Investment and Finance

The Great Progressive Stagnation vs. Dynamism

In the US, the decades after WWII were marked by high growth and technological innovation. Rebound from recessions was quick, and reforms like the deregulations of the Carter era (trucking, railroads, airlines, interest rates on savings, and the breakup of the AT&T monopoly on phone service) and the tax simplifications of the Reagan administration lifted growth. Waves of labor-saving innovations grew productivity — computers first eliminated most manual record-keeping, then automated processes and streamlined production and logistics.

But each successive wave of recovery growth from recession has been weaker. This graph from the Center for Economic Policy Research charts the recoveries from the recessions of 1981, 1990, 2001, and 2007.


Recession Rebounds Compared - US Census Data

Recession Rebounds Compared – US Census Data

The weak growth for the quarter puts this recovery even further behind any prior recovery at the same stage. After eight and a quarter years, the economy is only 10.1 percent larger than its pre-recession level of output. A more typical recovery would have seen at least twice as much growth.[1]

Economist Tyler Cowen has coined the term “The Great Stagnation” for this gradual decline in growth and economic dynamism. His book The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better[2] was published in 2011, after the shaky recovery from the recession of 2007, but before we knew the stagnation would continue for many more years.

His major point was that the US post-WWII took advantage of one-time advantages and opportunities: most of the industrialized world had been crippled by war, and unskilled unionized workers could take advantage of their position to win seemingly stable, high-paying jobs while the technologies developed in the Depression and WWII decades were rapidly incorporated into production processes. When the rebuilt rest of the world began to catch up and compete directly, much of the easy profits for both US companies and workers were competed away, and technologies developed since have been adopted around the world quickly. The backlog of new technology waiting to be incorporated into production is gone, and meanwhile the overhead of law, regulation, and the web of intellectual property (patents, trademarks, and copyrights) has grown complex, to the point where innovation in products may be retarded by legal tangles.

Here’s the blurb for his book:

America is in disarray and our economy is failing us. We have been through the biggest financial crisis since the Great Depression, unemployment remains stubbornly high, and talk of a double-dip recession persists. Americans are not pulling the world economy out of its sluggish state — if anything we are looking to Asia to drive a recovery.Median wages have risen only slowly since the 1970s, and this multi-decade stagnation is not yet over. By contrast, the living standards of earlier generations would double every few decades. The Democratic Party seeks to expand government spending even when the middle class feels squeezed, the public sector doesn’t always perform well, and we have no good plan for paying for forthcoming entitlement spending. To the extent Republicans have a consistent platform, it consists of unrealistic claims about how tax cuts will raise revenue and stimulate economic growth. The Republicans, when they hold power, are often a bigger fiscal disaster than the Democrats. How did we get into this mess?Imagine a tropical island where the citrus and bananas hang from the trees. Low-hanging literal fruit — you don’t even have to cook the stuff.In a figurative sense, the American economy has enjoyed lots of low-hanging fruit since at least the seventeenth century: free land; immigrant labor; and powerful new technologies. Yet during the last forty years, that low-hanging fruit started disappearing and we started pretending it was still there. We have failed to recognize that we are at a technological plateau and the trees are barer than we would like to think. That’s it. That is what has gone wrong.The problem won’t be solved overnight, but there are reasons to be optimistic. We simply have to recognize the underlying causes of our past prosperity—low hanging fruit—and how we will come upon more of it.

Cruft (a term from MIT hackers for useless, complicated leftover materials that have accumulated) has grown around our laws and practices, with vested interests blocking change through legal means and bureaucracy. New technologies continue to change our lives and speed up work, with the internet and web starting in the late 1980s and mobile apps and smartphones now connecting people on the go. Yet productivity does not appear to be increasing, and while there is a lot of improvement in living standards that doesn’t show up in GDP (no one enjoyed waiting in teller lines at the bank, for example!), all of that freed-up time is going somewhere else, and most people’s working hours aren’t shrinking, and their incomes aren’t rising much.

Occasionally a sector will be disrupted (the current buzzword for innovation that suddenly makes a stable sector of the economy unstable) and the efforts of the rent-seeking status quo defenders become more obvious, as with Uber and other ride-sharing services, which had cut into the business of cab companies in many cities before the taxi industry roused itself to try to outlaw them. Few understood the taxi system as it had been, with its taxi commissions, high-priced medallion licensing, and cabbies forced to rent cabs from medallion holders who made the lion’s share of the money. The taxi medallion system started in New York City in 1937 as another attempt to limit competition during the New Deal and spread elsewhere in following decades, originally justified as necessary to keep gypsy cabs and jitneys — low-priced, unregulated, and occasionally dangerous — from serving the needs of the poor and incidentally crowding the streets of Manhattan, where a free market in taxi services would have resulted in a tragedy of the commons in the form of continuous gridlock. Taxi commissions supposedly protected the safety of passengers, but they also restricted the market for local transportation, raising the price and reducing service. Medium-sized cities, low-income and low-density suburban areas adopting taxi regulations tended to end up underserved. In most places the benefits of Uber-like services were so apparent so quickly that politicians were forced to bow to Uber’s fait accompli, and the prices of taxi medallions giving the owner the right to operate a city-approved taxi fell dramatically:

To own a cab in New York, you need a medallion—a metal shield displayed on the vehicle’s hood—and there are a fixed number issued by the New York City Taxi & Limousine Commission (TLC). Until very recently, medallions were a good thing to have a lot of. In 1947, you could buy one for $2,500. In 2013, after a half-century of steady appreciation, including a near-exponential period in the 2000s, they were going for $1.32 million.

Then came Uber. Since the arrival of the car-by-app service… taxi ridership is down, daily receipts have declined, and drivers are idling—or going to work for Uber. Add it up, and desperate medallion sellers are trying to fob off their little tin ornaments for as little as $650,000.[3]

But that kind of disruption is rare and only happens when the public comes to understand the benefits of the innovative business before the vested interests can strangle it in the crib. More and more economic activities have come to be regulated and new entrants are kept out by the need for government approvals. Products and services from our most heavily-regulated industries — healthcare, education, energy utilities, cable and broadcast entertainment, housing, and finance — have seen outsized price increases without much increase in quality in recent decades, with government regulations either limiting competition or subsidizing consumption (or, as in the case of education and healthcare, both.) Routing around these government controls is starting to happen — household solar panels, Internet entertainment streaming, and homeschooling with online instruction from the likes of the Khan Academy[4] show what is possible when freed from monopoly providers. But breaking the grip of the vested interests in some of these sectors — like the NIMBY restrictions on new housing in the cities controlled by Progressive political machines, or the failed public K-12 schools in urban districts — will take more time and effort.

Virginia Postrel’s book, The Future and Its Enemies: The Growing Conflict Over Creativity, Enterprise, and Progress (1998)[5] set two opposing philosophies against each other: stasists, who prefer a regulated and controlled status quo offering predictability in a society mostly closed to new thinking, and dynamists, who accept instability, innovation, and change allowing higher growth and creative achievement. Her website has this blurb:

Postrel argues that these conflicting views of progress, rather than the traditional left and right, increasingly define our political and cultural debate. On one side, she identifies a collection of strange bedfellows: Pat Buchanan and Ralph Nader standing shoulder to shoulder against international trade; “right-wing” nativists and “left-wing” environmentalists opposing immigration; traditionalists and technocrats denouncing Wal-Mart, biotechnology, the Internet, and suburban “sprawl.” Some prefer a pre-industrial past, while others envision a bureaucratically engineered future, but all share a devotion to what she calls “stasis,” a controlled, uniform society that changes only with permission from some central authority.

On the other side is an emerging coalition in support of what Postrel calls “dynamism”: an open-ended society where creativity and enterprise, operating under predictable rules, generate progress in unpredictable ways. Dynamists are united not by a single political agenda but by an appreciation for such complex evolutionary processes as scientific inquiry, market competition, artistic development, and technological invention. Entrepreneurs and artists, scientists and legal theorists, cultural analysts and computer programmers, dynamists are, says Postrel, “the party of life.”[6]

Where are the jetpacks and the flying cars dreamed of in the 1960s? Disney’s Tomorrowland[7] suggested our shared pessimism had slowed progress and endangered the future, but it failed to address the source of the exhaustion and defeatism — the many regulations that now prevent an energetic entrepreneur from putting his or her new idea into practice in the world. People who tried to do something differently have found their way blocked, and their lives are often destroyed by vested interests using the legal system to delay their projects and drain them of energy and capital. Every effort to build something new becomes a political effort requiring that you not only interest customers, but pay off politicians and rent-seekers who see their interests threatened. The compliance overhead in growing from a small business to a large business is now so large that most people who might try are discouraged and stick with what already works for them. It’s far safer to work for a government or big corporation than to strike out on your own. The result for our economy is stagnation and declining growth.

The decline in new business formation and business dynamism from 1978 to 2011:[8]

Startups and Dynamism In Decline - US Census Data

Startups and Dynamism In Decline – US Census Data

It’s ironic that the free world outcompeted and ultimately broke the Communist central planning systems of the USSR and China, with both Russia and China now authoritarian mixed kleptocracies with at least some freedom for private industry, yet the US is now tied up by central-planning bureaucrats and regulations that are crippling growth and favoring larger corporations that support politicians through favor-trading and campaign contributions. Every small loss of economic freedom and increase in corruption has been accompanied by government-funded propaganda to explain how much it benefits The People. And The People have awakened to a hangover of enormous debts and poor job prospects, having been slipped a mickey of miseducation and dependency.

