"Envisaging a World Without the FDA" Fight Aging (HT: Jon Henke):
"There is no open marketplace for medical technology in the developed world, however. Instead, we see a very different set of incentives dominating the state of research and development. Regulatory bodies like the FDA have every incentive to stop the release of new medicine: the government employees involved suffer far more from bad press for an approved medical technology than they do from the largely unexamined consequences of heavy regulation. These consequences go far beyond the obvious and announced disapproval of specific medical technologies: the far greater cost lies in all the research, innovation and development that was never undertaken because regulatory burdens ensure there would be no profit for the developer. Personal gain for the regulator is thus to destroy the gains of people they will never meet, the exact opposite of what occurs in an open marketplace."
He then quotes a BusinessWeek article that mentions how it's been 20 years since the last new drug for prostate cancer was introduced and adds:
"Twenty years! Just stop a moment and think about how far and fast biotechnology and medical science has moved in the past twenty years. Think about what the far less regulated computing industry has achieved in the same time frame. We live in the early years of the biotechnology revolution, with something amazing and new demonstrated in laboratories every week. Yet the dominant regulatory body for one of the most advanced regions of the world has managed to stop the clock at 1988 for a major disease, the subject of research in a hundred laboratories worldwide."
It goes back to what Russ Roberts and Richard Epstein discussed in this podcast: the FDA (and by extension politicians) are more afraid of Type I errors (taking a med you shouldn't) than of Type II errors (not taking a med should should). There should be more of a balance.
"Moving Toward Energy Rationing" by Charles Krauthammer for the Washington Post (via RealClearPolitics):
"For a century, an ambitious, arrogant, unscrupulous knowledge class -- social planners, scientists, intellectuals, experts and their left-wing political allies -- arrogated to themselves the right to rule either in the name of the oppressed working class (communism) or, in its more benign form, by virtue of their superior expertise in achieving the highest social progress by means of state planning (socialism).
Two decades ago, however, socialism and communism died rudely, then were buried forever by the empirical demonstration of the superiority of market capitalism everywhere from Thatcher's England to Deng's China, where just the partial abolition of socialism lifted more people out of poverty more rapidly than ever in human history.
Just as the ash heap of history beckoned, the intellectual left was handed the ultimate salvation: environmentalism. Now the experts will regulate your life not in the name of the proletariat or Fabian socialism but -- even better -- in the name of Earth itself."
"Coburn: We ‘deserve’ to lose seats" by Walter Alarkon for The Hill:
"Coburn, a first-term senator who has crusaded against government waste, said that most Republicans in Congress are fiscal conservatives and correctly vote against spending measures put forth by Democrats. But he decried votes by "a Republican portion" to go along with the Democratic majority.
'I think they've lost their courage,' Coburn said. 'And I think the focus has been on short-term benefits, rather than long-term leaders of the country. And I think they have to start acting like Republicans. And they either have to believe it or not. And if they believe it, they'll vote that way. And if they don't, they really aren't Republicans.' "
I think he's absolutely right. It reminds me of this op-ed by Club for Growth's Pat Toomey where he discussed the opposition of some Republicans to his efforts, through the Club, to support fiscally-conservatives candidates against Republican incumbents. He reminds us that "[a] Republican majority is only as useful as the policies that majority produces. When those policies look a lot like Democratic ones, the base rightly questions why it should keep Republicans in power."
On a similar note, while looking for the link to the Toomey op-ed, I found the following letter:
"The GOP Needs More Than Right-Wingers to Govern" by Rep. Deborah Pryce (R., Ohio):
"We represent people, Mr. Toomey; people with disparate geographic and economic backgrounds, and differing philosophies on the nature and role of their government. To serve them, we must attempt to reflect their views -- not antagonize them to keep in good standing with your scorecard. And if you were more adept in your self-proclaimed abilities to divine the representative needs of a constituency, you would be a sitting U.S. senator from Pennsylvania."
She was being critical of his op-ed and his stance against RINO's. I sent the following letter in response:
"The letter written by Rep. Deborah Pryce (R., Ohio) (“The GOP Needs More Than Right Wingers to Govern”, May 28) in response to Pat Toomey’s May 8th op-ed (“In Defense of RINO Hunting”) illustrates what is wrong with politics. Ms. Pryce concludes her letter by taking a shot at Mr. Toomey: “And if you were more adept in your self-proclaimed abilities to divine the representative needs of a constituency, you would be a sitting U.S. senator from Pennsylvania.” What she is advocating, incidentally, is for Republican candidates to adopt a flexible platform, tailored to his or her constituency, that focuses on getting elected rather than implementing sound public policy. Isn’t this why Mitt Romney has been lampooned recently as a panderer? While in liberal Massachusetts he supported moderate policies, but when his constituency expanded nationwide, as he sought the Republican nomination for president, he was forced to move his policy position to the right. While I understand his motivations for doing so (he simply played the game the way he thought best), we can see where it got him.
But unfortunately, this is our political system. The incentive for politicians is not, though we would like to believe the contrary, to pass good legislation. Rather, the incentive is to get re-elected. To do this, politicians wisely stop short of trying to be all things to all people, because that, given our diversity as a country, is impossible, and settle for just being most things to most people, as Ms. Pryce appears to promote. This frequently leads them to pass populist legislation, like the recent Farm Bill, even when it goes against their personal ideology. (To her credit, though, Ms. Pryce did vote against the Farm Bill.) Mr. Toomey, on the other hand, knows that, ultimately, it is votes on the floors of congress that matter, not in-name-only party affiliations. I wish we had more like Mr. Toomey – willing to sacrifice election victories to put policies ahead of party.
Matt Hutchison
Atlanta"
Another Pat Toomey item:
"Pat Toomey on Fox Business Channel" Club for Growth:
It's a video where he's interviewed by Neil Cavuto. Worth a watch.
"In Defense of Lobbyists" WSJ op-ed by Tom Korologos:
"Interesting, isn't it, that the Founding Fathers in that very First Amendment – and in the same print size and in the very same sentence as freedom of religion and speech and peaceful assembly – included specific language permitting all people to address the government to express their complaints or to advocate?
So why do the pundits, political operatives and segments of the media look with suspicion on advocacy? Isn't everyone entitled to have his or her voice heard? Why should lobbying by Boeing or the American Petroleum Institute be bad and lobbying by the Friends of the Earth or the National Education Association pristine? Or lobbying by the National Association of Manufacturers or Chamber of Commerce unsavory, but lobbying by the Laborers International Union and AFL-CIO virtuous?...
Isn't it wise, or at least fair, that Congress and policy makers hear all sides of every issue? Congress and executive-branch agencies actually depend on lobbyists to present complete and detailed information. There's nowhere else they can get the total range of data they require to set intelligent policy or draft prudent legislation."
I sent the following letter in response:
"Tom Korologos's defense of lobbyists ("In Defense of Lobbyists", May 30) was spot on, though he only barely, and maybe inadvertently, alluded to the real problem when he suggested that we compile a list of "members of Congress who have abused their authority". Making a scapegoat of lobbyists when Congress appeases special interests is not unlike the husband who, upon learning of his spouse's infidelity, only directs his anger at his wife's lover instead of his wife. Finding someone else to blame (they did elect the politicians, after all) is little more than a pain-avoidance mechanism that keeps voters from having to admit their elected officials might not be as virtuous as they'd like to believe.
