There is a new and excellent paper by Vincent Armentano, Paul Niehaus, and Tom Vogl on this topic.  Here is one paragraph (not from the abstract):

We also see no cases in which changes in transfers (from public and private sources) played a dominant role. Among households that exited poverty, the share of income they obtained from transfers either rose slightly or fell substantially. Among those that entered poverty, the share generally rose substantially or fell slightly. Overall, the data are consistent with progressive redistribution, but not with transfer income accounting directly for a major share of the income gains that moved households above the poverty line. In this sense, the households that left poverty did so largely on their own…

Transitions out of agriculture accounted for a limited role. They did not account for the largest share, let alone the majority, of transitions out of poverty in any country. And the decomposition credits transitions into agriculture with a poverty reducing role: the opposite of the conclusion we reach if we ignore the panel structure of the data and apply older, cross-sectional decomposition techniques to it. More broadly, in every country, households that stayed in the same sector contributed more to poverty decline than households that changed sector. Migration, particularly rural-to-urban migration, also accounts for a limited amount of poverty decline in the three countries (Mexico, Indonesia and South Africa) for which migrants were tracked, with the one notable exception that rural-to-rural migrants accounted for a third of all net poverty decline in Indonesia.

This stands a good chance of being the most important paper of the year, and it has many other results of interest.

The post How poverty fell appeared first on Marginal REVOLUTION.

       

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With a day left before the 2024 polls close, I'd like to say something to the Republicans and the Democrats, the Trump chads and the Harris stans: Don't blame me for not voting for your shitty candidate.

There's a reason why presidential contests have been as tight as they have been for a while, and why control of Congress has flipped back and forth so much over the last couple of decades. It's not because of voters like me, who just want to vote for politicians and policies that won't bankrupt the country or rob me of the ability to make meaningful decisions in my life. It's not too much to ask for candidates who aren't colossal assholes, mental incompetents, or fakers that routinely lie and dissemble about all sorts of stuff. Your parties don't stand for anything consistent or appealing or responsible or responsive. You're not going to win elections easily until you stand for something consistent, productive, and respectful of the people you seek to govern.

Former President Donald Trump and Vice President Kamala Harris are arguing about which one of them will add $4 trillion in new debt vs. which one will add $8 trillion, according to mid-range estimates from the Committee for a Responsible Federal Budget. Both want to abolish taxes on tips and have their own special twists on adjacent topics. Trump has said he also wants to end taxes on overtime and Social Security income and cap credit-card interest rates, while Harris wants to shovel "free" money at first-time homebuyers and push for free or nearly free college, plus a bunch of other stuff. Both have pledged to maintain old-age entitlements exactly as they are, meaning federal spending has nowhere to go but up as baby boomers retire en masse and are joined by Gen Xers, the oldest of whom are pushing 60. They each threaten free speech in their own ways and traffic in delusion (Trump, for instance, can't admit he lost the popular vote in 2016 and 2020, while Kamala won't say when she knew that President Joe Biden's brain was cooked).

We know what a Trump presidency will look like because he's served already. It wasn't great, considering that most of the new debt he added to the nation's came before COVID-19 tanked the economy. But it wasn't a disaster either, at least until COVID-19 came along and he pushed to shut the country down and put together the very team of awful public health bureaucrats he spends a lot of time railing against now, as if they just showed in the Oval Office one day.

As part of the Biden administration, Harris was co-pilot during an equally mediocre run in the White House, especially when it came to prolonging or intensifying many of the worst COVID-19 policies that started under Trump. But if we're being honest, despite all the best attempts of Biden/Harris to utterly tank the economy, it seems to be doing just fine, just like it was doing under Trump (which is to say, OK but not anywhere close to where it should be). The Dow Jones is doing swell, and for all their bitching and moaning, younger Americans are doing better than previous generations, with Millennials and older Gen Zers accruing more wealth than Gen X. And miracles of miracles: Gen Z is outpacing Millennials when it comes to home ownership. The genius of America is that we survive almost any fool presiding over us.

Whatever else you can say about Trump and Harris, this much is indisputable: They are not popular. Each is pulling under 50 percent of voters the day before the election. And their parties aren't exactly reeling them in, either. Per Gallup's survey during the last two weeks of October, just 29 percent of Americans identify as Republican and just 32 percent as Democrats—figures that are near all-time lows. Let the partisans explain why the rest of us are so misguided in our indifference or hostility to these candidates and their parties. Maybe one of these years, those partisans will get around to figuring out how to appeal to people outside of the shrinking groups who already agree with them.

