Most clichés about California are true: we are both America’s most urban state and its most agricultural. We are home to more national parks, more immigrants, and a better public university than any other state. We have Silicon Valley, Hollywood, and Yosemite. We fashion ourselves seekers of talent, lovers of risk, and inventors of the future, gamely shrugging off earthquakes, fire, and drought. My family has been here since the 20s and we won't leave.  

We take for granted that California is the Golden State. When our comically dysfunctional state government cannot agree on a budget, we mutter about idiot politicians, shake our heads, and chalk it up to local color.

But our problems today are no laughing matter. The complete failure of state government now threatens everything we love about California. Today's special election would extend temporary
taxes, free up some spending categories, and borrow against future
lottery proceeds but would not solve our problems and is unlikely to pass in any case.

Tomorrow morning, Californians will confront their failed state. There will be blame and recrimination enough for everybody. Increasingly however, citizens will contemplate the conclusion reached this week by the Economist: our governance process is broken and in need of fundamental reform. A new batch of politicians will not do the trick. The evidence of failure is not hard to find:

• The home of the property tax rebellion is now a high tax state. Californians famously limited property taxes by passing Proposition 13 in 1978 but now lead the nation in sales taxes, car taxes, and gas taxes. Personal income taxes are the second highest of any state, corporate income taxes are the highest in the West, and capital gains the fourth highest in the nation.

• State spending has skyrocketed. State employment is up from 719,000 in 1997 to 895,000 in 2007 – an additional 176,000 employees. That means the state created more than 60 new positions every working day for ten years. Adjusted for inflation, state government spending per person is up nearly 20 percent. We have the nation’s seventh highest GDP/capita but our unionized prison guards, teachers and nurses are the highest paid and among the most powerful in the nation.

• Our public service needs have exploded. California currently has the fourth highest unemployment rate in the nation – a shocking 11.5%. We are home to the nation’s two largest traffic-jams – Los Angeles and the San Francisco Bay Area. Our desert economy depends on a creaky water system with a 75 percent chance of catastrophic failure in the next few years and Sacramento’s ancient levees expose that city to greater danger of catastrophic floods than New Orleans. State prisons are so overcrowded that a federal judge has ordered the release of 10,000 inmates. The University of California, an engine of mobility for generations, is being ravaged. 20% of all residents of Los Angeles County receive public welfare of some kind. This is a big deal: with 10 million people, LA County would be America’s eighth largest state and the world’s twentieth largest country by GDP.

• Talent is leaving. In the past ten years, 1.4 million more Americans moved out of California than moved in. The loss of talent is much worse than the net numbers suggest, since most who leave the state are employable taxpayers while many who arrive are immigrants with few marketable skills. Out-migration has slowed in the past year mainly because Californians cannot afford to sell their homes for an enormous loss.

• Our fiscal house has collapsed. Combine the above with a devastating economic downturn, and California now has the lowest bond rating of all 50 states. We face a $42 billion gap between revenue and spending. The state has halted income tax refunds, public works projects, federal stimulus spending, and may kill 20,000 state jobs.

How did the Golden State come to political and fiscal ruin and where to from here?

California's problems go beyond lousy politicians. It is true that most of California's Democratic leaders are craven, unimaginative, and unable to prioritize or restrain spending. And yes, many of our state Republicans are paleolithic knuckle-draggers. But most states get by with lousy politicians and historically California did too. The sources of our current failure run deeper than that.

California’s government is dysfunctional because we accidentally engineered it to fail. More than any other state, we have embraced a series of reforms that inadvertently designed sectarianism, paralysis, and waste into our state government. None of the reforms were by themselves terrible, but in combination with each other and with a deep economic crisis, they are devastating. Before we fix them, we need to understand the three design features of our government that build sectarianism, paralysis, and waste into our system.

To Design A Deeply Partisan Government, Let Politicians Select Voters, not Vice Versa
The central and unyielding promise of any democracy is that voters elect their leaders. California stands this core principle on its head: we let politicians select their voters with a system of bipartisan gerrymandering. 

In politics, if you draw the map, you control the election. After the 2000 census, the legislature set new boundaries for both for state Assembly and Senate districts and for federal congressional districts. Democrats and Republicans agreed to gerrymander the boundaries to preserve the balance of political power. They assigned voters to districts that were dominated by one or the other party, with few districts that could be considered competitive.

The electoral result was exactly as planned. In 2004, 2006, and 2008 all incumbent parties were returned to power. Not one of eighty Assembly seats, 40 Senate seats, or 53 Congressional seat changed parties. In nearly all of these 172 districts, the margin of victory was at least ten percentage points – a landslide. Incumbents frequently ran unopposed.

The less obvious result of bipartisan gerrymandering is that it elects partisans. In a solidly Republican District, I win if I appeal to the average Republican, not the average voter. We exaggerate partisanship with a second feature: the closed primary. Only party members may vote in primaries (which dampens turnout to partisans so much that candidates have been nominated with the support of fewer than 7% of the registered voters in their district).

We engineer swing voters out of the system. The paradox is that parties imagine that they will be stronger if they design partisan districts. In fact, they are often weaker because local candidates do not need their parties. In Oakland, “Barbara Lee Speaks for Me” is a bumper sticker designed not to reach out to Republicans (who are utterly irrelevant here) but to taunt moderate Democrats.

California was not always this way. In 1938, California had open primaries. That year a young Oakland District Attorney entered the California Republican primary to run for State Attorney General. To cover his bases, he also entered the Democratic Party primary and the Progressive Party primary as well. He won all three primaries and was nominated by all three parties. Naturally, he was elected in a landslide.

Eight years later, the Attorney General decided to run for governor as a Republican. But again he entered the Democratic and Progressive Party primaries. And again he was nominated by all three parties. To this day, Earl Warren remains the only person ever elected three times as governor of California. He presided over a huge and bipartisan infrastructure boom, including the expansion of the University of California, which has been an engine of California social mobility for decades.

To Design a Paralyzed Legislature, Let the Minority Rule
Upset by property taxes that increased with skyrocketing home values, California voters passed Proposition 13, which required that a two-thirds majority in both legislative houses approve all future
increases of state tax rates or amounts of revenue collected,
including income tax rates. It also requires a two-thirds majority
in local elections for local governments that wish to raise special taxes. The result: we reduced our property taxes by an average of 57% but we also enabled a political minority to block any state or local economic initiative.

Prop 13 was partially copied by Rhode Island and Arkansas, which require a two-thirds vote to increase state spending. Twelve other states require a two-thirds vote to increase taxes. But according to the Economist, only California requires both. As a result, no legislative majority can govern this state. When you marry this requirement to a legislature that is engineered for partisanship, agreement on a budget will produce political paralysis even in normal times. In an economic crisis, it is governance designed for disaster.

Minority rule fails California’s direct democracy as well. California is one of 24 states that allow referendums, recalls and ballot initiatives but the only state that does not allow its legislature to override successful initiatives. California’s cherished right of referendum and recall date from 1911 when Governor Hiram Johnson wanted to ensure the ability of citizens to challenge large corporate trusts – especially the powerful railroad interests. It made sense. Direct democracy always holds out the possibility that it will provide a check on a captured legislature as it does in Switzerland and other countries.

In modern times however, referendums are purchased by interest groups. Hiram Johnson could not have imagined an industry devoted to paid signature gathering that permits any group with money to place a proposition on the ballot. He could not have foreseen propositions so convoluted that educated citizens debate not their view of a proposition -– but what the text actually means. Californians now vote for an average of ten initiatives each year – nearly all thanks to paid signature gatherers. Most fail, several have been overturned by the courts, and none have addressed the state’s fundamental problems. The abuse and overuse of initiatives further weakens a paralyzed legislature and contributes to our reputation as the land of fruits and nuts. In July, 2003 a millionaire Congressman paid for enough signatures to initiate the recall of a governor who we had elected nine months earlier. The recall succeeded – only the second in US history – and brought Arnold Schwarzenegger to office.

To Prevent Significant Legislative Compromise, Outlaw Experience

It is very difficult to pass a budget in a legislature designed for paralysis unless you have senior lawmakers with the power to make deals and enforce legislative discipline. Anyone who served in the State Assembly under Willie Brown knows exactly what this sort of head-knocking looks like. It is not the attractive part of the sausage-making, but especially in a legislature of officials who are guaranteed reelection, it is a critical element of a productive legislature.

California has outlawed senior legislators by mandating term limits on all elected officials. Term limits, like partisan redistricting and partisan primaries, look progressive at first because they appear to strengthen activists and weaken incumbents. But frustrating the will of voters does not improve the quality of democratic decision-making. Outlawing legislators with the skills, experience, and relationships to pass laws and enforce bipartisan compromises is not simply undemocratic, it is profoundly unwise. (Term limits on the executive appear to cause fewer of these unintended consequences).