The only reason lobbyists appear as influential as they do is because of the power of the bodies they beseech. In other words, the power of lobbyists is directly proportional to the ability of the Senate and House of Representatives to give favors to the clients of lobbying firms. Reign in government and you reign in lobbyists. Any attempt to weaken lobbyists without reforming government will do nothing more than violate the constitution and ensure our politicians become less informed than they already are. That's the equivalent of the husband simply bloodying the nose of the other half of his wife's affair, confident that doing so will solve all of his problems.
Matt Hutchison
Atlanta"
Speaking of letters, the one I sent yesterday to the WSJ got published here. I haven't been this proud of myself since I found out I got accepted into Chicago.
"Futures Markets" by Walter Williams (via Townhall):
"Supposing my guess is correct about future supply and demand conditions and corn will be scarcer in the future, what is the socially wise thing to do now so that more will be available in the future? The answer is to use less corn now. How do you get people to voluntarily use less corn now? If you said, "Let the price rise," go to the head of the class. That is exactly what happens as other speculators and I buy corn now. Today's price of corn will be bided up. The result is people will use less corn now and more corn will be available in May 2009 than would be the case if the current price of corn remained at $6. The valuable function of futures markets is that of allocating goods over time. It is wise to take the future into account in decisions that one makes today."
There were three very interesting posts on Megan McArdle's blog talking about the arrogance, purposeful or not, of child or pet adoption agencies. They are:
"Color-blind Adoption"
"Self-important Adoption Officials"
"Everyone Needs a Hippocratic Oath"
A quote from the last one sums it up nicely:
"Now, I have no doubt that virtually all TSA officials sincerely believe that relieving me of my bottle of water is crucial to preventing the next September 11 attack. Part of this is that they aren't very smart. Part of it is that they're trained to follow instructions without engaging in a lot of critical thought. But in any event, I have no doubt that they're sincere.
That doesn't change the fact that most of what happens in an airport screening line is a waste of everyone's time. An enormous amount of time is being wasted for little to no increase in security. Bruce Schneier coined the apt phrase "security theater" to describe the process: the goal isn't to make people safer; the goal is to make people feel safer.
I think much the same thing is happening in the adoption process and at the local animal shelter. It's not that adoption case-workers or pet shelter volunteers are consciously wasting peoples' time to make themselves feel more powerful. I'm sure they sincerely believe that their efforts are helping kids and cats, respectively. But I think they're wrong."
It reminds of our friends who are trying to adopt and have been unsuccessful so far. He told me that he thinks the biggest knock against them as candidates for adoption was that when he was asked what he was passionate about (or something to that effect) he told them "roses." He loves plants, studied horticulture in school, and told me he reads books about roses like others read novels. He doesn't think they were impressed with his ambition. He also told me about all the child-proof requirements they will need to adopt that we don't have. It's another example of the government trying so hard to prevent the wrong adoption (Type I error) that they don't realize the danger caused by the exclusion of the right adoption (Type II error).
5.29.2008
Thursday's interesting reads - 5/29/08
"McCain's Question Time" by George Will (via RealClearPolitics):
"Before TR, presidents communicated mostly with the legislative branch, not the public, and mostly in writing. Jeffrey Tulis of the University of Texas, in his mind-opening book "The Rhetorical Presidency," says the Founders' theory of constitutional propriety strongly disapproved of presidential rhetoric used to move the public, other than patriotic orations on ceremonial occasions. Statesmen were supposed to serve as breaks upon, not arousers of, public opinion."
"Coal-Cap Disaster" by Larry Kudlow for National Review Online (HT: Club for Growth):
"And why not allow the current $130-a-barrel oil price to open the door to a full portfolio of energy resources, including offshore drilling, Alaska, nuclear power, oil shale, conversion of coal and natural gas to liquid fuel, and the development of so-called alternative-energy sources such as solar, wind, and various cellulosic investments (although this latter group may never contribute more than 10 percent to our energy needs)? A true free-market approach wouldn’t pick winners and losers with heavy subsidies or penalties."
Two things about stadium subsidies:
"Surprise! Stadium Predictions Flawed" by David Boaz [quoting Dennis Coates and Brad Humphreys]:
"Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city’s economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area."
And this video from reason.tv (HT: Club for Growth).
I've said it before, but, as much as I'm a fan of sports, I'm opposed to cities paying for the stadiums because it forces non-fans to subsidize fans.
There were two editorials in the WSJ today that discussed health care reform:
"The Florida Revelation . . ."
"But the Florida reform, which both houses of the legislature approved unanimously...nudges the government out of the health-care marketplace. Insurance companies will be permitted to sell stripped-down, no-frills policies exempted from the more than 50 mandates that Florida otherwise imposes, including for acupuncture and chiropractics. The new plans will be designed to cost as little as $150 a month, or less."
". . . And Escape From New Jersey"
"This one-policy-fits-all system tends to cause the young and healthy to drop insurance, which only raises the cost of insurance for the sick, which in turn makes coverage unaffordable for ever more families. It's no accident that about 1.2 million people – one of every eight residents – is uninsured in the state.
Under Mr. Webber's choice proposal, New Jersey residents could buy policies chartered in more enlightened states. For example, a healthy 25-year-old male could buy a basic health plan in Kentucky that now sells for $960 a year, about one-sixth of the $5,880 it would cost him in New Jersey. Residents of Pennsylvania pay health premiums that are one-half to one-third as high as do Garden State policy-holders. A new study by the National Center for Policy Analysis estimates that the availability of lower cost plans would reduce by 25% the number of uninsured."
"On Women and Assets" by Don Boudreaux on Cafe Hayek [its a letter he sent to USA Today]:
"Re your editorial "One bright sign emerges in a gloomy housing market" (May 29) and the general dismay about falling real-estate prices and rising gasoline prices: What principle of economics suggests that markets are working well when the price of one asset (say, housing) rises, but not when the price of another asset (say, petroleum) rises? What principle of ethics dictates that owners of one asset (say, housing) are entitled to capital gains and to enjoy these gains however large they might be, but that owners of another asset (say, petroleum) are not so entitled to their gains?
Finally, what moral precept advises us, in the case of petroleum products, to sympathize with buyers and demonize sellers, and in the case of housing, to ignore buyers and sympathize with sellers?"
"Think Tank: iProvo's Losses at $8 Million and Counting" Reason Foundation:
"iProvo has already posted over $8 million in losses according to a new Reason Foundation policy brief that concludes that Provo is destined to join a list of cities like Ashland, Oregon, and Marietta, Georgia, that have "thrown away millions of dollars on broadband projects that, in the end, failed to deliver any of the promised benefits."...
The Reason study notes large cities like Los Angeles, Houston and Chicago have recently backed away from municipal broadband plans because it is increasingly clear that government agencies aren't equipped to compete in the fast-moving, ever-changing Internet, phone and cable television business."
"Before TR, presidents communicated mostly with the legislative branch, not the public, and mostly in writing. Jeffrey Tulis of the University of Texas, in his mind-opening book "The Rhetorical Presidency," says the Founders' theory of constitutional propriety strongly disapproved of presidential rhetoric used to move the public, other than patriotic orations on ceremonial occasions. Statesmen were supposed to serve as breaks upon, not arousers of, public opinion."
"Coal-Cap Disaster" by Larry Kudlow for National Review Online (HT: Club for Growth):
"And why not allow the current $130-a-barrel oil price to open the door to a full portfolio of energy resources, including offshore drilling, Alaska, nuclear power, oil shale, conversion of coal and natural gas to liquid fuel, and the development of so-called alternative-energy sources such as solar, wind, and various cellulosic investments (although this latter group may never contribute more than 10 percent to our energy needs)? A true free-market approach wouldn’t pick winners and losers with heavy subsidies or penalties."