Last week, I voted early and wrote in the Libertarian Party presidential candidate Chase Oliver on my New York ballot. Like a lot of places, the Empire State does everything it can to bump non-major-party choices from its ballots, resulting in much lower-than-average voter participation rates over the past seven presidential elections. But screw that, I was happy to have somebody to vote for who comes close to my vision of government. He's talking about reducing the size, scope, and spending of government only a few years before our biggest budget items are about to go tits up. Good on him.

I get why Democrats and Republicans try to limit choices for voters and then denounce those of us who refuse to go along. I'm not above partisanship and in fact, I would love to be able to vote for a candidate who might actually win the presidency. But the major party candidates by and large suck and, even in an era of overheated, mentally diminished rhetoric where supporters of Kamala Harris and Donald Trump both claim this could be the last election EVER, the difference between the two is less than meets the eye. Or same thing, it's not worth picking one over the other.

That's on them, not me or my fellow citizens who are holding out for something better.

The post Don't Blame Me for Not Voting for Your Unbelievably Rotten Candidate appeared first on Reason.com.

The recent computer outage reminded me of one of my favorite poems, Kipling's The Sons of Martha. It has been at times, I'm told, an anthem of engineers; maybe it should be more broadly.

The poem is a reference to a Bible passage from Luke 10:38-42. (The passage, it turns out, immediately follows the story of the Good Samaritan, which is triggered by question from a lawyer—but that's the end of any legal connection.) Indeed, I would say it's something of a criticism of the passage, which runs:

[38] … [Jesus] entered into a certain village: and a certain woman named Martha received him into her house.
[39] And she had a sister called Mary, which also sat at Jesus' feet, and heard his word.
[40] But Martha was cumbered about much serving, and came to him, and said, Lord, dost thou not care that my sister hath left me to serve alone? bid her therefore that she help me.
[41] And Jesus answered and said unto her, Martha, Martha, thou art careful [i.e., full of cares] and troubled about many things:
[42] But one thing is needful: and Mary hath chosen that good part, which shall not be taken away from her.

Here then is the Kipling poem; my favorite parts are the first two lines of each stanza (except the last), but of course you have to read it all:

The Sons of Mary seldom bother, for they have inherited that good part;
But the Sons of Martha favour their Mother of the careful soul and the troubled heart.
And because she lost her temper once, and because she was rude to the Lord her Guest,
Her Sons must wait upon Mary's Sons, world without end, reprieve, or rest.

It is their care in all the ages to take the buffet and cushion the shock.
It is their care that the gear engages; it is their care that the switches lock.
It is their care that the wheels run truly; it is their care to embark and entrain,
Tally, transport, and deliver duly the Sons of Mary by land and main.

They say to mountains "Be ye removèd." They say to the lesser floods "Be dry."
Under their rods are the rocks reprovèd—they are not afraid of that which is high.
Then do the hill-tops shake to the summit—then is the bed of the deep laid bare,
That the Sons of Mary may overcome it, pleasantly sleeping and unaware.

They finger Death at their gloves' end where they piece and repiece the living wires.
He rears against the gates they tend: they feed him hungry behind their fires.
Early at dawn, ere men see clear, they stumble into his terrible stall,
And hale him forth like a haltered steer, and goad and turn him till evenfall.

To these from birth is Belief forbidden; from these till death is Relief afar.
They are concerned with matters hidden—under the earthline their altars are—
The secret fountains to follow up, waters withdrawn to restore to the mouth,
And gather the floods as in a cup, and pour them again at a city's drouth.

They do not preach that their God will rouse them a little before the nuts work loose.
They do not preach that His Pity allows them to drop their job when they damn-well choose.
As in the thronged and the lighted ways, so in the dark and the desert they stand,
Wary and watchful all their days that their brethren's ways may be long in the land.

Raise ye the stone or cleave the wood to make a path more fair or flat;
Lo, it is black already with the blood some Son of Martha spilled for that!
Not as a ladder from earth to Heaven, not as a witness to any creed,
But simple service simply given to his own kind in their common need.

And the Sons of Mary smile and are blessèd—they know the Angels are on their side.
They know in them is the Grace confessèd, and for them are the Mercies multiplied.
They sit at the feet—they hear the Word—they see how truly the Promise runs.
They have cast their burden upon the Lord, and—the Lord He lays it on Martha's Sons!

We Sons of Mary—including in the secular sense, as people who are paid to opine and teach law and Think Deep Thoughts—indeed smile and are blessed; for us the Mercies are indeed multiplied. But it's worth remembering how much of that comes from the burden that Martha's Sons bear.

The post "It Is Their Care That the Gear Engages; It Is Their Care That the Switches Lock" appeared first on Reason.com.

