Last week, Rand Paul explained that saying people have a right to health care is a form of slavery. Today on Fox News Sunday, his father Ron Paul suggested that Social Security and Medicare are slavery as well:

Read my colleague Ian Milhiser for a rebuttal of Paul’s constitutional arguments. For my part, when I hear this stuff I think of my former professor, the late great libertarian political philosopher Robert Nozick who developed the notion (“demoktesis”) that democratic governance is a form of slavery. Nozick is a very smart guy and the position is rigorously argued. That said, regulated welfare state capitalism is clearly not actually the same as slavery. The fact that one can reach the conclusion that it is shows that there’s something deeply unsound with the Nozick-style view of property rights and highlights the extent to which libertarian ideology represents a departure from the values of classical liberals in whose work one finds no support for such a conclusion.

This pop-up cafe in what’s normally a midtown Manhattan parking spot highlights to me the difficulty of really calculating which modes of transportation are subsidized and which aren’t:

The point here is that space in midtown Manhattan is extremely valuable. The conventional thing to do with curbside space is to sell it to car owners for parking purposes as sub-market prices, leading to shortages. One policy alternative that’s still considered vaguely radical is to sell the space to car owners for parking purposes at market-rate prices, thus ameliorating parking shortages and increasing city revenue. But imagine a city auctioning off a piece of city-owned land and saying “we’ll sell it to anyone who wants to put a bike shop here.” The severe restriction on permitted uses for the land (to wit: bike shops) would itself constitute a large subsidy to the winning bidder. The normal thing to do would be to auction the land off without restriction so that it can be put to the most economical use.

Given path dependency, the large fixed investments in buildings, etc., it’s obviously not very practical for New York City to auction off West 44th Street. But this kind of allocation of expensive space to automative purposes is a major source of subsidy to car owners. Consider not just street parking, but also space-intensive things like the elevated Southeast-Southwest Freeway in DC or the massive patch of “ramp spaghetti” near the Kennedy Center.

Not a big deal say Aysegul Sahi, Joseph Song, Giorgio Topa, and Giovanni Violante (mostly of the NY Fed) in their “Measuring Mismatch in the U.S. Labor Market” (PDF):

This paper measures mismatch in the U.S. labor market. Mismatch is defined as the distance between the observed allocation of unemployment across sectors and the optimal allocation chosen by a planner who can freely move labor across sectors. We show that, in a rich dynamic stochastic economic environment, the planner’s optimal allocation is dictated by a “generalized Jackman-Roper (JR) condition” where (productive and matching) efficiency-weighted vacancy-unemployment ratios are equated across sectors. We develop this condition into mismatch indexes that allow to quantify how much of recent rise in U.S. unemployment is associated to an increase in mismatch. We use two sources of cross-sectional data on vacancies, JOLTS and HWOL, together with unemployment data from the CPS for 2001-2010. We find that increased mismatch accounted for less than one percentage point of the rise in the unemployment rate from the start of the recession to 2010.

The difficulty of this kind of empirical work highlights in my view the need for monetary policy to be guided by clear rules.

I have no special insights into the arrest of IMF Managing Director Dominique Strauss-Kahn in New York last night on sexual assault charges, but I do think it’s a sign of America’s unhealthy parochialism that the American press doesn’t seem even slightly interested in a development that’s surely more significant than another week of pointless will he or won’t he speculation about Mitch Daniels.

DSK is a very interesting figure. The phrase “the IMF” tends to conjure up imagines of right-wing ogres traversing the world urging austerity budgets for all, but DSK is the leading figure of the moderate wing of the French Socialist Party, which is to say he’s ridiculously left-wing by American standards. And, indeed, under his tenure in office the IMF has consistently positioned itself to the left of the European Central Bank, the United States Congress, the government of the United Kingdom, etc. in calling for stimulative measures in the developed world to fight the recession. But beyond his IMF work, DSK was the leading contender to defeat the hideously unpopular Nicholas Sarkozy in the French presidential election next year. At the moment, progressive liberalism is enjoying political success in India under Singh, Brazil under Lula/Rousseff, and the United States but has been deeply marginalized in Germany. Strauss-Kahm seemed like perhaps the guy to turn that around. Now it seems he’s a a sociopathic rapist, so that hope has to be shelved.

One of the signature aspects of our contemporary politics is the mix of intense elite polarization with an electorate that continues to think of itself as very robustly moderately. This is driven, I think, largely by the fact that elites tends to be better-informed about politics and the fact that the status quo is genuinely unsustainable.

You can see this dynamic at work by comparing the House GOP Medicare elimination budget to the Congressional Progressive Caucus’ “People’s Budget” of tax hikes and defense cuts. The striking thing about these proposals is their mix of radicalism and conservatism. Ryan’s budget really would leave the tax burden more-or-less where it’s historically been. And the People’s Budget really doesn’t entail a dramatic expansion in social services. It’s just that maintaining historical levels of taxation require huge cuts in service levels, and maintaining historic commitments to social services requires big tax hikes. But to the “moderate” on the street, this all sounds extreme. A sensibly centrist budget plan shouldn’t have to include big cuts in major programs or big tax increases. Things should just more or less continue as they’ve been. At the elite level, people tend to know this isn’t workable and thus find themselves pushed to a whole variety of views that the public doesn’t like.

I saw on the twitter machines last night that Mike Huckabee’s not running for president, but it’s just this morning that I saw his announcement involved an homage to Christina Aguilera: “All the factors say go, but my heart says no.”

Remaining contenders hoping to snag the Huckabee endorsement will, of course, need to run him the right way. Common sense suggests that his absence helps the southerner in the race (Gingrich) and the Protestant (Pawlenty) and thus counts primarily as additional bad news for Mitt Romney.

Tyler Cowen linked to a paper from Timothy Conley and Bill Dupor (PDF) purporting to show that ARRA led to net job losses. Since I had an ideological motive to dislike the conclusion, I actually read through the paper. This, I think, turns out to be a worthwhile exercise both because they make some important analytic points about the fungibility of ARRA spending and also because I think there are some serious flaws in their analysis. For example:

Exploiting fungibility, we use two instruments to isolate a component of government finance stress that is likely orthogonal to the state’s short-run economic conditions. The first of these two instruments is the pre-recession fraction of each state’s tax revenue from sales taxes. Sales tax revenue is more cyclical than other tax revenue sources; therefore, a state that relies mainly on sales taxes will experience greater fiscal stress during a recession than a state that relies on other (mainly income and property) taxes.

There’s no footnote for this assertion that sales taxes are unusually cyclical, and I’m fairly certain it’s mistaken (see, e.g., this [PDF] from the Kansas City Fed). In particular, corporate income taxes and taxes on capital gains are extremely cyclical. Personal income are also highly cyclical when (as is often the case) there’s a progressive rate structure. Last, while property taxes haven’t historically been all that cyclical, a recession specifically associated with a collapse in housing prices is going to be a special case.