Two things about stadium subsidies:
"Surprise! Stadium Predictions Flawed" by David Boaz [quoting Dennis Coates and Brad Humphreys]:
"Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city’s economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area."
And this video from reason.tv (HT: Club for Growth).
I've said it before, but, as much as I'm a fan of sports, I'm opposed to cities paying for the stadiums because it forces non-fans to subsidize fans.
There were two editorials in the WSJ today that discussed health care reform:
"The Florida Revelation . . ."
"But the Florida reform, which both houses of the legislature approved unanimously...nudges the government out of the health-care marketplace. Insurance companies will be permitted to sell stripped-down, no-frills policies exempted from the more than 50 mandates that Florida otherwise imposes, including for acupuncture and chiropractics. The new plans will be designed to cost as little as $150 a month, or less."
". . . And Escape From New Jersey"
"This one-policy-fits-all system tends to cause the young and healthy to drop insurance, which only raises the cost of insurance for the sick, which in turn makes coverage unaffordable for ever more families. It's no accident that about 1.2 million people – one of every eight residents – is uninsured in the state.
Under Mr. Webber's choice proposal, New Jersey residents could buy policies chartered in more enlightened states. For example, a healthy 25-year-old male could buy a basic health plan in Kentucky that now sells for $960 a year, about one-sixth of the $5,880 it would cost him in New Jersey. Residents of Pennsylvania pay health premiums that are one-half to one-third as high as do Garden State policy-holders. A new study by the National Center for Policy Analysis estimates that the availability of lower cost plans would reduce by 25% the number of uninsured."
"On Women and Assets" by Don Boudreaux on Cafe Hayek [its a letter he sent to USA Today]:
"Re your editorial "One bright sign emerges in a gloomy housing market" (May 29) and the general dismay about falling real-estate prices and rising gasoline prices: What principle of economics suggests that markets are working well when the price of one asset (say, housing) rises, but not when the price of another asset (say, petroleum) rises? What principle of ethics dictates that owners of one asset (say, housing) are entitled to capital gains and to enjoy these gains however large they might be, but that owners of another asset (say, petroleum) are not so entitled to their gains?
Finally, what moral precept advises us, in the case of petroleum products, to sympathize with buyers and demonize sellers, and in the case of housing, to ignore buyers and sympathize with sellers?"
"Think Tank: iProvo's Losses at $8 Million and Counting" Reason Foundation:
"iProvo has already posted over $8 million in losses according to a new Reason Foundation policy brief that concludes that Provo is destined to join a list of cities like Ashland, Oregon, and Marietta, Georgia, that have "thrown away millions of dollars on broadband projects that, in the end, failed to deliver any of the promised benefits."...
The Reason study notes large cities like Los Angeles, Houston and Chicago have recently backed away from municipal broadband plans because it is increasingly clear that government agencies aren't equipped to compete in the fast-moving, ever-changing Internet, phone and cable television business."
5.28.2008
Wednesday's interesting reads - 5/28/08
"The Moral Challenge of Globalization" by Robert Samuelson for Newsweek (via RealClearPolitics):
"The solution to being poor is getting rich. It's economic growth. We know this. The mystery is why all societies have not adopted the obvious remedies...
Good government is relative; some fast-growing societies tolerated much corruption. Still, broad lessons are clear.
One is: Globalization works. Countries don't get rich by staying isolated. Those that embrace trade and foreign investment acquire know-how and technologies, can buy advanced products abroad and are forced to improve their competitiveness...
A second is: Outside benevolence can't rescue countries from poverty. There is a role for foreign aid, technical assistance and charity in relieving global poverty. But it is a small role...
"Windfall-Profit Nonsense" by John Stossel:
""They sure can afford it," she told an audience in Indianapolis (http://tinyurl.com/5tymvo).
Whom does she think "they" are?
Obama says: "It isn't right that oil companies are making record profits at a time when ordinary Americans are going into debt. ... That's why we'll put a windfall profits tax on oil companies..." (http://tinyurl.com/5b3aor).
Taxing "windfalls" is politically rewarding, but in the final analysis, only people pay taxes. When a corporation is taxed, the burden falls on workers (through smaller raises), consumers (through higher prices) and shareholders (through lower stock prices).
Do Clinton and Obama really want to tax these innocent people just to spite oil executives for high profits?
Anyway, what is a "windfall"? Any answer is arbitrary. Obama says it's the profit made off oil that's priced above $80 a barrel. Why not $70? Or $90? Did he pull that number out of a hat?"
"Income Inequality in the NFL" by Steven Malagna for RealClearMarkets:
"What accounts for this madness among professional sports owners? Perry, writing about Major League Baseball salaries, opines that “above-average competence commands higher monetary rewards in an increasingly competitive” environment. Why? Because professional sports are quintessential human-capital industries, valuing the talents of individuals far more than anything else. The old saw about the new economy, that your assets walk out the door every night, is especially true in sports.
Still, it’s not as if the top players are capturing all of the rewards of the growth in professional sports, to the exclusion of everyone else. As MLB and especially the NFL have cashed in over the years, everyone’s share has grown...
Something similar is going on in the rest of society, where the premium paid for talent has been rising, pushing up salaries fastest among those at the top even as everyone gains. In a highly influential paper published last year, Harvard economists Claudia Goldin and Lawrence Katz attributed rising income inequality not to the standard culprits we hear about in presidential campaigns—like globalization or the decline of unions—but rather to the growing premium that a knowledge-based economy places on education, especially on a college degree. The authors estimate that the returns on a college education actually fell from 1915 to 1950 as our universities supplied more grads than the economy could absorb, narrowing the income gap in the process between college grads and everyone else. That began to change, however, when rapid technological innovation created a demand, which has outstripped supply, for highly educated workers, something that began in earnest in the 1980s and has continued since then.
Facing such a dynamic in the labor market, there are a few things a society may be able to do to narrow the income gap for some people, like ensuring that public schools do the best job possible preparing kids for college, so that those with the potential for college don’t get their aspirations quashed because they’re stuck in a bad system. "
"Our Collectivist Candidates" WSJ op-ed by David Boaz:
"Sen. Obama told the students [of Wesleyan University] that "our individual salvation depends on collective salvation." He disparaged students who want to "take your diploma, walk off this stage, and chase only after the big house and the nice suits and all the other things that our money culture says you should buy."
The people Mr. Obama is sneering at are the ones who built America – the traders and entrepreneurs and manufacturers who gave us railroads and airplanes, housing and appliances, steam engines, electricity, telephones, computers and Starbucks. Ignored here is the work most Americans do, the work that gives us food, clothing, shelter and increasing comfort...
The real issue is that Messrs. Obama and McCain are telling us Americans that our normal lives are not good enough, that pursuing our own happiness is "self-indulgence," that building a business is "chasing after our money culture," that working to provide a better life for our families is a "narrow concern."
They're wrong. Every human life counts. Your life counts. You have a right to live it as you choose, to follow your bliss. You have a right to seek satisfaction in accomplishment. And if you chase after the almighty dollar, you just might find that you are led, as if by an invisible hand, to do things that improve the lives of others."
"Change You'll Have to Pay For" WSJ editorial:
"Mr. Obama's objection [to the Korean free trade agreement], as stated in his letter, is that the deal "would give Korean exports essentially unfettered access to the U.S. market and would eliminate our best opportunity for obtaining genuinely reciprocal market access in one of the world's largest economies." In other words, ordinary American consumers would get too good a deal...