Few voters appreciate how complex and specialized modern lawmaking has become. I once had the honor to join a small legislative strategy session between Teddy Kennedy and Robert Dole, then the ranking members of their respective parties. The topic was labor legislation that touched on a variety of issues of concern to both parties and to Kennedy’s Ed and Labor Committee. The two men, who would bash each other publicly without hesitation, spoke a language that few in the room could follow. In minutes, they agreed on what could get done. They outlined the scope of the legislation, what procedural tactics would enable which Senators to vote which way on different amendments and parts of the bill. They sorted out the likely time line and Congressional reconciliation issues, decided what amendments would be permitted at each stage, and what pieces of the opening bill would likely be traded off to secure the support of key Senators. My simple Aristotelian universe plotted the shortest distance from A to B as a straight line but Dole and Kennedy understood how mass distorts the space time continuum and how the instruments given to them were large and unbelievably blunt. In decades of practice, they had learned how to get legislation done.

Whether this is craftiness or craftsmanship is a longer debate — but is unquestionably how work gets accomplished in an effective legislature. Personally, I was awestruck to see legislative architects at work. It is unbelievably dumb to outlaw the expertise and relationships that take years to build and enable deals between adversaries. Voters can and do decide whether the cost of an incumbent is worth the benefit — that's why we have elections. But Californians banned experienced legislators outright, so today we have no Teddy Kennedys or Robert Doles and we are much worse off for it.

What is to be done?

California needs both short and medium term fixes — and splitting up the state is not a silly idea either. Near term, eliminating bipartisan gerrymandering and partisan primaries is a big step forward. Fundamentally however, California needs a constitution that will nourish the civic culture and political compromise that are the foundation of any effective government.

• Redistricting.  In 2008, California voters narrowly passed Proposition 11 over the objections of the California Democratic Party, Barbara Boxer, and Nancy Pelosi. Prop 11 shifts responsibility for drawing the new boundaries for Senate and Assembly districts from the Legislature to a 14-member commission made up of five Democrats, five Republicans and four independent or minor-party voters who would draw new maps every 10 years, corresponding with the census cycle.

This is a reasonable start that needs two improvements. First, the goal of the commission should be to create coherent and competitive legislative districts.  The commission should strive for geographically rational districts with equal Democratic and Republican registration. In Oakland or Orange County this is not going to happen, but in much of the state it can. The result would be a core of centrist legislators who are forced to work across party lines to get elected and to get things done. Second, the commission should have responsibility for Congressional Districts. No reason to leave those to party officials either.

• Open primaries In order to pass a state budget earlier this month, lawmakers agreed to place before voters a constitutional amendment for an "open primary".  The proposal would allow any registered voter to vote for any candidate in a primary for legislative, statewide elected positions, and congressional districts but not presidential primaries.

The two candidates who receive the most votes would square off in the November general election even if they were from the same party. As a result, two Democrats or two Republicans would often end up in the run-off. In this case, if independent voters and voters from the minority party voted for the more moderate of the two candidates in the general election, it would tend to reduce the ideological polarization of the state legislature.

Open primaries also eliminate the nasty tendency for elections in heavily Democratic or Republican districts to end with the primary. Together with redistricting, the competitive intensity of political races would go up, with significant benefits for citizen involvement and a meaningful penalty for extremists of either party. Naturally, both political parties oppose open primaries. Explain it to Earl Warren.

(Open primaries are a complex topic because those that get past voters often do not get past the courts, which have a rich case history in this area. California voters narrowly defeated another open-primary measure in 2004 and the Supreme Court invalidated an earlier, different California open-primary law in 2000.)

• Term limits for programs, not legislators. Instead of limiting the terms of legislators, we should limit the term of the programs they create. Otherwise our constitution ends up chock full of agencies, boards, and commissions that have outlived their usefulness or overlap with each other or with local agencies. Texas actually has a Sunset Commission which automatically abolishes nearly all of the state’s 150 agencies after 12 years unless legislation is enacted to continue them. It analyzes and proposes solutions to overlapping programs and jurisdictions.

Constitutional Convention
The Bay Area Council, a coalition of Bay Area companies impressively led by McKinsey Director Lenny Mendonca, has put forward a public case for a California constitutional convention. They note that our current constitution is a sclerotic document with more than 500 amendments and recently compared it to San Jose's “Winchester Mystery House – with rooms and stairways leading nowhere”.

The risk of a constitutional convention of course, is that it attracts wingnuts who hijack the process. To address these concerns, the Council proposes that delegates to the convention be chosen through the general jury pool to ensure that the constitution is revised by representatives of the population, not organized interest groups. Second, they suggest that the scope of the constitutional convention be explicitly limited to governance issues and the budget mechanism and exclude all others. These are both splendid ideas.

This process would enable reform of the two-thirds requirement for budgets and taxes. It could mandate two-year as opposed to annual budget cycles, give local governments more access to local revenues, enforce competitive redistricting, normalize rules about signature collection for ballot initiatives, and introduce a Texas-style “sunset” commission. It is a fine and timely idea — we need to make it work. At present, both Democrats and Republicans are getting on board.

Break up California
American states are designed to be laboratories of democracy where small groups of citizens can have a meaningful impact on their government. No group of 33 million people can possibly operate as our founders expected an American state to operate.

California today is larger than most large countries, including Canada and Australia. We are larger than Belgium, Portugal, and Greece combined. And we are not an especially coherent state: Northern California is green, technological, and vaguely European. Los Angeles combines massive immigrant communities with Beverly Hills. The region from Orange County to San Diego looks, feels, and votes like Arizona. Central Valley farmers have more in common with those in rural Nevada or Texas. We should pick a commission, set a timeline, and run smaller states that give more people a voice. Even if we broke California in five, each state would be bigger than the entire country at the time consititution was written.

At one level, California has always been too big, which is why proposals to divide the state began before we were admitted to the Union in 1850. In the first 150 years of statehood, there have been 27 serious proposals to split the state.  Although Article IV of the  Constitution allows the creation of new states so long as the state legislature and Congress approve, only Maine and West Virginia have actually done this. (Maine separated from Massachusetts at the time of the Missouri Compromise. West Virginia cheated – it seceded from Virginia during the Civil War and was admitted by Lincoln without congressional consent. Oops.) Both Carolina and the Dakota Territories divided before they became states. 

Dividing California is a good idea. Indeed dividing
any state that reaches a threshold of ten or fifteen million residents
makes sense.  But it is a formidable political challenge and not a solution to our immediate crisis. Our focus now should be to fix the state we are in.

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The crowd quiets when a Kathak dancer delivers a jaw-dropping chakkarwala tukra, with precise heel spins, fast footwork, tightly controlled head movements, and hula hands that recall a long forgotten story. The pacing is careful, the style fast but deliberate. Slowly, the dance becomes emotional — almost frenzied. Easy to see why the colonial Brits outlawed Kathak as anti-Victorian lewdness — but privately loved it.

The dance looks Persian or Arabic — recalling Northern India's Mughal past. The dancer maintains the vertical control, footwork, and complex rhythms that look a lot like Flamenco. A bit of research confirms that 11th-16th century gypsies moved between the Arabs of the Magreb through the Moors of al Andalus and Persia into what became Mughal India. Some argue that these gypsies provided the antecedents to Northern Indian Kathak, Spanish Flamenco, and eventually Salvadorean Cumbia. So it is possible that Islam is the cultural common denominator of this Punjabi-Salvadorean wedding.

The next evening, we join the Baraat — the procession of a hundred shouting, whooping, conch-blowing friends of the groom who escort him into the wedding hall. A Hindu priest performs Sanskrit purification chants while the priest's daughter,
a brilliant Berkeley PhD candidate, makes a violin sound like a
sitar for three hours.

When the priest has finished, the bride's parents make a knees bent sales pitch describing the enticements of their daughter (who, for the record, does not remotely need their help. She is smart, well-educated, and whiplash beautiful). At one point, by tradition, the groom bolts from the room declaring that he will seek a life of abstinence. It falls to the bride's parents (our good humored Salvadoreans) to restrain him while describing the pleasures that await his decision to accept their daughter. He manages not to laugh.

The groom relents and dons a hysterically silly three foot tall white hat. His bride enters the room covering her face. She is carried by her brothers around the large room seven times while the groom's family boisterously attempts to confuse them and persuade them to walk extra laps. Eventually, bride and groom eyes meet as wreaths and tender words are exchanged (in traditional Indian weddings, of course, they are literally seeing each other for the first time). I try and fail to imagine what it would be like to see my wife for the first time in front of several hundred people just moments before marrying her.

The priest performs the ritual of the Phere. He ties the groom and bride's clothes together and chants as they
walk slowly around a ceremonial fire seven times. The big moment comes when the groom rubs a bit of sindoor powder (vermilion) along the part in his bride's hair, taking care to spill just a bit on her nose. The priest declares them married. For the second time — since a Catholic priest had done the same thing in a somewhat starchier ceremony in a local cathedral a few hours earlier.