NYTimes: Treasury officials say that they fear that elevated Chinese production targets are causing its firms to produce far more electric vehicles, batteries and solar panels than global markets can absorb, driving prices lower and disrupting production around the world. They fear that these spillovers will hurt businesses that are planning investments in the United States with tax credits and subsidies that were created through the Inflation Reduction Act of 2022, a law that is pumping more than $2 trillion into clean energy infrastructure.

Amazing that Yellen can say this with a straight face:

as an economist, it was her view that China could benefit if it stopped giving subsidies to firms that would fail without government support.

The post Your Subsidies are Undercutting My Subsidies! appeared first on Marginal REVOLUTION.

       

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Here is a bit on privacy from Eric Hughes’s Cypherpunk’s Manifesto of 1993.

Privacy is necessary for an open society in the electronic age. Privacy is not secrecy. A private matter is something one doesn’t want the whole world to know, but a secret matter is something one doesn’t want anybody to know. Privacy is the power to selectively reveal oneself to the world.

…Since we desire privacy, we must ensure that each party to a transaction have knowledge only of that which is directly necessary for that transaction….In most cases personal identity is not salient. When I purchase a magazine at a store and hand cash to the clerk, there is no need to know who I am. When I ask my electronic mail provider to send and receive messages, my provider need not know to whom I am speaking or what I am saying or what others are saying to me; my provider only need know how to get the message there and how much I owe them in fees. When my identity is revealed by the underlying mechanism of the transaction, I have no privacy. I cannot here selectively reveal myself; I must always reveal myself.

Therefore, privacy in an open society requires anonymous transaction systems. Until now, cash has been the primary such system. An anonymous transaction system is not a secret transaction system. An anonymous system empowers individuals to reveal their identity when desired and only when desired; this is the essence of privacy.

I am saddened and dispirited by the evolving situation. Privacy is losing. Cash has nearly vanished without being replaced by cryptographically private alternatives. Instead, we rely on credit cards, debit cards, Venmo, PayPal, and other systems that log every transaction in vast databases.

Cash gave us substantial privacy by default because there was no technological alternative but there was never a collective vote for cash or, sadly, a consensus for privacy. You might hope that people would demand to keep the privacy rights they they once had but no. The populace seems indifferent to the erosion of privacy. Instead, paranoia about criminals hijacks the narrative. “What about the sex traffickers and terrorists?!” they shout. People seem more than willing to give up their privacy in exchange for a promise of security–false though the promise may be. Thus, we get ever more draconian regulations, effectively strangling our financial freedom. The $10,000 cash rule, for example, is insane, a reflection of Nixonian paranoia and not fit for a free society.

If you deposit or withdraw cash in excess of $10,000, your bank must fill out a currency transaction report (CTR) on a Department of the Treasury Financial Crimes Enforcement Network (FinCEN) Form 104. The person making the deposit or withdraw must provide identification to the bank, and the bank must report details of the transaction as well as the name, address, social security number, and birthdate of the person making the deposit or withdrawal. Multiple deposits made in one day must be added together and will trigger the reporting requirement if, combined, they exceed $10,000.

Bankers are also required to file suspicious transaction reports (STRs). Withdrawing or depositing amounts just under $10,000 often does not succeed in avoiding reports to the government, because STR’s have no dollar limit. A person who withdraws $8,000 three times in a week may trigger the filing of an STR, and that person will not be notified that the STR was filed. Banks are also directed to perform account audits to look for suspicious activity. If the banking activity is not consistent with the “customer’s profile,” banks are directed to file a suspicious activity report (SAR).

Reporting requirements are not limited to banks. Business are also required to report cash transactions over $10,000. Any business (including a sole proprietorship) that receives more than $10,000 in cash in a single transaction or in related transactions must file an IRS Form 8300. If a business or individual fails to file a Form 8300 when required, the business or individual can be fined. The penalty for intentionally disregarding the filing requirement is the greater of $25,000 or the amount of cash received in the transaction not to exceed $100,000.

Currency transaction reports and suspicious transaction reports, do they not sound like something the Stasi would demand in communist East Germany? A free people would throw off this outrageous transgression. But could we get rid of such rules today? Could we even index the rules to inflation? $10,000 in 1970, when the Bank Secrecy Act was passed, is about $80,000 today.

Privacy suffers from a collective action dilemma: individually it isn’t worth much and so we don’t defend it, but lack of privacy is immensely costly when lost en masse. Moreover, our data, en masse, is worth a lot to corporations and governments. Thus privacy has few defenders and strong attackers.

We are on technology path that by default leads to less and less financial privacy. Another path exists, a path on which technology safeguards our financial privacy, but that path must be chosen and time is running short.

The post The Erosion of Financial Privacy appeared first on Marginal REVOLUTION.

       

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