From Practical Economics
Insurance as a form of investment serves an important part in maintaining efficiencies in the market. Unfortunately, insurance is not limited to the private sector where competition and fear of losses force insurers to act in effective, productive and efficient ways or go out of business. Public or government run insurance programs have a record of inefficiencies that is remarkable. This is due to the fact that the mechanisms of the market, most notably competition and the profit/loss motive, do not apply to public insurance programs. Without fear of losses and competition from rival companies, public insurance programs are doomed to be wasteful, ineffective and inefficient.
Public insurance is risk blind, meaning it takes on risks that otherwise would not be insured by private companies unless extremely high premiums are paid. This allows for inefficient decisions to be made. Public insurance also charges premiums that are far below what the market equilibrium would demand. This creates incentives for individuals to take risks (and assume more services) they otherwise would avoid with the government (taxpayers) picking up the tab. Public insurance allows people, that otherwise could not afford to take on the risk or pay market premiums, to build on the beach or in high fire risk areas. This is a recipe for inefficiency and a waste of scarce resources.
Another pitfall of government insurance, or the presumed safety net of government policy, is the concept of moral hazard, or when a person or group is sheltered from risk. Moral hazards create incentives where individuals act in ways contrary to the risks that would be taken if the costs were fully carried by the individual. As a result, moral hazards create market inefficiencies/failures. The private insurance sector can create moral hazards, but is less of a problem as premiums and incentives adjust in relation to the amount of reckless behavior taken by policy holders. In the public sector, however, no such constraints exist.
A good example would be the moral hazard created by semi-private Fannie Mae and Freddie Mac insuring sub prime mortgages. This created a situation where lenders offered mortgages to people who did not have the credit to take on high risk debt. They did so because they were sheltered from carrying the risk burden by the government. This moral hazard eventually created severe market failure in the credit and banking industries.
In short, the free market protects against moral hazard, while government sponsored enterprise fosters its creation. Protecting losses that are far too risky to insure in the first place is an inefficient use of capital. Examples of public insurance programs run by the federal government include: flood, mortgage, bank deposit, terrorist acts, war risk, children‘s health, unemployment, life, pension, dental, vision, and crop insurance. In addition, Medicaid, Medicare, and Social Security are also federal insurance programs. The shear number of public insurance agencies found under the government banner is inconsistent with the spirit of capitalism and the free market.
Wednesday, August 12, 2009
Thursday, August 6, 2009
Healthcare reform made easy
Let’s simplify the debate on healthcare reform with some practical economics.
Doctors, hospitals, and insurance companies provide a service, just like automobile salesman and car dealerships. Consumers freely decide what car they want to buy based on what they need and can afford.
Consumers freely choose the type of car, salesman, and dealer they choose to do business with based on personal needs. Competition, supply, and demand have created the highest quality, lowest cost autos for all consumers.
This has allowed even the “poor” to have the ability to afford and own a car. This has occurred because in America, a company that can't compete in the marketplace is allowed to go out of business.
This frees up resources so they can be more efficiently used by more productive businesses.
In short, the free market capitalism works when consumers have the freedom to choose which car and dealer they want to have serve them.
For years, the government has been in the business of healthcare, i.e. Medicare, Medicaid; and insurance, i.e. Social Security.
The result has been less competition, less supply, increased demand, higher costs, and staggering deficits.
In short, government run or regulated businesses have been inefficient, ineffective, and have severely harmed the economy at a significant cost of personal freedom.
And what has been the result?
Government never goes out of business no matter how inefficient they are, i.e. Fannie Mae, D.M.V., Postal Service, etc.
In fact, they have the audacity to say they need more power and control to fix the inefficiencies they caused in the healthcare and insurance industries in the first place!
The government, now in the automobile business, wants to take over the entire healthcare industry.
The result will be less freedom, less competition, increased demand, lower quality, higher costs, and massive debts that may bankrupt the nation.
In short, the government “solution” may cost you your life and will certainly cost you your freedom.
The solution is simple.
Government must get out of the healthcare and insurance business and allow consumers to freely choose and businesses to freely compete to provide services like healthcare, insurance, and automobiles.
Free market entrepreneurial capitalism works in providing for the most with the least.
It’s just that simple.
Doctors, hospitals, and insurance companies provide a service, just like automobile salesman and car dealerships. Consumers freely decide what car they want to buy based on what they need and can afford.
Consumers freely choose the type of car, salesman, and dealer they choose to do business with based on personal needs. Competition, supply, and demand have created the highest quality, lowest cost autos for all consumers.
This has allowed even the “poor” to have the ability to afford and own a car. This has occurred because in America, a company that can't compete in the marketplace is allowed to go out of business.
This frees up resources so they can be more efficiently used by more productive businesses.
In short, the free market capitalism works when consumers have the freedom to choose which car and dealer they want to have serve them.
For years, the government has been in the business of healthcare, i.e. Medicare, Medicaid; and insurance, i.e. Social Security.
The result has been less competition, less supply, increased demand, higher costs, and staggering deficits.
In short, government run or regulated businesses have been inefficient, ineffective, and have severely harmed the economy at a significant cost of personal freedom.
And what has been the result?
Government never goes out of business no matter how inefficient they are, i.e. Fannie Mae, D.M.V., Postal Service, etc.
In fact, they have the audacity to say they need more power and control to fix the inefficiencies they caused in the healthcare and insurance industries in the first place!
The government, now in the automobile business, wants to take over the entire healthcare industry.
The result will be less freedom, less competition, increased demand, lower quality, higher costs, and massive debts that may bankrupt the nation.
In short, the government “solution” may cost you your life and will certainly cost you your freedom.
The solution is simple.
Government must get out of the healthcare and insurance business and allow consumers to freely choose and businesses to freely compete to provide services like healthcare, insurance, and automobiles.
Free market entrepreneurial capitalism works in providing for the most with the least.
It’s just that simple.
Wednesday, August 5, 2009
Market vs. command price systems and government run health care
From Practical Economics
The merits of a price system functioning within the free market are overwhelming in moving scarce resources to their most efficient use in a fair and equitable manner.
Market economic systems embrace the components of a price system to effortlessly move resources. Command economic systems ignore the components of a price system causing resource inefficiency. This is not to say that a command economy does not have prices, but that price is determined by decree and not supply and demand.
Because of this, a command economy has the problem of allocating the time, money, labor and capital necessary to meet the millions of diverse wants and needs of a population. In trying to do so, the command approach is faced with the staggering proposition of trying to digest literally millions if not billions of pieces of information that changes every second to determine prices.
History has shown the disastrous results of fallible men trying to indeed figure out the dynamic needs of the people through a command approach to prices. The miracle of the market framework is that the same complex situation is quickly and easily solved by a free exchange price system without fanfare or warfare.
The merits of a price system functioning within the free market are overwhelming in moving scarce resources to their most efficient use in a fair and equitable manner.
Market economic systems embrace the components of a price system to effortlessly move resources. Command economic systems ignore the components of a price system causing resource inefficiency. This is not to say that a command economy does not have prices, but that price is determined by decree and not supply and demand.
Because of this, a command economy has the problem of allocating the time, money, labor and capital necessary to meet the millions of diverse wants and needs of a population. In trying to do so, the command approach is faced with the staggering proposition of trying to digest literally millions if not billions of pieces of information that changes every second to determine prices.
History has shown the disastrous results of fallible men trying to indeed figure out the dynamic needs of the people through a command approach to prices. The miracle of the market framework is that the same complex situation is quickly and easily solved by a free exchange price system without fanfare or warfare.
Thursday, July 23, 2009
Adam Smith explains government run health care
From The Wealth of nations, 1776
The trade of a joint stock company is always managed by a court of directors. This court, indeed, is frequently subject, in many respects, to the control of a general court of proprietors. But the greater part of those proprietors seldom pretend to understand any thing of the business of the company; . . . give themselves no trouble about it, but receive contentedly such half year or yearly dividend, as the directors think proper to make to them. This total exemption from trouble and from risk, . . encourages many people to become adventurers . . . who would, upon no account, hazard their fortunes in any private company.
The directors of such companies, however, being the managers rather of other peopleʹs money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. . . Negligence and profusion therefore, must always prevail, more or less, in the management of the affairs of such a company.
Wednesday, July 22, 2009
Government health care: The effects of price controls
From Practical Economics
Price controls give government a more dominant role in the operation of the economy. The premise behind price controls is to either place a cap, or top price, a producer can charge for their product thus protecting the consumer, or place a minimum price consumers have to pay for a product thus helping the producer. In each and every case, price controls seem to offer valid solutions to market realities that seem troubling. Unfortunately, the good intentions of price controls create the opposite of the desired results.
Price controls are simply a game of economic slight-of-hand where costs are shifted to unsuspecting victims. Thomas Sowell said:
The following is a list of problems that arise by placing price controls in the market. As you will see, all of the ramifications of price controls create inefficiencies, lower the standard of living and inhibit economic growth.
-Create shortages and surpluses of goods
-Lower the quality of products
-Remove the incentives to be productive
-Worsen the problems that gave rise to the price control policy in the first place
-Expanded bureaucracy
-Lose individual economic freedom
-Increase economic engineering by government decree
-Decrease voluntary exchange
-Decrease efficiency
-Slows economic growth
-Fail to economize scarce resources
-Create powerful incentives that persuade normally law abiding people to break the law by forming black markets
-The ineffectiveness of the control will result in calls for even tougher controls
Price controls give government a more dominant role in the operation of the economy. The premise behind price controls is to either place a cap, or top price, a producer can charge for their product thus protecting the consumer, or place a minimum price consumers have to pay for a product thus helping the producer. In each and every case, price controls seem to offer valid solutions to market realities that seem troubling. Unfortunately, the good intentions of price controls create the opposite of the desired results.
