2007 February 26 Monday
Growing Income Inequality Boosts Tax Revenues

The Wall Street Journal explores some basic facts on tax revenue and wages.

Before taxes, the bottom 40% of U.S. households got 13% of the nation's income in 2004; after federal taxes of all sorts they got about 15%, according to the Congressional Budget Office's latest estimates. Because of the Earned Income Tax Credit, a cash bonus the government offers low-wage workers, many Americans at the bottom get money from the government, rather than having to pay income taxes; they still face payroll taxes on their wages.

Before taxes, the top 1% got about 16% of income; after taxes they ended up with 14%. (Yes, you read that right: The 1.2 million best-off households got about as much income, even after taxes, as the 45.5 million worst-off.) That top 1%, by the way, pays about a quarter of all federal taxes.

If the wealthy produce more new technology, goods, and services then the rest of us benefit from that. Plus, if they make more the rest of us get our government paid for by them. How much of income inequality is due to differences in productivity? How much is due to parasitism? I figure the parasitism argument is equally applicable to the lower classes who contribute little in the form of new designs and methods of production and who make an outsized contribution to total crime and other costs.

We've been seeing news reports on how the US government's revenues are surging and that surge is reducing the deficit more than expected. Why? The more rapid growth in income for the upper few percent means that the government is collecting much more revenue than it would if the people at the bottom were experiencing a big surge in income.

It's simple: Taking all federal taxes into account -- including payroll as well as income taxes, and allocating corporate profits and taxes paid on them to those who hold shares -- the CBO says those in the bottom fifth pay an average of $4.50 in taxes for every $100 they take in. Those in the top 1% pay $31.10 in taxes for every $100 they take in.

The US government makes more money if the wealthy continue to make a growing percentage of total income. But the government then also faces higher costs to subsidize medical care and other costs that the poor are too poor to pay for. Plus, the growing income inequality might cause more crime and the costs such as prisons and police that come as a result. My guess is the government comes out ahead if income inequality continues to rise. But I'm not certain on that point.

By Randall Parker 2007 February 26 11:36 PM  Economics Demographic
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2007 February 24 Saturday
Americans Less Satisfied With Jobs

Capitalism is not making people more happy. How come? People are becoming less satisfied with their jobs.

Americans are growing increasingly unhappy with their jobs, The Conference Board reports today. The decline in job satisfaction is widespread among workers of all ages and across all income brackets.

Half of all Americans today say they are satisfied with their jobs, down from nearly 60 percent in 1995. But among the 50 percent who say they are content, only 14 percent say they are “very satisfied.”

This report, which is based on a representative sample of 5,000 U.S. households, conducted for The Conference Board by TNS, a leading market information company (LSE: TNN), also includes information collected independently by TNS. This information reveals that approximately one-quarter of the American workforce is simply “showing up to collect a paycheck.”

My guess is that some of the people who are just showing up to collect a paycheck are holding back on the truth.

Rising productivity demands. Work longer hours of uncompensated time. Use lousy tools under lousy working conditions (noise, annoying intercom announcements, the heater is broken). Why be satisfied with all of that?

“Rapid technological changes, rising productivity demands and changing employee expectations have all contributed to the decline in job satisfaction,” says Lynn Franco, Director of The Conference Board’s Consumer Research Center. “As large numbers of baby boomers prepare to leave the workforce, they will be increasingly replaced by younger workers, who tend to be as dissatisfied with their jobs, but have different attitudes and expectations about the role of work in their lives. This transition will present a new challenge for employers.”

Are people growing dissatisfied due to rising expectations? Or at least due to rising dreams?

Job satisfaction has even declined in upper income brackets. Though I'm skeptical that those making a million dollars a year are feeling dissatisfied.

The survey finds that job satisfaction has declined across all income brackets in the last nine years. While 55 percent of workers earning more than $50,000 are satisfied with their jobs, only 14 percent claim they are very satisfied. At the other end of the pay scale (workers earning less than $15,000), about 45 percent of workers are satisfied, but only 17 percent express a strong level of satisfaction.

Money sounds like it is the biggest cause of dissatisfaction.

The survey also finds that employees are least satisfied with their companies’ bonus plans, promotion policies, health plans and pensions. The majority are most satisfied with their commutes to work and their relationships with colleagues.

The biggest decline is at early middle age.

  • The largest decline in overall job satisfaction, from 60.9% to 49.2%, occurred among workers 35-44.
  • The second largest decline took place among workers aged 45-54, with the satisfaction level dropping from 57.3% to 47.7%.

Why would people making less than $35,000 per year have previously had a 55.7% job satisfaction? That seems high for jobs with such low pay.

  • The largest decline in job satisfaction took place among householders earning $25,000 to $35,000, with satisfaction falling from 55.7% to 41.4%. This income group expressed the second lowest level of overall satisfaction.
  • The second largest decline was posted by householders earning $35,000-$50,000. This group experienced a decline from 59.7% to 46.7%.

Will this growing wave of dissatisfaction find political expression? If so, in what form? What demands will dissatisfied workers make of elected office holders?

Update: My guess: One of the causes of rising dissatisfaction is increased knowledge of how more successful people live. Everything from TV shows like Cribs (which shows the houses of rock star and rapper celebrities) to HGTV channel shows on expensive houses across America show how the higher income people live. The wealthy flaunt it to a much greater extent. Cable TV channels show you what they have in detail. Plus, a larger fraction of all wealth is held by a very small fraction of the population.

People would be happier if the wealthy hid their wealth. But the big mansions are too visible and the $60,000 and $100,000 SUVs and cars are too easy to spot. Many people will feel poor and lower status in comparison. And they will compare. The desire for higher status and the attention to status are wired into human brains.

By Randall Parker 2007 February 24 10:32 PM  Economics Labor
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Muslim Parallel Society Develops In Germany

Andrea Brandt and Cordula Meyer of the German magazine Der Spiegel report on the development of a Muslim parallel society in Germany.

Germany's Muslim population is becoming more religious and more conservative. Islamic associations are fostering the trend, particularly through their work with the young -- accelerating the drift towards a parallel Muslim society.

The article explains how German judges are instrumental in allowing Muslims to separate themselves in schools and other venues. My take: If separate parallel societies within borders are acceptable in this supposed universal world of liberal secular market capitalism and globalism why not put the separate societies on different sides of borders? Why do we need to construct separate parallel societies at close quarters in neighborhoods? How does this benefit us? It seems to only cost us and inflict strife, hostility, and conflicts right where we live.

Surveys in the country have charted a significant increase in fundamentalist attitudes, particularly among younger Muslims. The experiences of Ekin Deligöz, a member of the German parliament representing the Green Party, underscore the potential dangers. Having called on Muslim women to remove their headscarves, Deligöz faced death threats and now receives police protection.

This is a long article with lots of descriptions of Islamic residential homes for adolescents where the kids are basically taught to separate themselves from non-Islamic society. Click through and read the whole thing if you have any doubts about the scope of the problem.

The Muslims in Germany are becoming more Islamic and more separate from German society.

According to Faruk Süen, director of the Center for Turkish Studies, the boys and girls are increasingly defining themselves by reference to their faith. In his view, this is another consequence of 9/11. After the terror attacks, Islam was stigmatized by the world at large, he explains, sparking a counterreaction among Muslims. In 2000 Süen's center conducted a survey. The results showed that 8 percent of immigrants of Turkish extraction said they were "very religious." In 2005, the figure had climbed to 28 percent.

The survey's findings on headscarves are also striking. While only 27 percent had thought Muslim women should cover their hair in 2000, the number had almost doubled to 47 percent five years later. A similar pattern emerged on the topics of dual-sex sports classes and participation in coeducational school trips. Rejected by 19 percent in 2000, by last year the proportion had risen to 30 percent.

Women and young men are startlingly conservative: 59 percent of 18- to 30-year olds favored Muslim women wearing headscarves, as did almost 62 percent of female respondents. Members of mosque associations took particularly orthodox positions, including - and above all - the VIKZ members.

Why force your kids into environments where they are not tolerated? Why allow your society to change into a hostile alien one by letting in incompatible immigrants? Why force Western Christians into the same hostile conditions seen in Muslim countries? I realize that George W. Bush calls Islam a religion of peace. But why not challenge this ridiculous lie?

A teacher at Richard Elementary in the same district gave disturbing evidence last year to the school committee: German children "weren't really being tolerated," and "Christian" was often used as a term of contempt. The teachers were doing their best to set things straight during class "but, sadly, with very little success," she said.

This sort of report always remind me of Monty Python's Argument skit and the "Being Hit On The Head lessons". Yes, it is a stupid concept. But it is a concept which the West's elites have taught its masses they have to accept.

What should we do about Islam? Keep the Muslims out of the West. Lawrence Auster calls this strategy separationism. Mr. Auster brings to my attention an Investors Business Daily editorial calling for the separation of Islam from the West.

Global Jihad: A new Gallup poll finds that richer, better-educated Muslims are more likely to be radicalized. This explodes the myth of the poor, dumb terrorist.

Since 9/11, the politically correct elite have mau-maued Americans into thinking the terrorists have hijacked a peaceful religion out of ignorance and poverty. Or that they've been brainwashed by Osama bin Laden.