We chat with a couple from Brazil moving to Providence, a Chinese American student heading off for field work in Uganda, a Japanese friend who helps lead a famous research institute in India. A dark-skinned. long haired, Indian man with a strong accent tells me about taking
Hispanic and Black juvenile delinquents from their detention camps into
the coastal wilderness, getting them scared and excited, teaching them about
animals and fire. The key, he assures me, is to take away their shoes first. "They live in cities –
they have never been without shoes."

By 11pm, we are done dancing to salsa and Hindi/Latin rap. We get in the car, realizing once again that parts of the world are collapsing inward very, very quickly.

At one level all that matters is that two wonderful friends got married. But in 1960, you could not have attended this event anywhere in the world. Not only were foreigners in the American melting pot regarded as les estrangers, but our countrymen were culturally and legally far more segregated than now. Interracial marriage remained illegal in many parts of the US until the Supreme Court handed down Loving vs. Virginia in 1967.  Now events as heterogeneous as this wedding happen every weekend in Northern California — it is not at all remarkable.

Unless, of course, you think about it.

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The biggest disappointment so far has been Barack Obama. Six months ago, the self-described "skinny kid with the funny last name" was a fresh new voice in politics.

Obama came across like Bill Clinton with a zipper and a moral compass. He made common cause with Christian fundamentalists over the environment or Darfur while taking them to task on abortion rights. He brought a compelling biography, a language that seemed perfectly pitched to this election, and a delightful family (a nontrivial asset — just ask Rudy Giuliani). He drew huge crowds and could light up the room — and actually still does.

At worst, Obama can be another Democratic hack (Iraq) or frighteningly naive (Iran) if intelligently conservative in other parts of his foreign policy. But set aside the future of human freedom for just a moment. Set aside his sometimes professorial style. The question is: can this guy play in the bigs? Certainly a lot of donors thought so — Obama has been an astonishingly successful fundraiser.

But can he do what a President has to do all the time and run to the center of his base? I argued that Obama booted his chance for a major Sister Soldja moment in neglecting to denounce Move-On.org for their "General Betray-Us" advertisement kindly subsidized by the New York Times.
These chances do not come often and when they do, a smart politician
grabs them (as Hillary did the following week by opposing the anti-war
wing of the party and voting to declare the Iranian Republican Guard a
terrorist organization).

Immigration, not Iraq, is the sleeping giant of the 2008 campaign. My advice to Obama: ditch the Democratic mainstream and give the following speech:

• "Within my first year as President, I will build a 25 foot high wall along our southern border with guards, dogs, TVs, and guns. Where one wall doesn’t work, I will build two walls". Come out and  say it – six years after 9/11, the United States does not control our borders. A nation that cannot control its borders not only has no borders — it isn’t a nation. Say it: the US is not part of Mexico, we like Mexico but high fences make good neighbors.
  A top priority of your administration will be to make damned sure that nobody enters this country from Mexico without paperwork. Sound a little scary — you will be amazed at the votes you scare up. Point out that Hillary likes to call for strict enforcement without authorizing a dime for it or getting specific about who will be inconvenienced. You intend to badly inconvenience anybody who wants in illegally. Say it.

• "In the middle of my 25 foot high wall, I’m gonna open a big wide gate".
  This is the easy part — you talk about increasing, not decreasing the number of immigrants. You are the friggin’s statue of liberty with one arm burning in the air. You talk about favoring educated immigrants and
  not only increasing H1B visas, but subsidizing the world’s smartest people to relocate here.
  Explain that these folks create far more jobs and wealth than they consume and we literally cannot have too many of them. Talk about Bracero programs for farmworkers and how you want states to be able to petition for increases in migrant workers. Talk about a national ID card for everyone that speeds up airport screening and employment verification. It is not a crazy idea and you can make it voluntary, except for green card holders or registered aliens, for whom
  it would be mandatory.

• "If you are here illegally, you either register or leave". Now you are back to your bad self. Who are you gonna send home? Well not 12 million people, that’s for sure. Carting off the equivalent of the state of Ohio is lunacy, especially when 15% of them are kids.  You are going to force people who are here illegally to register. You are not granting an amnesty — you are giving people who cut in line and came over without papers 90 days to register. They are going to get a registration card with an RFI tag. When registration closes, anyone found without a registration card goes home. Say it — and mean it.

• People who register get scored. You do not reveal the scoring system — you aren’t obliged to. But we give points to people who have been here longer or people who bought a house. We favor those who have learned English, who have acquired skills, who have paid taxes, or are related to US citizens, including children. But if you have been in jail, collecting unemployment, or dealing drugs, pack your bags. Your message: the best can work towards citizenship but we are shutting the door and sending the worst home for good. Say it.

• Americans who exploit immigrants are no better than immigrants who exploit America.
  There is plenty of room in this for employer sanctions. Not sanctions against employers who hired the occasional undocumented immigrant along with the documented ones — we are not law enforcement officials. But there are always employers, especially growers, who use immigration laws and the fear of deportation to exploit migrant workers. That’s evil. Say it.

Remind voters that in the old days, Mexican laborers were sent home ("drying out the wetbacks") and had to sign new work contracts — often with the same employers who had just turned them in — if they wanted to return to El Norte and work. Remind people that this, roughly, is Bush’s plan — (and as a former Texas governor, Bush knows something about immigration, unlike some Republicans).

Promise that we will never return to 1948, when a plane carrying Mexican deportees from Oakland to El Centro crashed in the Central Valley near Los Gatos Creek, killing all 28 aboard. We recall the event today only because it moved Woodie Guthrie to pen his last song:

Some of us are illegal, and some are not wanted,
Our work contract’s out and we have to move on;
Six hundred miles to that Mexican border,
They chase us like outlaws, like rustlers, like thieves.

Is this the best way we can grow our big orchards? 
Is this the best way we can grow our good fruit?
To fall like dry leaves to rot on my topsoil
And be called by no name except "deportees"?

Your platform is simple: High walls. Big gates. Tough love for rulebreakers, whether they are people without documents or employers without scruples.

• You point out repeatedly that you are talking about the tough issues, the divisive issues, the issues
  that a President has to deal with. You are not sticking to the easy
  center trying to please everybody like some candidates do.

• You point out that George Bush couldn’t control the Texan
  Border and his brother in Florida can’t keep out the Cubans. You,
  America’s first modern President born to an immigrant father, are going to restore
  order and integrity to an immigration system that is dangerously
  broken.  

(Reality check: once you are elected, build that wall. For real. Blow open the H1B program — it will pay back in your first term.
And register the illegals, even though the ACLU will scream.
Ship a few crooks and bums home — and nail anybody who fails to
register. Make a big deal about it.

But face it, anybody who registers and makes
a life here accumulates enough points to eventually become a citizen.
We need them, we should welcome them, and there is not the slightest
chance that you
are sending them home. But that can be our little secret).

Obama, you don’t have many more chances left to clearly distinguish yourself from Hillary Clinton, to sound a clear and moderate voice for change, to be both tough and balanced on a major issue, and to demonstrate that you can tell some people what they don’t want to hear. You are the son of an immigrant and this can be a very good issue for you. Seize it.

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There was no reason to invite this guy — who is, after all, one of the most dangerous people on the planet. He is a deeply anti-Semitic holocaust-denier who funds terrorism throughout the Middle East. He has a great deal of American blood on his hands. He has little use for scientific inquiry or reason of the sort that Columbia upholds. Inviting him was dumb and shame on Columbia.

Now that he has an invitation however, withdrawing it is a mistake. I would not invite Hitler, nor would I retract the invitation if some misguided fool did so. I’d
let it happen not because I like the message (by that standard, I’d
have to bar a lot of the faculty). You keep a campus open for the same
reason you keep speech free: a university campus like a democracy thrives on the free exchange of ideas.
(OK, inviting our sworn enemies is imbecilic. We prefer people with
factual and scientifically valid ideas, but that’s what the listeners
get to judge). It is obnoxious to grant a podium to a guy with a vision
of women straight out of the 14th century who proudly funds military
attacks on US and Israel — but at this stage it is more obnoxious to
send him home. Let him speak and let others refute his vile beliefs.

In fact, I suspect that New Yorkers will have a thing or two to say
to a guy who celebrates the 9-11 attacks and gleefully executes
homosexuals in the public square. Of course it would be better if
Columbia did not bar ROTC recruiters from campus because they object to
Clinton’s laws on the treatment of gays in the military. This
tends to complicate our assertion that we are open to all ideas and
gives credence to those who observe that campuses are more open to
anti-American ideas than to pro-American ones.