Price controls are simply a game of economic slight-of-hand where costs are shifted to unsuspecting victims. Thomas Sowell said:
Misconceptions about the economic function of prices lead not only to price controls, with all their counterproductive consequences, but also to organized attempts by various institutions, laws and policies to get those prices paid by somebody else. For society as a whole, there is no somebody else. Yet few of those in politics seem prepared to face the fact. Economists may say that there is no such thing as a free lunch but politicians get elected by promising free lunches.
The following is a list of problems that arise by placing price controls in the market. As you will see, all of the ramifications of price controls create inefficiencies, lower the standard of living and inhibit economic growth.
-Create shortages and surpluses of goods
-Lower the quality of products
-Remove the incentives to be productive
-Worsen the problems that gave rise to the price control policy in the first place
-Expanded bureaucracy
-Lose individual economic freedom
-Increase economic engineering by government decree
-Decrease voluntary exchange
-Decrease efficiency
-Slows economic growth
-Fail to economize scarce resources
-Create powerful incentives that persuade normally law abiding people to break the law by forming black markets
-The ineffectiveness of the control will result in calls for even tougher controls
Tuesday, July 21, 2009
Class warfare
From Practical Economics
The art of government or politics must be factored into the incentives and behaviors of politicians. Class warfare is the tool of choice used to promote the ideology of income redistribution. By pitting one social group against another, politicians divide and conquer not only a peoples unity but also their wealth. Instead of creating a community of purpose and shared economic understandings, politicians tell the poor or the "have-nots"they are looking out for their concerns against the greedy and wealthy "haves."
At the same time, guilt is either self-inflicted or placed on the part of the wealthy that further promotes the rift. By playing on the less fortunates sense of emotions, unfairness, and entitlement, a symbolic divide is created so the politician can extort votes based on the very warfare they created. Sadly, none of this has anything to do with economic efficiency and everything to do with power, control, and utopian visions of social engineering.
A quote often attributed to Alexander Fraser Tytler, sums up the dangers of class warfare. "A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy followed by dictatorship."
The art of government or politics must be factored into the incentives and behaviors of politicians. Class warfare is the tool of choice used to promote the ideology of income redistribution. By pitting one social group against another, politicians divide and conquer not only a peoples unity but also their wealth. Instead of creating a community of purpose and shared economic understandings, politicians tell the poor or the "have-nots"they are looking out for their concerns against the greedy and wealthy "haves."
At the same time, guilt is either self-inflicted or placed on the part of the wealthy that further promotes the rift. By playing on the less fortunates sense of emotions, unfairness, and entitlement, a symbolic divide is created so the politician can extort votes based on the very warfare they created. Sadly, none of this has anything to do with economic efficiency and everything to do with power, control, and utopian visions of social engineering.
A quote often attributed to Alexander Fraser Tytler, sums up the dangers of class warfare. "A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy followed by dictatorship."
Thursday, July 16, 2009
How much do American's make?
From Practical Economics
According to the table below, 91.669% of Americans make less than $100,000 a year. Only 1.856% makes over $200,000 a year. Only 13/100ths of 1% (.13%) earn over $1,000,000 a year.
Gross income # of Americans % of population
$0 - $50,000 92,594,960 71.185%
$50,000 - $75,000 17,396,916 13.374%
$75,000 - $100,000 9,247,839 7.110%
$100,000 - $200,000 8,422,603 6.475%
$200,000 - $500,000 1,908,466 1.467%
$500,000 - $1,000,000 336,684 0.259%
$1,000,000 - $1,500,000 78,121 0.060%
$1,500,000 - $2,000,000 31,316 0.024%
$2,000,000 - $5,000,000 44,205 0.034%
$5,000,000 - $10,000,000 10,026 0.008%
$10,000,000+ 5,309 0.004%
Source: Glen Lipka; 2002 IRS Income Tax Statistics.
According to the table below, 91.669% of Americans make less than $100,000 a year. Only 1.856% makes over $200,000 a year. Only 13/100ths of 1% (.13%) earn over $1,000,000 a year.
Gross income # of Americans % of population
$0 - $50,000 92,594,960 71.185%
$50,000 - $75,000 17,396,916 13.374%
$75,000 - $100,000 9,247,839 7.110%
$100,000 - $200,000 8,422,603 6.475%
$200,000 - $500,000 1,908,466 1.467%
$500,000 - $1,000,000 336,684 0.259%
$1,000,000 - $1,500,000 78,121 0.060%
$1,500,000 - $2,000,000 31,316 0.024%
$2,000,000 - $5,000,000 44,205 0.034%
$5,000,000 - $10,000,000 10,026 0.008%
$10,000,000+ 5,309 0.004%
Source: Glen Lipka; 2002 IRS Income Tax Statistics.
Laissez faire in America?
From Practical Economics
Adam Smith is remembered for promoting the concept of laissez faire. This is a French term used when describing government actions over a market economy. Laissez faire literally is defined as "let do" but its applied meaning is 'let (it) be" or take a hands-off approach and allow the market economy to function without government interference in its industry or business.
This pure form of capitalism is the most beneficial because the free flow of economic decisions creates the greatest degree of efficiency. Anything that interferes with freedom in economic affairs, like the government commanding the economy, will retard the system overall and inhibit growth.
Some will argue the U.S. economy functions under laissez faire principles but Walter Williams, the John M. Olin Distinguished Professor of Economics at George Mason University points out, "There are 15 cabinet departments, nine of which control various aspects of the U.S. economy. They are the Departments of: Transportation, Housing and Urban Development, Health and Human Services, Education, Energy, Labor, Agriculture, Commerce, and Interior. In addition, there is the alphabet soup cluster of federal agencies such as: the IRS, the FRB and FDIC, the EPA, FDA, SEC, CFTC, NLRB, FTC, FCC, FERC, FEMA, FAA, CAA, INS, OHSA, CPSC, NHTSA, EEOC, BATF, DEA, NIH, and NASA."
This alphabet soup of government involvement in the American economy would make Adam Smith‘s head spin like a top as he rolls over in his grave. The important role of government in the economy will be discussed in chapter 19, but the idea that free markets need to actually function free of outside mandates and commands should seem painfully obvious at this point
Adam Smith is remembered for promoting the concept of laissez faire. This is a French term used when describing government actions over a market economy. Laissez faire literally is defined as "let do" but its applied meaning is 'let (it) be" or take a hands-off approach and allow the market economy to function without government interference in its industry or business.
This pure form of capitalism is the most beneficial because the free flow of economic decisions creates the greatest degree of efficiency. Anything that interferes with freedom in economic affairs, like the government commanding the economy, will retard the system overall and inhibit growth.
Some will argue the U.S. economy functions under laissez faire principles but Walter Williams, the John M. Olin Distinguished Professor of Economics at George Mason University points out, "There are 15 cabinet departments, nine of which control various aspects of the U.S. economy. They are the Departments of: Transportation, Housing and Urban Development, Health and Human Services, Education, Energy, Labor, Agriculture, Commerce, and Interior. In addition, there is the alphabet soup cluster of federal agencies such as: the IRS, the FRB and FDIC, the EPA, FDA, SEC, CFTC, NLRB, FTC, FCC, FERC, FEMA, FAA, CAA, INS, OHSA, CPSC, NHTSA, EEOC, BATF, DEA, NIH, and NASA."
This alphabet soup of government involvement in the American economy would make Adam Smith‘s head spin like a top as he rolls over in his grave. The important role of government in the economy will be discussed in chapter 19, but the idea that free markets need to actually function free of outside mandates and commands should seem painfully obvious at this point
Wednesday, July 15, 2009
Economic quote to note
A Fool can put on his coat better than a wise man can put it on for him.-proverb
Monday, July 13, 2009
How much does the government need?
Taxation to pay for government is a necessity; the key question is: how much is enough?
U.S. federal spending as a percentage of GDP A look at historical trends offers some answers to the question of how much taxation is sufficient for government to accomplish its necessary functions efficiently. Research has shown that for America‘s first 130 years, federal spending as a percentage of GDP averaged around 2.5%. Since 1915, or for the next 75 years, spending consistently rose as a percentage of GDP and averaged around 16.6%. Current spending is approximately 19% of GDP.
Year Government spending as a percentage of GDP
1787-1849 1.7%* (63 year period)
1850-1900 3.1%* (51 year period)
1901 2.5%
1905 2.1%
1910 2.2%
1915 2.0%
1920 7.3%
1925 3.3%
1930 3.4%
1932 6.9%
1933 8.0%
1934 10.7%
1935 9.2%
1939 10.3%
1941 12.0%
1944 43.6%
1945 41.5%
1947 14.8%
1948 11.6%
1950 15.6%
1955 17.3%
1960 17.8%
1965 17.2%
1967 19.6%
1970 19.3%
1975 21.3%
1980 21.7%
1985 22.9%
1990 21.8%
1995 20.7%
2000 18.4%
2003 19.9%
2008 21.0%
2009 28-31% estimated
2050 38% estimated
2075 40% estimated
* Total combined federal spending as a % of total combined GDP
Sources: Historical Tables. ―Budget of the United States Government.‖ fiscal year 2006. Johnson, Louis D. ―Source note for US GDP, 1790-Present.‖ Economic History Services (1997) Congressional Budget Office, Long range fiscal policy brief, July 3, 2002
U.S. federal spending as a percentage of GDP A look at historical trends offers some answers to the question of how much taxation is sufficient for government to accomplish its necessary functions efficiently. Research has shown that for America‘s first 130 years, federal spending as a percentage of GDP averaged around 2.5%. Since 1915, or for the next 75 years, spending consistently rose as a percentage of GDP and averaged around 16.6%. Current spending is approximately 19% of GDP.
