More evidence Aristotle was right: People pursue potential more than income when switching jobs

by Ryan Streeter on November 17, 2015. Follow Ryan on Twitter.

Interesting new numbers from Gallup.

As Americans job hop or look for jobs at other companies to which they want to apply, they are more drawn to jobs that “allow me to do what I do best” than jobs that increase income.

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Regulations on small businesses cost them three times as much per employee as regulations on large firms

by Ryan Streeter on November 13, 2015. Follow Ryan on Twitter.

Did you know that Canada is the only country in the world to have enacted legislation requiring the elimination of a regulation for every new regulation? Here’s a great Mercatus paper on it.

The paper’s author estimates that nearly one-third of U.S. regulation is “red tape,” meaning unjustified or unnecessary regulation.

This places an outsized burden on younger, smaller firms. For all the speculation about why entrepreneurship is declining in America, we might start with that fundamental data point.

This graph captures the point better than anything:

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When asked about what they would do if freed of the costs of unnecessary regulation, here’s how Canadian and U.S. employers responded:

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Ideological diversity reduces trust more than other types of diversity

by Ryan Streeter on November 13, 2015. Follow Ryan on Twitter.

From the great Kevin Lewis’s daily research roundup, I came across this interesting study (pdf) on cultural, or ideological, diversity and social trust.

The authors write:

We find that among the various dimensions of diversity considered (i.e., cultural, genetic, ethnolinguistic and religious), cultural diversity measured by the extent to which members of a society hold shared values is the single most important predictor of social cohesion, which is proxied for by the well known indicator of generalized trust. High diversity with regardto key cultural values is associated with lower levels of trust, and the association is particularly pronounced for values related to political preferences and ideologies. We show that the link between cultural diversity and trust is robust to the inclusion of an extensive set of control variables and that it holds at various levels of aggregation, namely the country level, the subnational, and the individual level.

It seems that with every generation ideological extremism has its day one way or another, and it seems like the present is no exception. Ideology as a social and political force is an especially modern phenomenon. Hume and his 18th century contemporaries likened the actions that follow from it to a kind of “barbarism.” Here’s my summary of Hume from my dissertation years ago:

When people ignore what their sentiments tell them about the value of their everyday practices and institutions, and choose to sell their souls to ideology or unaccountable philosophy, barbaric action follows—and barbarism’s commonest forms for Hume were superstition and fanaticism.

“Superstition” and “fanaticism” were the words Hume most commonly used to describe what we sometimes mean by our use of “ideology.” Maybe it’s time to revive that specific meaning behind those words.

On the disruptive Uberfication of trucking

by Ryan Streeter on November 9, 2015. Follow Ryan on Twitter.

Walter Russell Mead has provided illuminating commentary for years now on the challenges to what he calls the “blue model” of socioeconomic life in the 20th century. He has this to say of companies like Convoy and Trucker Path Inc., which are using an Uber-like platform to cut out the middleman and connect truckers directly to customers needing to ship goods:

This is a classic case of blue model disruption driven by technological innovation. On the one hand, change is chipping away at embedded costs—high prices for trucking are like a tax on the economy, making everything more expensive. On the other hand, the beneficiaries of the old system, including truckers who benefitted from fixed rates and union wages, are in the crosshairs. Global competition and technological innovation had already made the old system harder and harder to maintain. Technology and innovation are delivering the knockout blow.

He goes on to consider some political and ethical themes resulting from this. In some ways this is more consequential socially and economically than Uber and Lyft. Not everyone needs a taxi or an ersatz taxi. But everyone relies on trucking to put the goods on the shelves at Walmart or the grocery store, so the effects of this kind of innovation are more widely distributed – which means we can expect to see a hefty fight between the regulators and the unions on the one side, and the innovators in Silicon Valley on the other.

Why the middle class should worry about the tax plans of Republicans and Democrats alike

by Ryan Streeter on November 2, 2015. Follow Ryan on Twitter.

Both parties have constructed rationales for avoiding middle-class tax increases, which would be highly unpopular. It’s not that these rationales are illegitimate: The effect of tax policies on economic growth is clearly important; similarly, redistribution is a central function of the welfare state. But the resulting tax policies don’t come close to covering the real costs of government.

That’s from Robert Samuelson’s very good column on the inconvenient truth that every policy wonk knows but no candidate wants to say: we can’t both have the government we promise and protect the middle class from tax increases. Both parties are guilty of making the same case in different ways, as Samuelson shows, using studies from the Tax Foundation and the Brookings Institution to make his point.

Weirdest government news of the week: the Librarian of Congress regulates your car’s computer

by Ryan Streeter on October 28, 2015. Follow Ryan on Twitter.