Closer to home, Stanford faculty are protesting Don Rumsfeld appearing at a forum at Hoover and the University of California just rescinded an invitation
to Larry Summers
to speak on how it can compete more effectively with private
universities. Some faculty on the Davis campus, where Summers was to
speak, objected because of an inopportune comment he made while at
Harvard. Richard Blum, the multimillionaire Senator’s-husband and UC
Regent who has been pushing some helpful reforms at UC agreed to
rescind the invitation. This was cowardly — Blum knows better.

 To be sure, Summers’ suggestion
that the small number of female scholars in the hard sciences might reflect innate
gender differences was ill-advised, even if in theory the subject could be a valid subject of scientific
inquiry. It was not a terribly thoughtful suggestion coming from the
President of Harvard -- especially since the kind of research Summers was suggesting has been done for decades. As Summers protégé and Berkeley economist Brad DeLong noted,

"Summers’ views on gender, genetics, and math achievement are almost certainly wrong, are unsupported, and should not be pushed forward by somebody who is twenty years beyond the stage of his career where you throw out lots of unfiltered ideas in the belief that what matters is the quality of your best one."

I
am overall a fan of Summers (article here) even if I accept that this is not a personality well-suited to leading a major university. There is no excuse, however, for not hearing the ideas of one of the brightest economists in a generation, a former Treasury Secretary, and former Harvard President on the topic of improving UC competitiveness.

This is especially true since the competitiveness of the University of California is a big
issue — and ought to be a big public issue in California. Universities affect our
political as well as our economic living
standards. High quality public universities are indispensable engines
of social, economic, and technological progress. The University of California is looked to worldwide as a model public university that has powered the growth of an important part of the United States.

My wife and I are both
UC grads. She teaches and serves as a dean at
Cal (and endorses not a single word of this post). We have many friends
on the faculty and we cheer happily Cal sports teams, especially against Stanford. Like
many
in these parts, we bleed blue and gold (and
are delighted that the football team is averaging 40 points a
game and beating Arizona State as I write).

But the University of California is at risk – and the problem has more to do with leadership than with money. UC has not produced leaders up to the task of guiding the institution. Bob
Dynes was a sorry excuse for a President and nobody is
sorry to see him retire. (Among many other things, Dynes made a terrible
choice for Chancellor at my alma mater, UC Santa Cruz, and,
having botched the selection, proceeded to watch his candidate flounder embarrassingly for two years. The
situation ended tragically when, thoroughly humiliated, she jumped off a
building and killed herself).

Bob Birgeneau, Chancellor of the Cal campus for the past three years,
is another Dynes appointee and a much better one. A friendly progressive Canadian who is well-regarded by Cal faculty, Birgeneau at least raises money (not a trivial skill: last week he announced a $113 million gift from the William and Flora Hewlett Foundation –
the largest in campus history). Like most Chancellors since Clark Kerr, he will not confront the faculty
over things like the need to consolidate weak departments and the Byzantine hash of 50+ research units
that grow like weeds because there isn’t anyone in charge of
rationalizing them. Under Cal’s governance structure, faculty have an exceptionally strong voice. Birgeneau may be the zookeeper, but the animals,
largely undomesticated, have veto power and then some.

This is unnecessary and counterproductive. The presidents of our great universities were once extraordinarily
influential figures in American public and cultural life. They went on
to become national leaders like Woodrow Wilson, who left Princeton to
become governor of New Jersey. Universities attracted figures with global reputations
like Dwight Eisenhower, who ran Columbia when he was finished saving the world from
fascism (and would have doubtless had some choice thoughts about offering the prestige of Columbia to a fascist wannabe like Ahmadinejad). Other presidents played major national roles, like Harvard’s James
Bryant Conant who helped ramp up the Manhattan Project or Chicago’s
Robert Hutchens who pioneered modern Socratic teaching and founded the
briefly influential Center for the Study of Democratic Institutions.

These were individuals not easily swayed by fads or subject to
intellectual cowardice. One can only imagine what they would make of
the modern university president — a person in the thrall of a campus
religion called "diversity" that determines the correctness and
acceptability of ideas with the confidence and breadth of Sharia or medieval
Biblical law. The rhetoric of "diversity" overrides almost all other
considerations, arguments, and goals — even when diversity has nothing
to do with educating our smartest, most talented, and hardest working
young people.

Birgeneau is a modest man with a lovely wife who
seems to retain his Canadian socialist values — meaning he tries to be
a good guy and pull for the underdog. Problem is, the results produced
by Canadian socialist values here aren’t much better than they are in
Canada. Especially when he genuflects before the goddess of diversity
and announces that the major focus of his administration will be to
subvert Proposition 209, a measure passed by the citizens of California
that restricts the ability of the University to consider race in
admissions or hiring.

In making diversity his signature priority, the chancellor tied himself in a series of knots. Specifically,

• As an employee of the State of California he is unwise to defy a referendum recently passed by 55% of the voting citizenry (who see
  fit to pay him more than we pay our governor). Canadians have a long
  history of subjugating democratic preferences to government and cultural elites — but Californians don’t. We treasure our right of referendum to the extreme. A chancellor who declares that "quite a small percentage of
  the population" would have made Prop 209 come out differently will be viewed by taxpayers as delusional. In elections and surveys California voters consistently prefer
  decisions based on merit, not tribe — even when measurements of merit
  are not perfect. In short, this ain’t Canada.

• Our good chancellor then announced that the
  crying need of the Berkeley campus was for more Native-American,
  Hispanic, and African-American students. The most
  recent Berkeley enrollment I could find shows a student body that is 3% black, 9.5% Hispanic, and
  0.4% Native American, about 45% Asian-American and 33% white, with the
  balance not saying. (The state is 7% black, 33% Hispanic, 11% Asian
  Americans, and 45% white.). The chancellor might as well have held a
  press conference and announced: "Berkeley has
  four times too many Asian students. My #1 priority is to override the
  will of California taxpayers, kick out a bunch of Chinese, Indian, and
  Korean kids with high test scores, and admit folks who didn’t do quite
  as well in school". To be consistent, he will also have to complain about the shortage
  of whites on campus — a group that is significantly underrepresented.
  Indeed, Berkeley enrolls women significantly in excess of their numbers in the population,
  so are we to conclude that the consequence of this campaign for diversity will be to admit more white men? Somehow I can’t picture
  Robert Hutchens painting himself into a corner quite this quickly.

• Amusingly, certain parts of California history are now off limits to the Chancellor, given his "strategic priority". He will not want to discuss 19th century California, a time when the Golden State led the
  nation in anti-Chinese legislation or the mid 20th century, when we
  forced Japanese Californians into internment camps. Acknowledging
  racism against Asians is a bit awkward at the moment, since they now have the
  highest high school graduation rates in the state. Blacks and Hispanics
  have the lowest (indeed around here if you want to know how good a
  school is,  just count the share of Asian kids in attendance. It is a
  highly reliable indicator and one frequently discussed by black and
  Hispanic families who care about the quality of their kid’s education).
  For the chancellor to acknowledge that a
  history of vicious oppression need not prevent people from becoming
  outstanding academic achievers not only undermines the logic of
  affirmative action but suggests a vein of social research worthy of
  James Bryant Conant (who introduced aptitude tests into
  Harvard’s undergraduate admissions system so that students would be
  chosen for their intellectual promise and merit, rather than their
  social connections.)
• One wonders whether the chancellor will visit enough classrooms to notice that race is increasingly a weak way to describe California students. It is by no means irrelevant, but California Asians and Hispanics now marry "out" between 25-50% of the time. The
  college student closest to our family is a 21 year old medical student at UCSF. She is British but speaks Spanish because
  she lived for years in Puerto Rico. She is black with an Oxford accent and a Vietnamese boy friend. Try capturing that on a form. My wife’s
  students are often a mix of Chinese, Hispanic, Cambodian, etc. Many either cannot indicate a race on state forms or simply refuse to do so.

Cal-style diversity ignores the one form of diversity that should matter most to campus
life. A college campus, above all places in American life, is meant to be a cauldron of intellectual and ideological diversity that produces a healthy ferment of competing ideas and values.

On this dimension, UC Berkeley is a scandal. An academic study of the campus faculty
recently confirmed what it dryly termed the "one-party campus
conjecture". "For UC-Berkeley" it concluded, "we found an overall
Democrat:Republican ratio of 9.9:1" and declared Republicans an "endangered species" on campus. Statewide, registered Democrats now make up 42.5% of all potential voters and Republicans 34.2%. Translation: in the real world, there are 25% more Democrats than Republicans; on campus there are ten times more.

Where, precisely, is the clash of ideas and values that is training
our engineers, scientists, designers, and market makers of the future? Most faculty are ideological sheep who preach diversity but practice conformity while
defending their need for lifetime tenure to protect a right to dissent
they exercise mainly in defense of their own privilege.