The French have a term to describe their tendency to let a centralizing state control business activity: dirigisme, “to direct.” Progressives have gradually molded the US population to more closely resemble the French in looking to the state to decide economic matters, and borrowed many of the ideas of the welfare state and public education from German models. The bureaucracies they spawned tend to grow, and those employed to write regulations will never run out of ideas for new and more detailed specifications of how everything should be done. Because Progressives believe wise rulers (themselves) can make better decisions on every choice less enlightened citizens might make — and it’s their duty to improve society by improving people, for their own good. As C. S. Lewis said:

My contention is that good men (not bad men) consistently acting upon that position would act as cruelly and unjustly as the greatest tyrants. They might in some respects act even worse. Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. They may be more likely to go to Heaven yet at the same time likelier to make a Hell of earth. This very kindness stings with intolerable insult. To be ‘cured’ against one’s will and cured of states which we may not regard as disease is to be put on a level of those who have not yet reached the age of reason or those who never will; to be classed with infants, imbeciles, and domestic animals.[9]

While this book will touch on overregulation and bureaucracies, there are already quite a few studies and books on each of the affected industries — books on the failures of public education alone number in the hundreds. This book is primarily about labor regulations and their costly and productivity-draining intrusion into hiring and employment practices. Employer fears of exposure to lawsuits led to extensive delegation of control over hiring and firing decisions to HR departments. Government-enforced unions, Civil Service rules, and increasing efforts to require equality of outcome while denigrating excellence are reducing growth now and may doom us to a second-rate future as other countries not so crippled outcompete us. The US can return to a high-growth, lower-inequality path, but only if these sectors are unlocked and allowed to innovate in both process and personnel. Freedom to work and trade as we choose — and not as Washington dictates — will keep us free, and give our children the future we dreamed of.


[1] “Falling Investment and Rising Trade Deficit Lead to Weak First Quarter” – Dean Baker, Center for Economic and Policy Research, April 28, 2016
[2] The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better, by Tyler Cowen. Dutton (January 25, 2011) http://amzn.to/1pTybdh
[3] “The Struggles of New York City’s Taxi King” — by Simon Van Zuylen-Wood, Bloomberg, Augist 27, 2015 http://www.bloomberg.com/features/2015-taxi-medallion-king/
[4] https://www.khanacademy.org/
[5] The Future and Its Enemies: The Growing Conflict Over Creativity, Enterprise, and Progress, Virginia Postrel, Simon and Schuster, 1998 http://amzn.to/1SFodo7
[6] From Virginia Postrel’s web site.
https://vpostrel.com/future-and-its-enemies
[7] https://substratewars.com/2015/10/30/tomorrowland-tragic-misfire/
[8] “The Rate of New Business Formation Has Fallen By Almost Half Since 1978: America’s declining ‘business dynamism’ has affected all 50 states and nearly every single metro area.” Richard Florida, Citylab, May 5, 2014
[9] From C.S. Lewis’s essay anthology “God in the Dock” (1948), viewed 4-28-2015 at http://www.wsj.com/articles/SB10001424052702304527504579170134126854254

If you have a good story or anecdote from your organization, please email it to jebkinnison@gmail.com. I can use a few good tales (anonymized, of course) to illustrate the problems.


Death by HR: How Affirmative Action Cripples OrganizationsDeath by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations,  available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. Here’s the condensed version; view the entire review here.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

 


More reading on other topics:

Jane Jacobs’ Monstrous Hybrids: Guardians vs Commerce
The Great Progressive Stagnation vs. Dynamism
Death by HR: How Affirmative Action is Crippling America
Death by HR: The End of Merit in Civil Service
Corrupt Feedback Loops: Public Employee Unions
Death by HR: History and Practice of Affirmative Action and the EEOC
Civil Service: Woodrow Wilson’s Progressive Dream
Bootleggers and Baptists
Corrupt Feedback Loops: Justice Dept. Extortion
Corrupt Feedback Loops, Goldman Sachs: More Justice Dept. Extortion
Death by HR: The Birth and Evolution of the HR Department
Death by HR: The Simple Model of Project Labor
Levellers and Redistributionists: The Feudal Underpinnings of Socialism
Sons of Liberty vs. National Front
Trump World: Looking Backward
Minimum Wage: The Parable of the Ladder
Selective Outrage
Culture Wars: Co-Existence Through Limited Government
Social Justice Warriors, Jihadists, and Neo-Nazis: Constructed Identities
Tuitions Inflated, Product Degraded, Student Debts Unsustainable
The Morality of Glamour

On Affirmative Action and Social Policy:

Affirmative Action: Chinese, Indian-Origin Citizens in Malaysia Oppressed
Affirmative Action: Caste Reservation in India
Diversity Hires: Pressure on High Tech<a
Title IX Totalitarianism is Gender-Neutral
Public Schools in Poor Districts: For Control Not Education
Real-Life “Hunger Games”: Soft Oppression Destroys the Poor
The Social Decay of Black Neighborhoods (And Yours!)
Child Welfare Ideas: Every Child Gets a Government Guardian!
“Income Inequality” Propaganda is Just Disguised Materialism

The greatest hits from SubstrateWars.com (Science Fiction topics):

Fear is the Mindkiller
Mirror Neurons and Irene Gallo
YA Dystopias vs Heinlein et al: Social Justice Warriors Strike Again
Selective Outrage
Sons of Liberty vs. National Front
“Tomorrowland”: Tragic Misfire
The Death of “Wired”: Hugo Awards Edition
Hugos, Sad Puppies 3, and Direct Knowledge
Selective Outrage and Angry Tribes
Men of Honor vs Victim Culture
SFF, Hugos, Curating the Best
“Why Aren’t There More Women Futurists?”
Science Fiction Fandom and SJW warfare

More reading on the military:

US Military: From No Standing Armies to Permanent Global Power
US Military: The Desegration Experience
The VA Scandals: Death by Bureaucracy

Civil Service: Woodrow Wilson’s Progressive Dream

President Woodrow Wilson - Campaign Button

President Woodrow Wilson – Campaign Button

Until the victory of Andrew Jackson and his hoard of uncouth Democrats in the presidential election of 1828, the relatively tiny Federal government and its agencies were staffed largely by genteel men connected with the Eastern establishment. The Jacksonians came out of the expanding Western and Southern states, which resented the high tariffs imposed by the Eastern establishment to benefit manufacturers, and the new Democratic Party practiced the spoils system of patronage appointments — government jobs were filled by political supporters, and the promise of a government job was often the motivation for campaign workers. While today many see election contributions as corrupting, it was far more wasteful and corrupt to have government jobs turned over to barely competent campaign workers. This turnover on the election of a new administration did remove staff who might not implement the new administration’s policies, but it also broke continuity and allowed for more corruption. This was not terribly harmful to the newish country since federal agencies had limited scope and power over commerce — after Jackson’s inauguration, 10% of government officers were replaced by new appointees, but that was 919 replaced out of less than ten thousand employees total.[1] For comparison, if postal workers are included, there are now around 2.8 million Federal employees.[2]

Corruption scandals were frequent, and the reform movement to bring in a professionalized meritocratic civil service at the Federal level succeeded with the passage of the Pendleton Act in 1883, which created a bipartisan Civil Service Commission to fill positions by merit and protect current employees from political interference. The number of jobs so protected expanded with each administration as they moved to shield their own political appointees from removal at the end of their terms, until all but the most senior policymaking positions were covered. Today, political appointees have to deal with a permanent bureaucracy under them, which can successfully resist needed reforms as well as corruption.

The idea of a civil service originally came from China, where for a thousand years positions in Imperial service were filled through difficult examinations covering Confucian doctrines, poetry, and calligraphy, which while not directly relevant to most bureaucratic work, at least selected for competence in writing and thought. While in theory such exam systems would allow anyone of any class to demonstrate merit and move into a powerful position, in practice only the children of the landed gentry had the time and resources to study for the exams, but at least their system kept out those whose only qualification was a powerful patron.

As an interesting side-note, the Chinese idea of meritocracy goes back at least 2300 years. The recent discoveries of writings on bamboo from that era revealed considerable philosophical ferment, with the idea of rulers abdicating their power to successors selected by merit as the proper action of a wise ruler:

The manuscripts’ importance stems from their particular antiquity. Carbon dating places their burial at about 300 BCE. This was the height of the Warring States Period, an era of turmoil that ran from the fifth to the third centuries BCE. During this time, the Hundred Schools of Thought arose, including Confucianism, which concerns hierarchical relationships and obligations in society; Daoism (or Taoism), and its search to unify with the primordial force called Dao (or Tao); Legalism, which advocated strict adherence to laws; and Mohism, and its egalitarian ideas of impartiality. These ideas underpinned Chinese society and politics for two thousand years, and even now are touted by the government of Xi Jinping as pillars of the one-party state.

The newly discovered texts challenge long-held certainties about this era. Chinese political thought as exemplified by Confucius allowed for meritocracy among officials, eventually leading to the famous examination system on which China’s imperial bureaucracy was founded. But the texts show that some philosophers believed that rulers should also be chosen on merit, not birth—radically different from the hereditary dynasties that came to dominate Chinese history.[4]

The Chinese Imperial civil service was widely admired by Europeans and was the inspiration for civil service reforms in the British Empire, where posts had previously been handed out by patronage or directly sold. The British East India Company College was founded in 1806 to train bureaucrats for their Indian civil service, and the idea of merit and examinations to select the best employees for government service spread through Europe and to the US.

