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Archive for July, 2010

The unemployment rate is calculated by dividing those unemployed by the work force.  However, people that are unemployed but not looking for work, those who were looking for work but have given up, and institutionalized peoples are not considered part of the work force, and therefore are not considered to be unemployed.

I think that the definition of institutionalized peoples needs to be revised because I think that those serving active duty in the military should be included in unemployment figures.  I believe this for various reasons.  Those serving on active duty are able bodied people capable of doing work.  Suppose that, with our current conflicts in the Middle East, foreign policy changed and all active duty troops were brought home and discharged.  All of these active duty discharged would then be included in unemployment figures.  For this reason, I think that unemployment figures might be representing the actual employment situation.  So why not include them in unemployment figures now?

Currently there are about 1.5 million serving active duty for the United States.  The number of people in the work force in June was about 154 million and about 14 million were unemployed (http://www.bls.gov/news.release/empsit.t09.htm and http://www.bls.gov/news.release/empsit.t10.htm).  This means the unemployment rate in June of this year was about 9%.  Suppose the 1.5 million active duty were added to these figures (provided that they were still serving).  The new unemployment rate would be slightly lower, but of negligible change.  If all these active duty were put out of work, the new unemployment rate would be almost 10%.

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I just got done reading an article by The Economist (http://www.economist.com/node/16591136), and it got me thinking.

The article was about legalizing or simply decriminalizing marijuana consumption in California.

It was interesting to me because of how it could affect the economy.  In the article, the RAND Corporation predicted that the retail price of an ounce of marijuana would decrease by 80%.  This decrease can mean many different things.  It would be very bad for business for dealers and distributors because of the loss of revenues.  I recently started watching the Showtime show Weeds, and this point was further reinforced when Nancy’s distributor Heylia expressed disdain for legalization or decriminalization.

Another less obvious point that comes from this decrease in retail price is the ability of governments to tax purchases of marijuana.  If the retail prices does in fact decrease by 80%, then that is all the room government has to tax the marijuana without distorting consumer behaviors.  Furthermore, they would still have the room to levy a tax that would still make the price lower than when it was illegal, which could increase consumption, and thereby increasing tax revenues.

I am not an expert on tax policy, but these points are definitely something for policymakers to consider when dealing with near bankrupt state governments.

Of course, as many economists and analysts have stated before, legalization could decrease crime because of the elimination of marijuana’s black market.  Furthermore, cost to government to incarcerate “criminals” would decrease.

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I have many pet peeves, but this one relates to the political polarization of Americans.  People that I hear discussing politics often label themselves as either liberal or conservative.  In my opinion, they know little of what these two terms mean, and are unaware that the political spectrum is more than two dimensional.

According to Merriam-Webster.com, liberal means:

1 a : of, relating to, or based on the liberal arts <liberal education> b archaic : of or befitting a man of free birth
2 a : marked by generosity : openhanded <a liberal giver> b : given or provided in a generous and openhanded way <a liberal meal> c : ample, full
3 obsolete : lacking moral restraint : licentious
4 : not literal or strict : loose <a liberal translation>
5 : broad-minded; especially : not bound by authoritarianism, orthodoxy, or traditional forms
6 a : of, favoring, or based upon the principles of liberalism b capitalized : of or constituting a political party advocating or associated with the principles of political liberalism; especially : of or constituting a political party in the United Kingdom associated with ideals of individual especially economic freedom, greater individual participation in government, and constitutional, political, and administrative reforms designed to secure these objectives

Nowhere in these definitions is a connection to the “political left wing.”

The same goes for conservative.  According to Merriam-Webster.com:

1 : preservative
2 a : of or relating to a philosophy of conservatism b capitalized : of or constituting a political party professing the principles of conservatism: as (1) : of or constituting a party of the United Kingdom advocating support of established institutions (2) : progressive conservative
3 a : tending or disposed to maintain existing views, conditions, or institutions : traditional b : marked by moderation or caution <a conservative estimate> c : marked by or relating to traditional norms of taste, elegance, style, or manners
4 : of, relating to, or practicing Conservative Judaism

Again, nowhere in these dictionary entries is a mention of the “political right wing.”

So, what does this mean?

The terms “liberal” and “conservative” are misnomers when describing political ideologies and positions.  The use of these terms to describe political positions also suggests that the political spectrum is two-dimensional.

Political scientist David Nolan developed the Nolan Chart; the chart divides all decisions based on personal/social and economic freedom.  Those advocating no freedom in any respect are considered statists or totalitarians (i.e. Stalin).  Those advocating freedoms in all respects are considered libertarians (i.e. Ron Paul).  Remember, there are always varying degrees of all of these ideologies.

The political right (not necessarily conservative) advocates more economic freedom but less personal freedom.  The political left (not necessarily liberal) advocates the opposite: more personal freedom but less economic freedom.

This method of classifying political ideologies makes sense in my opinion.  For example, “conservatives” are not always conservative because they often advocate free trade policies (liberalism).  “Liberals,” in the same way, are not always liberal because they advocate laws that are intended to control people’s behavior (conservatism).

To see where you stand, take “The World’s Smallest Political Quiz” (http://www.theadvocates.org/quiz or http://www.politicalcompass.org/) (based on the Nolan Chart).  You might surprise yourself.  If this interests you further, take a look at these Nolan Charts showing the ideological standings of our current House of Representatives (http://www.freedomdemocrats.org/node/812) and historical and some current politicians (http://www.politicalcompass.org/analysis2).

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