Talent, creativity, initiative, academic excellence, and hard work
come in a huge variety of packages. But universities increasingly
judge the packaging, not the demonstrated capacity for creativity,
leadership, or academic excellence. Worse, having preached the value of
diverse packaging, they impose a stifling ideological conformity. The result not only has nothing to do with education — it has nothing to do with diversity.

Parts of this post appeared earlier.

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The government last week released its annual statistical report on
poverty and household income. As usual, we — meaning the public, the
press and politicians — missed a big part of the story. It is this:
The stubborn persistence of poverty, at least as measured by the
government, is increasingly a problem associated with immigration. As
more poor Hispanics enter the country, poverty goes up. This is not
complicated; but it is widely ignored.

Far from being stuck and unmovable, Samuelson notes that the
increase in the number of people living in poverty is accounted for
entirely by the increase in poor Hispanics.

Consider. From 1990 to 2006, the number of poor Hispanics increased
3.2 million, from 6 million to 9.2 million. Meanwhile, the number of
non-Hispanic whites in poverty fell from 16.6 million (poverty rate:
8.8 percent) in 1990 to 16 million (8.2 percent) in 2006. Among blacks,
there was a decline from 9.8 million in 1990 (poverty rate: 31.9
percent) to 9 million (24.3 percent) in 2006. White and black poverty
has risen somewhat since 2000, but is down over longer periods.

He draws the political lesson that few want to hear:

Only an act of willful denial can separate immigration and poverty.
The increase among Hispanics must be concentrated among immigrants,
legal and illegal, as well as their American-born children. Yet, this
story goes largely untold. Government officials didn’t say much about
immigration when briefing on the poverty and income reports. The
American Enterprise Institute, a conservative-leaning think tank, and
the Center on Budget and Policy Priorities, a liberal advocacy group
for the poor, both held briefings. Immigration was a common no-show.

…It’s usually held that we’ve made
little, if any, progress against poverty. That’s simply untrue. Among
non-Hispanic whites, the poverty rate may now be approaching some
irreducible minimum: people whose personal habits, poor skills, family
relations or bad luck condemn them to a marginal existence. Among
blacks, the poverty rate remains abysmally high, but it has dropped
sharply since the 1980s. Moreover, taking into account federal benefits
(food stamps, the earned income tax credit) that aren’t counted as cash
income would further reduce reported poverty.

We shouldn’t think that our massive efforts to mitigate poverty
have had no effect. Immigration hides our grudging progress.

 There are, of course, implications for immigration policy. Notes Samuelson

By
default, our present policy is to import poor people. This imposes
strains on local schools, public services and health care. From 2000 to
2006, 41 percent of the increase in people without health insurance
occurred among Hispanics. Paradoxically, many Hispanics are advancing
quite rapidly. But assimilation — which should be our goal — will be
frustrated if we keep adding to the pool of poor.

Samuelson does not call for less immigration, just for

..an immigration policy that makes sense. My oft-stated
belief is that legal immigration should favor the high-skilled over the
low-skilled. They will assimilate quickest and most aid the economy. As
for present illegal immigrants, we should give most of them legal
status, both as a matter of practicality and fairness. Many have been
here for years and have American children. At the same time, we should
clamp down on new illegal immigration through tougher border controls
and employer sanctions.

He closes with a plea for honesty, noting that

…any sensible debate requires accurate
information. There’s the rub. Among many analysts, journalists and
politicians, it’s politically or psychologically discomforting to
discuss these issues candidly….the facts won’t
vanish just because we ignore them.

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Like most comics, Opus pokes fun at the human condition. We see ourselves and we laugh. Besides, it’s America, and we make fun of anything we want to around here. In fact, I’m pretty sure that right to tasteless humor is enshrined somewhere in the Constitution.

Well, the WaPo Writers Group, which syndicates the column, decided that this strip was way too hot to handle. They sent out an alert and 25 papers, including the Washington Post, dropped the strip as a result.

It seems that some things, you just can’t make fun of. Actually –
only one thing. You absolutely cannot joke about Islam. It is SO off
limits. Seriously.

Notice that the WaPo is not worried that men will be offended by Mr. Dallas’ boorish behavior, which he commends heartily to his wide-eyed son. They plainly have no concerns that women might be offended by
a man whose sense of entitlement is so well developed that he orders
women into bikinis. They fear no PETA protesters screaming that animals
were insulted in the making of a cartoon strip. The syndicators don’t
worry about these groups because they don’t throw bombs or start riots
when their sensibilities are offended.

But Muslim groups can get quite excited about cartoons, books,
movies,  music — and a lot of other things. And many Islamic groups
have trouble expressing their concerns using their indoor voices.

Recall that in 2005, Denmark’s tiny newspaper, Jyllands-Posten published cartoons of Muhammad. Muslims rioted the world over, set fire to the Norwegian and Danish Embassies in Syria, and stormed European buildings in
Gaza City. More than 100 people died in cartoon-related violence, nearly all of them Muslim.
A number of Muslim leaders called for protesters to
remain peaceful but others, including Mahmoud al-Zahar of Hamas, issued
death threats. Danish Prime Minister Anders Fogh Rasmussen described
the controversy as "Denmark’s worst international crisis since World
War II", which in retrospect it probably was.

Obviously what we need here are more cartoons, not fewer. We need to start with Burquini and move on to stronger stuff. It is vital that these cartoons offend evenhandedly – this no time for bigotry.
Plenty of Jews and Christians need a bit of humor about their beliefs
too (I am picturing Christ on a cross complaining that this is a lousy
way for a Jewish kid to spend Easter…..bada bing).

Political and religious groups want to tell us how to live — often
with a sanctimony that would make Steve Dallas blush. The cure is humor
– fostered if need be by cartoons. Only when they laugh at themselves should we take religious or political groups seriously.

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To the ancient Greeks, fertility was life. They worshiped mothers with a festival to Cybele, the mother of all gods. Modern Greeks worship motherhood, but they also avoid it. The average woman in Greece gives birth to 1.3 children. Over a generation or two, this is a problem for Greeks who prefer that Greece be populated with Greeks. Societies with birth rates this low enter a demographic death spiral from which they are unlikely to recover.

The Romans had a different holiday, Matronalia. Today, the Italian fertility rate is 1.29 births per woman — meaning that by 2050, 60 per cent of Italians will have no brothers, sisters, cousins, aunts or uncles.

Mothers Day began in the US when Julia Ward Howe, having rallied union troops for the Civil War with her song "The Battle Hymn of the Republic", decided to import Mother’s Day to the US from the UK. She hoped to use the holiday to unite women against future wars but today restaurants, greeting card companies, and florists promote Mother’s Day, not pacifists.

Alone among developed countries, America maintains a fertility rate right at replacement level — 2.09 births per woman. The UK and Canada, in contrast have fertility rates of about 1.6 births per woman. Even China will shrink with a fertility rate of 1.75, achieved the wrong way and for the wrong reasons and featuring a dangerous gender imbalance.

The striking decline in developing country birthrates prompted Canadian polemicist Mark Steyn to write America Alone: the End of the World as We Know It, a conservative and occasionally very funny rant on "demography, Islam and civilizational exhaustion". Steyn notes that the developed world has gone from 30 per cent to 20 per cent of global population since 1970 and predicts dire consequences for Europe and Western values. Pausing to hyperventilate, he asserts that:

One way "societies choose to fail or succeed" is by choosing what to worry about. The Western world has delivered more wealth and more comfort to more of its citizens than any other civilization in history, and in return we’ve developed a great cult of worrying. You know the classics of the genre: In 1968, in his bestselling book "The Population Bomb," the eminent scientist Paul Ehrlich declared:

"In the 1970s the world will undergo famines–hundreds of millions of people are going to starve to death." In 1972, in their landmark study "The Limits to Growth," the Club of Rome announced that the world would run out of gold by 1981, of mercury by 1985, tin by 1987, zinc by 1990, petroleum by 1992, and copper, lead and gas by 1993." (Ehrlich famously lost money betting economists on these predictions).

Steyn misses no chance to blame the modern demographic predicament on "the progressive agenda" — abortion, gay marriage, the welfare state, and endlessly deferred adulthood. Some of his acolytes throw in premarital sex, STDs, hormones in beef, pollution, housing prices, working mothers, and Democrats.