But Gallup found the opposite to hold true: The most radical among Muslims — those who support jihad — earn more and stay in school longer. These are the smart ones, not the rubes.

As the IBD editors point out, the behavior of Muslims contradicts liberal dogma on education. Modern liberal dogma holds education as universal cure for most of what ails society. We are constantly told by high church liberals that if only we spent more on education and improved our ability to educate then everything from crime to racial differences in achievement to terrorism would go down.

In an amazing conclusion the IBD editors become perhaps the first editors of a major American newspaper to advocate the separation of Islam from the West.

Gallup's survey of Muslims, the largest conducted, puts to rest theories that radicals attack us because they're poor and alienated from society. Or because they're dim and easily misled.

Radical Muslims have an education and an economic future, yet they still hate. They're literate enough to interpret their holy books, yet they still embrace jihad against infidels.

Perhaps the only sane course in this war is to separate the West from Islam.

As Lawrence Auster points out, IBD's editors are unusual in the press because they follow the evidence to a logical conclusion.

Now, IBD’s editors are not the first people to note the connection between modernization and jihad. Intellectuals such Olivier Roy and Francis Fukuyama have said the same. But those intellectuals never follow through to the logical conclusions of this factual observation. Instead they suggest bandaids, such as easing the radicalization of Western Muslims via greater efforts at assimilation. IBD—and this is what is amazing—does follow through to the logical conclusion. If education and wealth, and thus by implication modernization, spur jihadism, then every additional contact of the West with Islam, whether through the export of our culture, technology, and political ideas to the Islamic world, or the import of Muslims to the West, leads to greater jihadism.

To dismiss the evidence one has to make an argument along the lines that moderate doses of Western exposure cause Jihadism but that if only we could make the doses of Western culture big enough then the Muslims would turn away from hostility toward non-Muslims.

Is this argument right? Sure, but only if we used methods that are anathema to liberals. What would work? If we took their babies away and raised the babies in Christian homes then the kids would grow up non-Muslim and hence wouldn't have the Muslim hostility to the West. We can hope that if the kids get to watch MTV that'd turn them away from Islam. But when we look at Muslims in Western countries such as Britain and Germany we can plainly see that the daily exposure of the larger societies is not enough to turn Muslims away from their hostility and their own construction of parallel cultures.

I criticize the war in Iraq because it does not protect us at home. We should stop Muslim immigration and pay Muslims to leave. For the cost of the Iraq war we could have greatly reduced our risk of Muslim terrorism by putting well defended national borders and thousands and miles between us and them.

By Randall Parker 2007 February 24 11:28 AM  Immigration Culture Clash
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2007 February 22 Thursday
12th Graders Doing Worse On US National Tests

Money and big national lies told by our elites have failed to raise standardized test scores of 12th graders in America.

WALNUT CREEK, Calif. - High school seniors take harder classes and earn higher grades than they used to but continue to fare poorly on achievement tests, according to reports released Thursday by the U.S. Department of Education.

Nationwide, just 1 in 4 high school seniors tested in 2005 ranked competent in math and barely a third read at grade level, the reports show. Reading scores are the lowest since 1992, with students in the Western United States performing worse than those in the Midwest and Northeast.

Despite the decline in achievement, students take the equivalent of 360 more hours of class than seniors who graduated in 1990.

The National Assessment of Educational Progress (NAEP) scores provide still more evidence that the mainstream debate on social policy in America is conducted based on a set of lies about human nature.

Within America's Lake Woebegone mythology (or, if you prefer, Bright Shining Lie) how to explain the failure of more instruction hours, more instruction in advanced topics, and standardized testing to raise test scores? How to explain the failure of more money to raise test scores? How to explain the failure of charter schools to raise test scores? How to explain the failure of the No Child Left Behind Act? After all, it had No Lie Left Behind. How to ignore the elephant called IQ standing in the room? Time for a new phrase, a new formulation. How about a "rigor gap"?

"How is it that our high school students can earn more credits, get higher GPAs, but yet not perform any better?" said David Gordon, member of the National Assessment Governing Board and Sacramento County, Calif., schools superintendent. During a Thursday press conference, Gordon termed the problem a "rigor gap."

The lies have some years to run yet. But the more vigorously the politicians try policies based on false assumptions the closer we get to the collapse of the old mythology.

We should be getting better if we live in wonderland.

The new reading scores show no change since 2002, the last time the test was given.

"We should be getting better. There's nothing good about a flat score," Winick said.

But our schools have gotten better at lying to parents about how well their kids are doing.

In 2005, high school graduates had an overall grade-point average just shy of 3.0 - or about a B. That has gone up from a grade-point average of about 2.7 in 1990.

Junior is getting better grades. Well, that's great news. What a nice lie those teachers are willing to tell.

The average kid was doing better in the good old days of 1992.

Nationwide, 73 percent of 12th-grade students achieved a ``basic'' reading score in 2005, down from 80 percent in 1992, according to the National Assessment of Educational Progress, a sampling test the government calls the ``nation's report card.'' Sixty-one percent scored at or above the basic level in math.

At the same time, 68 percent of high school graduates completed at least a ``standard'' curriculum, up from 59 percent in 2000, with the overall grade point average about one-third of a letter grade higher than in 1990, the department said in a report. The figures raise questions about the quality of the courses being taught at U.S. high schools, it said.

As Hispanics continue to grow as a percentage of the total population average NAEP scores are going to fall further. No educational reform can overcome the demographic force of ethnic groups which score lower in standardized IQ tests.

Steve Sailer says there's a wide gap between private beliefs and public utterances.

Here's the really fascinating thing about the broad support for NCLB.

In private, virtually every single person in America understands that human beings are highly diverse in mental capabilities.

They just won’t acknowledge it in public.

So why the massive widespread lying that forms the basis for educational policy in America? Liars who lie to protect the feelings of others are more popular.

Experiments have found that ordinary people tell about two lies every 10 minutes, with some people getting in as many as a dozen falsehoods in that period. More interestingly -- and Libby might see this as the silver lining if he is found guilty -- Feldman also found that liars tend to be more popular than honest people.

...

Saxe found in one experiment that nearly 85 percent of college students had lied in the course of a romantic relationship, most often about another relationship. (These were lies that people voluntarily admitted to Saxe, which means the actual number of lies and liars was probably higher.) Nearly to a person, the liars said they were trying to protect the feelings of someone they cared about.

But on some topics where the lies get translated into government policy the lies are very damaging. We need more honesty. We are hurting ourselves with these lies.

By Randall Parker 2007 February 22 10:39 PM  Education
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2007 February 21 Wednesday
Less Immigration Raises Farm Labor Rates $2 Per Hour

All the money that Congress has felt pressured into spending on border security has begun raising farm labor wages.

Empty stations on the harvest lines are more common this year throughout this swath of Arizona farm country, says Rademacher, who serves as president of the Yuma Fresh Vegetable Association. The reasons are many: a 40,000-person limit on the number of foreign guest workers allowed into the US, tighter borders that are discouraging illegal crossings, and rising demand for day laborers in other industries, such as higher-paying construction work.

The shortage of farm workers has been driving wages higher. Last season, base pay for day laborers working in this area was $6.50 an hour. Now it's $8.50. Rademacher says it may go higher because farmers here can't attract enough employees.

Growers want passage of the AgJOBS bill in Congress so that a flood of immigrant labor can drive down their labor costs. Never mind that the rest of us will pay more for police, schools, prisons, Medicaid. and other social programs. Never mind that less skilled and lower wage natives will see their incomes fall. The farmers want what is good for them at our expense.

If we stopped all legal and illegal immigration of low skilled workers then many industries would invest more in automation and the rate of increase in worker productivity would rise. We'd enjoy higher living standards and a less costly welfare state. Plus, our crime rates would be lower.

By Randall Parker 2007 February 21 10:43 PM  Immigration Economics
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British Begin Iraq Withdrawal

The coalition of the no longer willing keeps growing.

LONDON AND BOSTON - British prime minister Tony Blair announced Wednesday the beginning of the end of British military involvement in Iraq, starting with a 25 percent drawdown before summer.

Denmark also said it would pull all of its 460 ground troops from Iraq by August.

...

Blair said Wednesday that 1,600 of the 7,100-strong force will leave in the coming months, with hundreds more to pull out throughout the summer. In all, 3,000 could be gone by year's end, by which time all four southern provinces that were under the British should have been handed over to Iraqi control. The remaining troops will shift roles, taking a more discreet, remote approach inside their base at Basra airport, as the Iraqi security forces take on day-to-day security matters.

So by the end of the year Shia militias and factions in the national and local governments will be free to battle for control of the oil revenue. The Brits will stay in a base and offer training classes.

The crucial British difference? Parliamentary democracy. Bush can't get unseated by a no-confidence vote in Congress. Tony Blair is on the way out. The public expects his heir apparent Gordon Brown to get them out of Iraq.

Blair claims that the south is in so much better shape that the Brits can leave even as Bush tries to ramp up US troops in the middle of Iraq.

Answering unspoken accusations that this signaled a rift with Washington, Blair averred that these moves would be in tune with the new-minted policy of the Bush Administration and were "informed by Baker-Hamilton." The situation in southern Iraq "has never presented anything like the challenge of Baghdad" and had now reached a point in Basra — however battered the city and its economy, however uncertain its security — where the British-led coalition forces there could contemplate handing over control to the Iraqi army. "What all of this means is not that Basra is how we want it to be but that the next chapter of its history will be written by Iraqis," said Blair.

