than 100,000 votes while the Libertarian grabbed 34,000. A random millionaire “Independent” gathered 140,000. Democrats took notice.

This year, the left’s band of nuisance candidates have been systematically blocked from the ballot, giving Quinn a boost potentially worth a couple of percentage points. Meanwhile Rauner must still cope with a level of political vandalism eating into his numbers.

Third parties talk a lot about ‘democracy’ which is odd for organizations that never win enough votes to get elected to anything anywhere. They inhabit a category with door-to-door cult recruiters, email spammers, patent trolls and cold callers. They serve no purpose other than to promote themselves at the expense of people who are trying to accomplish something useful, yet they cannot be stopped.

Think this assessment is unfair? Ask a Green or Libertarian why they almost exclusively field candidates for top of the ballot races. A political group with a genuine interest in governing would start by finding winnable local elections and getting people into office. In other words, they would develop a ground game somewhere before running for President. Greens and Libertarians do not make any meaningful effort to compete in winnable elections because having their goofball candidates occupy an office would not bring a happy result for anyone.

Attention is all they are interested in. Libertarians and Greens don’t care if their actions benefit candidates deeply opposed to their interests or yours so long as they squeeze their fifteen minutes from the process. Libertarians and Greens deserve to be loathed because they are sanctimonious political vandals, monkeying with elections for publicity, distorting the democratic process to ‘make a point.’

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Posted in Illinois

Halloween is getting cheaper

Posted on October 30, 2014 by Chris Ladd — 120 Comments

One of the themes of this blog is the way capitalism is making nearly everything cheaper (where it isn’t now free). Next example: Halloween candy.

From the New York Times’ Upshot blog:

It turned out that Waldbaum’s still carries more than a third of the brands listed in the 1964 ad, at very favorable prices. Milky Way, Snickers and 3 Musketeers bars were 59 cents a pound back then, or $4.53 in today’s money; this week, they were on sale for $2.99 for an 11.2-ounce bag, or $4.27 a pound. Hershey’s Kisses, 69 cents ($5.30) for a one-pound bag in 1964, were $1.69 for 11 ounces, or $2.46 a pound.

The biggest price decrease might be for Brach’s candy corn, listed in 1964 at 69 cents for a “20-count package.” This week, a bag containing about 150 pieces sold for $1.69, which works out to 22 cents for 20 pieces. (Of course, it’s possible that a “20-count package” meant something other than that the package contained 20 pieces of candy corn.)

On the other hand, Oh Henry! bars have gotten slightly more expensive. In 1964, miniature bars sold for 39 cents ($2.99) for nine ounces; this week, they were bundled with Baby Ruth and other Nestlé candies for $6.99 per 20-ounce bag, or $3.15 for nine ounces. (Baby Ruth was also sold in 1964, but was packaged in a way that makes price comparisons difficult.)

Notice that wasn’t cheaper is the niche item, the Oh Henry.

Here’s a link to an old piece outlining the declining price of cars. And a description of what isn’t getting cheaper and why.

Posted in Uncategorized

Ebola, terrorism and political mass extinction

Posted on October 25, 2014 by Chris Ladd — 290 Comments

“We are entering a bifurcated world. Part of the globe is inhabited by Hegel’s and Fukuyama’s Last Man, healthy, well fed, and pampered by technology. The other, larger, part is inhabited by Hobbes’s First Man, condemned to a life that is “poor, nasty, brutish, and short.” Although both parts will be threatened by environmental stress, the Last Man will be able to master it; the First Man will not.”

Robert Kagan, The Coming Anarchy, 1994

Thirteen years ago, with the attacks on the Twin Towers and the Pentagon, the darker side of the End of History was brought home to our shores. We have yet to come to terms with its implications, choosing foolishly to fight these new threats with outdated tools and methods. The frequent comparisons to Pearl Harbor are worse than inapt, they are deceptive. In reality, 9/11 could be best thought of as the opposite of our experience in World War II, our introduction to a world in which freedom has become a dominant value but order is the most precious resource on Earth.

The world is rapidly growing smaller, freer, and richer, but the same forces behind this happy trend are wreaking havoc on some corners of the world. And those same forces mean that the misery festering in forgotten hellholes can neither be ignored nor contained.

We often think of evolution as a genetic process, but like many other creatures human beings evolve along three planes simultaneously. To speed up our adaptation beyond the pace of our genetic mutations, we have also evolved the capacity to adapt through our social structures and technology. Over the past ten generations or so the pace of technological adaptation has suddenly accelerated, putting pressure on us in numerous other ways. Cultures are struggling to keep pace with the new landscape of demands, but though they evolve faster than our genes, many of them are falling behind or even blinking out of existence.

Accelerating technological progress has placed amazing new power in the hands of individuals, weakening or destroying oppressive institutions that once exploited millions. Like attacking a cancer with chemotherapy, this same cure has weakened virtually every kind of institution regardless of merit, rendering the social and cultural institutions on which civilization depends more brittle almost everywhere.