On the record so far, Mr. Obama is the most protectionist U.S. presidential candidate in decades. In February he inserted a statement opposing the Korean trade deal into the Congressional record only days before securing the endorsement of the powerful Teamsters union."
Jon Henke, guest-blogging for Megan McArdle adds:
"Obama is offering a subsidy to Unions, paid for by higher consumer prices. Needless to say, Obama is supported by quite a few powerful Unions...whose election-year financial and mobilization support is essentially crucial to Democratic Party success...
But only a small percentage of the US labor force is unionized - meanwhile, 100% of the US labor force are also consumers. That Obama endorsement was awfully expensive for you and me."
After several of the comments went back and forth on the merits of free trade, I added this one:
"Two other thoughts.
First, I don't buy the argument that we should buy from Americans because it's in the national interest. The only real interest I have is to put food on my family's table, clothe my children and put a roof over their heads, and generally do the best for me and my family I can, all the while being as honest and ethical as I can. I don't have a problem with anyone else doing the same thing, no matter where they live or how they choose to do it, as long as they don't impede my ability to do the same. Tariffs, subsidies, protective regulation, etc prevents all of us who are impacted from doing that.
Second, I take issue with the idea that free trade alone "calls for unequal sacrifice". Forcing me to sacrifice by paying more for what I buy so someone else doesn't have to take a lower paying job or improve their skillset to get an equal paying job is no different. Actually, they are different - free trade lets people choose while other policies don't."
"The solution to being poor is getting rich. It's economic growth. We know this. The mystery is why all societies have not adopted the obvious remedies...
Good government is relative; some fast-growing societies tolerated much corruption. Still, broad lessons are clear.
One is: Globalization works. Countries don't get rich by staying isolated. Those that embrace trade and foreign investment acquire know-how and technologies, can buy advanced products abroad and are forced to improve their competitiveness...
A second is: Outside benevolence can't rescue countries from poverty. There is a role for foreign aid, technical assistance and charity in relieving global poverty. But it is a small role...
"Windfall-Profit Nonsense" by John Stossel:
""They sure can afford it," she told an audience in Indianapolis (http://tinyurl.com/5tymvo).
Whom does she think "they" are?
Obama says: "It isn't right that oil companies are making record profits at a time when ordinary Americans are going into debt. ... That's why we'll put a windfall profits tax on oil companies..." (http://tinyurl.com/5b3aor).
Taxing "windfalls" is politically rewarding, but in the final analysis, only people pay taxes. When a corporation is taxed, the burden falls on workers (through smaller raises), consumers (through higher prices) and shareholders (through lower stock prices).
Do Clinton and Obama really want to tax these innocent people just to spite oil executives for high profits?
Anyway, what is a "windfall"? Any answer is arbitrary. Obama says it's the profit made off oil that's priced above $80 a barrel. Why not $70? Or $90? Did he pull that number out of a hat?"
"Income Inequality in the NFL" by Steven Malagna for RealClearMarkets:
"What accounts for this madness among professional sports owners? Perry, writing about Major League Baseball salaries, opines that “above-average competence commands higher monetary rewards in an increasingly competitive” environment. Why? Because professional sports are quintessential human-capital industries, valuing the talents of individuals far more than anything else. The old saw about the new economy, that your assets walk out the door every night, is especially true in sports.
Still, it’s not as if the top players are capturing all of the rewards of the growth in professional sports, to the exclusion of everyone else. As MLB and especially the NFL have cashed in over the years, everyone’s share has grown...
Something similar is going on in the rest of society, where the premium paid for talent has been rising, pushing up salaries fastest among those at the top even as everyone gains. In a highly influential paper published last year, Harvard economists Claudia Goldin and Lawrence Katz attributed rising income inequality not to the standard culprits we hear about in presidential campaigns—like globalization or the decline of unions—but rather to the growing premium that a knowledge-based economy places on education, especially on a college degree. The authors estimate that the returns on a college education actually fell from 1915 to 1950 as our universities supplied more grads than the economy could absorb, narrowing the income gap in the process between college grads and everyone else. That began to change, however, when rapid technological innovation created a demand, which has outstripped supply, for highly educated workers, something that began in earnest in the 1980s and has continued since then.
Facing such a dynamic in the labor market, there are a few things a society may be able to do to narrow the income gap for some people, like ensuring that public schools do the best job possible preparing kids for college, so that those with the potential for college don’t get their aspirations quashed because they’re stuck in a bad system. "
"Our Collectivist Candidates" WSJ op-ed by David Boaz:
"Sen. Obama told the students [of Wesleyan University] that "our individual salvation depends on collective salvation." He disparaged students who want to "take your diploma, walk off this stage, and chase only after the big house and the nice suits and all the other things that our money culture says you should buy."
The people Mr. Obama is sneering at are the ones who built America – the traders and entrepreneurs and manufacturers who gave us railroads and airplanes, housing and appliances, steam engines, electricity, telephones, computers and Starbucks. Ignored here is the work most Americans do, the work that gives us food, clothing, shelter and increasing comfort...
The real issue is that Messrs. Obama and McCain are telling us Americans that our normal lives are not good enough, that pursuing our own happiness is "self-indulgence," that building a business is "chasing after our money culture," that working to provide a better life for our families is a "narrow concern."
They're wrong. Every human life counts. Your life counts. You have a right to live it as you choose, to follow your bliss. You have a right to seek satisfaction in accomplishment. And if you chase after the almighty dollar, you just might find that you are led, as if by an invisible hand, to do things that improve the lives of others."
"Change You'll Have to Pay For" WSJ editorial:
"Mr. Obama's objection [to the Korean free trade agreement], as stated in his letter, is that the deal "would give Korean exports essentially unfettered access to the U.S. market and would eliminate our best opportunity for obtaining genuinely reciprocal market access in one of the world's largest economies." In other words, ordinary American consumers would get too good a deal...
On the record so far, Mr. Obama is the most protectionist U.S. presidential candidate in decades. In February he inserted a statement opposing the Korean trade deal into the Congressional record only days before securing the endorsement of the powerful Teamsters union."
Jon Henke, guest-blogging for Megan McArdle adds:
"Obama is offering a subsidy to Unions, paid for by higher consumer prices. Needless to say, Obama is supported by quite a few powerful Unions...whose election-year financial and mobilization support is essentially crucial to Democratic Party success...
But only a small percentage of the US labor force is unionized - meanwhile, 100% of the US labor force are also consumers. That Obama endorsement was awfully expensive for you and me."
After several of the comments went back and forth on the merits of free trade, I added this one:
"Two other thoughts.
First, I don't buy the argument that we should buy from Americans because it's in the national interest. The only real interest I have is to put food on my family's table, clothe my children and put a roof over their heads, and generally do the best for me and my family I can, all the while being as honest and ethical as I can. I don't have a problem with anyone else doing the same thing, no matter where they live or how they choose to do it, as long as they don't impede my ability to do the same. Tariffs, subsidies, protective regulation, etc prevents all of us who are impacted from doing that.
Second, I take issue with the idea that free trade alone "calls for unequal sacrifice". Forcing me to sacrifice by paying more for what I buy so someone else doesn't have to take a lower paying job or improve their skillset to get an equal paying job is no different. Actually, they are different - free trade lets people choose while other policies don't."