The next chapter for Iraq features war between rival sects, tribes, and criminal gangs.

But the security situation in the Shia south features rival Shia militias battling for control and an increase in attacks on British soldiers.

The task is made harder in Basra by the fact that the two main militias, the Badr organisation and the Mahdi army, are linked to different Islamist political parties that are vying for supremacy. The governor of Basra and the chairman of the provincial council have ties to one side, and the police chief to the other, while the police force beneath him is packed with men from both. They are engaged in a kind of civic civil war, a local struggle over who controls revenues, both legal and illegal - the most lucrative of which is the siphoning-off of Basra's oil.

None of this lethal crew likes the British, so it is no surprise that British casualties over the past four months have tripled as troops go valiantly about Operation Sinbad, an effort largely aimed at "cleaning up" some of the city's police stations. The Ministry of Defence keeps no monthly count of attacks on British troops, but the figures for the wounded who are taken to field hospitals have gone up from a rate of five a month between February and October 2006 to 17 a month since then. On the plus side, the MoD claims that in terms of reduced corruption 55% of police stations are now considered "acceptable", compared with only 20% when Sinbad began.

During the invasion British troops peaked at about 45,000. So British troop levels are headed down to a tenth of that peak.

Can the United States help the Shias and Sunnis? Sure. Help them move away from each other. That'll reduce the death toll from sectarian violence. Once they are well separated we can leave. Or we can leave now and the civil war will progress more rapidly and end sooner.

By Randall Parker 2007 February 21 10:32 PM  Mideast Iraq Exit Debate
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2007 February 20 Tuesday
Medicare Drug Benefit Slows Drug Spending

Federal number crunchers said yesterday that the new Medicare drug benefit appears to be slowing the growth in national spending on prescription medicines because the drug plans are negotiating lower prices with drug companies.

But the analysts also forecasted that overall health-care spending would continue to rise and would account for nearly 20 percent of the economy -- or more than $4 trillion a year -- by 2016. In contrast, health-care spending was about $2.1 trillion in 2006, accounting for about 16 percent of the economy. In 1985, it was just over 10 percent.

Drug spending is that part of total health spending which has the largest impact on commercial research and development funding for new treatments. I'd rather see drugs cost more than physician services or nurses cost more.

What I'd like to see: a tax on medical services, the proceeds of which would go to fund biomedical research.

The medical industry is the industry in greatest need of automation. It is going to become the largest industry if it isn't already. We have less to spend on other things because so much goes to medical care. Expert systems, robots, and other technology to cut costs and raise quality can save us huge amounts of money and raise living standards.

Anyone have any suggestions for how and what in medicine should get automated?

By Randall Parker 2007 February 20 10:37 PM  Economics Health
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2007 February 18 Sunday
Hugo Chavez Threatens Supermarket Takeover In Venezuela

The President of Venezuela is threatening to take over supermarkets that sell meat for market prices.

Venezuelan President Hugo Chavez threatened to nationalize supermarkets that sell meat above the government-set price as his administration struggles to stem a surge in the cost of basic foodstuffs.

Chavez told a gathering of pensioners Wednesday in Caracas, Venezuela, he's waiting for the "first excuse" to take over butcher shops and supermarket chains that manipulate stockpiles of beef and other foods to artificially boost prices. The government blamed manipulators for a 4 percent surge in the cost of food in January that pushed inflation to the fastest in two years.

"If they continue to violate the interests of the people, I'm going to take the meat markets and supermarkets," Chavez said. "I'll nationalize them." Chavez, who won re-election for a third term in December, is raising the prospect of seizures to push companies to support his social programs and transform the oil-rich nation into a socialist state. Chavez is completing state control of companies in the energy and telecommunications industries, which he deems a strategic part of his socialist plan.

You might be thinking: Wait, everyone knows that price controls produce shortages. Everyone knows that below market prices end up below production costs and then the producers stop producing and shortages get worse. You might be thinking that the old USSR was characterized by long lines and empty shops. Surely, the Venezuelans have learned the glaringly obvious lessons of economic history?

Venezuela (and Russia and Iraq and quite a few other places) illustrates why progress is not inevitable and why democracy does not always work. Stupidity and ignorance hold back most of the world. If people are too unwise and intellectually incapable then they'll do damage with their power to vote and as bureaucrats and elected officials.

The government is combining price controls with subsidies to produce food.

The Venezuelan Farmers' Federation (Fedeagro) welcomed Monday the government decision to remove the value added tax (VAT) from meat and implement subsidies to agricultural products, said Fedeagro head Gustavo Moreno.

However, the senior representative added, this action must go along with additional policies, including a review once in a while of price controls.

The National Association of Supermarkets and Services (Ansa) backed also the government offer to remove 8 percent of VAT from beef. "This will be translated into a direct benefit for consumers," said the agency in a communiqué.

Venezuela makes enough money from oil sales to subsidize lower prices for food. This might work for a while. But eventually declining oil field production will make all the costs of price control unavoidable.

Venezuelan President Hugo Chavez rules by decree and he was given dictatorial power by the democratic process.

To illustrate just how democratic the country is, the 167 members of the National Assembly — all of whom support the president because the opposition boycotted the last parliamentary election — convened outdoors in Caracas last month, to be better seen by the throngs of red-shirted Chavistas gathered in the square, and unanimously voted themselves into irrelevance.

The vote gave Chavez the power to make laws by decree for 18 months, with no need to even use his Assembly's rubber stamp. Seeing as how Chavez already had total control over the judicial branch, how he is taking steps to quell opposition media and how he could have rammed any law he chose through the Assembly with barely a semblance of debate or a whisper of protest, his new powers seem gratuitous. But even symbolic oversight can be messy, bureaucratic and slow. Kind of like democracy.

The Assembly effectively voted to say that they are not competent to create legislation.

Dictatorial powers over government actions, firm control of the judiciary, and nationalization of major industries aren't the only ways that Chavez has extended his powers in Venezuela. Chavez is also undercutting the independence of so-called Non-Government Organizations (NGOs). Chavez is also working to cut back on TV broadcast stations that are critical of his government.

As Chavez accelerates his country's shift toward "21st-century socialism," a decision not to renew RCTV's broadcast license is among the government's more dramatic steps, and one that has caused serious concern among free-press advocates. While Venezuelan officials have accused the 54-year-old station of having collaborated with organizers of a 2002 coup against Chavez, the Committee to Protect Journalists in New York, the Organization of American States and the Catholic Church have warned that press freedoms in Venezuela are in danger.

The case has attracted widespread attention from officials in Washington and Latin America, for whom the non-renewal of a license has echoes of right-wing dictatorships of the past, when newspapers and broadcasters were closed if they veered from the party line. Though self-censorship and slayings of journalists remain common, particularly in Colombia and Mexico, the closing of a media outlet for political reasons has not occurred in years.

Vladimir Putin's government has done the same thing with opposition press in Russia and to an even greater extent. Putin's been in office longer and so he's had more time to reduce the size and influence of a free press.

The underlying political conflict driving events in Venezuela, and in much of the rest of Latin America, is between a lower IQ Amerind lower class and a smaller higher IQ ethnically Spanish upper class. The Amerinds have less. The want governments that'll take from the more affluent Spanish and give to them. Hugo Chavez rules a country which is perfectly suited to satisfy their desires because Venezuela is a big oil exporter. The oil revenue finances the wealth redistribution.

By Randall Parker 2007 February 18 12:28 PM  Democracy Failure
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2007 February 17 Saturday
Why Let Iraqis Settle In US While Sending US Troops To Iraq?

Reacting to the news that Bush wants to scale up immigration from Iraq to get out people who collaborate with the US in Iraq Lawrence Auster sees a direct connection forming between the "invade the world" and "invite the world" policies at the heart of the current US government's approach to foreign and domestic policies.

It used to be that America’s complementary policies of “invade the world” and “invite the world,” though they were going on simultaneously, took place in different “rooms” of our national consciousness, as it were, and most people didn’t associate them with each other or think they were causally related. But now the two policies have moved so close to each other that people can’t help but see their relationship and be troubled. Thus an L-dotter writes:

Not many voters in the USA are going to understand why the Administration should see sending many thousands of American troops into harms way in Iraq and at the same time be allowing thousands of Iraqis to enter the USA as “refugees” from Iraq. That just does not make sense.

What is most notable about all this is just how incredibly different the Iraqis are from America's famed freedom-loving Founding Fathers. Why aren't the Iraqis staying in Iraq to fight for freedom in Iraq? Freedom is worth fighting for if you really love freedom. But how many people really love freedom? Bush, the neoconservatives, and quite a few liberals hold that the vast bulk of the world's peoples love freedom as much as Americans do. This is the universalism at the heart of modern liberalism (and neoconservatism is a branch of liberalism - not of conservatism). In the universalist liberal most people in every country of the world are potential Americans and they are only not Americans due to an accident of birth.

The Iraqis clamoring to leave Iraq rather than fight for freedom against sectarian religious militias and theocratic insurgent bombers tells us that Iraqis differ in some really fundamental ways as compared to America's founding fathers. When American revolutionary Nathan Hale was captured by the British for spying and they decided to kill him in 1776 he made the famous statement:

I only regret that I have but one life to lose for my country.