Before he was elected president, the Progressive academic Woodrow Wilson wrote “The Study of Administration,” an essay setting forth his ideas on how public agencies should be organized. In 1886, his ideals of eternal, professional bureaucracies expanding enlightened government control over every service may have sounded achievable:

There is scarcely a single duty of government which was once simple which is not now complex; government once had but a few masters; it now has scores of masters. Majorities formerly only underwent government; they now conduct government. Where government once might follow the whims of a court, it must now follow the views of a nation.

And those views are steadily widening to new conceptions of state duty; so that, at the same time that the functions of government are every day becoming more complex and difficult, they are also vastly multiplying in number. Administration is everywhere putting its hands to new undertakings. The utility, cheapness, and success of the government’s postal service, for instance, point towards the early establishment of governmental control of the telegraph system. Or, even if our government is not to follow the lead of the governments of Europe in buying or building both telegraph and railroad lines, no one can doubt that in some way it must make itself master of masterful corporations. The creation of national commissioners of railroads, in addition to the older state commissions, involves a very important and delicate extension of administrative functions. Whatever hold of authority state or federal governments are to take upon corporations, there must follow cares and responsibilities which will require not a little wisdom, knowledge, and experience. Such things must be studied in order to be well done. And these, as I have said, are only a few of the doors which are being opened to offices of government. The idea of the state and the consequent ideal of its duty are undergoing noteworthy change; and “the idea of the state is the conscience of administration.” Seeing every day new things which the state ought to do, the next thing is to see clearly how it ought to do them.

This is why there should be a science of administration which shall seek to straighten the paths of government, to make its business less unbusinesslike, to strengthen and purify its organization, and to crown its duties with dutifulness. This is one reason why there is such a science.

Wilson looked to European models (as Progressives still do):

But where has this science grown up? Surely not on this side [of] the sea. Not much impartial scientific method is to be discerned in our administrative practices. The poisonous atmosphere of city government, the crooked secrets of state administration, the confusion, sinecurism, and corruption ever and again discovered in the bureaux at Washington forbid us to believe that any clear conceptions of what constitutes good administration are as yet very widely current in the United States. No; American writers have hitherto taken no very important part in the advancement of this science. It has found its doctors in Europe. It is not of our making; it is a foreign science, speaking very little of the language of English or American principle. It employs only foreign tongues; it utters none but what are to our minds alien ideas. Its aims, its examples, its conditions, are almost exclusively grounded in the histories of foreign races, in the precedents of foreign systems, in the lessons of foreign revolutions. It has been developed by French and German professors, and is consequently in all parts adapted to the needs of a compact state, and made to fit highly centralized forms of government; whereas, to answer our purposes, it must be adapted, not to a simple and compact, but to a complex and multiform state, and made to fit highly decentralized forms of government. If we would employ it, we must Americanize it, and that not formally, in language merely, but radically, in thought, principle, and aim as well. It must learn our constitutions by heart; must get the bureaucratic fever out of its veins; must inhale much free American air…

…in spite of our vast advantages in point of political liberty, and above all in point of practical political skill and sagacity, so many nations are ahead of us in administrative organization and administrative skill. Why, for instance, have we but just begun purifying a civil service which was rotten full fifty years ago? To say that slavery diverted us is but to repeat what I have said — that flaws in our constitution delayed us.

Of course all reasonable preference would declare for this English and American course of politics rather than for that of any European country. We should not like to have had Prussia’s history for the sake of having Prussia’s administrative skill; and Prussia’s particular system of administration would quite suffocate us. It is better to be untrained and free than to be servile and systematic. Still there is no denying that it would be better yet to be both free in spirit and proficient in practice. It is this even more reasonable preference which impels us to discover what there may be to hinder or delay us in naturalizing this much-to-be-desired science of administration.

We may find his technocratic idealism tragic and misguided, since we know his efforts did not result in that decentralized, responsive American-style civil service he had envisioned. Wilson admired the Prussian social welfare state, and the implementation of many of its features — government healthcare, government pension schemes, and centralized public schools to train good workers amenable to state guidance — became the Progressive program for the succeeding decades, with today’s Progressives continuing to promote universal pre-K and government-run healthcare as central goals over a hundred years later. Wilson blamed that stodgy old Constitution for holding back progress, which he thought could be achieved through “scientific administration” of government which would leave citizens “free in spirit and proficient in practice.” Where, in practice, implementation of his ideas created an underclass of citizens so unproficient as to lose their freedom to dependency and addiction.

Wilson responded to critics who argued civil servants would be unaccountable:

And let me say that large powers and unhampered discretion seem to me the indispensable conditions of responsibility. Public attention must be easily directed, in each case of good or bad administration, to just the man deserving of praise or blame. There is no danger in power, if only it be not irresponsible. If it be divided, dealt out in shares to many, it is obscured; and if it be obscured, it is made irresponsible. But if it be centred in heads of the service and in heads of branches of the service, it is easily watched and brought to book.

I know that a corps of civil servants prepared by a special schooling and drilled, after appointment, into a perfected organization, with appropriate hierarchy and characteristic discipline, seems to a great many very thoughtful persons to contain elements which might combine to make an offensive official class, — a distinct, semi-corporate body with sympathies divorced from those of a progressive, free-spirited people, and with hearts narrowed to the meanness of a bigoted officialism. Certainly such a class would be altogether hateful and harmful in the United States. Any measure calculated to produce it would for us be measures of reaction and of folly….

But to fear the creation of a domineering, illiberal officialism as a result of the studies I am here proposing is to miss altogether the principle upon which I wish most to insist. That principle is, that administration in the United States must be at all points sensitive to public opinion. A body of thoroughly trained officials serving during good behavior we must have in any case: that is a plain business necessity. But the apprehension that such a body will be anything un-American clears away the moment it is asked, What is to constitute good behavior? For that question obviously carries its own answer on its face. Steady, hearty allegiance to the policy of the government they serve will constitute good behavior. That policy will have no taint of officialism about it. It will not be the creation of permanent officials, but of statesmen whose responsibility to public opinion will be direct and inevitable.

Bureaucracy can exist only where the whole service of the state is removed from the common political life of the people, its chiefs as well as its rank and file. Its motives, its objects, its policy, its standards, must be bureaucratic. It would be difficult to point out any examples of impudent exclusiveness and arbitrariness on the part of officials doing service under a chief of department who really served the people, as all our chiefs of departments must be made to do. It would be easy, on the other hand, to adduce other instances like that of the influence of Stein in Prussia, where the leadership of one statesman imbued with true public spirit transformed arrogant and perfunctory bureaux into public-spirited instruments of just government….

The ideal for us is a civil service cultured and self-sufficient enough to act with sense and vigor, and yet so intimately connected with the popular thought, by means of elections and constant public counsel, as to find arbitrariness of class spirit quite out of the question.

In hindsight, we know that accountability has been almost completely lost, with the recent failures at Federal agencies resulting in nothing more punishing than transfers or brief suspensions. We’ll go over how this came to be in the later chapter on public employee unions, which have made punishment of negligent or criminal employees, merely difficult under civil service rules, near-impossible. And as a result, there is close to zero response to efforts from above to make bureaucracies function efficiently and responsively. Public anger over scandals at the VA and the IRS have resulted in little or no reform and bureaucracies have grown larger and less responsive as their functions have multiplied until no one — not even Congress — can control them. Similarly, already heavily-regulated banks and mortgage agencies were nationalized (in the case of Fannie Mae and Freddie Mac) or heavily fined after the financial crisis of 2008, but only one banker spent time in jail. Bankers as a class had become as immune from prosecution as civil servants.

And our politics are now dominated by a government Leviathan supported and supporting “a distinct, semi-corporate body with sympathies divorced from those of a progressive, free-spirited people, and with hearts narrowed to the meanness of a bigoted officialism” — unaccountable regulators, civil servants, unionized public employees, and regulated big businesses protected from upstart competition.

Progressives had good intentions — directed by Science and molding flawed human beings into more virtuous citizens by edict and government training, the enlightened Administration would shepherd the flock to a brighter, healthier future. The Progressive causes — Prohibition, eugenics, antitrust, the Federal Reserve system, centralized public schooling, Social Security and Medicare — have all been implemented, and while the most flawed (Prohibition, eugenics) were quickly abandoned and renounced, many remain with us, rooted so deeply in our society that major change seems impossible. Too many vested interests and public employees depend on them, and voters are more and more likely to be dependent as well, and so unwilling to risk voting for any reforms. But as Herb Stein said, “If something cannot go on forever, it will stop,” and the current worldwide debt crisis will forcibly dismantle these systems as the money to support them in their current form evaporates. This seems to be the inevitable result of universal laws of bureaucratic growth in democratic systems, the kind of systemic corruption the Founding Fathers warned against when they set up what they hoped would remain a limited republican government.

[1] https://en.wikipedia.org/wiki/Spoils_system
[2] https://en.wikipedia.org/wiki/United_States_federal_civil_service
[4] “A Revolutionary Discovery in China,”
Ian Johnson, April 21, 2016. The New York Review of Books.