Year Government spending as a percentage of GDP
1787-1849 1.7%* (63 year period)
1850-1900 3.1%* (51 year period)
1901 2.5%
1905 2.1%
1910 2.2%
1915 2.0%
1920 7.3%
1925 3.3%
1930 3.4%
1932 6.9%
1933 8.0%
1934 10.7%
1935 9.2%
1939 10.3%
1941 12.0%
1944 43.6%
1945 41.5%
1947 14.8%
1948 11.6%
1950 15.6%
1955 17.3%
1960 17.8%
1965 17.2%
1967 19.6%
1970 19.3%
1975 21.3%
1980 21.7%
1985 22.9%
1990 21.8%
1995 20.7%
2000 18.4%
2003 19.9%
2008 21.0%
2009 28-31% estimated
2050 38% estimated
2075 40% estimated
* Total combined federal spending as a % of total combined GDP
Sources: Historical Tables. ―Budget of the United States Government.‖ fiscal year 2006. Johnson, Louis D. ―Source note for US GDP, 1790-Present.‖ Economic History Services (1997) Congressional Budget Office, Long range fiscal policy brief, July 3, 2002
Monday, July 6, 2009
Scarcity
From Practical Economics
Before we can understand economics with any degree of expertise, there needs to be agreement that:
We live on an Earth that is finite and limited.
Humans are not perfectible and have insatiable desires as a part of their nature.
Putting these two factors together, basic reasoning tells us that:
Since we live with scarcity we can‘t meet every desire.
We will have to make choices; taking into consideration trade-offs or costs in making decisions.
The choices that are made will either increase or decrease our efficiency to the betterment or detriment of the entire society. The quest is to increase the number of desires reached while decreasing the resources used to reach them as effectively as possible.
When scarcity is ignored in the decision making process, ideals that can only come true in a world of unlimited abundance are embraced without the worry of the devastating affects of such utopian dreams. In other words, acting upon what might sound like a glorious and noble idea can, and often does, have the opposite affect on the health and standard of living for everyone.
Because of scarcity, we can only hope for a best case scenario between a myriad of choices, each having an associated cost. Wasting time with theoretical "what ifs" may make those with the time to fantasize about perfection smug, but it does little to raise the standard of living and quality of life for everyone
Before we can understand economics with any degree of expertise, there needs to be agreement that:
We live on an Earth that is finite and limited.
Humans are not perfectible and have insatiable desires as a part of their nature.
Putting these two factors together, basic reasoning tells us that:
Since we live with scarcity we can‘t meet every desire.
We will have to make choices; taking into consideration trade-offs or costs in making decisions.
The choices that are made will either increase or decrease our efficiency to the betterment or detriment of the entire society. The quest is to increase the number of desires reached while decreasing the resources used to reach them as effectively as possible.
When scarcity is ignored in the decision making process, ideals that can only come true in a world of unlimited abundance are embraced without the worry of the devastating affects of such utopian dreams. In other words, acting upon what might sound like a glorious and noble idea can, and often does, have the opposite affect on the health and standard of living for everyone.
Because of scarcity, we can only hope for a best case scenario between a myriad of choices, each having an associated cost. Wasting time with theoretical "what ifs" may make those with the time to fantasize about perfection smug, but it does little to raise the standard of living and quality of life for everyone
Tuesday, June 30, 2009
Technological growth
From Practical Economics:
While technology is often made out to be the enemy of the worker, technological growth is a vital part of creating economic growth. Developing new and/or advanced technologies is a process akin to using building blocks. With each development or advancement, the stage is set for the next level that, in turn, fosters further advancements in technology. This system allows for continual acceleration in growth as knowledge builds upon itself in geometrically increasing proportions.
All societies develop new or improved technologies and advance as a rule of thumb, but a society that fosters a free and open market economic system adds an additional accelerant for creating technological advances. Because of the incentives and motivating forces that a free enterprise system offers, individuals are given the drive to find the advancements that people desire. The faster the advancement occurs, the greater the benefits; so anything that speeds up the process of technological advancement, within ethical boundaries, should be seen as efficient.
For example, advancements in the telecommunications industry from the time of the earliest car phone to today‘s voice activated digital communications network is extraordinary. Technological growth has produced countless increases in productivity that created efficiencies allowing the economy to grow. These advances were made possible not out of chance or governmental fiat (decree). They happened with amazing speed because the free market creates incentives for individuals to make breakthroughs in technology for their own benefit and with ruthless disregard for the life saving consequences they pass on to the society as a whole.
While technology is often made out to be the enemy of the worker, technological growth is a vital part of creating economic growth. Developing new and/or advanced technologies is a process akin to using building blocks. With each development or advancement, the stage is set for the next level that, in turn, fosters further advancements in technology. This system allows for continual acceleration in growth as knowledge builds upon itself in geometrically increasing proportions.
All societies develop new or improved technologies and advance as a rule of thumb, but a society that fosters a free and open market economic system adds an additional accelerant for creating technological advances. Because of the incentives and motivating forces that a free enterprise system offers, individuals are given the drive to find the advancements that people desire. The faster the advancement occurs, the greater the benefits; so anything that speeds up the process of technological advancement, within ethical boundaries, should be seen as efficient.
For example, advancements in the telecommunications industry from the time of the earliest car phone to today‘s voice activated digital communications network is extraordinary. Technological growth has produced countless increases in productivity that created efficiencies allowing the economy to grow. These advances were made possible not out of chance or governmental fiat (decree). They happened with amazing speed because the free market creates incentives for individuals to make breakthroughs in technology for their own benefit and with ruthless disregard for the life saving consequences they pass on to the society as a whole.
Saturday, June 27, 2009
Minimum wage myths
From Practical Economics
Minimum wage laws are pushed on the political agenda by calling minimum wages a "living wage" and conjuring up images of people dying if they earn any less. Sadly, obesity, heart disease, and diabetes are a bigger problem than starvation among the poorest in America.
The problem with the living wage euphemism for socialist government is the fact that even at the current minimum wage rate of $6.40 hour, a worker who works 40 hours a week and 52 weeks a year will gross $13,312. This is well above the official 2006 poverty line, set by the government, which is just under $10,000 for an individual.
These numbers do not apply to places like Oregon, Vermont and Washington where the minimum wage is $7.50, $7.25 and $7.63 respectively, according to the U.S. Bureau of Labor Statistics. In San Francisco, the minimum wage is $8.50 hour, or $17,680 a year, guaranteed if you are willing to work at any job.
Even if minimum wage workers were barely scratching out an existence as many would have you believe, Walter Williams has detailed that only 18% of minimum wage workers have dependents and only 5.3% live below the poverty line. Thomas Sowell has shown that those who are at the minimum wage do not stay there for very long. In fact, Sowell shows that an absolute majority of workers in the bottom 20% of wage earners (many making the minimum wage) move to the top 20% within a time span of approximately 17 years. Even if a minimum wage was as some suggest too low, it is obvious that people do not stay at the minimum for very long.
Lastly, if you add marriage to the equation, the minimum wage debate is moot. Married couples who both have minimum wage jobs earn a gross income of $26,624 which is above the government poverty level of $20,000 for a family of four. Minimum wage couples live with luxuries that their parents could not have even dreamed of. In fact, marriage is the best indicator of economic self-sufficiency.
Minimum wage laws are pushed on the political agenda by calling minimum wages a "living wage" and conjuring up images of people dying if they earn any less. Sadly, obesity, heart disease, and diabetes are a bigger problem than starvation among the poorest in America.
The problem with the living wage euphemism for socialist government is the fact that even at the current minimum wage rate of $6.40 hour, a worker who works 40 hours a week and 52 weeks a year will gross $13,312. This is well above the official 2006 poverty line, set by the government, which is just under $10,000 for an individual.
These numbers do not apply to places like Oregon, Vermont and Washington where the minimum wage is $7.50, $7.25 and $7.63 respectively, according to the U.S. Bureau of Labor Statistics. In San Francisco, the minimum wage is $8.50 hour, or $17,680 a year, guaranteed if you are willing to work at any job.
Even if minimum wage workers were barely scratching out an existence as many would have you believe, Walter Williams has detailed that only 18% of minimum wage workers have dependents and only 5.3% live below the poverty line. Thomas Sowell has shown that those who are at the minimum wage do not stay there for very long. In fact, Sowell shows that an absolute majority of workers in the bottom 20% of wage earners (many making the minimum wage) move to the top 20% within a time span of approximately 17 years. Even if a minimum wage was as some suggest too low, it is obvious that people do not stay at the minimum for very long.
Lastly, if you add marriage to the equation, the minimum wage debate is moot. Married couples who both have minimum wage jobs earn a gross income of $26,624 which is above the government poverty level of $20,000 for a family of four. Minimum wage couples live with luxuries that their parents could not have even dreamed of. In fact, marriage is the best indicator of economic self-sufficiency.
Monday, June 22, 2009
Winners and losers
From Practical Economics
Capitalism allows for winners and losers in order to create incentives for productivity, innovation and excellence. Winning feels good and reinforces efficient behaviors while losing feels bad and reinforces behaviors that should not be repeated. This is a highly motivating phenomenon that moves people to change their behavior in directions that benefit everyone. The system of competition creates short term pain for some at the cost of long term happiness for many.
Remember, self-interest is not just negative in nature, it can also be seen as a positive because people working within markets will do for themselves things that benefit others. Competition in the free market is a struggle to see who can benefit others the most. As a result, the winners and losers of a competitive market create efficiencies. A system that includes pain creates a more pleasurable existence for everyone while a system that looks to create pleasure creates a more painful existence for everyone.
