Friday, January 29, 2010

Drayage blues

The cycle in which port truck drivers are stuck:

Costs are externalized from the shipping industry onto port truck drivers and the state. The drivers earn very little income, and, as independent contractors, have very little bargaining power and no health insurance. To compete for business, they reduce their costs by whatever means possible, generally running very old, dirty trucks. The surrounding communities bear the brunt of the pollution from these trucks. The surrounding communities are, of course, low-income communities. It goes without saying that the greater metropolitan area (and ultimately the atmosphere of our planet) suffer for the pollution, as well.

The port - charged with the responsibility of being an economic engine for Washington state - fears losing business to other, cheaper, west coast ports if the cost of shipping goes up as a result of increased driver wages and/or truck regulation. Their proposed solution is to use public money to subsidize a clean trucks program that will be only marginally effective, at best, rather than put the costs on the international shippers via fees at the port terminals. So, WalMart (for example) doesn't pay the real costs of shipping, and continues to use its profits to expand its own business, making it that more capable of out-competing its competitors as well as its own labor.

Moreover, the argument that WalMart is creating jobs is a fallacy. They are edging out smaller stores and replacing those jobs with their jobs. Their full-time employees earn on average under $20,000/year and must spend 20% of that income on health care before their insurance kicks in. It is clear that their incomes and their jobs are not doing much for the dynamism of our economy. The GDP grows, but so does inequality. The power and the resources accumulate at the top.

Thoughts on this?

Monday, January 25, 2010

"Further, an informed respondent is one who knows the benefits and negative externalities of a public good, and it therefore becomes easier for the respondent to accurately assess the maximum amount he/she is willing to pay for a good. Research has also demonstrated that informing respondents of the negative externalities of a good on society prior to surveying has a higher impact on the marginal WTP estimate than does informing respondents of the societal benefits of the good (Marette et al., 2004) That is, people respond more to the harm a good can cause than to the benefits that good may bring to society."

From here.

This makes me think about creating negative laws - can't do this, can't do that - rather than positive laws - must do this, must do that. This bears some resemblance to libertarian or Hayek-style laws for regulating the economy and other human affairs. There's some sense to it. Not being able to do something doesn't feel as controlling to people as having to do something.

With the exception, perhaps, of gun control. Hm, this needs further consideration....

Sunday, January 24, 2010

Albert Einstein on the deal with American capitalism

"Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights."

From here.

Saturday, January 16, 2010

Interesting Ideas

"From both a liberal and a mildly libertarian perspective, it would be preferable to have big, decisive, well-defined programs that fully guarantee key public goods--such as Social Security, defense, national health insurance, or anti-trust regulation--on one side, and a fairly open field for human activity on the other, with the line between public and private, regulated and unregulated domains, fairly obvious and well-guarded."

Interestingly, this encapsulates my recent thoughts that certain services - health care, education, social security, etc. - should be universal and guaranteed, and innovation and entrepreneurship allowed free reign after this.

I would add that environmental protections have to be as rigorously maintained as anti-trust laws. And that money has to be kept entirely out of politics, and perhaps entirely out of media, as well.

From here

"We are fully convinced that every human being is endowed with enormous capacity to contribute to the economy and society. By one’s own effort one can pull himself/herself out of poverty.… The poor do not need charity or a handout. The only thing that the poor need is a supportive set of institutions and rules. Charity and handouts were invented to avoid the issue of poverty alleviation. Handouts carry the message that the society is ignoring you. It is not interested in your ability. (p. 8)"

- Muhammad Yunus, founder of Grameen Bank, from this article by David Stoaz, advocating asset-building institutions rather than income-subsidized welfare policies.

Friday, January 8, 2010


As I am a gardener (it's a job I've had on the side for a while), please indulge my use of the following metaphor: if an intact, healthy culture is the equivalent of good soil, economic opportunity is the equivalent of ample light, fair access to health and education is the equivalent of adequate water, then “welfare”-style policy is like fertilizer, most effective when selectively but consistently and appropriately applied.