5.27.2008
Tuesday's interesting reads - 5/27/08
"Two-bit drilling for change" Washington Times op-ed by Mark Steyn (HT: Don Boudreaux):
"[T]hey [the House] went off and passed by 324-82 votes the so-called NOPEC bill. The NOPEC bill is, in effect, a suit against OPEC, which, if I recall correctly, stands for the Oil Price-Exploiting Club. "No War For Oil!," as the bumper stickers say. But a massive suit for oil — now that's the American way!
"It shall be illegal and a violation of this Act," declared the House of Representatives, "to limit the production or distribution of oil, natural gas, or any other petroleum product... or to otherwise take any action in restraint of trade for oil, natural gas, or any petroleum product when such action, combination, or collective action has a direct, substantial, and reasonably foreseeable effect on the market, supply, price, or distribution of oil, natural gas, or other petroleum product in the United States."
Er, OK. But, before we start suing distant sheikhs in exotic lands for violating the NOPEC act, why don't we start by suing Congress? After all, who "limits the production or distribution of oil" right here in the United States by declaring that there'll be no drilling in the Gulf of Florida or the Arctic National Mosquito Refuge?"
"A 'West Wing' Rerun?" by David Boaz with Cato:
"And in the debate, Vinick showed those libertarian-center colors against Santos’s tired old big-government liberalism dressed up in appeals to hope. The morning after that debate aired on NBC, libertarian-leaning Republicans told each other, “if only a real candidate could articulate our values as well as a liberal actor did!” Asked about creating jobs, Vinick declared, “Entrepreneurs create jobs. Business creates jobs. The President’s job is to get out of the way.”...
His closing statement:
Matt has more confidence in government than I do. I have more confidence in freedom — your freedom; your freedom to choose your child’s school, your freedom to choose the car or truck that’s right for you and your family, your freedom to spend or save your hard-earned money instead of having the government spend it for you. I’m not anti-government. I just don’t want any more government than we can afford. We don’t want government doing things it doesn’t know how to do or doing things the private sector does better or throwing more money at failed programs because that’s exactly what makes people lose faith in government."
The post is comparing the final election on the Wst Wing to the current run for president. The whole post is worth a read.
"[T]hey [the House] went off and passed by 324-82 votes the so-called NOPEC bill. The NOPEC bill is, in effect, a suit against OPEC, which, if I recall correctly, stands for the Oil Price-Exploiting Club. "No War For Oil!," as the bumper stickers say. But a massive suit for oil — now that's the American way!
"It shall be illegal and a violation of this Act," declared the House of Representatives, "to limit the production or distribution of oil, natural gas, or any other petroleum product... or to otherwise take any action in restraint of trade for oil, natural gas, or any petroleum product when such action, combination, or collective action has a direct, substantial, and reasonably foreseeable effect on the market, supply, price, or distribution of oil, natural gas, or other petroleum product in the United States."
Er, OK. But, before we start suing distant sheikhs in exotic lands for violating the NOPEC act, why don't we start by suing Congress? After all, who "limits the production or distribution of oil" right here in the United States by declaring that there'll be no drilling in the Gulf of Florida or the Arctic National Mosquito Refuge?"
"A 'West Wing' Rerun?" by David Boaz with Cato:
"And in the debate, Vinick showed those libertarian-center colors against Santos’s tired old big-government liberalism dressed up in appeals to hope. The morning after that debate aired on NBC, libertarian-leaning Republicans told each other, “if only a real candidate could articulate our values as well as a liberal actor did!” Asked about creating jobs, Vinick declared, “Entrepreneurs create jobs. Business creates jobs. The President’s job is to get out of the way.”...
His closing statement:
Matt has more confidence in government than I do. I have more confidence in freedom — your freedom; your freedom to choose your child’s school, your freedom to choose the car or truck that’s right for you and your family, your freedom to spend or save your hard-earned money instead of having the government spend it for you. I’m not anti-government. I just don’t want any more government than we can afford. We don’t want government doing things it doesn’t know how to do or doing things the private sector does better or throwing more money at failed programs because that’s exactly what makes people lose faith in government."
The post is comparing the final election on the Wst Wing to the current run for president. The whole post is worth a read.
"For All the Ecological Concern, Economy Drives Energy Use" WSJ by Jeffrey Ball:
"Gasoline consumption is down. Hybrid-car sales are up. Wal-Mart is selling millions of squiggly energy-efficient light bulbs. Proof of a new wave of environmental consciousness?
For all the talk about global warming, what is prompting Americans to rein in their fossil-fuel use isn't the effect of their consumption on the planet. It is the effect on their pocketbooks."
"McCain Defends Opposition to Veterans Bill" Washington Wire:
"He also paid tribute to fellow Vietnam War veteran Jim Webb, his colleague in the Senate, who is prime sponsor of the veteran benefits bill and added that it would have been “much easier politically” for him to have joined in sponsoring the bill.
But he said he couldn’t do that, saying that the Webb bill would give veterans who served one enlistment the same benefits at those who re-enlisted several times.
The Webb bill provides $52 billion over 10 years for college funding for veterans who have served on active duty since Sept. 11, 2001. It would cover the cost of the most expensive in-state public school, with the amount of aid linked to a veteran’s length of service.
Democrats Hillary Clinton and Barack Obama returned to the Capitol from the campaign trail to support the bill. Sen. McCain wasn’t there for the vote, but said he opposed it and preferred a narrower version he had drafted."
I left the following comment, edited for my stupid misspellings:
"What’s the point of the Webb bill? Is it to “thank” them for their service? If so, say thank you and move on. Do you think they are under-compensated for their work? Pay them more. All the education promise is is additional comp. Not every enlisted soldier wants a college degree. Some don’t need one because they’ve already got one. Why focus the benefit one one group of unlisted soldiers and exclude all others who don’t want/need a college education? I don’t see one benefit of going about it this way."
"Climate Reality Bites" WSJ editorial:
"And for the most part, the politicians favor cap and trade because it is an indirect tax. A direct tax – say, on gasoline – would be far more transparent, but it would also be unpopular. Cap and trade is a tax imposed on business, disguising the true costs and thus making it more politically palatable. In reality, firms will merely pass on these costs to customers, and ultimately down the energy chain to all Americans. Higher prices are what are supposed to motivate the investments and behavioral changes required to use less carbon.
The other reason politicians like cap and trade is because it gives them a cut of the action and the ability to pick winners and losers. Some of the allowances would be given away, at least at the start, while the rest would be auctioned off, with the share of auctions increasing over time. This is a giant revenue grab. The Congressional Budget Office estimates that these auctions would net $304 billion by 2013 and $1.19 trillion over the next decade. Since the government controls the number and distribution of allowances, it is also handing itself the political right to influence the price of every good and service in the economy."
"Republicans Are in Denial" WSJ op-ed by Tom Coburn:
"Unfortunately, too many in our party are not yet ready to return to the path of limited government. Instead, we are being told our message must be deficient because, after all, we should be winning in certain areas just by being Republicans. Yet being a Republican isn't good enough anymore. Voters are tired of buying a GOP package and finding a big-government liberal agenda inside. What we need is not new advertising, but truth in advertising...
Compassionate conservatism's starting point had merit. The essential argument that Republicans should orient policy around how our ideas will affect the poor, the widow, the orphan, the forgotten and the "other" is indisputable – particularly for those who claim, as I do, to submit to an authority higher than government. Yet conservatives are conservatives because our policies promote deliverance from poverty rather than dependence on government.