Economist J. A. Schumpeter used to refer to progress under capitalism as “creative destruction” or the replacement of businesses that have outlived their usefulness with businesses that carry technological and organizational creativity forward, raising standards of living in the process.
Capitalism allows for winners and losers in order to create incentives for productivity, innovation and excellence. Winning feels good and reinforces efficient behaviors while losing feels bad and reinforces behaviors that should not be repeated. This is a highly motivating phenomenon that moves people to change their behavior in directions that benefit everyone. The system of competition creates short term pain for some at the cost of long term happiness for many.
Remember, self-interest is not just negative in nature, it can also be seen as a positive because people working within markets will do for themselves things that benefit others. Competition in the free market is a struggle to see who can benefit others the most. As a result, the winners and losers of a competitive market create efficiencies. A system that includes pain creates a more pleasurable existence for everyone while a system that looks to create pleasure creates a more painful existence for everyone.
Economist J. A. Schumpeter used to refer to progress under capitalism as “creative destruction” or the replacement of businesses that have outlived their usefulness with businesses that carry technological and organizational creativity forward, raising standards of living in the process.
Tuesday, June 16, 2009
Practical Economics
What is politically palatable is often different than what is economically accurate and as you well know understanding economics takes time and thoughtful contemplation. Policy makers, however, deal in sound bites and feel good demagoguery. This is to create a persona that wins votes in the hearts of voters because winning the minds of the voters is much more difficult and next to impossible for those who know what you need better than you. Short-term time horizons and the purposeful ignoring of unforeseen consequences might make for good political rhetoric and policy making, but the tragic results are nonetheless painful. Thomas Sowell explained this type of stage one, short-term, thinking when he said, ―killing the goose that lays the golden egg is a viable political strategy, so long as the goose does not die before the next election and no one traces the politicians fingerprints on the murder weapon.
Wednesday, June 10, 2009
From Practical Economics: Freedom-Choice-Cost
Economist Arnold Kling says that there are three types of economists that believe in capitalism. Those that favor the free market with reservations and thus believe that because markets fail the government should be used in an attempt to fix the failures. Let‘s call these people pessimistic economists.
The second group favors the free market without reservations and thus believes that because markets work well, use the market. We can call these people optimistic economists.
The last group favors the market with reservations and thus believes that because markets fail we need more markets. They see market failures as natural and thinking in terms of perfect markets would be a bad approximation to reality. Because of this they do not look to government as a solution to imperfect markets because the market is more perfect than fallible government institutions that have the power of oppression and tyranny. Remember, governments do not have to face competition and the fear of loss. We can call this third group, practical economists.
Monday, June 8, 2009
Economics quote of the day
"There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen." -Frederic Bastiat
Todays lesson from Practical Economics
The idea that consumers are at the mercy of abusive producers is an absurd notion in a market economy. Just as producers have the final say in supply based on consumer demand, consumers have the final say in demand based on what producers have supplied. This cyclical interrelationship between consumers and producers creates a division and separation of power that supports consumer and producer sovereignty (independence).
Consumers, as a whole, determine demand and guide the market. But it is the independence of each individual to freely make economic decisions that creates micro-efficiencies based on specific and specialized knowledge. This is vital because even the greatest minds using the most powerful of computers can only track general trends to forecast future demands.
The strength of a market economy is the exercise of free choice based on personal needs, incentives and wisdom. This creates real-time efficiencies far greater than any collective exercise by even the best of elites with the latest technology. The scale of data necessary to create an efficient economy is incomprehensible to man or machine. Only through a consumer guided market can billions of pieces of information be deciphered and acted upon economically.
Saturday, June 6, 2009
Quote of the day
"Fundamentally, there are two ways of coordinating the economic activities of millions. One is central direction involving the use of coercion—the technique of the army and of the modern totalitarian state. The other is voluntary cooperation of individuals—the technique of the market place." -Milton Friedman
Practical Economics lesson of the day
At face value, the self-interest and greed to acquire capital in the form of profits looks like a system that can only create the worst of consequences. Fortunately, when you add the ingredients of freedom and competition into the equation, the outcomes for the consumer become nothing short of miraculous. Businesses will always operate in their own best interest and one must never think that it is any other way. The key is allowing market principles to channel that self-interest into behaviors that benefit everyone. In short, the free market is the check to the tyranny of business just like a free republic is a check to the tyranny of government.
Want more? Read Practical Economics- DK
Friday, June 5, 2009
Conservatives Aren't the extremists
Excepts from David Limbaugh:
Editors note: conservative does not mean Republican, it means classical liberal thinking, a-la the enlightened philosophers.
Conservatives are not the ones who sermonize about tolerance yet demonstrate intolerance toward conservative and Christian thought; support exterminating babies in the womb; apologize the world over for America; or gut the military and missile defense because of some dangerously egotistical notion that they have the magic to turn evil into goodness with their charisma and eloquence or, even worse, because they refuse to recognize evil in the world, except as emanating from the United States.
Conservatives aren't the ones who have so little faith in their fellow human beings that they diminish their dignity by expanding the welfare state and increasing man's learned dependency on government; judge people by the color of their skin instead of the content of their character; pit economic groups against one another, stoking the flames of envy and greed; punish success, reward failure and promote mediocrity; side with the world's tyrants and dictators; slavishly attach themselves to leftist propaganda about impending environmental catastrophes; promote a secular humanist worldview that considers government a quasi-deity that can perfect the human condition; or morally equate the practice of enhanced interrogation techniques to save innocent lives with that of beheading innocent people. . .
glamorize the world's tyrants and the conditions in their thugocracies; ignore the verdict of history that socialism destroys the human spirit and cannot work in the real world -- assuming it would be desirable if it could, which it most certainly would not
http://townhall.com/columnists/DavidLimbaugh/2009/06/05/conservatives_arent_the_extremists
Editors note: conservative does not mean Republican, it means classical liberal thinking, a-la the enlightened philosophers.
Conservatives are not the ones who sermonize about tolerance yet demonstrate intolerance toward conservative and Christian thought; support exterminating babies in the womb; apologize the world over for America; or gut the military and missile defense because of some dangerously egotistical notion that they have the magic to turn evil into goodness with their charisma and eloquence or, even worse, because they refuse to recognize evil in the world, except as emanating from the United States.
Conservatives aren't the ones who have so little faith in their fellow human beings that they diminish their dignity by expanding the welfare state and increasing man's learned dependency on government; judge people by the color of their skin instead of the content of their character; pit economic groups against one another, stoking the flames of envy and greed; punish success, reward failure and promote mediocrity; side with the world's tyrants and dictators; slavishly attach themselves to leftist propaganda about impending environmental catastrophes; promote a secular humanist worldview that considers government a quasi-deity that can perfect the human condition; or morally equate the practice of enhanced interrogation techniques to save innocent lives with that of beheading innocent people. . .
glamorize the world's tyrants and the conditions in their thugocracies; ignore the verdict of history that socialism destroys the human spirit and cannot work in the real world -- assuming it would be desirable if it could, which it most certainly would not
http://townhall.com/columnists/DavidLimbaugh/2009/06/05/conservatives_arent_the_extremists
Snobs who have it all tell us to downsize
Excerpts from Todd Bucholz in the Wall Street Journal:
Maybe amid the financial wreckage we feel a natural yearning to go back to simpler times. But some of our commentators have taken this urge a little far. our rise from poverty.
In fact, small is not necessarily better, and there is a difference between a simpler life and the life of a simpleton. At what point in time should we declare: "Stop. Enough progress. Let's keep things simple"? Would 1 B.C. have been a good time to hit "pause"? Or July 3, 1776? Or on the eve of the 1964 Civil Rights vote? It's a good thing Teddy Roosevelt did not lock us into the standard of living of 1904 or we would never fly on airplanes, get a polio vaccination or expect to live past the age of 50.
The point is that we cannot know what we could be missing by halting our climb to toward affluence, any more than Emperor Joseph II could help Mozart by declaring that his opera had "too many notes."
And there is something unfair about decrying consumption at this stage in the game. Even if we simplify our lives and forswear "extra income," we will still benefit from centuries of innovation and wealth-creation that others have yet to enjoy. Make no mistake: To embrace the small-is-beautiful ethos is to crank up the drawbridge and leave a crocodile-infested moat between elites who already own Viking ranges and the masses yearning to gain access to indoor plumbing.
Never mind that in the past 20 years, thanks in part to the explosion of American consumption, hundreds of millions of people around the world, now with jobs to meet U.S. import demands, have eaten three meals in one day -- for the very first time in their lives. This is a War on Poverty that we are winning! Snobs would rather downsize and turn victory into defeat.
I would argue that it is the excitement of competition -- sloppy, risky and tense -- that brings us happiness.
Humans have competed ever since Cain picked up a rock and knocked Abel on the head. And, from a historical point of view, the idea of competition has not imprisoned us but liberated us, psychologically and materially.
http://online.wsj.com/article/SB124417359117288163.html
Maybe amid the financial wreckage we feel a natural yearning to go back to simpler times. But some of our commentators have taken this urge a little far. our rise from poverty.
In fact, small is not necessarily better, and there is a difference between a simpler life and the life of a simpleton. At what point in time should we declare: "Stop. Enough progress. Let's keep things simple"? Would 1 B.C. have been a good time to hit "pause"? Or July 3, 1776? Or on the eve of the 1964 Civil Rights vote? It's a good thing Teddy Roosevelt did not lock us into the standard of living of 1904 or we would never fly on airplanes, get a polio vaccination or expect to live past the age of 50.
The point is that we cannot know what we could be missing by halting our climb to toward affluence, any more than Emperor Joseph II could help Mozart by declaring that his opera had "too many notes."