A Revolutionary Discovery in China


Death by HR: How Affirmative Action Cripples OrganizationsDeath by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations,  available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. Here’s the condensed version; view the entire review here.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

 


More reading on other topics:

Jane Jacobs’ Monstrous Hybrids: Guardians vs Commerce
The Great Progressive Stagnation vs. Dynamism
Death by HR: How Affirmative Action is Crippling America
Death by HR: The End of Merit in Civil Service
Corrupt Feedback Loops: Public Employee Unions
Death by HR: History and Practice of Affirmative Action and the EEOC
Civil Service: Woodrow Wilson’s Progressive Dream
Bootleggers and Baptists
Corrupt Feedback Loops: Justice Dept. Extortion
Corrupt Feedback Loops, Goldman Sachs: More Justice Dept. Extortion
Death by HR: The Birth and Evolution of the HR Department
Death by HR: The Simple Model of Project Labor
Levellers and Redistributionists: The Feudal Underpinnings of Socialism
Sons of Liberty vs. National Front
Trump World: Looking Backward
Minimum Wage: The Parable of the Ladder
Selective Outrage
Culture Wars: Co-Existence Through Limited Government
Social Justice Warriors, Jihadists, and Neo-Nazis: Constructed Identities
Tuitions Inflated, Product Degraded, Student Debts Unsustainable
The Morality of Glamour

On Affirmative Action and Social Policy:

Affirmative Action: Chinese, Indian-Origin Citizens in Malaysia Oppressed
Affirmative Action: Caste Reservation in India
Diversity Hires: Pressure on High Tech<a
Title IX Totalitarianism is Gender-Neutral
Public Schools in Poor Districts: For Control Not Education
Real-Life “Hunger Games”: Soft Oppression Destroys the Poor
The Social Decay of Black Neighborhoods (And Yours!)
Child Welfare Ideas: Every Child Gets a Government Guardian!
“Income Inequality” Propaganda is Just Disguised Materialism

The greatest hits from SubstrateWars.com (Science Fiction topics):

Fear is the Mindkiller
Mirror Neurons and Irene Gallo
YA Dystopias vs Heinlein et al: Social Justice Warriors Strike Again
Selective Outrage
Sons of Liberty vs. National Front
“Tomorrowland”: Tragic Misfire
The Death of “Wired”: Hugo Awards Edition
Hugos, Sad Puppies 3, and Direct Knowledge
Selective Outrage and Angry Tribes
Men of Honor vs Victim Culture
SFF, Hugos, Curating the Best
“Why Aren’t There More Women Futurists?”
Science Fiction Fandom and SJW warfare

More reading on the military:

US Military: From No Standing Armies to Permanent Global Power
US Military: The Desegration Experience
The VA Scandals: Death by Bureaucracy

Bootleggers and Baptists

Prohibition: Sheriff Dumps Bootleg Booze

Prohibition: Sheriff Dumps Bootleg Booze

When a campaign is underway to regulate a business or a product, it’s usually easy to identify two groups promoting increased regulation: “Bootleggers” (people who will benefit because the regulation hobbles a competitor) and “Baptists” (people who sincerely believe the new regulation will help others.) The Baptists naively think goodness will come from outlawing bad things, while the bootleggers are aware of unintended consequences and second- and third-order effects of the proposed regulation that will benefit them personally, but pretend to join the Baptists on a moral crusade. Marching together, they agitate for more laws and less freedom of choice.

“Bootleggers and Baptists” is a catch-phrase invented by regulatory economist Bruce Yandle for the observation that regulations are supported both by groups that want the ostensible purpose of the regulation, and by groups that profit from undermining that purpose.

For much of the 20th century, Baptists and other evangelical Christians have been prominent in political activism for Prohibition and Sunday closing laws restricting the sale of alcohol. Bootleggers sold alcohol illegally, and got more business if legal sales were restricted. “Such a coalition makes it easier for politicians to favor both groups. … [T]he Baptists lower the costs of favor-seeking for the bootleggers, because politicians can pose as being motivated purely by the public interest even while they promote the interests of well-funded businesses. … [Baptists] take the moral high ground, while the bootleggers persuade the politicians quietly, behind closed doors.

Strongly-motivated minority interest groups can move the political process toward satisfying their demands, as Prohibitionists did when they succeeded in getting the Eighteenth Amendment passed outlawing alcoholic beverages in the US, a ban which lasted from 1920 to 1933 before it was repealed by the Twenty-First Amendment. It took a decade of rising organized crime and disrespect for the law to finally rouse the great middle of the electorate to demand repeal.

Similar battles still take place on smaller scales. In a recent example,

Arkansas liquor stores have allied with religious leaders to fight statewide legalization of alcohol sales. The stores in wet counties don’t want to lose customers. The churches don’t want to lose souls. Larry Page, a Southern Baptist pastor and director of the Arkansas Faith and Ethics Council, which traces its roots to the Anti-Saloon League of Arkansas in 1899, [also recalled]. . .when his group joined with feminists to oppose pornography and cooperated with Mississippi casinos to fight gambling in Arkansas.

The selfish motivations of the bootleggers hide behind the naive but high-minded feelings of the Baptists. How can a politician oppose Goodness in the form of legislated morality?

Here are some other examples of the phenomenon:

Universal pre-K: Who can be against the education of young children, especially those growing up in poor environments for early learning? Surely extending public school to even earlier years will help underprivileged children catch up! And parents can use even more public-funded daycare to ease their burden, right?

While it’s common to see articles and editorials accepting the positive benefits of pre-K programs without question, the evidence is thin and suggests that some children can benefit from very high-quality programs, but that such benefits disappear after a few years. The Head Start federal program targeting poor children has been expensive and disappointing, with recent studies demonstrating little permanent improvement in outcomes in the long term.

As often happens, proponents start a few pilot programs, recruit highly-motivated staff and parents, and find significant positive benefits. When expanded and managed via the standard education bureaucracy and with less-motivated, unionized staff, benefits to the children shrink or disappear completely, with some programs actually worse for children than being left in a standard private preschool or home setting.

A well-regarded and funded program in Tennessee was studied by a grant-funded group of social scientists and educators at Vanderbilt who had every reason to bias the study to favor the state’s pre-K program. The result? (Emphasis added):

By the end of kindergarten, the control children had caught up to the TN‐VPK children and there were no longer significant differences between them on any achievement measures. The same result was obtained at the end of first grade using both composite achievement measures. In second grade, however, the groups began to diverge, with the TN‐VPK children scoring lower than the control children on most of the measures. The differences were significant on both achievement composite measures and on the math subtests. … In terms of behavioral effects, in the spring the first grade teachers reversed the fall kindergarten teacher ratings. First grade teachers rated the TN‐VPK children as less well prepared for school, having poorer work skills in the classrooms, and feeling more negative about school. It is notable that these ratings preceded the downward achievement trend we found for VPK children in second and third grades. The second and third grade teachers rated the behaviors and feelings of children in the two groups as the same; there was a marginally significant effect for positive peer relations favoring the TN‐VPK children by third grade teachers.

The constant drumbeat of publicity promoting Universal pre-K is motivated by the desire of teacher and public employee unions to employ more staff who will provide more revenue and political power for them. They are the bootleggers in the coalition pushing for Universal pre-K at local and federal levels, and the disorganized voices of those who would be hurt by such programs — operators of private preschools, parents of children who want to choose which daycare they pay for or handle pre-K nurturing themselves — are rarely heard, while the propaganda from the government PR offices and unions is well-funded by tax dollars and compulsory union dues.

Free College For All: Bernie Sanders is currently promoting a plan for free tuition at public colleges and universities for everyone. “Education” (in the form of conventional regimented schooling) is a sacred cow, and the belief that everyone is better off being sent to college after high school has been promoted by politicians for years. We’ll cover the pernicious results of policies based on that belief later in the chapter on Higher Education, but we’ve already seen what happens when you make subsidized student loans available to everyone: you get millions of deeply-indebted former students, both those who failed out because they should never have been admitted in the first place and those who learned little of value to the job market. You also get a high rate of inflation in college costs, as these loans allowed colleges to expand and compete for students with less concern for costs or outcomes.

The Baptists in this case are all those well-meaning people who believe everyone should go to college and get a professional white-collar job. The bootleggers are all of those college administrators and employees who benefit from increased funding and enrollment, the prospective students who want to have a free ride, and the politicians who rely on the support of academics. The scribes and government workers who are products of academia themselves write all the narratives in our society, and blue-collar workers and nonacademics who would be taxed to pay for this freebie get no taxpayer funding to tell their own stories.

Let well-known philosopher of labor Mike Rowe explain this:

Consider the number of college graduates today, who can’t find work in their chosen field. Hundreds of thousands of highly educated twenty-somethings are either unemployed or getting paid a pittance to do something totally unrelated to the education they borrowed a fortune to acquire. Collectively, they hold 1.3 trillion dollars of debt, and no real training for the jobs that actually exist. Now, consider the country’s widening skills gap – hundreds of thousands of good jobs gone begging because no one wants to learn a useful trade. It’s madness. “College For All” might sound good on the campaign trail, but in real life, it’s a dangerous platitude that reinforces the ridiculous notion that college is for people who use their brains, and trade schools are for people who use their hands. As if the two cannot be combined.