Compassionate conservatism's next step – its implicit claim that charity or compassion translates into a particular style of activist government involving massive spending increases and entitlement expansion – was its undoing. Common sense and the Scriptures show that true giving and compassion require sacrifice by the giver. This is why Jesus told the rich young ruler to sell his possessions, not his neighbor's possessions. Spending other people's money is not compassionate."
Compare that with the illustrious Mike Huckabee:
"Huckabee On The Next Republican Revolution" by Will Mari for The Huffington Post (HT: Nachama Soloveichik):
"Republicans need to be Republicans. The greatest threat to classic Republicanism is not liberalism; it's this new brand of libertarianism, which is social liberalism and economic conservatism, but it's a heartless, callous, soulless type of economic conservatism because it says "look, we want to cut taxes and eliminate government. If it means that elderly people don't get their Medicare drugs, so be it. If it means little kids go without education and healthcare, so be it." Well, that might be a quote pure economic conservative message, but it's not an American message. It doesn't fly. People aren't going to buy that, because that's not the way we are as a people. That's not historic Republicanism. Historic Republicanism does not hate government; it's just there to be as little of it as there can be. But they also recognize that government has to be paid for."
Nachama had this to add:
"Huckabee is subscribing to the liberal, not to mention condescending, notion that people cannot better their lives without government holding their hand a good part of the way. Huckabee is entitled to his opinion, but he shouldn't pretend to be an economic conservative when he rejects the basic tenet upon which conservatism is based."
5.16.2008
Friday's interesting reads - 5/16/08
"Cap-And-Trade Folly" IBD editorial:
"Much of the pain would be caused by increases in gasoline and electricity prices. The Science Applications International Corporation calculates that Lieberman-Warner by 2030 would boost gasoline prices from 60% to 144% while electricity prices would be up 77% to 129%.
Hit hardest by higher energy prices: The poor. The National Center for Policy Analysis points out that energy costs consume 15% of the poorest households' income while the average household spends 3% on energy. Who is going to feel the pinch more?"
This is one of the hardest for me to understand. The thing people talk the most about is high prices of energy, and cap-and-trade will only make them more expensive. Not only that, and probably more important, is the impact it will have on the poor. But this won't just hurt our own poor, but the poor throughout the world.
"Broder Unwittingly Helps to Expose the Beast" by Don Boudreaux:
"Second, successful politicians must behave duplicitously. Here's Broader: 'Since McCain effectively cinched his nomination in February and mostly fell out of the news, he has accomplished a lot. He has targeted potential constituencies with appearances and messages tailored for them, knowing that other voters probably are not paying attention.' Broder casually adds that 'Obama needs to do similar work.'
This isn't leadership; it's cowardly con-artistry."
The key to winning elections seems to be throw enough cookies to special interests to build a coalition. Not that McCain will be any different, but I've thought for awhile that the only thing Obama will unify is a majority that will get him elected. That's just the truth of presidential elections. We're too diverse of a nation to hope for much more.
"Subsidized farmers: little house on the prairie or gone with the wind?" by Megan McArdle:
I've left a couple comments on this post that talks about, although briefly, the income limits on the farm bill. This one explains why I favor no limits and a lower per-unit subsidy?:
"My point is that, like a progressive tax, with income limits, you end up discriminating between big and small farmers, between the wealthy and the not. This is one reason why conservatives support tax reform because the progressive tax punishes people's success. With income limits, you ultimately punish a farmer's success. If he goes out and buys a lot of land and invests in ultra-efficient machinery, why is he less deserving? Just like high marginal tax rates, doesn't this make him less likely to invest, because he knows that the extra income gained by the bigger farm or more efficient machine might be offset by the loss of a per-bushel or per-acre subsidy?
What's the point of a progressive income tax? Isn't it fairness? Maybe it doesn't work like this explicitly, but I believe there is a max amount of subsidies congress is willing to distribute. If you limit the amount the wealthy farmers get, it means more to the smaller guys. Why are the small farms more deserving? Do we need to protect the small farms from becoming extinct? I don't feel some romantic desire to preserve the family farm. I won't miss the family farm any more than I miss 1960's Ford. Sure they looked cool and all, but I'd rather have a cheaper, more comfortable, more fuel efficient, etc car of today. They may be of value to some, and think that's fine, but don't ask me to subsidize it for you.
Again, I don't like subsidies; I wish we'd get rid of them altogether. But if we're going to have them, I'd rather distribute them fairly (or in other words irrespective of income). If it means lowering per-unit subsidies to small farms, so be it. If we end up with a bunch of large corporate farms that can do things cheaper than their smaller brethren, then maybe people will feel better about ending subsidies entirely, given the current populist hatred of big business."
"Gay Marriage Returns" WSJ editorial:
"In other words, the American people, rather than simply shunning the desire of gays to form permanent unions, are clearly willing to take up the matter and work it through their legislatures. California's legislature has passed bills twice to authorize gay marriage; both were vetoed by Governor Arnold Schwarzenegger. If California can find a Governor willing to sign off, so be it. It is preposterous, though, to let four judges decide this for a state of more than 36 million diverse individuals."
"Why We Need a Market for Human Organs" WSJ op-ed by Sally Satel:
"Because of the global organ shortage, thousands of patients die unnecessarily each year for want of a kidney. (In my case, I was lucky to have received a kidney from a friend.) And because organ sales are illicit, corrupt brokers may deceive indigent donors about the nature of transplant surgery, cheat them of payment, and ignore their postsurgical needs and long-term complications. The only way out is to increase the supply of available kidneys – whether by a cash payment to potential donors or through some other form of compensation."
I understand a lot of the concerns of those who may be against the sale of organs, but I disagree. Ever since I heard this podcast (as well as this one to a lesser degree), I've been much more comfortable with kidney sales. It's kind of the Type I/Type II error risk: does denying people access to kidneys obtained on a market kill more people (or do more social harm) than giving them on opportunity to buy them? My thought is yes, especially considering I think a lot of the risks of letting people buy them are overblown.
"A Welcome, Not a Wall" WSJ book review of Jason Riley's Let Them In by the Editorial Board [an excerpt from the book]:
"Reasonable people agree that illegal immigration should be reduced. The question isn't whether it's a problem but how to solve it. Historically, the best results have come from providing more legal ways for immigrants to enter the country. Most of these people are not predisposed to crime or terrorists in waiting. They are economic migrants who would gladly use the front door if it were open to them. Post 9/11, knowing who's in the country has rightly taken on an urgency. But painting Latino immigrants as violent criminals or Islamofascists won't make us any safer. Nor will enforcing bad laws and policies, as opposed to reforming them. On the whole, immigrants are an asset to America, not a liability. We benefit from the labor, they benefit from the jobs. Our laws should acknowledge and reflect this reality, not deny it."
"Much of the pain would be caused by increases in gasoline and electricity prices. The Science Applications International Corporation calculates that Lieberman-Warner by 2030 would boost gasoline prices from 60% to 144% while electricity prices would be up 77% to 129%.
Hit hardest by higher energy prices: The poor. The National Center for Policy Analysis points out that energy costs consume 15% of the poorest households' income while the average household spends 3% on energy. Who is going to feel the pinch more?"
This is one of the hardest for me to understand. The thing people talk the most about is high prices of energy, and cap-and-trade will only make them more expensive. Not only that, and probably more important, is the impact it will have on the poor. But this won't just hurt our own poor, but the poor throughout the world.