Steyn notes with glee that:

In America, demographic trends suggest that the blue states ought to apply for honorary membership of the EU: In the 2004 election, John Kerry won the 16 with the lowest birthrates; George W. Bush took 25 of the 26 states with the highest. By 2050, there will be 100 million fewer Europeans, 100 million more Americans–and mostly red-state Americans…

To avoid collapse, European nations will need to take in immigrants at a rate no stable society has ever attempted. The CIA is predicting the EU will collapse by 2020. Given that the CIA’s got pretty much everything wrong for half a century, that would suggest the EU is a shoo-in to be the colossus of the new millennium. But even a flop spook is right twice a generation. If anything, the date of EU collapse is rather a cautious estimate. It seems more likely that within the next couple of European election cycles, the internal contradictions of the EU will manifest themselves in the usual way, and that by 2010 we’ll be watching burning buildings, street riots and assassinations on American network news every night. Even if they avoid that, the idea of a childless Europe ever rivaling America militarily or economically is laughable. Sometime this century there will be 500 million Americans, and what’s left in Europe will either be very old or very Muslim. Japan faces the same problem: Its population is already in absolute decline, the first gentle slope of a death spiral it will be unlikely ever to climb out of. Will Japan be an economic powerhouse if it’s populated by Koreans and Filipinos? Very possibly. Will Germany if it’s populated by Algerians? That’s a trickier proposition.

Steyn makes little effort to conceal his disdain for most things Islamic.

There are many trouble spots around the world, but as a general rule, it’s easy to make an educated guess at one of the participants: Muslims vs. Jews in "Palestine," Muslims vs. Hindus in Kashmir, Muslims vs. Christians in Africa, Muslims vs. Buddhists in Thailand, Muslims vs. Russians in the Caucasus, Muslims vs. backpacking tourists in Bali. Like the environmentalists, these guys think globally but act locally.

All of the concerns Steyn raises are not silly — and at times he is laugh-out-loud funny — but he has fallen into Paul Ehrlich’s trap of straightlining demographic trends ad absurdum until the outcomes get scary. Like the nineteenth century British economist Robert Malthus before him, Ehrlich grew population geometrically and food arithmetically until the planet starved to death. It didn’t happen that way: technology and trade completely changed the economics of food production and rich countries stopped breeding. To quote the great student of global demographics, Yogi Berra: "Prediction is very hard, especially about the future".

It turns out that predicting fertility rates is easier than Yogi thought because there is one major predictor of fertility rates.

Unfortunately for Steyn, it is not religion (Steyn points out that Islamic Yemen, Afghanistan, and Somalia all have very high birth rates. He conveniently neglects to note that Tunisia, Algeria, and Turkey all have birth rates below the US and below their population replacement rate).

Just as bad for Steyn is that the level of welfare provided by the state is also a poor predictor of fertility (Steyn gloats at western Europe’s declining population. But Eastern Europe and Russia, with vastly different welfare states, are also shrinking. The four lowest birthrates on the planet are found in Hong Kong, Singapore, Macau, and Taiwan — hardly bastions of socialist paternalism).

The most reliable predictor of fertility is standard of living. Rich countries are not replacing their populations anywhere except in the United States — where affluent families have far fewer babies than do poor families — especially poor immigrant families. Islamic birth rates are higher because Islamic countries without oil are poorer. (Whether they are poorer because they are Islamic is a different question. The simple answer is almost surely yes — they are. But the problem is likely less Islam per se than how Islam evolved from the days when Muslim scientists and technologists led the world and it was Christians who were stuck in the Dark Ages).

The CIA Factbook makes it pretty easy to grab fertility rates (number of children born/woman) from each country in the world, as well as standard of living (GDP per person adjusted for "Purchasing Power Parity" so that a dollar buys the same amount of stuff in each country). Excel makes it easy to draw scatter diagrams. Put them together and here is what you get:

The red line denotes the replacement birth rate of 2.1 births per woman. The only countries to the right of the red line with $20,000 of GDP per capita are oil countries or Israel, with a birth rate of 2.38 children per woman and a GDP per capita of more than $25k. The US dot is next to the red line up high.

The reasons that birth rates drop as countries prosper are relatively well understood: children are no longer a major source of economic wealth and security, women have access to professions outside the home, and the cost of raising and educating children in rich economies skyrockets, so families have fewer kids.

This presents some problems, but overall is fine. Most demographers believe that our 6+ billion person planet will top out at 8-10 billion people before global population begins to decline. Poor countries, or poor people moving to richer countries, will contribute more than all of the world’s population growth as the world continues to march left and up this chart. This will surely cause social tensions — economic development always does. But economic development causes many fewer problems than grinding poverty. Mark Steyn and anyone else concerned about the rising share of the world that is poor should devote themselves not to the cause of Western fertility but to the cause of relieving third world, especially Islamic, poverty.

It is perhaps time to modify Harriet Beecher Stowe’s holiday. Mother’s Day in developed countries should be an opportunity to not only celebrate families but to celebrate women’s rights and opportunities. Along with trade, the education of girls and women and the protection of their economic and political rights are the single largest steps a country can take to rapidly increase its standard of living. It appears likely that future Mother’s Days will see fewer children celebrating with each mom. But they will have a lot more to celebrate.

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Trying to protect individual companies is like trying to protect individual jobs.We could make it illegal to compete with US firms by outlawing overseas goods and services. This would also produce the opposite of the effect we wanted: US companies would fail because they could not access skills and resources from wherever in the world they can be produced most cost-effectively. Once again, an attempt to improve our economic security would backfire and leave us with worse problems than we started with.

But economic security is a fundamental human need — so how do we meet it? Technology and trade continually create new jobs and wipe out old ones. Overall, the results are excellent – billions of people are moving out of poverty now far more quickly than at any time in human history. Global competition is a bracing economic tonic, but a terrifying one if your job, your company, or your industry is being made obsolete. Nobody who works for a living wants to be suddenly unemployed. Worse, the fear of sudden economic dislocation is politically potent. It leads people to embrace solutions like the ones above that not only don’t work — these solutions are like trying to put out a fire by spraying gasoline on it.

People with secure jobs often like the sound of Joseph Schumpeter’s “creative destruction” but people whose jobs are threatened hear only the second word. They rightly worry that they will become just another cost that a company can dump on the public like pollution or pension obligations. It is up to government to transfer the cost of creative destruction from victims to beneficiaries — but what is the least damaging way to do this?

The short answer is that government needs to protect incomes, not jobs, companies, or industries. The reason is simple: no other policy works. Taxing citizens to preserve threatened jobs, companies, or industries subsidizes the past at the expense of the future. On the other hand, forcing individual employees and their families to bear the cost of these changes is politically and ethically unacceptable and reliably produces a protectionist political backlash that undermines the enormous economic and social benefits of globalization.

It is one of the most critical problems for government to get right — but Republicans have proven too willing to pass the burden of globalization onto working families while Democrats have little in their toolbox but tariffs (including soft tariffs like labor and environmental standards).

So how exactly do we do this?

Governments often get these policies backwards because of the political clout of companies and industries exposed to global competition. Last night’s BBC broadcast featured Leo Gerard, president of the Steelworkers Union, announcing an alliance with manufacturing companies (the ones with record high profits and record low employment). The goal of the alliance is to keep low cost products from China out of the US. Leo is a lion, a good man, and a friend — but his agenda fools nobody: in the name of “a level playing field”, he wants tariffs that are a tax on consumers to be paid to his members. The tax makes imports more expensive, increases prices, and reduces the standard of living of everybody except manufacturers and their employees, who become richer. Manufacturers of course love the idea of reduced competition, increased prices to consumers, and higher profits even after the union guys take their cut. What’s not to like?

Trade threatens a small fraction of all jobs, but the psychology of job loss is powerful because the human need for economic security is powerful. As a result, companies, governments, and schools often agree to rules that make it very hard to fire people.These rules are understandable since being fired or laid off can be economically devastating but they often bring about a perverse result: without the ability to replace poor performers, organizations underperform and get wiped out (the major exception being government organizations, which are monopolies with the power to compel people to pay for services. They underperform and don’t get wiped out — nice work while it lasts).

At a personal level, trade and employment policies come down to having to change jobs because either the market or your boss force you to do so. My perspective on this comes from an unusual set of experiences. As an employee, I have been laid off and fired more than once. As an employer and an adviser to employers, I’ve fired and laid off far more than my share. And as a union representative, I handled dozens of termination grievances in different industries and learned first-hand that employers can be unbelievably stupid.

I represented an older nurse who was fired for dying the grey out of her hair during her lunch break. (Got her rehired, but I was a slow learner. Years later, I went to work for this same employer. One day they fired me for telling a reporter that I had given notice of my resignation!)

I worked in a large machine shop, where my boss fired a machinist for listening to the World Series on his transistor radio while on the job. Claimed that the guy couldn’t hear the machine cutting while wearing an earphone. I pointed out that you could hear these machines in the next county, most of us wore earplugs out of necessity, and two of the best machinists in our shop were so deaf that I had to learned rudimentary sign language in order to be their shop steward. Won that one in an afternoon.