Universal Healthcare: The Baptists here are well-meaning people who think everyone should get good healthcare, and because they have been told by propagandists that everyone in Europe and Canada has free, quality healthcare that costs their government far less, they can’t imagine why the US shouldn’t have it, too. Which ignores the major differences between such programs — only Canada has single-payer without a parallel private-pay healthcare system, and even that is changing, while the Canadian provinces vary in costs and coverages, as well as waiting periods for nonemergency care. Meanwhile, European countries have systems that vary from Britain’s NHS, a completely government-owned and run healthcare system with enough problems that its breakdowns are daily news fodder, to Swiss and French programs that are really public-private insurance plans with cheaper basic options. “Medicare-for-All” as proposed by US universal healthcare proponents would expand the Medicare system, which is already headed for financial disaster as the population ages, to cover everyone. It’s never acknowledged that rising costs will then require rationing and onerous cost controls that would make the US system start to resemble Britain’s NHS — cheaper but lower quality, with worse outcomes for cancer treatments and limited access to more advanced care.

Who are the bootleggers? The ACA co-opted the big health insurance and drug companies to guarantee them a captive market with higher revenues in return for turning the private insurance market into a kind of regulated utility that everyone would be forced to join, which allows regulations to essentially tax younger and healthier people to subsidize the costs of the older and sicker without regard to ability to pay. We now have lower-middle-class working families paying much more than they would in a free market so that wealthy people with pre-existing conditions can get insurance at subsidized rates. While many pre-existing conditions were unfortunate accidents, some were acquired because of poor life choices and self-indulgent health and dietary habits — so now the rich couch potato who drank and ate himself to diabetes and heart problems suffers no penalty, at least financially, since some group of healthy families is paying extra to subsidize his care.

Single-payer, Medicare-for-All is another step toward micromanagement of both citizen lifestyles and medical procedures. The politicians are dreaming of more dependent voters who will always support them, as in Britain, where voters are continually told they can have a “better” NHS by voting in the right people. The problems of the British NHS cannot be solved by a change in administrations because they are due to its structure as a socialized service, with unionized civil service-style employee protections and the accompanying limited accountability for poor service and failure. Once in place, such systems are very difficult to repeal, and their bureaucracies, like today’s federal HHS and Medicare bureaucracies, provide a good place for political supporters to collect a paycheck while serving as the party of government’s permanent supporting class.

Climate Change: The Baptists here are citizens who believe that not only is global warming a man-made phenomenon resulting from increases in greenhouse gases in the atmosphere (that much is probably true), but that its onset will be rapid and severe enough to justify virtually any costly program proposed to limit the threat (which appears untrue, or at least unproven, as the simplistic early climate models have failed to correctly predict the amount of actual warming.) What price would you pay to save the planet? Even questioning the cost of proposed programs is viewed as heresy by true believers.

The bootleggers are the rent-seeking part of the coalition to “do something,” which began when the danger was first popularized and resulted in large increases in research funding for the small number of climate scientists who specialized in climate change research. As momentum built and more governments funded research and activism in the field, whole labs and careers depended on finding the danger to be as large as possible, to justify ever more research funding. Stoking popular fear, politicians could appear to be protecting citizens by promising more and more measures to slow greenhouse gas emissions. It became clear, though, that vested interests would not allow the least-cost, most economically-sound means of reducing emissions: research on solar and nuclear power generation and low, rebated carbon taxes which would allow businesses and citizens to gradually reduce emissions over time without sacrificing current plants and arrangements.

What happened instead: complex emissions credit schemes which allowed politicians to favor some interest groups over others while raking in hidden taxes from consumers; mandates requiring utilities to pay much more to purchase ever-increasing percentages of “green” power, generated at high cost from subsidized windmills and solar power plants which proved to work poorly or have limited service lives; and command-and-control regulations that shut down existing plants and closed down coal mines.

Each of these schemes had bootleggers waiting to profit: politically-connected investors in solar power schemes like Solyndra (bankrupt in 2011, with $535 million in federally-guaranteed loans and $25 million in California tax credits lost) and the Ivanpah steam-solar project ($2.2 billion, obsolete and unable to generate its designed power since the day it opened.) Both Ivanpah and Solyndra were huge bets on the wrong technologies, with standard photovoltaic panels falling in price so much that these huge investments were rendered uncompetitive shortly after they were funded. Ivanpah received $1.6 billion in loan guarantees from federal taxpayer funds, covering investments by its owners, BrightSource Energy, NRG Energy, and Google. The company has delayed payment on its loans and in late 2014 requested an additional $539 million in funding via a federal tax credit program.

Spain’s Abengoa, a multinational alternative energy company, has filed for Chapter 11 protection in the US, and in March of 2016 filed for bankruptcy. The federal loan guarantees for $1.45 billion for the Solano solar plant in Arizona and the $1.2 billion for the Mojave solar project in California now appear to be US taxpayer losses. Again, enormous sums of taxpayer money built scaled-up projects with obsolete technology which could only produce power at many times the cost of natural gas plants.

In parts of Europe and the US, poor and middle-class ratepayers pay much more for electricity because of these state-required green energy programs, while many wealthy consumers avoid paying the inflated rates by installing subsidized solar panels.

Other bootleggers include the large number of government staff now employed to work on climate change issues and propaganda in governments around the world, with the many UN climate meetings in cities like Paris and Copenhagen serving as luxurious junkets for tens of thousands of functionaries.

Even businessmen in the petroleum industry will surreptitiously support green activist organizations they believe will harm competitive fuels more than theirs. Aubrey McClendon, who made and then lost a huge fortune pioneering the fracking production of natural gas in the US, “secretly gave $25 million to the Sierra Club for the Sierra Club’s ‘Beyond Coal’ campaign, for the obvious reason that it would benefit his natural gas company if coal were squeezed by new regulation.”:

But as the Sierra Club and other environmental groups have made clear, once they’re done killing coal they’re going after natural gas next. Did McClendon think they’d spare him? He was a perfect example of Churchill’s description of an appeaser as someone who feeds the crocodile hoping he’ll be eaten last. I lost all respect for McClendon when this news leaked out, and it was a great embarrassment to the Sierra Club as well. He was rent-seeking bootlegger. A lot of them died in high-speed crashes back during Prohibition, usually being chased by the law.

Internet Gambling Prohibitions: This is closer to the coalitions against alcohol, with many religious and social organizations concerned about gambling addiction (the Baptists) joining with casino magnates, Indian tribes, and state lotteries (the bootleggers) to try to outlaw a competitor — easy gambling on the Internet. In 2015, Sheldon Adelson, billionaire head of the Las Vegas Sands and numerous hi-revenue casinos worldwide, promoted a bill in Congress (The Restoration of America’s Wire Act, or RAWA) intended to prohibit Internet gambling at the federal level, superseding state authorizing laws. He hired a lobbying firm, Steptoe and Johnson, which was then also hired by fantasy sports companies — which would be exempt under the proposed Act. By outlawing some forms of online gambling but exempting others, the proposed law would preserve casino monopolies and take control away from states.

Tobacco: Vaping equipment, or e-cigs, provide the appearance of cigarettes and a dose of the nicotine smokers crave in a delivery format (evaporated carrier with nicotine and flavoring) that is much less harmful to smoker’s lungs. Many experts recommended smokers switch to e-cigs immediately, since harm to their health would be much reduced. But e-cigs threaten both the makers of the highly-regulated and taxed legacy cigarettes and the makers of smoking cessation products like nicotine gum and patches — often the same companies! So paid “medical authorities” and lobbyists began to work hard to promote the view that the new and untested e-cigs were just as hazardous — if not more hazardous, since their long-term effects were unknown! — than traditional cigarettes. Cato’s Regulation put out a good paper on the bootleggers-and-Baptists pattern in this new propaganda war:

Now consider the situation with electronic cigarettes (e-cigs) and their incumbent competitors: tobacco companies that produce and sell traditional cigarettes and drug companies that produce nicotine replacement therapies (NRTs). The U.S. cigarette market has been regulated, one way or another, since colonial times. Along the way, federal regulation—coupled most recently with the state attorneys general Master Settlement Agreement (MSA, about which we say more later)—effectively cartelized the industry, bringing increased profits to the industry and higher cigarette prices and reduced cigarette consumption throughout the nation. Falling cigarette consumption gladdened the hearts of health advocates, who fought for the elimination of tobacco products, while higher industry profits brought joy to tobacco company owners.

This happy Bootlegger/Baptist equilibrium is now threatened by the exploding sales of e-cigs, a new technology for delivering nicotine to all who want it without simultaneously bringing the harmful combustion-induced chemicals associated with burned tobacco. Today, there are many e-cig producers and numerous small shops selling e-cigs and customized nicotine-dispensing products. It is a rapidly evolving market that has been relatively open to new entrants and innovation in product design. Given the quick growth in e-cig use (much of which comes at the expense of cigarette sales), previous political deals that stabilized tobacco industry profits are at risk. The major tobacco companies are understandably not sitting idle. They, too, have entered the e-cig marketplace and are responding in other ways to the new competition.

The major pharmaceutical companies have not been idle either. The makers of smoking cessation products, including NRTs such as the nicotine patch and nicotine gum, are major players in the politics of tobacco and nicotine. The producers of traditional nicotine delivery devices and NRTs are at work trying to stop the disruptive e-cig producers. These Bootleggers are joined by health advocates (Baptists) who raise questions about unknown potentially harmful effects that may be associated with e-cig use. Both groups—cigarette and NRT producers on the one hand, and health advocates on the other—would like to stop new e-cig producers or severely crimp their ability to compete.