"Broder Unwittingly Helps to Expose the Beast" by Don Boudreaux:
"Second, successful politicians must behave duplicitously. Here's Broader: 'Since McCain effectively cinched his nomination in February and mostly fell out of the news, he has accomplished a lot. He has targeted potential constituencies with appearances and messages tailored for them, knowing that other voters probably are not paying attention.' Broder casually adds that 'Obama needs to do similar work.'
This isn't leadership; it's cowardly con-artistry."
The key to winning elections seems to be throw enough cookies to special interests to build a coalition. Not that McCain will be any different, but I've thought for awhile that the only thing Obama will unify is a majority that will get him elected. That's just the truth of presidential elections. We're too diverse of a nation to hope for much more.
"Subsidized farmers: little house on the prairie or gone with the wind?" by Megan McArdle:
I've left a couple comments on this post that talks about, although briefly, the income limits on the farm bill. This one explains why I favor no limits and a lower per-unit subsidy?:
"My point is that, like a progressive tax, with income limits, you end up discriminating between big and small farmers, between the wealthy and the not. This is one reason why conservatives support tax reform because the progressive tax punishes people's success. With income limits, you ultimately punish a farmer's success. If he goes out and buys a lot of land and invests in ultra-efficient machinery, why is he less deserving? Just like high marginal tax rates, doesn't this make him less likely to invest, because he knows that the extra income gained by the bigger farm or more efficient machine might be offset by the loss of a per-bushel or per-acre subsidy?
What's the point of a progressive income tax? Isn't it fairness? Maybe it doesn't work like this explicitly, but I believe there is a max amount of subsidies congress is willing to distribute. If you limit the amount the wealthy farmers get, it means more to the smaller guys. Why are the small farms more deserving? Do we need to protect the small farms from becoming extinct? I don't feel some romantic desire to preserve the family farm. I won't miss the family farm any more than I miss 1960's Ford. Sure they looked cool and all, but I'd rather have a cheaper, more comfortable, more fuel efficient, etc car of today. They may be of value to some, and think that's fine, but don't ask me to subsidize it for you.
Again, I don't like subsidies; I wish we'd get rid of them altogether. But if we're going to have them, I'd rather distribute them fairly (or in other words irrespective of income). If it means lowering per-unit subsidies to small farms, so be it. If we end up with a bunch of large corporate farms that can do things cheaper than their smaller brethren, then maybe people will feel better about ending subsidies entirely, given the current populist hatred of big business."
"Gay Marriage Returns" WSJ editorial:
"In other words, the American people, rather than simply shunning the desire of gays to form permanent unions, are clearly willing to take up the matter and work it through their legislatures. California's legislature has passed bills twice to authorize gay marriage; both were vetoed by Governor Arnold Schwarzenegger. If California can find a Governor willing to sign off, so be it. It is preposterous, though, to let four judges decide this for a state of more than 36 million diverse individuals."
"Why We Need a Market for Human Organs" WSJ op-ed by Sally Satel:
"Because of the global organ shortage, thousands of patients die unnecessarily each year for want of a kidney. (In my case, I was lucky to have received a kidney from a friend.) And because organ sales are illicit, corrupt brokers may deceive indigent donors about the nature of transplant surgery, cheat them of payment, and ignore their postsurgical needs and long-term complications. The only way out is to increase the supply of available kidneys – whether by a cash payment to potential donors or through some other form of compensation."
I understand a lot of the concerns of those who may be against the sale of organs, but I disagree. Ever since I heard this podcast (as well as this one to a lesser degree), I've been much more comfortable with kidney sales. It's kind of the Type I/Type II error risk: does denying people access to kidneys obtained on a market kill more people (or do more social harm) than giving them on opportunity to buy them? My thought is yes, especially considering I think a lot of the risks of letting people buy them are overblown.
"A Welcome, Not a Wall" WSJ book review of Jason Riley's Let Them In by the Editorial Board [an excerpt from the book]:
"Reasonable people agree that illegal immigration should be reduced. The question isn't whether it's a problem but how to solve it. Historically, the best results have come from providing more legal ways for immigrants to enter the country. Most of these people are not predisposed to crime or terrorists in waiting. They are economic migrants who would gladly use the front door if it were open to them. Post 9/11, knowing who's in the country has rightly taken on an urgency. But painting Latino immigrants as violent criminals or Islamofascists won't make us any safer. Nor will enforcing bad laws and policies, as opposed to reforming them. On the whole, immigrants are an asset to America, not a liability. We benefit from the labor, they benefit from the jobs. Our laws should acknowledge and reflect this reality, not deny it."
5.14.2008
Thursday's interesting reads - 5/15/08
"Environmentalists Oppose Air-Cleanup Plan" By Jim Carlton for WSJ:
"The Port of Long Beach adopted an ambitious plan in February to clean its air by replacing thousands of aging diesel trucks that haul cargo at the facility. But the plan faces an unlikely opponent: a big environmental group.
The point of contention is that the port's plan doesn't guarantee that driving jobs will go to trucking-company employees, who are easier for unions to organize than independent owner-operators. That doesn't sit well with the Natural Resources Defense Council, an environmental group whose stated mission is to "safeguard the Earth" and also is tied closely to labor unions. The group, based in New York, has threatened legal action that might block the port's emission-cutting plan."
Sometimes you just can't please people, no matter how hard you try. But it never helps when they effectively collude with other interest groups.
"Alice in Housing Land" by George Will for the Washington Post (via Real Clear Politics):
"Are we to assume that last year, when housing prices were, say, 10 percent higher than they are now, they were exactly right? If so, why is that so? Because the market had set those prices, therefore they were where they belonged? But if the market was the proper arbiter of value then, why is it not the proper arbiter now? Whatever happened to the belief, way back in 2007, that there was a housing "bubble"? Or to the more ancient consensus that, because of, among other things, the deductibility of mortgage interest payments from taxable income, too much American capital flows into the housing stock?
Homeownership is, up to a point, a barometer of social health: Ownership deepens an individual's sense of having a stake in the health of the neighborhood and the larger community. There are, however, limits to how high the rate can rise: Not everyone wants or can afford to own. And there are prudential limits to how high government should drive ownership by, for example, pressuring lenders to satisfy borrowers who have questionable qualifications.
As housing legislation perhaps heads for a rendezvous with the president's veto pen, remember that the object of the policymaking exercise is not justice -- or compassion, which is not the same thing -- for this or that category of lenders or borrowers. Rather, the main point of the exercise is to mitigate bad consequences for two categories of innocent bystanders."
"The Republican Health-Care Surrender" WSJ op-ed by Dick Armey:
"A rational, conservative solution to rising health-care costs gets the government and other third parties out of our health-care business. Both our families and the GOP can win by expanding Health Savings Accounts, by allowing people to buy insurance across state lines, by doing away with tax policies that encourage third-party payment systems, and by embracing health-care price disclosure."
He talks mostly about how the Republican Party has wavered on health care reform because of political pressure. He's right. But it's on more issues than just health care.
"Keep the Immigrants, Deport the Multiculturalists" WSJ editorial by Jason Riley:
"If American culture is under assault today, it's not from immigrants who aren't assimilating but from liberal elites who reject the concept of assimilation. For multiculturalists, and particularly those in the academy, assimilation is a dirty word. A values-neutral belief system is embraced by some to avoid having to judge one culture as superior or inferior to another. Others reject the assimilationist paradigm outright on the grounds that the U.S. hasn't always lived up to its ideals. America slaughtered Indians and enslaved blacks, goes the argument, and this wicked history means we have no right to impose a value system on others.