How unlike Nathan Hale are the Iraqis. At this point Iraqis are saying:

I regret that I can not leave my country because I care more about my life than fighting for the freedom of my people.

The Iraqis who support the American presence are saying:

I regret the Americans won't give more of their lives to make my neighborhood safe because I do not want to give any lives of my family to restore order.

What amazes me about the intellectual state of America is that there are Americans who are gullible enough to agree with these Iraqis.

Bush wants to let the collaborators come to the US. Some Iraqi collaborators are thinking:

I regret I have but one country to give up for the good life.

Or how about: for collaborators

I regret I do not have control of more of my country to trade for the good life.

Why aren't we telling these collaborators to stay and fight for their own country?

Iraqi exiles in poorer Arab countries such as Jordan and Syria are thinking:

I regret that wealthier countries won't give me more opportunities for an even better life.

How about the perspective of Iraqi Army enlisted soldiers?

I regret the Americans want me to give my life for my country. Why won't they give their lives so I won't have to?

The Iraqis exiles in general are saying:

I regret the conditions in Iraq. But I highly value my life. You don't honestly expect me to risk my life for something as worthless as the government of Iraq, do you?

The secular agnostic and atheist Iraqis:

I think I only have this life. You don't honestly expect me to risk that?

The Iraqi Sunnis are saying:

I regret we do not have many more Sunni lives to give so we can dominate the Shiites once again.

The Iraqi Muslim clerical warrior leaders are thinking:

I regret you have but one life to give for my religion.

The tribal sectarians are thinking:

I regret I have but one life to give for my sect/clan/tribe/extended family.

Al Qaeda bombers are thinking:

I regret I have but one life to give for only 70 virgins.

Then there are the Kurdish pesh merga fighters:

I regret I have but one life to give for my country, Kurdistan.

This is crazy. I say we tell the Iraqis to stay in their own country and fix it. If they refuse then why should our soldiers pay the price and why should we let Iraqis come to America?

Thanks to Bob Badour for helping me rift on Iraqi variations on Nathan Hale's quote.

Update: How about George W. Bush?

I regret the Iraq invasion was not the easy popularity booster I thought it would be and I regret that the Iraqis aren't doing what I think they ought to do to make my invasion a success.

By Randall Parker 2007 February 17 08:00 PM  Mideast Iraq Human Nature
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2007 February 14 Wednesday
Bush Embraces Refugee Immigration From Iraq

The Bush Administration wants to up the cost of the Iraq war for the American people.

The United States will accelerate the resettlement of about 7,000 Iraqis referred by the U.N. High Commissioner for Refugees and will contribute $18 million to the agency's appeal for Iraq, about one-third of the total, Undersecretary of State Paula J. Dobriansky said Wednesday.

Plans call for the paperwork allowing the Iraqis to enter the United States to be completed by the end of September, said Dobriansky, appearing at a news conference in Washington with U.N. High Commissioner for Refugees Ant?nio Guterres, and Assistant Secretary of State Ellen Sauerbrey.

This is part and parcel with Bush's larger "Invade the world, Invite the world" strategy. He connects various harmful policies together to increase the synergy between them.

Bush wants to scale up Iraqi immigration even higher in order to protect collaborators.

WASHINGTON, Feb. 14 — The Bush administration is considering legislation that would allow Iraqis who have been singled out as collaborators for working or associating with American officials to come to the United States on special immigrant visas or through other programs, officials said Wednesday.

Bush embraces the exact opposite of the strategy best equipped to protect us from a threat that he claims is large enough to justify a very costly war. What is that best strategy that Bush rejects? Separationism. Separate the West from the Muslim countries. This is akin to containment with a greater emphasis on immigration restriction. The need for military deterrence is much less in the case of Muslim countries because they are so weak militarily in the first place. We just have to keep them from migrating to non-Muslim countries.

By Randall Parker 2007 February 14 11:57 PM  Mideast Iraq Costs
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Costs Rise Rapidly For New Oil And Natural Gas Projects

Rising capital costs suggest higher oil prices may continue for years to come.

The costs of major oil and gas production projects have risen more than 53% in the past two years, and no significant slowing is in sight, according to a new benchmark index developed by IHS and Cambridge Energy Research Associates (CERA).

The IHS/CERA Upstream Capital Costs Index (UCCI), which tracks nine key cost areas for offshore and land-based projects, climbed 13% to 167 during the six months ending October 31, 2006, compared with an increase of more than 17% in the previous six months. Since 2000, the UCCI has risen 67% -- with most of the increase in the last two years -- while the Producer Price Index-Commodities for finished goods (excluding food and energy) moved up just 7.5% during the same period.

"This continuing cost surge is central to every energy company's strategic planning and to every energy user's expectations for supply security in the coming years," said CERA Chairman Daniel Yergin. "Rising capital costs rank right alongside more widely recognized issues such as world market trends, geopolitics, globalization and new technologies at the top of the agenda for the energy industry," he said. "And this will be a central issue at CERAWeek in Houston," referring to the CERA conference that opens in Houston on Tuesday.

The continued rapid growth of China seems set to continue strong growth in the world demand for oil. So the current upturn in oil exploration

In recent months the rapid rise in costs has continued.

"If current trends continue, 2007 is shaping up to be a year of further increases. Despite a slight slowing in the rate of increase during the six months to October 31, we expect project capital costs to continue reaching new record levels during 2007," said CERA senior director and UCCI project manager Richard Ward. "With high oil prices driving new development projects, capacity constraints continue to support increases in the cost of equipment and services."

Deeper water projects have experienced the largest cost increases, according to the UCCI data, rising 15% in the recent six month period, primarily due to drill rig rates, technology limits and skills requirements, and are expected to continue to rise due to tight industry capacity. Onshore facilities, including LNG, have seen the slowest rates of increase, 12%, but are still only slightly behind the overall averages.

A chart associated with the article shows the cost of offshore rigs tripling in the last year with the cost of steel up only 3.5%. Well, either rigs were previously going for less than their construction costs or now they are far above their construction costs. If the latter then rig makers will eventually make more rigs and that'll bring prices down. The article reports on 100 new rigs planned as a result of higher prices.

Higher oil and natural gas project development costs make alternatives more cost competitive.The shift toward drilling for oil offshore makes new oil production more expensive even before considering the rising costs of drilling equipment. If the Peak Oil pessimists are correct then the higher development costs are a sign of a longer term trend of rising oil prices.

Natural gas production has peaked in the United States and more drilling hasn't turned around production.

"Record prices in 2005 triggered a tremendous response in drilling by gas producers, leading to nearly decade-high reserves additions of 26.4 tcf and added production of 14.7 bcf that year," Bodell said.

Yet production remained flat despite more rigs drilling during the past decade, he said. Meanwhile, the cost of new gas supply rose due to higher drilling and operating costs as well as declining average well productivity and initial production rates.

By Randall Parker 2007 February 14 11:07 PM  Economics Energy
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2007 February 13 Tuesday
US Trade Deficit Hits New Record

The US trade deficit continues to grow rapidly.

The gap between what the U.S. sells abroad and what it imports rose to a record $763.6 billion last year, up 6.5 percent from the previous record of $716.7 billion in 2005, the Commerce Department reported Tuesday.

For December, the deficit jumped a bigger-than-expected 5.3 percent to $61.2 billion.

How long will this continue? Can the Chinese and Japanese continue to prop up the value of the dollar against their currencies? I do not see how they can continue this indefinitely. But how long till the correction?

The previous article reports Democratic Party claims that of 3 million manufacturing jobs lost in the US since Bush took office a third of them went due to the trade deficit.

Curiously, House Democrats find rising inequality as a reason to oppose a massive trade deficit. But by that logic if rising inequality is bad these very same people should oppose low IQ immigration.

In a letter to President Bush, top Democrats, including House Speaker Nancy Pelosi (D-Calif.) and Rep. Charles B. Rangel (D-N.Y.), chairman of the Ways and Means Committee, called the trade deficit "unsustainable," listing among its consequences "failed businesses, displaced workers, lower real wages and rising inequality."

The House leaders called on the president to submit an action plan within 90 days aimed at shrinking the deficit by removing barriers to U.S. exports and eradicating trading practices they regard as unfair.

Exports surged but imports grew even faster.

"It was a banner year for U.S. exports," said Joseph Quinlan, chief investment strategist at Bank of America Corp., noting that manufactured exports surged by 14.7 percent, aerospace exports skyrocketed by 30 percent, exports to oil-producing countries jumped by 26.7 percent and exports of advanced technology products to India soared by 60 percent. The United States posted double-digit export gains to 30 out of 41 trading partners in 2006.

But the gains were overwhelmed by America's unrelenting thirst for oil, with the cost of imported energy jumping 20 percent to $291.3 billion during the year. That barely eclipsed the $232.5 billion trade deficit with China, the largest ever recorded with any nation, and a resurgence in imports of fuel-efficient cars that raised the deficit with Japan to a new record of $88.4 billion.

The United States also crossed an ominous threshold for the first time last year, with U.S. income payments to the rest of the world exceeding foreign payments to the United States by $11 billion -- a shift that could escalate pressure on the deficit in the future, Mr. Quinlan said.