Lawfare between the tobacco industry and state attorneys general was settled in 1998 with the MSA (Master Settlement Agreement), which set the payments due to the states to compensate them for the additional Medicare and Medicaid costs states would bear because of tobacco products. The agreement was carefully designed to send money to the states while protecting the incumbent manufacturers from competition, allowing them to raise prices more than required to pay the fines.

Again from Cato’s paper:

The heart of the MSA was the promised payment of $206 billion by the four participating cigarette companies to the participating states. Those payments would be tax deductible and the costs would be paid by consumers in the form of higher cigarette prices. (Because cigarette consumption is highly price inelastic, the cost of the price increase was largely borne by consumers rather than producers.) The MSA presented state legislatures with a simple choice: either accept the MSA, in which case they would be able to spend their state’s share of the billions of dollars raised from smokers, or reject the proposed statute and their states’ smokers would still pay the higher prices necessary to fund the deal but they would lose their claim on the money. Not surprisingly, every state legislature took the money.

Responsibility for the payments was allocated among the cigarette companies in proportion to their current market share, thereby reducing the incentive for the participating cigarette companies to engage in price competition to increase their respective market shares. The structure of the MSA thus provided a powerful incentive for each company to be satisfied with the status quo.

The MSA also attempted to protect the major cigarette companies from new competition. At the time of the agreement, the four participating cigarette companies accounted for about 99 percent of domestic cigarette sales. Increasing cigarette prices to pay for the settlement risked a loss of market share to marginal competitors or new entrants. Therefore the MSA provided that for every percent of market share over 2 percent lost by a participating cigarette manufacturer, the manufacturer would be allowed to reduce its payments to the states by 3 percent, unless each participating state enacted a statute to prevent price competition from non-participating manufacturers (which each state did). The statutes require nonparticipating cigarette producers to make payments equal to or greater than what they would owe had they been participants in the agreement, to eliminate any cost advantage.

The MSA also included restrictions on cigarette marketing practices agreed to by the participating producers. The advertising limits were portrayed as a public health measure because they reduced advertising that could influence young adults and teens. The limits also reinforced the anticompetitive nature of the MSA by making it more costly for new brands or entrants to secure market share through promotional efforts.

The MSA’s cartel-reinforcing provisions sufficiently suppressed competition to enable cigarette companies to take advantage of the price inelasticity of cigarette demand and obtain record profits. This made it possible for the major cigarette manufacturers to increase prices by more than was necessary to make the mandated MSA payments.

Having made a deal to get big money for states and attorneys while protecting the companies from competition and raising prices more than enough to make the addicted smokers themselves pay the full cost of the settlement, many of the states decided to grab their money immediately by selling municipal (federal tax-free) bonds backed by the MSA payments expected. California alone issued at least $16.8 billion in such bonds, proceeds being used for both immediate expenses and long-term capital improvements. Legislators appear to have forgotten that the supposed purpose of the payments was to cover smoking-related expenses of future medical care for the state’s population, and instead chose to spend the money immediately on unrelated matters while leaving the burden of those health expenses with future taxpayers.

In some cases, however, the bonds are backed by secondary pledges of state or local revenues, which creates what some see as a perverse incentive to support the tobacco industry, on whom they are now dependent for future payments against this debt.

Tobacco revenue has fallen more quickly than projected when the securities were created, leading to technical defaults in some states. Some analysts predict that many of the bonds will default entirely. Many of the longer-term bonds have been downgraded to junk ratings. More recently, financial analysts began raising concerns that the rapid growth of the electronic cigarette market is accelerating the decline of $97 billion outstanding in tobacco bonds…. Lawmakers in several states proposed measures to tax e-cigarettes like traditional tobacco products to offset the decline in TMSA revenue. They anticipate that taxing or banning e-cigarettes would be beneficial to the sale of combustible cigarettes. — Wikipedia on “Tobacco Master Settlement Agreement”

Vested interests, including tobacco companies and the states, now actively seek to suppress e-cigs or at least tax them enough to make up for any lost revenue as they are adopted. This means they are actively working to keep smokers addicted to the most hazardous form of nicotine consumption, with its resultant cancers and other diseases. The original Baptist goal of helping smokers quit the habit to avoid cancer and early death has long since been forgotten.

Minimum Wage: Baptists: voters who want low-paid workers to have better lives and higher incomes, imagining poor families will benefit while businesses will pay the costs. Bootleggers: Politicians needing an issue to show they want to help “working families” and unions who represent some minimum-wage workers, but more importantly represent many more workers who make more than that, who will get even higher wages as a result of existing contracts and the outlawing of lower-paid laborers who might compete with them.

Economically, it’s very clear: minimum wage laws harm inexperienced and unskilled workers by making it illegal for them to be employed at wage rates that reflect the value they can add with their labor. Those workers won’t be hired, and many will be replaced by automation as they are priced out of the labor market. Politicians and union bosses won’t lose their jobs, even as unemployment among the unskilled increases as a result of the new minimum wage law. Most unionized workers make much more than minimum wage now, so they will keep their jobs while outlawing lower-priced nonunion competition. Economists who study the issue tend to agree there is a small negative effect on employment when minimum wages are increased slightly, but the large increases now proposed may do much greater harm by reducing hours and eliminating jobs for unskilled workers. The economists who find no negative effects tend to be labor economists, who tend to be supported by government and labor union funding and so have some conflict of interest in their researches.

Meanwhile, small business owners are ignored when they explain their response to much higher minimum wages has to be reduced hours, higher prices, and possibly going out of business since many have committed to expensive leases and can’t withstand a huge increase in costs:

[Seattle restaurant owner Grant Chen wrote of] his struggles to stay in business as he faces a 61% increase in his labor costs from Seattle’s $15 minimum wage initiative. As I’ve mentioned before on CD, the $15 an hour minimum wage law isn’t really ultimately “a political problem as much as it’s a simple math problem,” as Anthony Anton of the Washington Restaurant Association explained the situation. And Grant Chen and other Seattle restauranteurs like Brendan McGill (owner of Hitchcock Restaurant and Hitchcock Deli) are finding out that the new restaurant math of Seattle’s $15 minimum wage is breaking the system…. a 61% increase in wages from $9.32 to $15 an hour is like imposing an annual tax on restaurants of $11,360 per full-time employee. If you understand that a $11,360 tax per employee (and $113,600 in higher labor costs for every 10 employees) would drive many restaurants out of business, you’ll understand why the “new restaurant math of a $15 minimum wage” is making Grant Chen’s restaurant unprofitable, and why it is driving him out of business.

The Baptists are told hard-working poor families will enjoy richer lives, but it’s rarely mentioned that young people looking for summer work or just starting out will find it much harder to reach that first rung on the career ladder.

As Glenn Reynolds of Instapundit says:

The Los Angeles Times report somehow fails to list union workers among the winners. They earn quite a bit more than the minimum, but many of them have their pay scales indexed to the minimum wage. Unions also give heavily to Democratic politicians who support union-friendly issues like hiking the minimum wage.

And the losers? Anyone whose labor is worth less than $15 an hour, and who is about to learn the hard way that the real minimum wage is always zero.

They Wrote a Book On It: Economist Bruce Yandle (who coined the term “bootleggers and Baptists” in 1983) has a book out with co-author Adam Smith, Bootleggers and Baptists: How Economic Forces and Moral Persuasion Interact to Shape Regulatory Politics. Recommended for further study and examples, notably TARP, a $700 billion emergency response to the economic crisis of 2008 which ended up as a field day for bootleggers and rent-seekers.


Death by HR: How Affirmative Action Cripples OrganizationsDeath by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations,  available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. Here’s the condensed version; view the entire review here.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

 


More reading on other topics:

Jane Jacobs’ Monstrous Hybrids: Guardians vs Commerce
The Great Progressive Stagnation vs. Dynamism
Death by HR: How Affirmative Action is Crippling America
Death by HR: The End of Merit in Civil Service
Corrupt Feedback Loops: Public Employee Unions
Death by HR: History and Practice of Affirmative Action and the EEOC
Civil Service: Woodrow Wilson’s Progressive Dream
Bootleggers and Baptists
Corrupt Feedback Loops: Justice Dept. Extortion
Corrupt Feedback Loops, Goldman Sachs: More Justice Dept. Extortion
Death by HR: The Birth and Evolution of the HR Department
Death by HR: The Simple Model of Project Labor
Levellers and Redistributionists: The Feudal Underpinnings of Socialism
Sons of Liberty vs. National Front
Trump World: Looking Backward
Minimum Wage: The Parable of the Ladder
Selective Outrage
Culture Wars: Co-Existence Through Limited Government
Social Justice Warriors, Jihadists, and Neo-Nazis: Constructed Identities
Tuitions Inflated, Product Degraded, Student Debts Unsustainable
The Morality of Glamour

On Affirmative Action and Social Policy:

Affirmative Action: Chinese, Indian-Origin Citizens in Malaysia Oppressed
Affirmative Action: Caste Reservation in India
Diversity Hires: Pressure on High Tech<a
Title IX Totalitarianism is Gender-Neutral
Public Schools in Poor Districts: For Control Not Education
Real-Life “Hunger Games”: Soft Oppression Destroys the Poor
The Social Decay of Black Neighborhoods (And Yours!)
Child Welfare Ideas: Every Child Gets a Government Guardian!
“Income Inequality” Propaganda is Just Disguised Materialism