And there is something unfair about decrying consumption at this stage in the game. Even if we simplify our lives and forswear "extra income," we will still benefit from centuries of innovation and wealth-creation that others have yet to enjoy. Make no mistake: To embrace the small-is-beautiful ethos is to crank up the drawbridge and leave a crocodile-infested moat between elites who already own Viking ranges and the masses yearning to gain access to indoor plumbing.
Never mind that in the past 20 years, thanks in part to the explosion of American consumption, hundreds of millions of people around the world, now with jobs to meet U.S. import demands, have eaten three meals in one day -- for the very first time in their lives. This is a War on Poverty that we are winning! Snobs would rather downsize and turn victory into defeat.
I would argue that it is the excitement of competition -- sloppy, risky and tense -- that brings us happiness.
Humans have competed ever since Cain picked up a rock and knocked Abel on the head. And, from a historical point of view, the idea of competition has not imprisoned us but liberated us, psychologically and materially.
http://online.wsj.com/article/SB124417359117288163.html
Today's lesson from Practical Economics
Market vs. command price systems
The merits of a price system functioning within the free market are overwhelming in moving scarce resources to their most efficient use in a fair and equitable manner. Market economic systems embrace the components of a price system to effortlessly move resources. Command economic systems ignore the components of a price system causing resource inefficiency. This is not to say that a command economy does not have prices, but that price is determined by decree and not supply and demand. Because of this, a command economy has the problem of allocating the time, money, labor and capital necessary to meet the millions of diverse wants and needs of a population. In trying to do so, the command approach is faced with the staggering proposition of trying to digest literally millions if not billions of pieces of information that changes every second to determine prices.
History has shown the disastrous results of fallible men trying to indeed figure out the dynamic needs of the people through a command approach to prices. The miracle of the market framework is that the same complex situation is quickly and easily solved by a free exchange price system without fanfare or warfare.
The merits of a price system functioning within the free market are overwhelming in moving scarce resources to their most efficient use in a fair and equitable manner. Market economic systems embrace the components of a price system to effortlessly move resources. Command economic systems ignore the components of a price system causing resource inefficiency. This is not to say that a command economy does not have prices, but that price is determined by decree and not supply and demand. Because of this, a command economy has the problem of allocating the time, money, labor and capital necessary to meet the millions of diverse wants and needs of a population. In trying to do so, the command approach is faced with the staggering proposition of trying to digest literally millions if not billions of pieces of information that changes every second to determine prices.
History has shown the disastrous results of fallible men trying to indeed figure out the dynamic needs of the people through a command approach to prices. The miracle of the market framework is that the same complex situation is quickly and easily solved by a free exchange price system without fanfare or warfare.
Tuesday, June 2, 2009
Presidential line of succession.
Put your seat belts on so you don't fall out of your chair.
Tim Geithner is 5th in presidential succession. He is not even in the same league with Sec of Treasury Alexander Hamilton.
It is bad enough having Nancy Pelosi and Robert Byrd #2 and #3. Not to mention Joe Biden.
1 Vice President Joe Biden
2 Speaker of the House Nancy Pelosi
3 Senate President pro tempore Robert Byrd
4 Secretary of State Hillary Clinton
5 Secretary of Treasury Tim Geithner
Tim Geithner is 5th in presidential succession. He is not even in the same league with Sec of Treasury Alexander Hamilton.
It is bad enough having Nancy Pelosi and Robert Byrd #2 and #3. Not to mention Joe Biden.
1 Vice President Joe Biden
2 Speaker of the House Nancy Pelosi
3 Senate President pro tempore Robert Byrd
4 Secretary of State Hillary Clinton
5 Secretary of Treasury Tim Geithner
Friday, May 29, 2009
Why capitalism works
Excerpts from a piece by Carl Schramm via Wall Street Journal Europe
http://online.wsj.com/article/SB124354060463363743.html#printModeWe continue to be in the middle of a frightening economic drama, one that is putting the core tenets of modern capitalism at the center of the global debate.
Is this the moment the Austrian economist Joseph Schumpeter had envisaged when he spoke of "creative destruction"? After all, it was Schumpeter who worried more than any other modern economist about what might be called the fragile condition of capitalism. . . His life's work concentrated on entrepreneurs renewing the economy through what he called "creative destruction."
Schumpeter embraced capitalism not as a reaction or as the second-best solution to the unproductive reality of utopian economic planning. Rather, he saw capitalism as the foundation of two complementary forces. The first was economic expansion. The second was its role in protecting individual freedom.
For Schumpeter, to sacrifice one was to imperil the other. More starkly, he would remind us in no uncertain terms that, whatever our present doubts, the only way freedom is secure for any individual is within a growing economy. In other words, political freedom depends on economic expansion.
As a general rule, only capitalism can create wealth and liberty at the same time. And, of course, capitalism can expand welfare faster than any other social or economic order has ever done.
From Schumpeter's vantage point, capitalism's very success allows rich societies to use government to relax the impersonal rules that govern markets, creating new rules that buffer citizens from the rigors of risk-taking and failure. In that sense, government invents for itself the task of mediating market outcomes.
No doubt, in the face of the continuing financial crisis, entrepreneurial capitalism is threatened. All over the world, people are giving greater emphasis to personal security. Their taste for assuming personal risk may be chastened, at least for the moment. This is an altogether rational and expected response.
Where that becomes troublesome, however, is the moment when government comes to be seen as the sole source of security. What we, the public, need to understand is that the best guarantor of security is not government. It's economic growth. While we want to believe otherwise, the cold fact is that government can't guarantee economic permanency. Nobody, and nothing, can.
Pragmatically speaking, we must figure out how to increase people's sense of security without making government itself bigger or more powerful.
Whatever road we choose, entrepreneurial capitalism cannot be revived or flourish if new government security programs end up attenuating the individual's ultimate responsibility to attend to his or her own welfare.
Thursday, May 28, 2009
"Green" is code for anti-capitalism
First of all, the term "green" is an oxymoron. If "green" means the environment, then all energy sources are "green." Maybe "green" energy should be called non-fossil fuel energy with some carbon costs?
Tony Blankley cites sound research on green energy job creation.
Tony Blankley cites sound research on green energy job creation.
In March, one of Spain's leading universities, Universidad Rey Juan Carlos, published an authoritative study "of the effects on employment of public aid to renewable energy sources." The report pointed out: "This study is important for several reasons. First is that the Spanish experience is considered a leading example to be followed by many policy advocates and politicians. This study marks the very first time a critical analysis of the actual performance and impact has been made. Most important, it demonstrates that the Spanish/EU-style 'green jobs' agenda now being promoted in the U.S. in fact destroys jobs, detailing this in terms of jobs destroyed per job created."http://www.humanevents.com/article.php?id=32025
The central finding of the study is that -- treating the data optimistically -- for every renewable-energy job that the government finances, "Spain's experience … reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created."
And she'll have fun, fun, fun til her daddy takes her Prius away
When Barack Obama announced that the government will use its fist to wave onto the highways of America cars that get 39 miles to a gallon of liquefied switch grass or something, he said, "Everybody wins."Everybody? What country has he been living in? This marks the end of the internal combustion engine as we knew it, and it is the way Americans have defined, designed and literally driven much of the nation's culture for as long as anyone can remember. Car culture is America's culture.
It's 2016. Imagine a Brian Wilson ever thinking to write: "And she'll have fun, fun, fun til her daddy takes her Prius away."
This tension over how we live arrived before the world began standing on its head over global warming. The guys in the hemi-powered drones used to mock the granola and Birkenstock crowd. Look who's on top now.
"Everybody wins?" Not quite. What's winning is a worldview that goes deeper than the data beneath global warming. The gasoline cars they want to turn into scrap were about a lot more than the thrill of roaring on.
The cars and their culture were a manifestation of what made the U.S. really different. The cars, like the country, were big, fast and unfettered. Their drivers were delirious with the possibility of finding something new in life.
When Americans grew up, that's just what a lot of them did -- win. Now, it looks like we're being asked to throttle down to government-approved survival. . . Save the planet and lose the nation's heart.
Maybe the car culture will revert to where it began, when the whiskey runners in the South ran from the revenuers. This time the cars themselves will be bootlegged -- fat, fast and gas-powered -- racing through the night on off-map roads while the National Green Corps -- enacted by Congress in the second Obama term -- looks for them from ethanolic choppers overhead.
http://online.wsj.com/article/SB124346903426760553.html#printMode
Wednesday, May 27, 2009
We fight for a color-race-ethnicity-gender-blind society of equal oportunity, by only seeing color-race-ethnicity and gender?
I wonder how Dr. King would feel right know considering those who fought for a color blind society, and were rolled down the street with fire hoses, have seen their struggle turned 180 degrees. Today, it's all about color, gender, sexual orientation, and personal struggle, as long as you adhere to a particular ideology. What ever happened to the principle and visualization that lady liberty/justice was blind-folded. Far too many in America, who claim to hold the torch of civil rights, have become the very thing they claim to hate. Intellectual hypocrisy of the highest destructive order.-DK
From Scott Swirles, via Thomas Sowell's column regarding Obama's Supreme Court nominee and the President's desire to pick judges who have "empathy."
From Scott Swirles, via Thomas Sowell's column regarding Obama's Supreme Court nominee and the President's desire to pick judges who have "empathy."
If you were going to have open heart surgery, would you want to be operated on by a surgeon who was chosen because he had to struggle to get where he is or by the best surgeon you could find-- even if he was born with a silver spoon in his mouth and had every advantage that money and social position could offer?While we are on the subject. Some excerps from Michelle Malkin's, Not all "Compelling Personal Stories" are Equal are in order.
If it were you who was going to be lying on that operating table with his heart cut open, you wouldn't give a tinker's damn about somebody's struggle or somebody else's privileges.