We live in what Warren Buffett calls Squanderville. I think we'd be better off in his Thriftville.

By Randall Parker 2007 February 13 11:17 PM  Economics Trade
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US Army Letting In More With Criminal Records

One of the costs of the Iraq war is a decline in the quality of recruits.

The number of waivers granted to Army recruits with criminal backgrounds has grown about 65 percent in the last three years, increasing to 8,129 in 2006 from 4,918 in 2003, Department of Defense records show.

...

The sharpest increase was in waivers for serious misdemeanors, which make up the bulk of all the Army’s moral waivers. These include aggravated assault, burglary, robbery and vehicular homicide.

Look at it on the bright side: If we are going to lose American soldiers fighting in Iraq I'd rather lose people with criminal records.

More recruits are being let in on medical waivers.

The Defense Department has also expanded its applicant pool by accepting soldiers with criminal backgrounds and medical problems like asthma, high blood pressure and attention deficit disorder, situations that require waivers. Medical waivers have increased 4 percent, totaling 12,313 in 2006. Without waivers, the soldiers would have been barred from service.

Some of those with medical problems can probably serve in domestic positions and free up others to go abroad.

As Steve Sailer points out, the Army places such a high priority on intelligence that they have relaxed IQ standards the least. Better to let in criminals than dummies. Much of the time the criminals will carry out the tasks assigned to them. By contrast, the dummies lack the capacity to learn how to do complex tasks.

Update: A link from Salon brought a fair number of readers, some of whom saw my comments as an opportunity to pose as morally superior to moi. Let me be clear to those individuals: The American government sends troops to Iraq where lots of people want to kill them. As a result, some of them die. As long as the American government sends troops to Iraq some of them will continue to die. Do you really favor sending non-criminals to die in preference to criminals? If so, why?

I happen to think we shouldn't send US soldiers to Iraq. I have argued this position for years now. I do not think our vital national interests are at stake. I also do not think US troops make Iraq a better place. All we are doing is slowing down the civil war and by slowing it down we are increasing the number of Iraqis who will die and we are doing so at considerable expense with deaths and maiming of our own soldiers. It is a bad idea to have US forces in Iraq. It is pointless. It is even counter-productive.

But, again, if we are going to have Americans dying in Iraq I'd rather some of them be criminals than not. How can one argue otherwise? Leave aside standard liberal or neocon moral posing. Just tell me why you would prefer non-criminals to die over criminals.

By Randall Parker 2007 February 13 10:55 PM  Mideast Iraq Costs
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Sadr In Iran To Sit Out US Troop Surge In Iraq

A few weeks ago Iraqi Shia cleric and Mahdi Army militia leader Moqtada al-Sadr brought his political party back into Iraq's parliament after a boycott.

Ending a two-month boycott, the powerful political movement of anti-American Shiite cleric Muqtada al-Sadr will return to Iraq's parliament, the parliamentary speaker announced Sunday.

Politicians backing al-Sadr withdrew participation in Iraqi politics in a protest over Prime Minister Nuri al-Maliki's November meeting with President Bush in Jordan.

The al-Sadr bloc controls six government ministries and holds 30 of the 235 seats in parliament.

But around the time that this was happening Sadr fled Iraq for Iran in order to safely sit out the US troop surge.

WASHINGTON | Anti-American cleric Muqtada al-Sadr fled Iraq for Iran ahead of a security crackdown in Baghdad and the arrival of 21,500 U.S. troops sent by President Bush to quell sectarian violence, a senior U.S. official said Tuesday.

Al-Sadr left his Baghdad stronghold some weeks ago, the official said, and is believed to be in Tehran, where he has family. The official, speaking on condition of anonymity to discuss U.S. monitoring activities, said fractures in al-Sadr's political and militia operations may be part of the reason for his departure. The move is not believed to be permanent, the official said.

Ian Bremmer thinks the factions in and around Iraq can wait out the US troop surge.

To be sure, Bush's new strategy is highly unlikely to help Iraqis avert a slide into sectarian civil war. A temporary 16 percent boost in troops simply is not enough to get that job done. Bush insists that there will soon be enough US troops in central Iraq to "hold" areas seized from militia groups and insurgents. But for how long? A month? Four months? Three years? American troops will eventually leave Iraq, and all the relevant parties - the Maliki government, Shiite militias, Sunni insurgents, Iran, and Iraq's Sunni Arab neighbors - know it. Sadr can simply hold back and wait the Americans out.

I agree with this analysis. The armed groups that take on the US forces will take a lot of casualties. The result will be to strengthen the other factions that decide to hide and lay low. Sadr will benefit because some of the groups that have split off from the Mahdi Army have less sense and less discipline. They'll fight US forces and get weakened. After US forces peak and decline in number Sadr will eventually return to Iraq with fewer competitors. His forces will pick up where they left off.

By Randall Parker 2007 February 13 10:26 PM  Mideast Iraq Insurgency
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2007 February 11 Sunday
After The Surge: Call For Gradual Withdrawal From Iraq

A new report from the Council on Foreign Relations calls for a gradual withdrawal of US forces from Iraq after the troop surge.

President Bush's "surge" plan has come under heavy fire in the halls of Congress, from independent policy experts, as well as from a large majority of the American public. Some analysts depict it as a flawed last-ditch attempt (Mail & Guardian) to secure Iraq and prevent it from being dragged into a decades-long civil war on the scale of Algeria's or Lebanon's. But alternative strategies also pose problems. Backers of the Bush administration fault opponents of the plan for lacking a coherent alternative strategy.

A rapid withdrawal of forces, CFR President Richard N. Haass told the Senate Foreign Relations Committee, does not constitute a reliable alternative because it would “raise questions in the minds of friends and foes alike about U.S. predictability and reliability,” not to mention leave Iraq as a “humanitarian disaster” and a “sanctuary and a school for terrorists.”

Some experts say the best approach is a gradual “disengagement” of U.S. forces to begin after six months of the surge—the earliest point at which U.S. military officials have said they can assess the surge’s impact. Under a gradual drawdown, troops would be withdrawn within twelve to eighteen months, while efforts are intensified to carry out a regional stablization plan. That is the strategy outlined in After the Surge, CFR Senior Fellow Steven Simon’s new Council Special Report. “The United States has accomplished all it’s likely to accomplish in Iraq,” Simon tells CFR.org’s Bernard Gwertzman. “Every day we stay in Iraq, the higher the price we pay for what we’ve already achieved.”

The premise of his plan rests on two conclusions: U.S. forces have not proved capable of stabilizing Iraq and instability is a structural element of Iraqi politics that cannot be solved militarily. Of course, a pullout is fraught with risks, but Simon says talk of a “regional conflagration” is “not the likeliest consequence of civil war,” if Middle Eastern history is any indication (Israel and Syria’s involvement in Lebanon is an exception). Nor are the preconditions (i.e. heavy weaponry) present for Bosnia-like genocidal violence. The priority, Simon says, “should be to limit the effects of the civil war and, at worst, confine it to Iraq itself.”

This so-called “containment” strategy echoes the plan put forth by Kenneth M. Pollack and Daniel L. Byman of the Brookings Institution. Their plan paints a grim prognosis. Based on their analyses of some dozen recent civil wars, Pollack and Byman call for a redeployment of U.S. forces from Iraqi population centers to the periphery to stem the flow of refugees, keep Iraq’s neighbors at bay, and essentially let the civil conflict “burn itself out.” Like Simon, Pollack admits the plan is risky. “To tell you the truth, it’s something many countries have tried over the course of history and few have succeeded,” he tells CFR.org’s Gwertzman.

Our policy toward all the Islamic countries should be one of containment. Keep Muslims in Muslim countries and out of Western countries. Separationism.

Retired US Army Lieutenant General and former head of the National Security Agency under Reagan William Odom says the war in Iraq does not further US interests and we can not make it further US interests.

2. The war has served primarily the interests of Iran and al-Qaeda, not American interests.

We cannot reverse this outcome by more use of military force in Iraq. To try to do so would require siding with Sunni leaders and the Ba'athist insurgents against pro-Iranian Shi'ite groups. The Ba'athist insurgents constitute the forces most strongly opposed to Iraqi cooperation with Iran. At the same time, our democratization policy has installed Shi'ite majorities and pro-Iranian groups in power in Baghdad, especially in the ministries of interior and defense. Moreover, our counterinsurgency operations are, as unintended (but easily foreseeable) consequences, first, greater Shi'ite openness to Iranian influence and second, al-Qaeda's entry into Iraq and rooting itself in some elements of Iraqi society.

I agree with Odom. We are wasting lives and money and harming US interests by continuing to fight the war.

By Randall Parker 2007 February 11 10:14 PM  Mideast Iraq Exit Debate
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Mahdi Army Brings Progress To Sadr City

A secure Shia-dominated Sadr City has already begun to recover from the still on-going Iraqi civil war.

BAGHDAD, Feb. 8 — Just past the main checkpoint into Sadr City, children kick soccer balls at goals with new green nets, on fields where mounds of trash covered the ground last summer. A few blocks away, city workers plant palm trees by the road, while men gather at a cafe nearby to chatter and laugh.