The greatest hits from SubstrateWars.com (Science Fiction topics):

Fear is the Mindkiller
Mirror Neurons and Irene Gallo
YA Dystopias vs Heinlein et al: Social Justice Warriors Strike Again
Selective Outrage
Sons of Liberty vs. National Front
“Tomorrowland”: Tragic Misfire
The Death of “Wired”: Hugo Awards Edition
Hugos, Sad Puppies 3, and Direct Knowledge
Selective Outrage and Angry Tribes
Men of Honor vs Victim Culture
SFF, Hugos, Curating the Best
“Why Aren’t There More Women Futurists?”
Science Fiction Fandom and SJW warfare

More reading on the military:

US Military: From No Standing Armies to Permanent Global Power
US Military: The Desegration Experience
The VA Scandals: Death by Bureaucracy

Affirmative Action: Chinese, Indian-Origin Citizens in Malaysia Oppressed

Malay Demonstration

Ethnic Malay demonstration – AFP PHOTO / MANAN VATSYAYANA

Malaysia is another country where attempts to reserve places in education and jobs for certain ethnicities have led to strife and ongoing political problems. The Malays arrived on their peninsula thousands of years ago via Indonesia, and while originating in the same broad migration to Asia as the Chinese, are noticeably different in appearance and culture. British rule beginning in the 1870s brought new mines and rubber plantations which imported Chinese and Indian laborers, as well as a Chinese cosmopolitan business and commercial population in the cities. The Chinese population of today is still split between a wealthier city population and the poor, largely rural descendants of miners.

About half of today’s Malaysian population are ethnic Malays, while 30% are of Chinese descent and 8% are of Indian origin. Japanese occupation in WW2 was welcomed by some Malays, and with negotiated independence from Britain in 1957, the new Malaysian constitution reserved special status for Malays. Race riots between Chinese and Malays occurred frequently through the 1950s and 60s, and Singapore was expelled to become a separate country in 1965 since its largely Chinese population resented rule by the Malay-dominated Malaysia. Thus Malaysia eliminated from its polity the population of Chinese who dominated Singapore and were the source of much of the opposition to those Malay-preference policies.

A deeper dive into the history of the Chinese in Malaysia:

The situation of the 7 million ethnic Chinese in Malaysia is tentative at best, mainly due to the dichotomous and contradictory social roles played by two divergent elements within the Chinese community: the rural-poor and the urban-commercial sector. The urban-commercial sector of the ethnic-Chinese community, in conjunction with foreign (mainly British) interests, completely controlled the country’s economy. The ethnic-Malays countered Chinese economic clout by institutionalizing Malay dominance in the newly independent (1957) Malayan state.

Communal tensions had become pronounced following the Japanese occupation during World War II. The Malays at first sided with the Japanese against the British colonial administration but became increasingly disillusioned with Japanese dominance. The Chinese, on the other hand, were badly mistreated by the Japanese authorities (and their Malay collaborators) and many joined an armed resistance group, the Malayan People’s Anti-Japanese Army (MPAJA). After the Japanese defeat, the MPAJA attempted to establish political control in the Malayan peninsula and engaged in a violent retaliation against suspected Malay collaborators. Ethnic violence flared throughout the peninsula….

Malay distrust of the Chinese (and Indian, see separate entry) “foreign element”, stimulated by the MCP insurgency and exacerbated by the ethnic tensions displayed during the aborted incorporation of the Chinese-dominated island of Singapore (1963-1965), erupted into serious communal rioting in the summer of 1969 following a successful Chinese and Indian electoral challenge to the Malays’ political hegemony. The legal imposition in 1970 of the New Economic Policy (NEP), designed to redress “bumiputra” (all groups indigenous to Malaysian territory) economic disadvantages, was the important result of the 1969 disturbances. The NEP, however, tended to assign remedial advantages only to ethnic-Malays. It thereby buttressed Malay political and military dominance with economic power, mainly to the disadvantage of the aboriginal peoples and Indian groups.[1]
 

Malay, Chinese, and Indian communities tended to remain separated by language and culture, educated in separate schools and socially isolated. Resentment between the groups has built up over generations, and the continuing preferences for bumiputra breed more resentment, while Malay politicians continue to scapegoat the Chinese. An anecdote from a review of Thomas Sowell’s book Affirmative Action Around the World:

In 2004 while on cruise (I was active duty in the Navy at the time), our ship arrived in Port Kelang, Malaysia, not too far from the capital of Kuala Lumpur. A bus took us sailors into the city and cabs were lined up calling for Americans to get into their taxis despite a group of al-Qaeda sympathizers threatening to attack Americans…. Me and few friends hop into the cab and the guy seemed so nice but suddenly he went into a racist rant about Chinese people. He also hinted that some cabs refused service to the Chinese. I was shocked. If people of Chinese heritage were born in Malaysia, was it lawful for this man or any other ethnic Malay to refuse service? … I realize that affirmative action in that country may have played a part in it. I don’t want this for our country.

From “A Never-Ending Policy,” a story in The Economist of 4-27-2013:

The policies which favour ethnic Malays and other indigenes at the expense of Malaysia’s ethnic Chinese and Indian citizens are an oddity in the realm of state discrimination. It is not unusual that they favour a majority, the two-thirds of the population known as the bumiputra, or sons of the soil. But it is peculiar that their Chinese and Indian targets have never ruled Malaysia.

Their presence in the country, though, was encouraged under British colonial rule without the consent of native Malays. After independence this became a source of grievance, one exacerbated by the minorities’ wealth. In 1969 mobs burned Chinese shops, killing hundreds. The government responded with a “New Economic Policy” (NEP) aimed at improving the lot of the bumiputra with preferences in university admissions and for civil-service jobs. Billed in 1971 as a temporary measure, the NEP has become central to a system of corrupt patronage….

Provisions that require a certain proportion of the shares of any publicly quoted company to be in bumiputra hands, and that favour bumiputra-owned firms for various government contracts, undoubtedly enrich a few well-connected Malays. And the policies seem good for bumiputra civil servants: the civil service is now 85% Malay, if one excludes teachers. But they do little for the rest. “There has been little or no trickle-down effect, and I think more bumiputra know this today,” says Wong Chen of Pakatan Rakyat, the main opposition party. The increasing wealth of ethnic Malays in past decades echoes rising fortunes across South-East Asia, casting doubt on the idea that affirmative action has been a particular help.

Malaysia’s Chinese and Indian citizens chafe at being second-class citizens. Quotas in university admissions are particularly resented. Most universities in Malaysia reserve 70% or more of their places for bumiputras. Chinese and Indian students flock instead to private and foreign ones. Those who leave often stay away. A World Bank study in 2011 found that about 1m Malaysians had by that stage left the country, which has a total population of 29m. Most were ethnic Chinese, and many were highly educated. Some 60% of skilled emigrants cited “social injustice” as an important reason for leaving Malaysia. This exodus makes it a less attractive place to invest in.

Supporters of the NEP argue that, without such assistance, Malays will not catch up economically or academically. Critics worry that it dulls their incentives to excel. There is evidence of a skills gap. Nearly half the managers at Malaysian manufacturing firms surveyed by the World Bank said that the ability of local skilled workers to handle information technology was either “poor” or “very poor”. Mahathir Mohamad, a former prime minister who in his time extended the reach of the NEP, lamented in 2002 that bumiputras too often treat university places as “a matter of right”, neglecting their studies.

A survey in 2008 found that 71% of Malaysians agreed that “race-based affirmative action” was “obsolete” and should be replaced with a “merit-based policy”. The ruling coalition pays lip service to such ideas and has tinkered with the racial preferences—lowering, for example, the fraction of a company’s shares that has to be in bumiputra hands when a service company goes public. The opposition argues for “colour-blind” affirmative action—that is, policies that favour the poor in general, rather than the bumiputra specifically. But are enough of the sons of the soil ready to make the change?[2]

So the ethnic preferences are pushing highly-educated citizens to leave the country and are seen by most thoughtful observers to badly need reforming, yet nothing is changed.

Another feature of the Malaysian preferences also seen elsewhere is their continuation and expansion long after imbalances have been corrected. The Malay population has become an even larger majority in the years since the policies were implemented, and Malays now dominate the country’s government and most of the wealth and jobs. Asia-Pacific regional magazine The Diplomat goes into more depth in its story of 11-20-2015 by Han Bochen, “Malaysia’s Chinese Diaspora: The Other Side of the Story: Conventional narratives overlook the marginalization of ethnic Chinese in Malaysia — especially the Chinese poor.”:

While the Chinese do hold political power as part of the ruling coalition, it is their success in the economic realm that has been the main source of dissatisfaction for ethnic Malays. Right-wing groups often complain about a Chinese take-over of the country’s economy, and encourage ethnic Malays to unite under the idea of “ketuanan Melayu”, or Malay pre-eminence, against the Chinese domination of the economy. Ordinary Malays have adopted the rhetoric as their own, using social media as a tool to speak out against any indication that the Chinese are second-class or disadvantaged.