Since when did securing a Supreme Court seat become a high hurdles contest? The White House and Democrats have turned Second Circuit Judge Sonia Sotomayor's nomination into a personal Olympic event. Pay no attention to her jurisprudence. She grew up in a Bronx public housing project. She was diagnosed with childhood diabetes at 8. Her father died a year later. And, oh, by the way, did you hear that she was poor?
It's a "compelling personal story," as we heard 20,956 times on Tuesday. Sotomayor's a "real" person. Why, she even read Nancy Drew as a young girl, President Obama told us. She's "faced down barriers, overcome the odds and lived out the American dream that brought her parents here so long ago," Obama said.
If Sotomayor were auditioning to be Oprah Winfrey's fill-in host, I'd understand the over-the-top hyping of her life narrative. But isn't anybody on Sotomayor's side the least bit embarrassed by all this liberal condescension?
Republicans are not allowed to mention Sotomayor's ethnicity lest they be branded bigots, but every Democrat on cable television harped on her multicultural "diversity" and "obstacle"-climbing... New York Sen. Charles Schumer stated outright: "It's long overdue that a Latino sit on the United States Supreme Court." Color-coded tokenism dominated the headlines, with blaring references to Sotomayor as the high court's potential "first Hispanic."
Sotomayor's statement at a 2001 University of California at Berkeley speech asserting brown-skin moral authority: "I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn't lived that life."
Tuesday, May 26, 2009
I'll have a baby with my fries.
The casual nature of parenting is becoming an epidemic.
Startling information on social decay. Excerpts from Born Unequal, by the Editors of National Review. If the family institution collapses, disaster occurs. To find out more, read http://freedom-choice-cost.blogspot.com/2009/05/canary-is-dead.html
Startling information on social decay. Excerpts from Born Unequal, by the Editors of National Review. If the family institution collapses, disaster occurs. To find out more, read http://freedom-choice-cost.blogspot.com/2009/05/canary-is-dead.html
“Childbearing by unmarried women has resumed a steep climb since 2002,” the (National Center for Health Statistics) NCHS reports. Between 2002 and 2007, the birth rate among unmarried women increased by 21 percent; since 1980, it has increased by 80 percent. In 2007, almost 40 percent of all births in the United States were to unmarried women. The out-of-wedlock birth rate among blacks was just under 72 percent, while the rate among non-Hispanic whites was nearly 28 percent. .http://article.nationalreview.com/?q=ODU0Mjg3Yjk5ZDJiNWUzYjRlNzQ2MGU2YmQ1NDE3ODk=
Between 2002 and 2006, the birth rate among unmarried Hispanic women jumped by 20 percent. In 2007, more than 51 percent of all Hispanic births were out of wedlock. . . This is retarding their assimilation, hindering their upward mobility, and exacerbating a bevy of social problems, such as gang activity. . .
out-of-wedlock birth rate among the white underclass “is probably now in the region of 70 percent,” while “the proportion for the white working class may be above 40 percent. The white middle class is approaching 20 percent — a scarily high figure when you think about all the ways that the middle class has been the spine of the nation.” By contrast, at the top of the income ladder — among the “white overclass” — Murray estimates that the out-of-wedlock birth rate “is probably about 4 or 5 percent, tops.”
Friday, May 22, 2009
Voting and democracy are just outdated ideas
A new party will emerge, and classical liberal philosophies and values of the great enlightenment will again be represented in our great Republic. Question is, how bad will things have to get before the change comes, and how nasty will the revolution be? Excerpts from Newt Gingrich, A Rising Anti-Government Tide:
Americans should look carefully at the anti-politician, anti-government mood exhibited in California this week.
The repudiation of the California establishment in the series of initiative defeats could hardly have been more decisive. Five taxing and spending measures were rejected by 62.6 to 66.4 percent of the voters.
This vote is the second great signal that the American people are getting fed up with corrupt politicians, arrogant bureaucrats, greedy interests and incompetent, destructive government.
The elites ridiculed or ignored the first harbinger of rebellion, the recent tea parties. While it will be harder to ignore this massive anti-tax, anti-spending vote, they will attempt to do just that.
Voters in our largest state spoke unambiguously, but politicians and lobbyists in Sacramento are ignoring or rejecting the voters' will, just as they are in Albany and Trenton. The states with huge government machines have basically moved beyond the control of the people. They have become castles of corruption, favoritism and wastefulness. These state governments are run by lobbyists for the various unions through bureaucracies seeking to impose the values of a militant left. Elections have become so rigged by big money and clever incumbents that the process of self-government is threatened.
Sacramento politicians will now reject the voters' call for lower taxes and less spending and embrace the union-lobbyist-bureaucrat machine that is running California into the ground, crippling its economy and cheating residents.
Now President Obama, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid want to impose on the nation this style of politics in which interest groups, politicians and bureaucracies dominate.
Then look again at the 62 percent-plus majority in California in favor of smaller government and lower taxes.
In the great tradition of political movements rising against arrogant, corrupt elites, there will soon be a party of people rooting out the party of government. This party may be Republican; it may be Democratic; in some states it may be a third party. The politicians have been warned.
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/21/AR2009052103724.html
America to use the "Zimbabwe Solution"
A great piece by Carolyn Baum on those who wish for the FED to use inflation (6% a year) to ease us out of the recession. They say we need to help those who are struggling with their decisions. This is nauseating.
In the Middle Ages, they threw people who failed to repay their debts into debtors’ prisons. Today debtors are rewarded with all kinds of government perks. Look how far we’ve come!http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_baum&sid=auFHtpfT9hRI
Borrowers took out mortgages they couldn’t qualify for to buy homes they couldn’t afford. When the housing market collapsed, they were rewarded with government-subsidized mortgage modifications and, in some cases, partial forgiveness on their loan balances. And now, under Rogoff’s 6 percent solution, debtors would see more of their burden lifted.
And we, the savers, get screwed again.
Wednesday, May 20, 2009
The canary is dead
By Dean Kalahar
In the current climate of economic uncertainty, and questions regarding the health of capitalism, there is little talk concerning the well being of other vital institutions that sustain western civilization at large and America specifically. Unfortunately, like a canary in a mine providing an early warning signal to dangers, numerous examples can be given of widespread institutional decay across our cultural landscape.
America’s religious institution has been eroded by the secularization of society, the welfare state, the misguided belief in the separation of church and state, and attacks toward any outward expression of religious passion. Our public education institution has been decimated by bureaucracies and unions that have failed to teach children how to read, write, or add, while choice and vouchers are fought at every turn. Our family institution has been redefined into a bizarre amalgam of gender, sexual, and parental proclivities. 40% of children are born out of wedlock and 25% of teenagers have a sexually transmitted disease. The overt-sexualization of our society has created confusion and despair among our children, while infanticide has become an all too easy choice. Biological and psychological realities for sanctioning marriage between a man and woman for the sake of their posterity have been ruthlessly attacked by those seeking to re-define the universal order.
What we are experiencing is terrorism of the politically correct variety. A cultural war is being raged in America by a progressive “tolerance” movement that is intolerant toward many institutional traditions, principles, and laws that were created and tested over thousands of years of trial and error. The attackers show a condescending hypocrisy of moral relativism towards any concept that might interfere with their self-anointed sensibilities of creating a utopia so as to avoid self awareness.
The sad irony to today’s problems is that the government swears it is the last best hope in remedying our economic and social ills. Yet, this same government has implemented misguided government policy that has visibly created the deep fracturing of the economy while invisibly undermining the religious, education, and family pillars of our nation. Americans who are worried and focused solely on the economy need to wake up and see the walls of the republic crumbling.
Warnings have been offered before. In the 1980s, A Nation at Risk report was issued. It said the biggest threat to the United States during the darkest days of the cold war was not an attack from the Soviet Union, it was the collapse of the education system from within that would allow the Soviets to easily overtake America. Today, our biggest outside threat is Islamic extremism. Sadly, al-Qaida and the Taliban need only to wait us out while we allow the un-checked power of government and progressive ideology destroy, from within, our social fabric. Once this happens, brutalizing non-believers and instituting Sharia law will be the only form of terrorism necessary to end western civilization as we know it.
When the Nation at Risk report was released, few worried about the collapse of our economic, governmental, family and religious institutions, so little was done to stem the tide of our failing schools. No one believed our world class education system would decline to the point of bringing down the American experiment. 30 years later, however, when you add the significant erosion to the remainder of the institutions that support our way of life, that early warning has turned into a clarion call. The present danger to our nation is potentially catastrophic.
Is there hope? President Ronald Reagan made America great again, and defeated communism, by unleashing liberty with the principles and power of free market capitalism. We can defeat Islamic extremism and regain the cultural strength of our nation’s institutions by restoring our belief in freedom and the fundamental constructs of western thought. It is time to stand up for the founder’s blueprint of life, liberty, and property that defines the traditions of market economics, education, religion, and family guided by limited government.
We can rebuild America to be, as Reagan said, “a shining city upon a hill whose beacon light guides freedom-loving people everywhere.” If we, however, ignore the warnings and sow the seeds to our own destruction, as the Romans did long ago, our fate will be written in the epilogue of history. Gone, a nation whose torch was smothered when a complacent arrogance forgot what made them great, and the humility to stand vigilant in defending liberty was lost.
Monday, May 18, 2009
Defining liberal and conservative
Exerpts from, The Nature of Conservatism by Mike Adams
If there is one thing that separates the conservative from the liberal it is his view of human nature. The conservative sees man as born in a broken state. This tragic view of human nature sees man as selfish and hedonistic by design. Given his nature, it is no wonder a man chooses crime. It is a wonder he ever chooses conformity.