Sadr City, once infamous as a fetid slum and symbol of Shiite subjugation, is recovering, with the help of $41 million in reconstruction funds from the Shiite-led government, all of it spent since May, according to Iraqi officials, and millions more in American assistance.

But as Shiite areas like Sadr City begin to thrive as self-enclosed fiefs, middle-class Sunni enclaves are withering into abandoned ghettos, starved of government services.

What a great story, right? A victory for Bush Administration strategy? Not so fast. The secret is that the Shia Mahdi Army sectarian militia, using Sunni-killing death squads and ethnic cleansing, made Sadr City safe enough for economic recovery.

Many residents credit a Shiite militia, the Mahdi Army, and its powerful political leader, the radical cleric Moktada al-Sadr, for keeping the area safe enough to allow rebuilding. Yet the Mahdi Army has also killed American troops and has been linked to death squads preying on Sunnis, making the district a potential target as American troops pour into Baghdad to enforce the new security plan.

Shias have flowed in from Sunni majority areas, rents are rising, the economy is growing, and signs of prosperity (by Iraqi standards of course) are showing up.

If the United States would let the Shias push the Sunnis entirely out of Baghdad then all of Baghdad would start rebuilding and the economy would boom. In other words, ethnic cleansing is the path to recovery. But under US supervision the ethnic cleansing could be done without killing. Help the Shias and Sunnis move away from each other. Help them settle in areas which are pure one group or the other.Short of that, a wall across Baghdad to separate the two ethnic groups might work to greatly reduce the disruptions from civil war.

By Randall Parker 2007 February 11 05:27 PM  MidEast Iraq Partition
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Biggest H1B Visa Use: Outsourcing To India

A program whose stated purpose is to bring people with rare skills to work in America has become a program that helps ship jobs abroad.

But a review of new information from the federal government suggests that the companies benefiting most from the temporary worker program aren't U.S. companies at all. Rather, they appear to be Indian outsourcing firms, which often hire workers from India to train in the U.S. before returning home to work. Data for the fiscal year 2006, which ended last September, show that 7 of the top 10 applicants for H-1B visas are Indian companies. Giants Infosys Technologies (INFY) and Wipro (WIT) took the top two spots, with 22,600 and 19,400 applications, respectively. The company with the third most applications is Cognizant Technology Solutions (CTSH), which is based in Teaneck, N.J., but has most of its operations in India. All three companies provide services to U.S. companies from India, including technology support and back-office processing.

The only other U.S. companies among the top 10 are the accounting and consulting firm Deloitte & Touche and consultancy Accenture (ACN). They rank seventh and ninth, with 8,000 and 7,000 applications, respectively.

I suspect one reason why the US companies aren't such big H1B users is that they are simply starting more IT projects abroad.

This brings up questions that some big US tech companies would rather not hear asked.

The dominance of Indian outsourcing companies raises public policy questions about the temporary visa program. Some experts say that while the intent of H-1B visas may be to help U.S. companies hire workers with rare skills, the effect in some cases may be to facilitate moving jobs abroad.

A coalition of US companies wants to double the number of H-1B visas issued each year. My guess is this data will make it harder for them to push for their goal. Expansion of a ship-jobs-abroad program is a harder sell in Congress. Though big money talks loud enough that I can't say it is an impossible sell.

By Randall Parker 2007 February 11 12:06 AM  Economics Labor
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2007 February 08 Thursday
Bush Parallels On Budget And Iraq

The Bush Administration has just released another budget proposal based on rosy scenarios and improbable sequences of events. David Wessel of the Wall Street Journal examines the question of whether the Bush policies toward Iraq and the US federal budget are based on a similar tendency to embrace an unrealistic vision and stick with it even as it becomes harder to reconcile with reality.

William Gale of the Brookings Institution think tank -- populated by deficit-fearing Democratic wonks who have been trying to find common ground with deficit-fearing Republican wonks -- has been thinking a lot lately about the parallels between Mr. Bush on Iraq and Mr. Bush on the budget.

"The Bush administration's two signature policies have been the war in Iraq and consistent pressure for tax cuts," he argues. "On the surface, they look quite different and were advocated by different parts of the administration. Look a little deeper and some common patterns emerge -- so maybe this says something about the principles or management style of the Bush administration."

It is a provocative and illuminating exercise. Let Mr. Gale kick it off: The president took the U.S. into Iraq with "falsely rosy scenarios" about the post-Saddam landscape there, he says. Mr. Bush built his tax cuts in 2001 on a similarly unrealistic hope that the budget surplus was large enough to cut taxes without creating deficits.

Let us keep going. As Iraq proved different and more difficult than anticipated, and contingency planning was regarded by the Bush White House as a sign of weakness, rather than prudence, Mr. Bush vowed to "stay the course." When then-Treasury Secretary Paul O'Neill and Federal Reserve Chairman Alan Greenspan argued for "triggers" to undo tax cuts if budget reality didn't match projections, the White House scoffed. Even when the Sept. 11, 2001, attacks and the wars in Iraq and Afghanistan drove spending on homeland security and the military far above projections, Mr. Bush didn't revisit his fiscal strategy.

A similar criticism was made of Reagan during the 1980s on the budget and the Cold War. But Reagan had factors in his favor that Bush lacks. First off, the Soviet Union was in deep trouble and its ideologues had ceased to believe in its secular religion. By contrast, the Middle East has no lack of faithful believers in Mohammed, Allah, and Jihad,

Also, Reagan's spending on defense and stirring rhetoric helped catalyze a collapse of the Soviet Union that yielded a huge dividend in lower needed defense expenditures. So Reagan's spending ended up acting like a sort of investment. By contrast, Bush's approach to the Middle East is making the US military more expensive to maintain. But this won't make US defense cheaper down the road.

During the Reagan era the demographic problems in the United States were still a more distant gathering storm. Reagan raised taxes to put off the reckoning with the aging population economic problems. But the decade after Bush leaves office is when the baby boomers retire in large numbers. Also, the average skill level of the remaining workers will decline. Reagan steadfastly opposed the biggest external threat to the United States. Bush embraces the big immigration surge that is doing so much to make our demographic situation worse. Bush even refuses to see Islam as a negative force. By contrast, Reagan always saw the nature of communism as evil.

By Randall Parker 2007 February 08 10:39 PM  Elites Neoconservative Menace
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2007 February 07 Wednesday
Oil Crisis Could Bring On World Recession

Sebastian has a piece in Vanity Fair on the threat that political instability poses to oil prices. If a rebel military organization in Nigeria called MEND knocked out all of Nigeria's oil production the price of oil could spike to $80 a barrel and go to $120 a barrel if this happened in combination with a terrorist attack on oil facilities in the Middle East.

Since Nigerian oil is classified as "light sweet crude," meaning that it requires very little refining, this makes it a particularly painful loss to the American market. Concurrently, in this scenario, a cold wave sweeping across the Northern Hemisphere boosts global demand by 800,000 barrels a day. Because global oil production is already functioning at close to maximum capacity (around 84 million barrels a day), small disruptions in supply shudder through the system very quickly. A net deficit of almost two million barrels a day is a significant shock to the market, and the price of a barrel of oil rapidly goes to more than $80.

The United States could absorb $80 oil almost indefinitely—people would drive less, for example, so demand would decline—but the country would find itself in an extremely vulnerable position. Not only does the American economy rely on access to vast amounts of cheap oil, but the American military—heavily mechanized and tactically dependent on air power—literally runs on oil. Eighty-dollar oil would mean that there was virtually no cushion in the world market and that any other disruption—a terrorist attack in Saudi Arabia, for example—would spike prices through the roof.

According to the Oil ShockWave panel, near-simultaneous terrorist attacks on oil infrastructure around the world could easily send prices to $120 a barrel, and those prices, if sustained for more than a few weeks, would cascade disastrously through the American economy.

Gasoline and heating oil would rise to nearly $5 a gallon, which would force the median American family to spend 16 percent of its income on gas and oil—more than double the current amount.

MEND has knocked out big pieces of Nigerian oil production running into the hundreds of thousands of barrels per day. This scenario is not out of the question. The article reports on how the US government might intervene militarily to get oil pumping again in event of big cuts in production due to rebel forces. I think the lesson we should take away from all this is that we should develop energy technologies that can replace oil and at low cost. Better batteries would let us use electric power for a substantial portion of all transportation. Cheap photovoltaics, cheaper nuclear power, wind, and geothermal could eliminate the need for fossil fuels for electric power generation. The sooner we start seriousy to end the era of fossil fuels the better off we'll be.

By Randall Parker 2007 February 07 11:36 PM  Economics Energy
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2007 February 06 Tuesday
Perfect Storm In Demographics To Shrink American Middle Class

Demographic trends driven by immigration will make the US workforce less literate in the year 2030.

US workers may be significantly less literate in 2030 than they are today.

The reason: Most baby boomers will be retiring and a large wave of less-educated immigrants will be moving into the workforce. This downward shift in reading and math skills suggests a huge challenge for educators and policymakers in the future, according to a new report from the Educational Testing Service (ETS).

If the trend continues it will shrink the middle class.

The decline in literacy is one of the more startling projections in a report that examines what it calls a "perfect storm" of converging factors and how those trends are likely to play out if left unchecked.

The three factors identified are: a shifting labor market increasingly rewarding education and skills, a changing demographic that include a rapid-growing Hispanic population, and a yawning achievement gap, particularly along racial and socioeconomic lines, when it comes to reading and math.