Another employer asked me to 86 a loud drunk from his restaurant where I worked as a waiter. After I escorted the fellow to the parking lot, he pulled a knife and started swinging it at me. He was far too pickled to be a serious threat, but a cook named Lupe Martinez witnessed the assault from the kitchen and came flying out the back door swinging his belt buckle hard and high. They fired Lupe for his heroism, so I organized a union at the restaurant and the hotel that adjoined it. Spent the next decade organizing workers. I never saw Lupe after that night and never could help him get his job back.

Oddly perhaps, I have also fired and laid-off more people than I’d care to count.

As an adviser to the Canadian Steelworkers, I stood with Leo to deliver the bad news to workers in a large rural plant. When the dot com bubble burst, I more than once had to lay off friends and colleagues who had bet on me and my company. I have fired friends and people I liked a lot but whose performance tapered off. These are gut-wrenching, tearful experiences — don’t let any economist tell you otherwise.

Firing people is never fun — although one time it was funny. I took a talented woman to lunch and advised her that she had pissed off so many people that she had become a liability and I had to let her go. We had discussed this problem a lot and she was not remotely surprised — in fact, she broke out laughing. She laughed so hard that she could hardly breathe — tears were streaming down her bright red face. When I asked her what was so funny, she finally regained her composure and politely advised me that “you were so nervous about firing me that you squirted mustard from your sandwich all over your shirt“. To nobody’s surprise, she went on to do great things — but the mustard stain never did come out.

My policy and management views about forcing people to change jobs come from time spent on both ends and in the middle of a fair number of terminations. I have learned five lessons about firing people (and many of these lessons I learned not practicing them):

1. Hire selectively; fire generously. Hiring is a ton of work — it takes time, attention, patience, and experience. I’m still not great at it — I wish I knew who was. I do know that if you don’t work hard at hiring, you will work hard at firing. I try not to hire people for money; I try to find people who are genuinely excited about the work and pay them at or slightly below market. I’d rather save the payroll for a generous severance program and not pay people so much that they can’t afford to leave. At the end of the day, if professional transitions are economically comfortable, they aren’t as big a deal.
2. Fire for poor performance or to cut staff — not to punish. Except in extreme cases, firing should not be a punishment and severance should not be a reward. This is a hard lesson for managers who wait until they are angry or a situation is desperately messed up to replace a faltering subordinate. Be generous even to those who are a complete disaster on the job – after all, you were the bonehead who hired them. This may seem expensive, but 2-6 months of severance pay is often a cheap price to improve morale, create room for new talent, and improve performance by cleaning out deadwood. Remember the old joke: “why is a divorce is so expensive?” Answer: “Because it’s worth it.” If you cannot think of a better reason to be generous when firing people, remember that some day your turn will come.
3. Fire often. Most organizations perform better if they turn over the bottom 2-10% of their workforce each year. If you are hiring well, communicating well, and not overpaying people, some of this will very likely happen naturally through discussions. The best place I ever worked was McKinsey & Co., which fired 10-15% of its elite workforce every year – people who readily found work elsewhere. They were very generous and classy about it and almost everyone who ever worked there looks back on the experience fondly. Nobody wants to be in the bottom quartile of performers over a long period of time — and if being “counseled out” of a company is fairly common, little less stigma attaches. And you will be surprised how many people actually appreciate being told it’s time for them to make a change.
4. Fire fast. Most managers avoid firing and nearly all wait too long. It is not unusual for inexperienced managers to wait years before indicating to a subordinate that it is time to change jobs. Many people stick around even though they recognize that they need a new challenge, hate their new boss, are sick of the work, or are rootbound and in need of repotting. Generosity helps those folks on move before business performance suffers. Of course nobody should be surprised that they are getting fired – but there is nothing wrong with moving on quickly. Heck, in Silicon Valley we sometimes worry about folks who stay too long in the same place.
5. Fire anyway. Union contracts, civil service rules, and academic tenure are no excuse. It is much harder to terminate poorly performing people when employees have contractual rights — that is, after all, why they obtained the rights. But it can be done and is worth doing. Unfortunately, most managers simply give up and decide that they cannot replace people — usually at the advice of HR departments that should have been chucked long ago. There is always a way to fire people in bad need of a good firing. It can be expensive – but it’s almost always worth it.

Colleges, universities, and public schools do an especially poor job of managing the performance of tenured faculty (in fairness, most faculty are highly dedicated, work hard, and motivate themselves – until the day they decide not to). The rationale for academic tenure, that scholars need to have their freedom of speech protected, is complete hogwash. At many universities, including the one I married into, some of the most creative and talented faculty has adjunct positions. They are nontenured, do fantastic work, and have more job security than most private sector employees because they are state employees without a lot of competition. At this point the only sensible argument for tenure is that everybody else has it, so abolishing it puts a school at a competitive disadvantage. A classic market failure so, in a moment, we will outlaw tenure.

Union members can be fired by managers who are not intimidated. I’ve fired union members and I’ve lost plenty of grievances representing fired union members. Even government employees who are union members can be fired, although there is a good deal of paperwork involved. When I joined the leadership of the U.S. Department of Labor, I discovered an enormous and terribly sleepy organization that had neglected professional development since roughly the Ford Administration. A reasonable manager would replace 5-10% of the staff annually for awhile, just to trim dead wood. Each case took months, but I fired an inspector for painting his car to look like a police vehicle so people would think he was a cop. Canned another who hadn’t shown up for work in three months (AFL-CIO President Lane Kirkland called personally to grieve that one). Altogether, I fired four people for performance during my two years of service – a pathetically low number. But these were the only four people fired for performance in the entire 18,000 person Labor Department during the time I served there. At one point, my staff threw a party because they were so grateful that someone had attempted to deal with the worst of the incompetence that plagued the place. To be clear, I truly admire the many committed and competent government professionals I worked with – but most are abused by management indifference. If there is no reward for solid performance or consequence to incompetent or indifferent performance, why bother? For a place that claimed to care about work and workers, the Labor Department was truly pitiful – and even though I started an innovative new agency, I did far too little to trim the dead branches and give the new ones room to grow.

What public policies contribute to better business results and better adjustment to the sometimes wrenching dislocations caused by global economic integration? The key to both turns out to be to make firing people as easy as hiring them and to make changing jobs economically painless. Imagine a law with three provisions:

1. All employment must be “at will”, meaning that an employer has the right to terminate any employee at any time for any reason. It’s a no-fault firing law — employers can fire anyone they wish. No law, employment agreement, union contract, or civil service rule may provide otherwise. Academic or government tenure is not just dead – it’s illegal. When it comes to employment, employers get all the rights.
2. With these rights however, come a significant economic responsibility. An employer can fire at will, but he or she must make income continuation payments to a terminated employee and cover their health care insurance until the employee starts a new job or for three months plus a month for each year of service up to a maximum of six months. Labor or employment agreements or state laws could increase the income continuation period — this would be the minimum. Employers would make health care coverage (COBRA) payments through the employment transition period.
3. Income continuation would be adjusted in special cases.
4. • A government income continuation payment would provide an extension to the income continuation period, perhaps at 80% pay, for those employees over age 50 who need it — or for those workers in industries targeted for trade adjustment assistance. Older workers and those employed in industries that are declining rapidly often take longer to find new jobs. Many must retrain and/or relocate and direct payments of this sort are efficient to administer.
   • Workers under age 25 would have their income continued for half as long. There are enough barriers to hiring young people; most can relocate, retrain, and get rehired quickly. And this ain’t France.
   • Employers can require a 60 day probationary period during which they may terminate an employee without an income continuation obligation (you need a wacko exemption to catch people who should not have been hired in the first place).
   • No games. An employee who quits or is fired for criminal behavior forfeits their right to income continuation. An employer who demotes or relocates an employee more than ten miles would be deemed to have constructively terminated the person and would be liable for paying income continuation.

Under this no-fault termination law, we no longer care whether a person was laid off because they were no longer needed or dismissed for mediocre performance. Under the no-fault system, it is “time to go – here’s your dough” and everyone parts friends.

We eliminate a ton of employment litigation, since we no longer care why an employer fires you, so long as they keep paying you for the required length of time. In the words of Oliver Wendell Holmes, you can be fired for “a good reason, a bad reason, or no reason at all”. An employer might have legitimate reasons (lousy performance, declining demand for your skills) or despicable ones (race, creed, color, political belief, sexual orientation, the cut of your jib, or the mustard on your shirt). Since they have to keep paying you, who cares why they fired you?

All firing costs are hiring costs however, so employers will either learn to hire more carefully and to terminate more selectively or lose ground to those who do. Donald Trump style bosses would quickly go broke — which strikes me as a fine thing. The cost of income continuation would be offset in some measure by productivity increases that would result from the greater flexibility granted employers. For conservatism however, assume that labor costs go up. The law would destroy jobs or depress wages because hiring is like anything else: the more it costs, the less it happens.

Priced correctly however, the advantages of no-fault terminations would more than make up for their costs.