This tragic view of human nature also explains why conservatives often speak of religion and family values. Given his selfish nature, man must internalize some reason to behave in pro-social ways. That fact that he falls short of these values does not mean he is a hypocrite. The one who does not even believe what he says is the hypocrite. The one who believes what he says and falls short is merely human.
The conservative knows in advance that he (and others) will fall short of what religion expects of him. But his solution is not to give up on religion. His solution is to implement a back-up plan. In the context of crime, that back-up plan takes the form of a criminal justice system focused on punishment.
According to the conservative, effective punishment is that which produces fear of transgression. Fear of transgression occurs when the punishment is swift, certain, and severe. In sum, the conservative believes we should first try to love people into conformity. If that does not work, we should scare people into conformity.
But the liberal sees things differently. Everyone is born “good” with a blank slate. To the extent that people become “bad” it is because “society” corrupted them. Nowhere does the liberal explain how combining many good people makes a bad society.
Taxation, incentives, and outcomes
Arthur Laffer and Steven Moore explain:
http://online.wsj.com/article/SB124260067214828295.html
Updating some research from Richard Vedder of Ohio University, we found that from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.
Those who disapprove of tax competition complain that lower state taxes only create a zero-sum competition where states "race to the bottom" and cut services to the poor as taxes fall to zero. They say that tax cutting inevitably means lower quality schools and police protection as lower tax rates mean starvation of public services.
They're wrong, and New Hampshire is our favorite illustration. The Live Free or Die State has no income or sales tax, yet it has high-quality schools and excellent public services. Students in New Hampshire public schools achieve the fourth-highest test scores in the nation -- even though the state spends about $1,000 a year less per resident on state and local government than the average state and, incredibly, $5,000 less per person than New York. And on the other side of the ledger, California in 2007 had the highest-paid classroom teachers in the nation, and yet the Golden State had the second-lowest test scores.
Or consider the fiasco of New Jersey. In the early 1960s, the state had no state income tax and no state sales tax. It was a rapidly growing state attracting people from everywhere and running budget surpluses. Today its income and sales taxes are among the highest in the nation yet it suffers from perpetual deficits and its schools rank among the worst in the nation -- much worse than those in New Hampshire. Most of the massive infusion of tax dollars over the past 40 years has simply enriched the public-employee unions in the Garden State. People are fleeing the state in droves.
Texas created more new jobs in 2008 than all other 49 states combined. And Texas is the only state other than Georgia and North Dakota that is cutting taxes this year.
http://online.wsj.com/article/SB124260067214828295.html
Friday, May 15, 2009
Q: How to fight poverty & save children? A: Marriage
Mona Charen reports:
http://article.nationalreview.com/?q=ZTM0MzI2NGFkOTFlNmM3YjgzZTM5Mzk1Njk3MWIxOTQ=
the latest report from the National Center for Health Statistics. It seems that the rate at which unmarried women are having babies in America jumped dramatically in the past seven years. “In 2007, there were 1,714,643 babies born to unmarried women, an increase of 4% from 2006, and 26% higher than the number in 2002 (1,365,966),” the NCHS reports. Forty percent of births in America are now to unwed mothers. Rates are highest among Hispanic women
By the age of 12, 78 percent of children living in non-married households have experienced one or more years of poverty. For children in intact families, the figure is 18 percent. Babies born to unwed moms are more likely to be premature, to be low birthweight, and to suffer other pathologies. Children who are raised in non-marital households have poorer school performance, more trouble with the law, more mental and emotional disturbances, more poverty, suffer more physical and sexual abuse, and are more likely to become unwed parents themselves. Here’s Hymowitz again: “Children of single mothers have lower grades and educational attainment than kids who grow up with married parents, even after controlling for race, family background, and IQ.”
Young women, especially poorly educated ones, have gotten the idea that marriage is all about them — about their romantic hopes. In fact, while marriage often does deliver on the promise of happiness for adults, it is only secondarily about adult happiness. It is primarily about safety and security for children. The old stigma against illegitimacy was harsh and led to its own kind of suffering. But it prevented narcissistic young people from impairing the lives of their children on a grand scale.
http://article.nationalreview.com/?q=ZTM0MzI2NGFkOTFlNmM3YjgzZTM5Mzk1Njk3MWIxOTQ=
Saving lives or extending lives?
The problem the following piece has is in its rogue statistics that are thrown around with the words "we would save" such and such number of lives and "half (the deaths)would be prevented." What should be said is the number of lives "would be extended" since we all lose our life at some point. The second problem is that the do-gooders use these "stats" to try to legislate our choices, lifestyle and restrict our freedom. Everything kills at some point and at some level. The question is in choices and costs. To jeopardize our freedom in the process equals a life not worth living. Pun intended.-DK
Daniel Akst writes:
Daniel Akst writes:
http://online.wsj.com/article/SB124234518114321687.htmlToo many of us appear to be bent on slow-motion suicide. Consider smoking; if we could get every American to stop, we'd save 467,000 lives annually. Solving high blood pressure (much of it arising from unhealthy lifestyles) would save 395,000. And if we could get everyone to slim down to an appropriate body weight, we'd save 216,000 lives.
You can't aggregate all the lives that would be saved from the 12 lifestyle factors covered by the study because of some serious overlap; obesity, for instance, causes a lot of hypertension. But Dr. Majid Ezzati, a Harvard School of Public Health professor who co-authored the report, estimates that if you net out the double-counting, somewhat more than a million people die annually from the 12 behavioral risk factors, which include the obvious (immoderate alcohol consumption) and the less so (eating too little fish, which provides omega-3 fatty acids).
Put more starkly: Of the 2.5 million deaths that occur annually in America, something approaching half could be prevented if people simply led healthier lives.
Thursday, May 14, 2009
Thomas Sowell video on the housing crisis
A rare appearance of one of the greatest thinkers of our time. Click, enjoy, and learn the truth. Never mind the host...focus on Sowell's words.
http://www.realclearpolitics.com/video/2009/05/13/thomas_sowell_stimulus_might_end_up_being_a_sedative.html
http://www.realclearpolitics.com/video/2009/05/13/thomas_sowell_stimulus_might_end_up_being_a_sedative.html
"The door be broke."
Janice Shaw on education:
A friend of mine went to his first day on the job at the United States Department of Education and was chagrined to see a sign on the door warning, “The door be broke.” That sign is emblematic of what’s wrong with education in America: our schools be broke!http://townhall.com/columnists/JaniceShawCrouse/2009/05/13/our_schools_be_broke
Public schools are failing too many of the nation’s children by not preparing them to meet even the most basic standards for being well educated. The cause of this deficiency is not a lack of money devoted to the task. In 2006, America spent $599 billion, or 7.4 percent of the GDP, to educate the nation’s children (about $10,800 per child in public and private elementary and secondary schools). Yet, the unavoidable fact is that despite a 33 percent increase in spending per student in constant dollars since 1990 and a 10 percent decrease in the number of students per teacher, student achievement has, at best, remained essentially the same.
Wednesday, May 13, 2009
Capitalists are the true conservationists
John Stossel says what I have taught my economics students for years.
Terry Anderson of the Property and Environment Research Center (PERC) points out that governments have repeatedly failed to save animals by banning their sale. They've failed with the Colobus monkey in West Africa, the alligator in China and now with the tiger in Asia.
How do we save them? Here's an idea. Let's sell them! And eat them!
http://townhall.com/columnists/JohnStossel/2009/05/13/eat_the_tigers!
The environmentalists market feelings not facts.
It is a telling situation when environmentalists use high dollar marketing consultants to figure out how best to sell their ideology to the average American. When facts and reality are not good enough, envro-power-brokers use slight of hand to push through their Utopian visions. Their true agenda could not be more transparent in its deceitfulness. How ironic, and condescending.
Joe Queenan reports:
The environmentalist movement has an image problem. Greens are losing the battle . . . because they continue to use antiquated, in-your-face terms like "global warming," "cap and trade," and yes even "the environment." So says a new report by ecoAmerica, a cutting-edge, Washington-based nonprofit that specializes in environmental marketing and messaging, as reported in the New York Times.
According to ecoAmerica, which has conducted rigorous, focus-group research in this area, environmentalists are taking it on the chin because politically charged terms like "global warming" conjure up images of hirsute, confrontational '60s types. "When you say 'global warming,'" Robert M. Perkowitz, ecoAmerica's president and founder, told the Times, "a certain group of Americans think that's a code word for progressive liberals, gay marriage and other such issues."
ecoAmerica recommends that environmentalists mothball the textured scientific lingo and get right down to the nitty-gritty. That means ditching excessively technical terms like "carbon dioxide" and substituting catchy phrases like "moving away from the dirty fuels of the past."
EcoAmerica also recommends jettisoning the cumbersome term "the environment" and replacing it with the infinitely more felicitous "the air we breathe, the water our children drink." The organization probably got paid tons of money for this high-level research, so its advice should not go unheeded.
Tuesday, May 12, 2009
Sense of humor vs. sense of hypocrisy
What if this was said by Wanda Sikes at the White House corespondents dinner last weekend regarding the Bush presidency. Her exact quotes from a Wall Street Journal article are intact, "what if" changes are in bold.
