Worst of all, at the behest of the public employee unions, Congress imposed “maintenance of effort” spending requirements on states. These federal laws prohibit state legislatures from cutting spending on 15 programs, from road building to welfare, if the state took even a dollar of stimulus cash for these purposes.

One provision prohibits states from cutting Medicaid benefits or eligibility below levels in effect on July 1, 2008. That date, not coincidentally, was the peak of the last economic cycle when states were awash in revenue. State spending soared at a nearly 8% annual rate from 2004-2008, far faster than inflation and population growth, and liberals want to keep funding at that level.

A study by the Evergreen Freedom Foundation in Seattle found that “because Washington state lawmakers accepted $820 million in education stimulus dollars, only 9 percent of the state’s $6.8 billion K-12 budget is eligible for reductions in fiscal year 2010 or 2011.” More than 85% of Washington state’s Medicaid budget is exempt from cuts and nearly 75% of college funding is off the table. It’s bad enough that Congress can’t balance its own budget, but now it is making it nearly impossible for states to balance theirs.

These spending requirements come when state revenues are on a downward spiral. State revenues declined by more than 10% in 2009, and tax collections are expected to be flat at best in 2010. In Indiana, nominal revenues in 2011 may be lower than in 2006. Arizona’s revenues are expected to be lower this year than they were in 2004. Some states don’t expect to regain their 2007 revenue peak until 2012.

So when states should be reducing outlays to match a new normal of lower revenue collections, federal stimulus rules mean many states will have little choice but to raise taxes to meet their constitutional balanced budget requirements. Thank you, Nancy Pelosi.

Apparently a couple of states (no surprise, Texas is among them) were smart enough to turn down some of the money.

I see nothing wrong with selling your baby – born or unborn – to loving parents.

Until recently, though, I didn’t notice this follow-up question from former GMU prof Jennifer Roback Morse:

You say, “I see nothing wrong with selling your baby – born or unborn – to loving parents.”  I don’t understand your reason for the qualifier. If it is ok to sell
your baby to loving parents, is it ok to sell your baby to merely
“liking” parents, as opposed to loving parents? Is it ok to sell your
baby to someone who doesn’t want to parent the child, but who plans to
use the child for some purpose, such as labor, or spare body parts for
another child, or for sexual services?

I know why I would prohibit these transactions. I just want to hear your rationale.

Like almost everyone, I favor the prohibition of child abuse by both relatives and non-relatives, and consider someone who knowingly sells a baby to someone expected to abuse him to be an accomplice to his abuse. 

What about Morse’s less frightening hypotheticals?  Is is morally wrong to sell your baby to parents who merely “like” him, or who desire a household servant?  If so, should these transactions be prohibited?  Let’s start with moral wrongness:

1. If you reasonably expect that your baby will be better-off – for example because you’re on the edge of starvation – then selling your baby is a tragic but morally admirable sacrifice. 

2. If you reasonably expect that your baby will be worse off, but still have a life worth living, and you desperately need the money (for example to feed your other kids), it might not be admirable to sell your baby, but it’s understandable and morally acceptable.

3. If you reasonably expect that your baby will be worse off, but
still have a life worth living, and you don’t desperately need the money, then it’s probably morally wrong.  If I knew someone in these circumstances, I would try to convince them to keep their baby.  However, it’s easy to come up with hypotheticals that leave me less than certain.  Suppose a woman who doesn’t like kids deliberately gets pregnant purely in order to sell the babies to farmers who need extra help.   The babies have moderately unhappy childhoods, but as a whole their lives are worth living.  If the mom said, “I’m doing a lot more good for my kids than if I were childless.  If voluntary childlessness isn’t morally wrong, why is my approach?,” I’d have to admit that she’s got a point.

Now what about prohibition?  Moral wrongness is a necessary but not sufficient condition for prohibition, so we shouldn’t ban #1 or #2.  Furthermore, the merely probable wrongness of #3 does not seem strong enough to overcome the presumption of liberty.

So that’s my response to Roback’s questions.  I understand why she asks, but I’ve got to say that her hypotheticals are ultimately red herrings.  In reality:

1. People who adopt babies almost always love them, whether or not they pay for them.   Banning baby-selling to prevent mistreatment of children is like banning driving to prevent drunk driving.

2. In a free market, most of the baby suppliers would be poor families in the Third World, and most of the baby demanders would be much richer families in the First World.  The exchanges would drastically raise babies’ well-being and chances of survival.