Economic dislocation is a feature, not a bug. It is part and parcel of the profound changes sweeping the globe — changes that have the potential to bring a better life to people all over the world. But these changes are not good news for all people at all times — they create in many, many people real fears and economic insecurities that can manifest themselves in political decisions that do little to reduce disruption but can do a great deal of damage to world economic growth.

After World War I, a new technology wiped out more jobs than any other in American history. Those affected were devastated by widespread job loss and some scholars assert that this change contributed to one of the largest labor migrations in US history. Do you recall what invention had such a massive impact?

The answer is that until the 1920s, most middle class households in America had domestic servants, or washerwomen. Then the washing machine (helped later by the vacuum cleaner) eliminated hundreds of thousands of these jobs, which were held almost entirely by African American and immigrant women.

Few today wish those jobs to return – but at the time, plenty were terrified to see them go. Nearly a century later, helping people change jobs remains one of our most pressing unsolved domestic problems.

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Pretty much all economists support skilled worker immigration — and very few argue that unskilled immigration helps the earnings of unskilled native workers. The question is does the immigration of low skilled workers hurt the wages of native unskilled workers and if so, by how much?

Borjas argues that unskilled immigrants hurt the economic prospects of unskilled Americans, especially African-American men.

Borjas has been making this case – which is based on the familiar concept of supply and demand – for more than a decade. But the more elegantly he has made it, it seems, the less his colleagues concur. ”I think I have proved it,” he eventually told me, admitting his frustration. ”What I don’t understand is why people don’t agree with me.”

It turns out that Borjas’s seemingly self-evident premise – that more job seekers from abroad mean fewer opportunities, or lower wages, for native workers – is one of the most controversial ideas in labor economics. It lies at the heart of a national debate, which has been encapsulated (if not articulated) by two very different immigration bills: one, passed by the House of Representatives, which would toughen laws against undocumented workers and probably force many of them to leave the country; and one in the Senate, a measure that would let most of them stay.

You can find economists to substantiate the position of either chamber, but the consensus of most is that, on balance, immigration is good for the country. Immigrants provide scarce labor, which lowers prices in much the same way global trade does. And overall, the newcomers modestly raise Americans’ per capita income. But the impact is unevenly distributed; people with means pay less for taxi rides and household help while the less-affluent command lower wages and probably pay more for rent.

Borjas’ leading critic is David Card, a talented economist who received the coveted Marshall prize awarded each year to the nation’s most promising young economist.

..Card … has said repeatedly that, from an economic standpoint, immigration is no big deal and that a lot of the opposition to it is most likely social or cultural. "If Mexicans were taller and whiter, it would probably be a lot easier to deal with," he says pointedly.
Economists in Card’s camp tend to frame the issue as a puzzle – a great economic mystery because of its very success. The puzzle is this: how is the U.S. able to absorb its immigrants so easily?

After all, 21 million immigrants, about 15 percent of the labor force, hold jobs in the U.S., but the country has nothing close to that many unemployed. (The actual number is only seven million.) So the majority of immigrants can’t literally have "taken" jobs; they must be doing jobs that wouldn’t have existed had the immigrants not been here.

The economists who agree with Card also make an intuitive point, inevitably colored by their own experience. To the Israeli-born economist whose father lived through the Holocaust or the Italian who marvels at America’s ability to integrate workers from around the world, America’s diversity – its knack for synthesizing newly arrived parts into a more vibrant whole – is a secret of its strength.

To which Borjas, who sees a different synthesis at work, replies that, unlike his colleagues, the people arriving from Oaxaca, Mexico, are unlikely to ascend to a university faculty. Most of them did not finish high school. "The trouble with the stories that American journalists write about immigration," he told me, "is they all start with a story about a poor mother whose son grows up to become. . . . " and his voice trailed off as if to suggest that whatever the particular story – that of a C.E.O., a ballplayer or even a story like his own – it would not prove anything about immigration. What economists aim for is to get beneath the anecdotes. Is immigration still the engine of prosperity that the history textbooks describe?

The article, by Roger Lowenstein, presents both perspectives fairly. I come down solidly with Card, but then he is my Berkeley neighbor. Either way, the article is well worth a read.

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The 2006 World Cup was his to take — and at age 34, it would be his swan song. A few wondered whether he still had the brilliance he had shown when he scored two of France’s three goals in its 1998 World Cup victory over Brazil. The game made him a football icon and a hero to hundreds of millions of fans around the world. In 2004, he had been voted the best European player for the past 50 years. The the Global Soccer Federation (FIFA) named him the World Player of the Year in 1998, 2000, and 2003. Soccer legend and teammate Thierry Henry once said of Zidane that "he does things with his feet that others cannot do with their hands".

Today’s World Cup championship match was to be the culmination of this brilliant career and more than one billion people would be watching in perhaps the largest television, radio, satellite, and Internet audience ever assembled on planet earth. Many analysts expected him to win the Golden Ball — the MVP for World Cup play. Zidane has had a brilliant tournament and few had a greater claim to the prize. Today, one sixth of humanity stopped to watch Zizou play soccer. Few men in history have earned or received such a moment of triumph.

Zidane’s victory was to be rich in political symbolism. An Algerian triumphant in France. France victorious on the world stage, after a series of embarrasing political catastrophes documented here, here, and here. Zidane victorious in Berlin, where Hitler held the 1936 Olympics as a monument to Aryan superiority and Jesse Owens, a black American, won three gold medals. Coming from France, where anti-Semitism curses Jew and Arab alike and where rightists such as Jean Marie Le Pen oppose the current French team because some of its players are of African origin, Zidane would remind the world that talent, dedication, and inspiration matter more than birth or race. Zizou would make today important and the world would be watching.

Instead, Zidane blew it. He disgraced himself, his team, and his country in front of a billion people. I cannot recall a moment in sports history when genius and madness were connected so closely.

For those not among the World Cup obsessed, here is what happened. Having scored the game’s opening goal, Zizou grew frustrated at the Italian defense as the game wore on — perhaps because he had seen his sharp header that seemed sure to score blocked at the last moment by Gianluigi Buffon, the tall and talented Italian goalie.

Zidane’s counterpart on the Italian team, Marco Materazzi, was also irritating him. The two men had made two of the game’s critical plays. It was Materazzi’s clip that led to Zidane’s penalty kick in the opening minutes. And it was the tatooed Materazzi, known as a defensive enforcer and an "in-your-face" player, who tied the score, 1-1, in the 19th minute with a header off a corner kick.

Then, twenty minutes into overtime with the game still tied 1-1, Materazzi held Zidane back with a hand around his waist (and this game, unlike most World Cup matches, probably suffered from too few penalty calls). Materazzi then allegedly called Zidane a "dirty terrorist" — he apparantly insults people a lot, but for now, neither man is commenting. Zidane walked away from Materazzi, then rounded on him and used his head to violently butt the Italian in the chest. He hit Materzzi low and hard, lifting him off his feet and throwing him backwards onto the field. It was the sort of vicious, thuggish attack that will get an athlete thrown out of any game and will land you in jail if you do it off the field. Worse, the attack handsomely rewarded Materazzi’s slander. Watch it here.

The Argentine referee, Hector Elizondo, did not see the attack — indeed the San Jose Mercury News is reporting that no referee saw it and that the referees consulted video replay for the first time in the history of international soccer. As a billion television viewers and the media representatives in the stadium saw, the video replay was unambiguous.

Elizondo pulled his red card and Zidane left the field not to the adoring, roaring ovation that he had so richly earned — he left in disgrace and in tears. His teammates had not only lost their captain and their leader, but they were forced to play a man short.

They also lost their best penalty kicker, which is not trivial in a game that was ultimately decided by penalty kicks. This is, of course, a truly dumb way to break a tie in soccer. They might as well draw straws. Vince Lombardi famously said that a tie in football is like kissing your sister. Breaking a tied World Cup with PKs is like kissing your ex — disgusting, pointless, and guaranteed to disappoint.

One of the French guys muffed his kick and it was over. I was glad to see Italy win after Zidane’s outrageous behavior, but under Zidane’s inspired leadership, the French had outplayed the Italians on every measure and can be forgiven for feeling that the Cup was taken from them by the conduct of their own captain. It was Italy’s fourth Cup (only Brazil has won more) but face it, Italy is returning to a huge national soccer corruption scandal and played very strong defensively but showed little offense to speak of. In short, Italy didn’t win the World Cup so much as France lost it.

After the game ended, Zizou’s coach and his teammates said that they believe that his behavior had cost France the Cup. We will never know of course, but it was an infuriating and heartbreaking end to a brilliant athletic career.

Postscript: the real winner of the World Cup may have been Germany. The German team was more disciplined, if less creative, than France and less corrupt and scandal-plagued than Italy. A young German team that played brilliantly and rightly proud of the tournament they hosted. Berlin is back – and 1936 is starting to look like a very long time ago.

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