Genetic engineering could reverse the trend. A high IQ threshold on immigrants could slow the trend.

The report is available online. From the executive summary, the US workforce is going to become less skilled. (PDF format). To my knowledge that has never happened before in the US.

Employing demographic projections combined with current skill distributions, we estimate that by 2030 the average levels of literacy and numeracy in the working-age population will have decreased by about 5 percent while inequality will have increased by about 7 percent. Put crudely, over the next 25 years or so, as better-educated individuals leave the workforce they will be replaced by those who, on average, have lower levels of education and skill. Over this same period, nearly half of the projected job growth will be concentrated in occupations associated with higher education and skill levels. This means that tens of millions more of our students and adults will be less able to qualify for higher-paying jobs. Instead, they will be competing not only with each other and millions of newly arrived immigrants but also with equally (or better) skilled workers in lower-wage economies around the world.

The change in the number of years of education understates the change in skills and intellectual abilities. On average Hispanics in 12th grade know about as much as whites in 8th grade.

The dual weights of a huge retired elderly group and a growing less educated and less intellectually able segment of the working age will weigh heavily on the US economy in coming decades.

By Randall Parker 2007 February 06 11:41 PM  Immigration Dumbing Down
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2007 February 04 Sunday
National Intelligence Estimate Paints Bleak Iraq Picture

Portions of the January 2007 US government National Intelligence Estimate "Prospects for Iraq’s Stability: A Challenging Road Ahead” have been made public and the New York Times has published them. It is no worse than anything you have already heard. But it comes from supposed experts and government officials. First off, the NIE sees continued decay in security in Iraq as likely unless some way is found to turn it around.

Iraqi society’s growing polarization, the persistent weakness of the security forces and the state in general, and all sides’ ready recourse to violence are collectively driving an increase in communal and insurgent violence and political extremism. Unless efforts to reverse these conditions show measurable progress during the term of this estimate, the coming 12 to 18 months, we assess that the overall security situation will continue to deteriorate at rates comparable to the latter part of 2006.

The US troop surge might delay the downward trend for a while. But eventually the surge will end and the fighting will continue to escalate.

What the NIE misses: A stronger government isn't going to be a fairer government.

If strengthened Iraqi Security Forces (I.S.F.), more loyal to the government and supported by coalition forces, are able to reduce levels of violence and establish more effective security for Iraq’s population, Iraqi leaders could have an opportunity to begin the process of political compromise necessary for longer term stability, political progress, and economic recovery.

But loyalty to the government is not all that different than loyalty to a Shia militia. The Iraqi government is basically the biggest Shia militia. The next paragraph from the report says something similar.

Nevertheless, even if violence is diminished, given the current winner-take-all attitude and sectarian animosities infecting the political scene, Iraqi leaders will be hard pressed to achieve sustained political reconciliation in the time frame of this estimate.

Winner-take-all? That's what any battle for the Iraq government is about.

The Shias do not want to share power with the Sunnis. The Sunnis do not want to admit that they are not the majority. These two paragraphs describe problems that US forces can not fix.

Decades of subordination to Sunni political, social, and economic domination have made the Shia deeply insecure about their hold on power. This insecurity leads the Shia to mistrust U.S. efforts to reconcile Iraqi sects and reinforces their unwillingness to engage with the Sunnis on a variety of issues, including adjusting the structure of Iraq’s federal system, reining in Shia militias, and easing de-Baathification.

Many Sunni Arabs remain unwilling to accept their minority status, believe the central government is illegitimate and incompetent, and are convinced that Shia dominance will increase Iranian influence over Iraq, in ways that erode the state’s Arab character and increase Sunni repression.

While the Arabs duke it out the Kurds busily work to assure their autonomous zone is as large as they can make it.

The Kurds are moving systematically to increase their control of Kirkuk to guarantee annexation of all or most of the city and province into the Kurdistan Regional Government (K.R.G.) after the constitutionally mandated referendum scheduled to occur no later than 31 December 2007. Arab groups in Kirkuk continue to resist violently what they see as Kurdish encroachment.

The Kurds have de facto seceded from Iraq already. I say we let them secede officially. That way at least one of the factions will see us as friends.

The report states that the Sunni jihadist group Al Qaeda in Iraq (A.Q.I.) and Shia oppositionist Jaysh al-Mahdi (J.A.M.) are blowing up things and people on a scale that is feeding the cycle of sectarian violence. The recent bombing that killed at least 130 people in a market shows one of these groups knows how to fan the flames.

The next part of the report sounds like a list of talking points for why the US should do a troop surge.

If such a rapid withdrawal were to take place, we judge that the I.S.F. would be unlikely to survive as a nonsectarian national institution; neighboring countries — invited by Iraqi factions or unilaterally — might intervene openly in the conflict; massive civilian casualties and forced population displacement would be probable; A.Q.I. would attempt to use parts of the country — particularly Al Anbar Province — to plan increased attacks in and outside of Iraq; and spiraling violence and political disarray in Iraq, along with Kurdish moves to control Kirkuk and strengthen autonomy, could prompt Turkey to launch a military incursion.

Dennis Dale thinks the worst case scenario for Iraq is coming from the same people who have been wrong and dishonest all along.

The newest trend in conventional wisdom regarding Iraq, going as unexamined by the major media as every previous stage of denial masquerading as incontrovertible fact regarding this war, reads something like this: Iraq is certain to descend into greater chaos and potential genocide, become a terrorist haven, spark a regional war, and elevate Iran to a position of dominance in the Middle East if we leave now. This cannot be allowed to happen.

Forget that the case has by no means been made that this worst-case scenario will come to pass. That is irrelevant. The question is now, as it was before the war, of whether or not we have the right; the right to escalate the war in Iraq against the wishes of its people and government, or the right to expand the war by attacking Iran.

He is right. We can't trust those bozos. Will Turkey intervene if Kurdistan secedes? Why? With what justification? Will the Shias fight effectively enough to put the Sunnis in danger of being overrun in their own area and therefore pull in Sunni neighboring states? Or will the Sunni neighbors just send aid and keep their distance while the Shias show themselves unwilling to take the fight into Sunni areas?

Dennis Dale argues the American people are the only force that can hold the Bush Administration accountable and responsible for its actions and that the failure of the American people to do so is a moral failure.

But when the veil fell from the Administration's connivance, we chose to avert our eyes. The other, ancillary justifications offered for deposing Saddam were all furtively moved up a spot. Like the disgraced subject of a Soviet show trial, the WMD/terrorist threat was erased from the offical history. It was never primarily about WMD became the line (and besides, everyone thought he had them, straight-faced). Such a blatant lie requires the complicity of its intended audience.
Why did we play along?
Holding our leaders accountable would have entailed acknowledging the thing for what it was: a national disgrace and a crime. Because there’s no entity more powerful than the United States, there is no one to hold its leadership accountable other than the sovereign American people.
When we took a pass we disgraced ourselves and damaged our republic in ways we won’t know for years to come.

Listen up American people. You are a disgrace. You continue to let Bush get away with his conduct of a foolish war. Does that argument fly? I guess my conservative argument against that is that the American public lacks the capacity to discharge the responsibilities of voters of the most powerful nation in the world. The problem, then, is universal suffrage.

Who should be held responsible? People who are smart enough to know better. That's not a populist mass democracy answer. Still, Dennis writes great prose and he's all worked up about Iraq. Go read him.

Stephen Hadley, President Bush's National Security Adviser, claims the NIE justifies the Bush plan for a troop surge.

I want to begin by saying that while the NIE, the National Intelligence Estimate, which is an effort to bring together all the elements of the intelligence community and come out with a consolidated set of judgments about the situation in Iraq -- this is a new document, the result of the conclusion of that review, but it's not new intelligence. That is to say, the substance of the document is intelligence that we have been provided by the intelligence community for several months, and it is this intelligence and the picture it paints that caused the President to conclude and then develop a new strategy or new approach to Iraq.

Secondly, in developing that new strategy or new approach, the intelligence community was a participant, and this intelligence, of course, inputted into that process to help us identify, then, and develop the policy that we did. Put another way, the intelligence assessment that is reflected in this NIE is not at war with this new approach or new strategy the President has developed, but I would say, explains why the President concluded that a new approach, a new strategy was required; explains a number of the elements of that strategy, and generally supports it. That is to say that the policy is designed to deal with the challenges that are reflected in this intelligence.

Bush's plan is the only thing the Bushies could think to do that assumes there's some way to make a semi-happy outcome in Iraq using US power. That is why the Bush and company are pursuing the troop surge.

By Randall Parker 2007 February 04 10:35 PM  Mideast Iraq Decay
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Steve Sailer On Debating Ploys Of The Smug And Stupid

A reader of Steve Sailer writes in with a number of debating ploys widely used by liberals and neoconservatives. (see the whole list)

Appeal to theoretical human potential: Actual human behavior seems to mean less to liberals than potential human behavior. I think this is one of the things that distinguishes liberals and neoconservatives from actual conservatives. For liberals, the fact that a person or people could conceivably do something often seems to be as good as if they actually do do something. Worried that Mexican cultural values are inferior to traditional Anglo-American cultural values when it comes to maintaining a First World country? "Sure, Mexican-Americans may not currently be as highly individualistic as Anglo-Americans, but no problem," the liberal will respond, "I see no reason why they couldn't be." The liberal is then happy to rest their case as if "could" solves the problem once and for all. They will simply ignore the reality that there is no force forcing Mexican-Americans to adopt such Anglo values. As a matter of fact, those traditional values are in decline among whites also. "But not to worry," the liberal might say, "we could regain those values if we really needed them."