3. Baby-selling is a solution to abuse, not a cause.  Most of the horror scenarios that Morse poses – like child prostitution – are far more likely to involve kids raised by their biological families in the Third World.

4. The same goes for child labor.

Using the Labor Department’s local area unemployment statistics, Slate presents the recession as told by unemployment numbers for each county in America. Because the data are not seasonally adjusted for natural employment cycles throughout the year, the numbers you see show the change in the number of people employed compared with the same month in the previous year. Blue dots represent a net increase in jobs, while red dots indicate a decrease. The larger the dot, the greater the number of jobs gained or lost. Click the arrows or calendar at the bottom to see each month of data. Click the green play button to see an animation of the data.

~~~

Source:
When Did Your County’s Jobs Disappear?
An interactive map of vanishing employment across the country, updated with the latest figures.
Chris Wilson
Slate, Wednesday, Dec. 30, 2009
http://www.slate.com/id/2216238

Highlights:

Children of economists recall how tightfisted their parents were. Lauren Weber, author of a recent book titled, “In Cheap We Trust,” says her economist father kept the thermostat so low that her mother threatened at one point to take the family to a motel. “My father gave in because it would have been more expensive,” she says.

Ms. Stevenson and Justin Wolfers, also of the Wharton School, gave a friend $150 to hire movers instead of helping him themselves. Harvard University economist John Laibson pays to have a driver pick up his sister from the airport rather than driving himself.

Stanford University economist Robert Hall, incoming president of the American Economic Association, values his time so highly that his wife, economist Susan Woodward, occasionally puts her foot down. “Bob doesn’t see why we can’t just hire people to trim the Christmas tree,” she says. “I tell him that’s not what it’s supposed to be about.”

The one I identified with most was the moving story above. It makes total sense to me to calculate what a friend would have to pay to move and what fraction of that I could save him by helping, and then give that amount. Moreover, one scratched otherwise-nice piece of furniture can eat up all the gains that I would have provided by physically helping him and I’m more likely to scratch it than an expert mover. On the other hand, I think differently when it’s my daughter. As I wrote last year, my wife and I helped her move because we got to be part of an important stage in her life. I missed a friend’s 60th-birthday party because of it, but I still think it was the right move.

I thought my Hoover colleague, Bob Hall, though, went too far. Susan thought so too.

So, yes, I think some of my economist colleagues are cheap, but often there’s a core of rationality, as in the moving example above.

When I teach economics, I often give my students examples that help them see the range of options open to them and help them identify their goals. After a few weeks, they are starting to think that I’m Mr. Cheapskate and so, to explain that they missed the point and that I’m trying to get them to compare costs and benefits clearly, I tell them the following true story:

I was traveling home from Winnipeg in 1997, after winding up my father’s modest estate. I brought back a record turntable packed well and carried on board to avoid breakage. I was connecting through O’Hare and had a long walk with a heavy box under my arm and a wheeled carry-on bag. My arm was getting sore because it was a long walk and I envisioned it being so sore if I went the whole distance that way that I would have pains for a few days. When I popped up the escalator, I still had a long way to go and I saw a man with an airport EZ cart. It was empty and it looked as if he was waiting for his flight and was done with it. I pulled a $20 bill out of my wallet and said, “Excuse me, sir. I’ll give you $20 for that cart.” I was fully prepared to pay and would have gained a lot of consumer surplus from that transaction. Instead, he said, “Go ahead. It’s yours. I don’t need you to pay me.” I thanked him profusely and went on to save my arm.

That’s not the usual story told by a cheapskate.

My co-author, Charley Hooper, and I write about many such things, applying economics to decision-making in Making Great Decisions in Business and Life.

And what did I get for my frugality? The financial wherewithal, on one full-time income, to send my daughter to a private school from 5th grade on and to send her to an expensive private college. Tradeoffs, tradeoffs, always tradeoffs.

So, are economists cheap or just rational? Answer: depends on the economist.

Muzorama from Muzorama Team on Vimeo.

Muzorama is a short 3D animation film based on the universe of french illustrator Jean-Philippe Masson aka Muzo.

Produce in 2008 with a six weeks production time.

Directed by Elsa Brehin, Raphaël Calamote, Mauro Carraro, Maxime Cazaux, Emilien Davaud, Laurent Monneron and Axel Tillement.

Softwares used are Autodesk 3D Studio Max, Adobe Photoshop and Adobe After Effects.

Hat tip boingboing