The following line is not from The Onion:

At any moment now, the Library of Congress is expected to lay out new rules dictating the extent to which Americans can tap into their cars’ software systems.

This is actually for real. The Library of Congress has authority over cars and other things you didn’t realize it can control

Basically, Congress passed a law in 1998 on digital copyrights that gave the Librarian of Congress authority to grant exemptions to stipulations in the law. Because of how digital technology has advanced, the Librarian is now responsible for granting exemptions to people who want to log into their car’s computer system to fix things or do their own diagnostics.

So if you’re a car-loving code-writer, in order to fix your car, you need to get permission from…a librarian.

“No other metro area in the country enjoyed anything like Austin’s rate of in-migration”

by Ryan Streeter on October 7, 2015. Follow Ryan on Twitter.

Joel Kotkin and Wendell Cox write in Forbes:

Cities get ranked in numerous ways — by income, hipness, tech-savviness and livability — but there may be nothing more revealing about the shifting fortunes of our largest metropolitan areas than patterns of domestic migration.

The most mobile Americans are those aged 25 to 34 and people approaching retirement age. People are looking for economic opportunity, quality of life, and affordability. Cox and Kotkin looked at annual net migration in the nation’s 53 largest metro areas between 2010 and 2014.

The fastest-growing cities continue to be in the south and southwest, “led by Austin, Texas, which gained 126,296 more migrants over that time span from other parts of the country than it lost in outmigration, accounting for an annual increase in its population of 1.69%. No other metro area in the country enjoyed anything like this rate of in-migration.”

They continue:

Austin’s high job creation rate — over 3% growth annually since 2010 — has a great deal to do with its ability to lure new residents not only from other Texas cities, but from the coasts as well.

Of the top 15 fastest-growing U.S. metros, 13 are in Texas

by Ryan Streeter on September 30, 2015. Follow Ryan on Twitter.

WalletHub has ranked 515 U.S. metro areas according to 10 measures of socioeconomic growth. Of the top 15, 13 are in Texas. Austin is the top-ranked large metro area at #9.

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The weakness of the Congress is the foremost problem now confronting our constitutional system

by Ryan Streeter on September 28, 2015. Follow Ryan on Twitter.

Lifting our eyes from the day-to-day media coverage of the frenetic assembly of the circular firing squad that is the Republican Party, Yuval Levin provides some perspective, as usual:

The weakness of the Congress is the foremost problem now confronting our constitutional system.

He continues:

For decades now, under presidents and congressional majorities of both parties, the Congress has willingly ceded power to the president and to judges and has abided the erosion of its primary position in our system of government. Congress has done this for a variety of reasons, though above all because its members (of both parties) would rather avoid responsibility for hard policy choices and because members of the president’s party at any given time incline to think their policy preferences would be better served by an assertive executive who shares them.

He has four proposals, all worth considering:

First, a reassertion of the power of the purse, not to be used as a weapon at midnight on the last day of the fiscal year but to be used as a means of constitutional control of the government.

Second, and relatedly, Congress needs to change the defaults in the budget process to avoid showdowns and crises that are structurally inclined to empower the executive.

Third, Congress needs to rein in executive rulemaking and insert itself more in the regulatory process.

And fourth, Congress should rein in discretion by better defining it in law.

He says more about each of these in the full post.

We are not as creative as the Victorians when it comes to solutions benefiting the middle class

by Ryan Streeter on September 28, 2015. Follow Ryan on Twitter.

I really enjoyed the Charles Moore essay in the WSJ Review section this weekend.

It’s a solid treatment of the middle class issue that so many people want to own even as they put forward uncreative thoughts on the matter. I liked how he framed it:

The Victorians were more imaginative than we are about principles of mutuality—credit unions, building societies, the cooperative movement. Such organizations feel creakier in an age when people want larger sums, faster. But is it really beyond the skill of our great modern business brains to develop these concepts and adapt them to modernity? Financial creativity, unfortunately, really has become the preserve of the few, for the few.

And here are some good thoughts that should provoke some debate leading toward creative solutions:

Too many advocates of markets have allowed themselves to be suborned into becoming apologists for business. And too many businesses now operate as if their responsibilities are only to themselves and not to consumers.

Why are so few companies owned by the people who work for them, and why do both liberal and conservative political parties not offer greater incentives, such as tax advantages, for this to change? It is extraordinary that the joint stock company, the foundation of modern commercial and industrial wealth, is still so little influenced by the views of shareholders.

This is perhaps most evident in the preposterous salaries paid, particularly in the U.S. and Britain, to top executives of public companies. If the owners of these companies truly exercised authority over what is theirs, this wouldn’t happen. If these enterprises had grown over the last 20 years at the same rate as pay for the men who run them (it usually still is men), no one would be talking of a crisis of capitalism.