Looking purely at numbers, it does seem that the Chinese have it much better. Census data from 2014 show that the average monthly gross income for the Chinese is much higher than that of any other ethnic group in the country. Adding to this narrative are lists like the Forbes’ 50 Richest, which consistently reveal that the majority of Malaysia’s richest are of Chinese descent (in 2015, eight of the top 10 Malaysian nationals on the Forbes’ list were Chinese).

Under this banner, two intertwined narratives have been consistently marginalized: that of the mirage of Chinese dominance in Malaysian society, and that of the Chinese poor.

First of all, despite the lack of indication in the Malaysian constitution, there’s no debate over the fact that the prime minister must be of Malay origin, meaning that Chinese political power will always hit a brick wall. Furthermore, there is little support from the Chinese community for the Malaysian Chinese Association (MCA), the voice for the ethnic-Chinese population in government. Political observers agree that, that while they are vocal in the opposition, the Chinese have a largely insignificant voice in Malaysian parliament.

Secondly, it is the Malays, not the Chinese, that actually control most of the economy. Since the enactment of the New Economic Policy (NEP) in the 1970s — a set of affirmative action policies for ethnic Malays aimed to reduce inequality between them and their ethnic-Chinese counterparts — the Malays have monumentally improved their situation. They control most of the major banks, including the central bank, the government-linked companies (GLCs), as well as constitute the majority of the top professional and highest-paying occupations in the private sector.

What the impressive statistics touting Chinese success obscure is that while there is a sizable ethnic Chinese middle class, income inequality is also most rampant within the Chinese population. All the wealth is concentrated within a few, and there is a large number of Chinese who are either below the urban poverty line or slightly above the poverty line. Furthermore, while many of the NEP measures are still in force protecting the ethnic-Malays, there is relatively little government support for non-Malays in poverty. Correspondingly, there is a dire lack of academic study and census focus on the Chinese poor.

Meanwhile the government certainly isn’t helping matters with its rhetoric. The “Bangsa Malaysia” policy introduced in the 1990s, aimed to create an inclusive national identity for all Malaysian residents, has evolved into a nebulous concept. Over the years the government hasn’t ceased to refer to the ethnic Chinese as “pendatang,” which means “immigrant” in Malay. Such language confirms, and often exacerbates, the distinctions that exist between Malaysian nationals. In early February Rural and Regional Development Minister Datuk Seri Ismail Sabri Yaakob used racial language to encourage Malay consumers to boycott Chinese-owned businesses that have been raising their prices.[3]

For a look at the Indian-origin Malaysians who are also chafing under ethnic set-asides, The New York Times story of 2-10-2008 by Thomas Fuller, “Indian Discontent Fuels Malaysia’s Rising Tensions,” has some revealing anecdotes:

KUALA LUMPUR, Malaysia — Malaysian Indian Casket, a shop on the outskirts of this modern and cosmopolitan city, sells coffins in all sizes: standard coffins clutter the entrance, child-size boxes are stacked high on the shelves and extra-large models, those for the tallest of the deceased, are stored in the back.

But there is no variety in the ethnic background of the clientele.

“All the customers are Indian,” said Aru Maniam, a shop salesman.

In death as in life, Malaysians are divided by ethnicity. The country’s main ethnic groups — Malays, Chinese and Indians — have their own political parties, schools, newspapers and, in the case of Malays, a separate Islamic legal system.

For years this segregation was promoted as the best formula for social harmony in a country that advertises itself as “Truly Asia” because of its diversity, but where the memory of ethnic riots in 1969 is invoked as proof of the fragility of cross-cultural relations. Nearly 200 people died in that spasm of violence.

Now, ethnic tensions are again rising, driven in large part by dissatisfaction among the country’s Indians, who have mainly lost out in the long battle of all three ethnic groups over power, privilege and religion….

Some Indians in Malaysia are very rich, but a majority have not been able to move up from the lowest rungs of society. The children and grandchildren of rubber tappers, they remain poor, poorly educated and overrepresented in menial jobs….

Chinese Malaysians, who form the core of the merchant class, are angry about quotas that keep many of them out of local universities and about the government’s preference for hiring Malay companies, among other issues.

Malaysia’s ethnic tensions were born during the 19th and early 20th centuries, when Chinese and Indian workers came to what was then called Malaya and helped drive the colonial economy of tin and rubber. But this influx created resentment among Malays, who lost control of the economy to British plantation owners and Chinese businesses. The Malay sultans later struck a deal with the British: Malays would retain political supremacy in Malaysia after independence in exchange for citizenship for the Chinese and Indians.

Underpinning the anger of the latest generation of Chinese and Indians is an affirmative action program in place for 37 years that favors Malays and other indigenous ethnic groups, collectively known as bumiputra, literally “sons of the soil.” The program was devised to increase the share of bumiputra ownership of the economy, which in the 1970s was in the single digits.

Today, bumiputra make up 60 percent of the population but have 87 percent of government jobs. They receive discounts of 5 to 10 percent on new homes and are allotted 30 percent of stock shares in initial public offerings. Newspapers are filled with notices of government construction contracts exclusively reserved for companies controlled by bumiputra.

“It’s completely unacceptable that you cannot get awarded a contract just because of the color of your skin,” said Lim Guan Eng, an ethnic Chinese Malaysian who is secretary general of the Democratic Action Party, the leading opposition party in Parliament. “That grates tremendously. We are treated as though we are third- or fourth-class citizens.”[4]

In the United States, the preference system got started as a remedy for the evils of slavery and Jim Crow segregation and has never been as extreme as the Malaysian preference scheme, which was motivated by a colonial history. But similar resentment is building among those who are pushed out by the preferences for politically-favored groups. The US is fortunate in having less extreme ethnic and religious differences to deal with, as well as an ideal of equal treatment under the law, but the political rewards of setting groups against each other and stoking resentment are similar.


[1] “Chinese in Malaysia,” originally an article from U. Maryland’s College of Behavioral and Social Sciences, copied to: http://www.eng.fju.edu.tw/worldlit/link/malaysia_chinese.htm
[2] “A Never-Ending Policy,” The Economist, 4-27-2013 (author unnamed) http://www.economist.com/news/briefing/21576654-elections-may-could-mark-turning-point-never-ending-policy
[3] The Diplomat, Han Bochen, 11-10-2015. “Malaysia’s Chinese Diaspora: The Other Side of the Story: Conventional narratives overlook the marginalization of ethnic Chinese in Malaysia — especially the Chinese poor.”
[4] The New York Times, 2-10-2008, Thomas Fuller, “Indian Discontent Fuels Malaysia’s Rising Tensions”: http://www.nytimes.com/2008/02/10/world/asia/10malaysia.html


Death by HR: How Affirmative Action Cripples OrganizationsDeath by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations,  available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. Here’s the condensed version; view the entire review here.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

 


More reading on other topics:

Jane Jacobs’ Monstrous Hybrids: Guardians vs Commerce
The Great Progressive Stagnation vs. Dynamism
Death by HR: How Affirmative Action is Crippling America
Death by HR: The End of Merit in Civil Service
Corrupt Feedback Loops: Public Employee Unions
Death by HR: History and Practice of Affirmative Action and the EEOC
Civil Service: Woodrow Wilson’s Progressive Dream
Bootleggers and Baptists
Corrupt Feedback Loops: Justice Dept. Extortion
Corrupt Feedback Loops, Goldman Sachs: More Justice Dept. Extortion
Death by HR: The Birth and Evolution of the HR Department
Death by HR: The Simple Model of Project Labor
Levellers and Redistributionists: The Feudal Underpinnings of Socialism
Sons of Liberty vs. National Front
Trump World: Looking Backward
Minimum Wage: The Parable of the Ladder
Selective Outrage
Culture Wars: Co-Existence Through Limited Government
Social Justice Warriors, Jihadists, and Neo-Nazis: Constructed Identities
Tuitions Inflated, Product Degraded, Student Debts Unsustainable
The Morality of Glamour

On Affirmative Action and Social Policy:

Affirmative Action: Chinese, Indian-Origin Citizens in Malaysia Oppressed
Affirmative Action: Caste Reservation in India
Diversity Hires: Pressure on High Tech<a
Title IX Totalitarianism is Gender-Neutral
Public Schools in Poor Districts: For Control Not Education
Real-Life “Hunger Games”: Soft Oppression Destroys the Poor
The Social Decay of Black Neighborhoods (And Yours!)
Child Welfare Ideas: Every Child Gets a Government Guardian!
“Income Inequality” Propaganda is Just Disguised Materialism

The greatest hits from SubstrateWars.com (Science Fiction topics):

Fear is the Mindkiller
Mirror Neurons and Irene Gallo
YA Dystopias vs Heinlein et al: Social Justice Warriors Strike Again
Selective Outrage
Sons of Liberty vs. National Front
“Tomorrowland”: Tragic Misfire
The Death of “Wired”: Hugo Awards Edition
Hugos, Sad Puppies 3, and Direct Knowledge
Selective Outrage and Angry Tribes
Men of Honor vs Victim Culture
SFF, Hugos, Curating the Best
“Why Aren’t There More Women Futurists?”
Science Fiction Fandom and SJW warfare

More reading on the military:

US Military: From No Standing Armies to Permanent Global Power
US Military: The Desegration Experience
The VA Scandals: Death by Bureaucracy

If you have a good story or anecdote from your organization, please email it to jebkinnison@gmail.com. I can use a few good tales (anonymized, of course) to illustrate the problems.