"Obama said he hopes Bush fails, so you're saying, 'I hope America fails,' you're, like, 'I dont [sic] care about people losing their homes, their jobs, our soldiers in Iraq.' He just wants the country to fail. To me, that's treason. "He's not saying anything differently than what Osama bin Laden is saying. You know, you might want to look into this, sir, because I think Hussein Obama was the 20th hijacker. But he was just so strung out on Smoking cigarettes he missed his flight." "Obama, I hope the country fails, I hope his lungs fail, how about that? He needs a good waterboarding, that's what he needs." Cheney seemed to think this bit was pretty hilarious, grinning and chuckling and turning to share the "joke" with the person sitting on his right.You know what the outrage would be from the left.
http://online.wsj.com/article/SB124205737720007119.html
Monday, May 11, 2009
Do not feed the mouth that bites you
From Thomas Sowell's new book, The Housing Boom and Bust. The lesson, government got us into our current economic mess, and we must not allow government to bully us into thinking they can get us out of this mess.
locally extreme housing prices have been a result of local political crusades in the name of locally attractive slogans about the environment, open space, “smart growth,” or whatever other phrases had political resonance at the particular time and place. . .As far as blaming U.S. capitalism for our social woes, and looking to government to save us from ourselves, Sowell goes on to reminds us,
Few things blind human beings to the actual consequences of what they are doing like a heady feeling of self-righteousness during a crusade to smite the wicked and rescue the downtrodden. . .
It has been almost axiomatic, for at least a century, that the American economy produces more output than any other economy in the world. All this is so much taken for granted that no one considers it worth commenting on the fact that 300 million Americans today produce more output than more than a billion people in India or an even larger population in China — indeed, more than these two countries which, put together, have more than eight times the population of the United States. We also produce more than Japan, Germany, Britain, and France combined.http://article.nationalreview.com/?q=OTE0YmIwNjg1NjA1N2QxNGUzNGUyMmZiZThmN2UwNTg=&w=MQ==
Friday, May 8, 2009
Twisting reality to fool the people
Jonah Goldberg:
The mainstream perception that conservatives are close-minded and dogmatic while liberals are open-minded and free-thinking has it almost exactly backward. Liberal dogma is settled: The government should do good, where it can, whenever it can. That is President Obama’s idea of pragmatism and bipartisanship: He’s open to all ideas, from either side of the aisle, about how best to expand government and get the state more involved in our lives. Meanwhile, conservatism’s dogma remains forever in flux. We constantly debate the trade-offs between freedom and virtue, the conflicts between liberty and order. . .http://article.nationalreview.com/?q=ODMzOTlmZWM0ZWU1MjA5NWE4ZTBhY2NmMGFmNDQ4ZTA=
I would love it if the GOP dedicated itself to cutting government by two-thirds, leaving only a minimal social safety net, a big honking military, and a few other bells and whistles for promoting the general welfare. My ideal ticket in 2008 would have been Cheney-Gramm. That’s right, Dick Cheney and Phil Gramm: two old white guys who would crush our enemies and liberate our economy while shouting, “You kids get off my lawn!”
Thomas Sowell on judicial activism semantics
This process of “interpreting” the Constitution (or legislation) to mean pretty much whatever you want it to mean, no matter how plainly the words say something else, has been called judicial activism. But, as a result of widespread objections to this, that problem has been solved by redefining “judicial activism” to mean something different.
By the new definition, a judge who declares legislation that exceeds the authority of the legislature unconstitutional is called a “judicial activist.”
The verbal virtuosity is breathtaking. With just a new meaning to an old phrase, reality is turned upside down. Those who oppose letting government actions exceed the bounds of the Constitution — justices like Antonin Scalia and Clarence Thomas — are now called “judicial activists.” It is a verbal coup.
http://article.nationalreview.com/?q=YTgwYWQ0N2RhZDY3ZDJjNjU1NjE4M2I1MzY3MGNlYzk=
Thursday, May 7, 2009
Adults who think like children
Victor Davis Hansen,
Americans became wealthy and strong through unique self-reliance, common sense, and delayed gratification. And we — or our children — will soon become poor precisely because we hold on to the romance that producing food and fuel and saving money are icky tasks to be ignored or left to others.http://article.nationalreview.com/?q=MTVmOWQ0MzhiMGZjNDcxNjE4OWUxZDM4YzE1NGFhMzE=
Wednesday, May 6, 2009
The statist/progressive/modern liberal mind
Mike Adams discussing the psychology of the progressive mind.
http://townhall.com/columnists/MikeAdams/2009/05/06/liberty_and_tyranny?page=full&comments=true
Mark Levin [writing in Liberty and Tyranny: A Conservative Manifesto] is correct in saying that this passion for equality is driven by the statist’s deep sense of inferiority. For the passion for equality is, at its core, a passion for anonymity. When the fabric of society is woven together in such a way that one thread cannot be distinguished from another, no judgment is possible. That is why the economic Marxist prefers a guaranteed average outcome. And it is why the cultural Marxist is receptive to the religion of moral relativism.
The statist may well say that he rejects traditional religion because it provides an opiate to the masses. But there is more to his opposition to religion than his fear of a disincentive to revolt against ruling classes. He also fears that religion leads to judgment and intolerance – the kind that reminds him of his inferiority.
Not wanting to be judged, the statist rejects the notion that man is endowed by a Creator with certain unalienable rights. No longer convinced of the permanence of any rights, the statist gives birth to the idea that a constitution – like a right – can be “living” and “breathing” and ever evolving.
And this gives rise to a serious question: If rights are not bestowed by a Creator, then under what conditions do they exist? In other words, who bestows them?
The answer for the statist is, of course, the statist. The answer grants a license to lawless activism that is arbitrary and subject to rationing by the statist himself.
http://townhall.com/columnists/MikeAdams/2009/05/06/liberty_and_tyranny?page=full&comments=true
Tuesday, May 5, 2009
Rule of law or rule by feelings?
President Obama believes empathy is a priority for Supreme Court members. Feelings have nothing to do with the rule of law and the security of individual human rights.-dk
Thomas Sowell talking about the Supreme Court opening said,
http://article.nationalreview.com/?q=MzM0MzdiMTVhZTgxNmE5ZGYzZWY3M2UyNDQ3NjI3NWY=
Thomas Sowell talking about the Supreme Court opening said,
Would you want to go into court to appear before a judge with “empathy” for groups A, B, and C, if you were a member of groups X, Y, or Z? Nothing could be farther from the rule of law. That would be bad news, even in a traffic court, much less in a court that has the last word on your rights under the Constitution of the United States.
Appoint enough Supreme Court justices with “empathy” for particular groups and you would have, for all practical purposes, repealed the 14th Amendment, which guarantees “equal protection of the laws” for all Americans.
http://article.nationalreview.com/?q=MzM0MzdiMTVhZTgxNmE5ZGYzZWY3M2UyNDQ3NjI3NWY=
Winners and losers
Great letter to editor in Wall Street Journal regarding college rejection letters.
Attempts of colleges to achieve the lofty goal of notifying unaccepted applicants of their rejection without hurting the feelings of a generation that has never encountered rejection or failure [are being made]
This is the maturation of the generation where everyone was chosen for the team, all were allowed to play regardless of level of skill, and all received some award or trophy. Now they are squinting as they enter the blinding reality of the real world where only the qualified get hired, only the best get promoted and where there really are winners and losers.
The colleges go to great lengths to avoid hurting an applicant's feelings by "denying the student's application, and not rejecting the student" when in reality it is the student and not the application who wasn't as qualified as those who were accepted. They lost, a better student earned the spot, and they are upset because they didn't get a blue ribbon for trying. The generation protected from failure and rejection is now coming of age and they expect special treatment from the world.
Stanley Riggs
Sarasota, Fla.
Monday, May 4, 2009
Brietbart irony on hate crime, big brother, and tortur
"The real hate crime these days is the Orwellian intimidation wielded by the left against those that don't think the way they do. It's worse than waterboarding." - Andrew Breitbart
And yet, their moral certainty knows no limits. That, my friends, is what is so dangerous.-dk
http://www.realclearpolitics.com/articles/2009/05/04/political_correctness_is_torture_96326.html
And yet, their moral certainty knows no limits. That, my friends, is what is so dangerous.-dk
http://www.realclearpolitics.com/articles/2009/05/04/political_correctness_is_torture_96326.html
Friday, May 1, 2009
Donald Boudreaux on health care's simple economics
A story to entertain and enlighten-dk
http://www.pittsburghlive.com/x/pittsburghtrib/s_622894.html#
If you go to dinner with a large group of strangers and you know that the bill will be split evenly, aren't you more likely to order pricier dishes and drinks than you would order if you, and you alone, were responsible for picking up your full tab?
The answer is surely "yes." Let's say that you'd be content to order the pork chop priced at $15, but would get even greater enjoyment from ordering the rack of lamb priced at $25. If you alone were responsible for your tab, you'd order the lamb only if it is worth to you at least the extra $10 that it costs. So suppose that you value the lamb by only $8 more than you value the pork chop. In that case, you'd order the pork chop. You wouldn't spend an extra $10 to get extra satisfaction worth only $8.
But if the bill is evenly shared among, say, 10 diners (yourself and nine others), then if you order the lamb, your share of the higher bill will be only $1. That's $10 split evenly 10 ways. You'll order the lamb.
You might think that this sharing arrangement is good. After all, in this example, the cost to you of getting something you valued more (the lamb rather than the pork chop) was reduced. It became sensible for you to order the lamb.
Look more deeply, though. What happened is that society (here, the 10 diners) was led to supply something that wasn't worth its cost. The lamb was worth to you only an additional $8, but to make it available to you, society spent $10. Ten dollars were used to raise the welfare of society by only $8. (You're a member of society, so any improvement in your welfare counts as an improvement in the welfare of society.) That's a waste of $2.
You are better off, but the group is worse off.
Now look even more deeply. Everyone at the table faces the same incentives that you face. You're not the only person who will order excessively costly dishes and drinks. Everyone will. The entire table over-consumes. The total bill is higher -- even your share is higher -- than it would have been had the bill not been split evenly. Resources are wasted.
Such sharing of our medical-care bill takes place now on a massive scale. It is impossible to see how expanding this sharing will reduce the bill.
http://www.pittsburghlive.com/x/pittsburghtrib/s_622894.html#
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