Where core institutions are traditionally strong and dense, as in Europe and North America, these forces have brought increasing government dysfunction and political polarization, but basic order remains largely unthreatened. Where public institutions have been weak or few, as in parts of the world once dominated by empires or monolithic dictatorships, this dynamic has bred a technology-infused chaos.

This is an age of mass extinctions, driven by an explosion of human technological evolution. Those extinctions are not limited to rare frogs or charming songbirds. Social institutions, cultures, entire political frameworks are collapsing under pressure from new, more adaptive innovations. As these less durable frameworks collapse they create little black holes of chaos, murder and disease that contain the potential to undermine the entire environment.

Terrorism, Ebola, mass immigration of unaccompanied minors – these are all essentially the same problem. Pockets of anarchy created by the collapse of poorly adapted institutions can be the birthing ground of new, freer, more liberal institutions. Or they can become poison factories. For those of us in rising Asia and the traditional West, decisions we make about how and when to intervene in these evolutionary episodes will grow increasingly complex and consequential as the world shrinks and only the hard cases remain to be worked out.

This is not a military problem, though the problem has a military dimension. The first order of civilization is to monopolize the use of violence in order to make it accountable and therefore legitimate.

Our enemy, per se, is not ISIS any more than the enemy is Ebola or unaccompanied migrant children. The enemy is chaos. Battling chaos might begin by using violence to thwart an organization like ISIS, but to accomplish any useful objective the fight must extend beyond the reach of the military. Using air power to combat ISIS is roughly equivalent to using fighter jets to stop the gangs on the west side of Chicago. It amounts to a fundamental misunderstanding of the nature of the situation. Violence does not create order, though it sometimes can be used to remove forces that stand in the way.

We will not be secure from the reach of roaming terrorist gangs in Syria until some accountable structure exists to govern the place and channel the needs of its people into policy. We will not be free from the dangers of Ebola, or the diseases coming in its wake like Marburg or nature’s as yet undiscovered surprises, until some credible order exists in the places where these diseases arise. No drone yet invented can bomb Ebola. It can only be stopped by a minimally effective public health system.

‘Foreign policy’ has become a quaint concept, evoking an age when the term ‘foreign’ referred to matters that were distant and only relevant in exceptional circumstances. We now operate in two political categories: matters under our direct legal jurisdiction and matters outside the reach of our legal sovereignty. There is no ‘foreign.’ There is ‘legal’ and ‘extralegal.’

To add to the complexity of the challenge, rising chaos is not a geographically distant problem. Sometimes it emerges in places under our legal authority.

Detroit is a laboratory for domestic social collapse as the institutions that tentatively supported that long-troubled place have dipped below the water line. Depressed rural areas of the Great Plains, the Deep South and Appalachia face similar challenges as the economic value of labor for mining and farming continues to decline. Many of the same basic political tools we will need to combat the expansion of chaos abroad might be sharpened in our own back yard. Our first order of business is to protect the viability of our social institutions.

What can we do to promote our interests in this changing landscape? First, we must begin to recognize the limits of military hegemony as a policy tool. We are exquisitely prepared for problems that can be bombed away – so prepared that those problems have largely disappeared.

In light of that recognition, we must begin building international institutions capable of doing more than talking about problems (the UN) or bombing those problems (NATO). The world’s free countries should be working together much more closely, likely starting with the nations of NATO and extending to Asia, to build government-sponsored organizations that look less like the army and more like Medecins Sans Frontieres.

Trans-national organizations in the shape of the Peace Corps, backed by the political and diplomatic force of free governments while supported and protected by military alliances, are the next evolutionary step in fighting the breakdown of social institutions in fragile places. They could succeed where the US military failed in places like Iraq and Afghanistan, or Haiti, Liberia and Honduras.

There may be no better symbol of the need for such a force than the US military’s recent deployment to Liberia. Using troops to ‘fight’ a disease is expensive and it’s a mission for which they are poorly suited on almost every level. Yet we have no appropriate force, no US or transnational medical or political reserve, ready to respond to such scenarios.

At home, our response to this challenge requires us to protect the viability of our own fragile institutions. Weakening social institutions are creating instability and feeding the rise of dangerous extremism and malaise. Our most important global challenge, the declining effectiveness of social institutions and the resultant rise of chaos, is not a foreign problem.

For at least the next couple of generations the most precious resource supporting human life will be organization – and in some places it will be perishingly scarce. We are living through an unprecedented shift in human evolution, in which the pace of evolution of our technology has overwhelmed our cultural and genetic evolution.

For those lucky enough to live under institutions with the resources and flexibility to weather the storm this is likely to be a time of wonder, wealth and freedom. Elsewhere in the world there is going to be trouble and that trouble will not stay put. We will either take intelligent calculated actions to limit the growth of chaos in distant places or the consequences will find us.

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Posted in Foreign Policy, Political Theory
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