But in reality groups that are not individualistic remain that way for many generations. The causes are probably at least partially genetic. The "could" argument is only true because of the future potential for genetic engineering to remold human nature. But the people using the "could" argument are believers in the Blank Slate and in the primacy of environment to easily mold humans.

In the discussion thread for that post another reader, Dave, comments that right-wingers often make arguments which similarly assume qualities in humans that are not present in a substantial portion of the population.

Interesting that you write that liberals often assume that theoretical human potential equals actual human potential. Conservatives do the same thing in many instances.

Examples abound when it comes to retirement security. Conservatives expect that lower-income folks will take advantage of 401(k)s, IRAs and other tax-advantaged retirement accounts because... who wouldn't be that prudent? They seem to forget that one reason these folks have been poor for generations is that they aren't prudent and they have no concept of thrift. We would all be better off if the government mandated a certain level of participation in retirement plans.

My reaction is that the argument Dave criticises isn't really conservative. It comes from right wingers of libertarian free-marketeer and economic bents (where economists assume we are all utility maximizing members of the species homo economicus). We heard this argument a lot a few years ago when George W. Bush was trying to get Congress to create supposedly private Social Security accounts. The argument made no sense to me for exactly the reason Dave cites: a substantial fraction of the population (I'd say well over three quarters) do not know how to invest money and lack the time and intellectual capacity to analyse investment choices. It strikes me as conservative to say that and left-liberal to say that everyone has equal capacity to do anything.

During the Social Security privatization debate big Wall Street money from both sides of the political aisle lined up in favor of the proposal. The prospects of immediate big profits often cause ideological beliefs to fall by the wayside. The Wall Streeters stood to make huge yearly fees managing the many personal investment accounts. But outside of the investment industry the argument had greater appeal on the right since most (not all) capitalistic individualists consider themselves right wing and want control of their own money and want to believe a totally voluntary society would work much better than what we have now.

Some advocates of Social Security privatization recognized the lack of capacity of most people to make investment decisions but saw that as an opportunity. The greater the number of foolish investors the better the opportunity for more astute investors to make money off of the stampedes of the crowds. But privatization would eventually have brought even more taxes to pay for retirements of the unwise investors. The masses aren't going to let a substantial number of old folks get put out on the streets due to extreme poverty.

Our larger problem is that a substantial (and growing) portion of the population lack the capacity to analyze large quantities of data and to make correct decisions about their own interests or about the interests of the society at large. Lower IQ people aren't competent members of juries or voters or raisers of children. I wish it were otherwise because I'd much prefer to live in a society of more autonomous individuals and a smaller state. But in a non-solipsistic universe wishing does not make things come true.

By Randall Parker 2007 February 04 02:18 PM  Cultural Wars Western
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Tom Lasseter Finds US Troops Pessimistic About Bush Iraq Strategy

Tom Lasseter of the McClatchy newspapers reports that almost all the US soldiers in Baghdad think the Bush Administration's troop surge proposal will fail to permanently lower the violence in Baghdad.

"What is victory supposed to look like? Every time we turn around and go in a new area there's somebody new waiting to kill us," said Sgt. 1st Class Herbert Gill, 29, of Pulaski, Tenn., as his Humvee rumbled down a dark Baghdad highway one evening last week. "Sunnis and Shiites have been fighting for thousands of years, and we're not going to change that overnight."

"Once more raids start happening, they'll (insurgents) melt away," said Gill, who serves with the 1st Infantry Division in east Baghdad. "And then two or three months later, when we leave and say it was a success, they'll come back."

Soldiers interviewed across east Baghdad, home to more than half the city's 8 million people, said the violence is so out of control that while a surge of 21,500 more American troops may momentarily suppress it, the notion that U.S. forces can bring lasting security to Iraq is misguided.

The troops think they are fighting for a lost cause. Lasseter finds optimism about the troop surge is rare.

Almost every foot soldier interviewed during a week of patrols on the streets and alleys of east Baghdad said that Bush's plan would halt the bloodshed only temporarily.

Yesterday I watched John Burns and Rajiv Chandrasekaran (who have extensively covered Iraq for the NY Times and WPost respectively) getting interviewed on TV by Tim Russert. Chandrasekaran says Sadr's militia has been told to lay low during the US troop surge. Sadr is going to use the surge troops to his advantage to have them hunt down dissident Mahdi split-off groups so that he emerges from the surge period stronger than ever. Also, many fighters are leaving Baghdad to fight elsewhere during the US troop surge.

As for the Iraqi government: It is not committed to Bush's strategy. Iraqi Prime Minister Maliki expects there to eventually be an all-out civil war between Sunnis and Shias. Therefore he does not want to burn his bridges with the big Shia militias. Contrary to Maliki's promises in a meeting with Bush, the Iraqi government has made little change in its treatment of Shia militias.

I think Sadr and Maliki are correct in their estimations. Once the US starts pulling out troops the civil war will scale up and the Shias and Sunnis will have it out.

These reporters also discussed the Washington DC blame game. For example, the Bush Administration is blaming General George Casey for the failure of the Bush Administration's 2006 strategy for Iraq and is putting Lt. Gen. David Petraeus in his place as top commander in Iraq. Others have blamed Paul Bremer, Paul Wolfowitz, Donald Rumsfeld, and other Bush Administration members (and they all do deserve large doses of opprobrium). But Chandrasekaran thinks even if we'd done many more things right that the conflict between Shias and Sunnis was inevitable. I agree. The mistake was in the decision to invade. That mistake was compounded by sticking around in a foolish attempt to build democracy once Saddam was overthrown.

A few years ago Anthony Shadid, also of the Washington Post (and who apparently speaks Arabic) was out with a US patrol and he was asking the US soldiers what the Iraqis thought of them. The soldiers thought that only 10% of the Arabs waving at them in Baghdad were hostile toward Americans. But Shadid started asking the Arabs and found at least half were hostile all the way back in June 2003. So those American soldiers were way over-optimistic on how many were friendlies.

It bears repeating why the US intervention in Iraq was fated to fail from the very beginning. First off, Islam makes Muslims very resistant to non-Muslim rule. Also, the values in Islam are not compatible with liberal democracy. Plus, the intermarrying of cousins which forms the basis for about half the marriages in Iraq makes loyalties toward the state weak since much of the feeling of loyalty is directed at extended families. Corruption by government officials, voting for clan leaders in elections, and a lack of civic involvement to improve the conditions for everyone are all partially the products of the cousin marriage practice. On top of all that (and perhaps at least a partial cause of all that), Iraq has an average IQ in the upper 80s. We can't expect to reason with them using the same conceptual model of the world as smarter populations use. Not going to happen.

How many more soldiers dead, soldiers maimed for life, and hundreds of billions of dollars will we waste in Iraq? Bush and the neoconservatives are peddling a fantasy. The only antidote is a big dose of reality.

By Randall Parker 2007 February 04 09:31 AM  Mideast Iraq Exit Debate
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2007 February 02 Friday
China Swings Toward Economic Nationalism

A recurring ParaPundit theme: Do not trust what your elites tell you. They are wrong and/or deceitful with depressing regularity. Remember when we were told that World Trade Organization (WTO) membership for China would open up a huge market for our products and would be a boon for our companies?

Since the mid-1990s, China has aggressively courted foreign investment, crediting capital from abroad with helping it become a world economic power. In recent months, however, the Chinese government, saying it needs to protect homegrown companies from unfair competition, has thrown a multitude of new regulations at foreign firms seeking to do business in China.

While some believe the new restrictions -- which affect several sectors, including real estate, retailing, shipbuilding, banking and insurance -- may be only temporary measures to control growth, others worry that there's a larger political issue: that economic nationalism or even protectionism is rising.

First off, we found we could sell little to China as compared to what the Chinese would sell to us and they manipulated currency exchange rates to assure this. Now they aren't even going to let US companies benefit from Chinese economic growth.

American companies are pulling back on their China plans because legal changes block them.

Last month, eBay said it would close its Web site in China, saying it was facing difficulties because Chinese regulations limit the types of financial transactions foreign companies can conduct. In November, Warner Bros. International Cinemas, part of Time Warner, which had been planning a massive expansion in China, abruptly announced plans to close operations in the country. It cited a recent policy change that no longer allowed foreign companies to control domestic theaters except in a handful of large cities.

The full article lists an assortment of new regulations restricting foreign investments. The Chinese are nationalistic. They are becoming more anti-foreigner. They also have over a billion people, a rapidly growing economy, and values that are quite different from our own. The West has peaked demographically. As a percentage of the world's population white people peaked about 100 years ago and then went into a continuous decline ever since. The world of the future is going to be less supportive of free societies - unless the way people around the world use offspring genetic engineering turns the tide back toward cognitive qualities that make people more individualistic.

By Randall Parker 2007 February 02 05:44 PM  China
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