But social conservatives who want to seal the border in response to these left-wing elites are directing their wrath at the wrong people. The problem isn't the immigrants. The problem is the militant multiculturalists who want to turn America into some loose federation of ethnic and racial groups. The political right should continue to push back against bilingual education advocates, anti-American Chicano Studies professors, Spanish-language ballots, ethnically gerrymandered voting districts, La Raza's big-government agenda and all the rest. But these problems weren't created by the women burping our babies and changing linen at our hotels, or by the men picking lettuce in Yuma and building homes in Iowa City."
I have zero problem with immigration. I welcome it. The only thing I ask is that they assimilate. It doesn't have to be right away, in fact it probably won't. I don't, however, think we should be asked to bend over backwards to make life easier for them. My primary reason for this is that, in the long run, it makes the ultimate goal of assimilation more difficult. As my wife and I have discussed, I think this is happening at church. Currently, my congregation (ward if you're familiar with the LDS church) offers full congregation-wide services in spanish via translation as well as Sunday School classes that are taught in spanish. This gives spanish-speaking members the opportunity to allow their children to attend church with english speakers, which only furthers assimilation, as these are often the same kids they go to school with. Another option, for people who are interested, is to attend another, much smaller congregation of only spanish speakers. The benefit: they get to worship in their own language. The cost: fewer opportunities for their children, as well as themselves, to learn english. Well, the point of this background is that a family who until recently attended church in our congregation decided to attend at the spanish-only congregation. The reason? The mom, who has been in the States for over 10 years (I think) doesn't speak english very well and doesn't feel she can participate in our congregation. It just makes me sad.
"Clinton Uses Farm Bill to Link McCain and Bush" WSJ Washington Wire:
"After introducing his aunt who was standing nearby, Ryan Reinhardt of nearby Aberdeen, S.D., went on to say, “She said I’m so smart I can be anything I want to be when I grow up. I’ve been a blue-collar worker. I worked in every coal mine and power plant in North Dakota, I worked at the Ford truck plant in Louisville, I worked at the GM truck plant in Arlington, Texas. I got more life experience than any man I know, and I would love to be your vice president.”
Reinhardt then went on to propose some unconventional policy positions. “We’ll turn the country around. We’ll start sending water to the polar ice caps so they build ‘em back up.”
“I think you should give me your resume,” Clinton said, after a brief pause.
“Just call me,” Reinhardt replied. “Because I’m very computer unfriendly.”
W-O-W. "So they build ‘em back up." Who are "they"? I'm really just being mean. And I think Washington Wire is just making fun of Clinton (and by extension the guy) by putting it up.
"The Port of Long Beach adopted an ambitious plan in February to clean its air by replacing thousands of aging diesel trucks that haul cargo at the facility. But the plan faces an unlikely opponent: a big environmental group.
The point of contention is that the port's plan doesn't guarantee that driving jobs will go to trucking-company employees, who are easier for unions to organize than independent owner-operators. That doesn't sit well with the Natural Resources Defense Council, an environmental group whose stated mission is to "safeguard the Earth" and also is tied closely to labor unions. The group, based in New York, has threatened legal action that might block the port's emission-cutting plan."
Sometimes you just can't please people, no matter how hard you try. But it never helps when they effectively collude with other interest groups.
"Alice in Housing Land" by George Will for the Washington Post (via Real Clear Politics):
"Are we to assume that last year, when housing prices were, say, 10 percent higher than they are now, they were exactly right? If so, why is that so? Because the market had set those prices, therefore they were where they belonged? But if the market was the proper arbiter of value then, why is it not the proper arbiter now? Whatever happened to the belief, way back in 2007, that there was a housing "bubble"? Or to the more ancient consensus that, because of, among other things, the deductibility of mortgage interest payments from taxable income, too much American capital flows into the housing stock?
Homeownership is, up to a point, a barometer of social health: Ownership deepens an individual's sense of having a stake in the health of the neighborhood and the larger community. There are, however, limits to how high the rate can rise: Not everyone wants or can afford to own. And there are prudential limits to how high government should drive ownership by, for example, pressuring lenders to satisfy borrowers who have questionable qualifications.
As housing legislation perhaps heads for a rendezvous with the president's veto pen, remember that the object of the policymaking exercise is not justice -- or compassion, which is not the same thing -- for this or that category of lenders or borrowers. Rather, the main point of the exercise is to mitigate bad consequences for two categories of innocent bystanders."
"The Republican Health-Care Surrender" WSJ op-ed by Dick Armey:
"A rational, conservative solution to rising health-care costs gets the government and other third parties out of our health-care business. Both our families and the GOP can win by expanding Health Savings Accounts, by allowing people to buy insurance across state lines, by doing away with tax policies that encourage third-party payment systems, and by embracing health-care price disclosure."
He talks mostly about how the Republican Party has wavered on health care reform because of political pressure. He's right. But it's on more issues than just health care.
"Keep the Immigrants, Deport the Multiculturalists" WSJ editorial by Jason Riley:
"If American culture is under assault today, it's not from immigrants who aren't assimilating but from liberal elites who reject the concept of assimilation. For multiculturalists, and particularly those in the academy, assimilation is a dirty word. A values-neutral belief system is embraced by some to avoid having to judge one culture as superior or inferior to another. Others reject the assimilationist paradigm outright on the grounds that the U.S. hasn't always lived up to its ideals. America slaughtered Indians and enslaved blacks, goes the argument, and this wicked history means we have no right to impose a value system on others.
But social conservatives who want to seal the border in response to these left-wing elites are directing their wrath at the wrong people. The problem isn't the immigrants. The problem is the militant multiculturalists who want to turn America into some loose federation of ethnic and racial groups. The political right should continue to push back against bilingual education advocates, anti-American Chicano Studies professors, Spanish-language ballots, ethnically gerrymandered voting districts, La Raza's big-government agenda and all the rest. But these problems weren't created by the women burping our babies and changing linen at our hotels, or by the men picking lettuce in Yuma and building homes in Iowa City."
I have zero problem with immigration. I welcome it. The only thing I ask is that they assimilate. It doesn't have to be right away, in fact it probably won't. I don't, however, think we should be asked to bend over backwards to make life easier for them. My primary reason for this is that, in the long run, it makes the ultimate goal of assimilation more difficult. As my wife and I have discussed, I think this is happening at church. Currently, my congregation (ward if you're familiar with the LDS church) offers full congregation-wide services in spanish via translation as well as Sunday School classes that are taught in spanish. This gives spanish-speaking members the opportunity to allow their children to attend church with english speakers, which only furthers assimilation, as these are often the same kids they go to school with. Another option, for people who are interested, is to attend another, much smaller congregation of only spanish speakers. The benefit: they get to worship in their own language. The cost: fewer opportunities for their children, as well as themselves, to learn english. Well, the point of this background is that a family who until recently attended church in our congregation decided to attend at the spanish-only congregation. The reason? The mom, who has been in the States for over 10 years (I think) doesn't speak english very well and doesn't feel she can participate in our congregation. It just makes me sad.
"Clinton Uses Farm Bill to Link McCain and Bush" WSJ Washington Wire:
"After introducing his aunt who was standing nearby, Ryan Reinhardt of nearby Aberdeen, S.D., went on to say, “She said I’m so smart I can be anything I want to be when I grow up. I’ve been a blue-collar worker. I worked in every coal mine and power plant in North Dakota, I worked at the Ford truck plant in Louisville, I worked at the GM truck plant in Arlington, Texas. I got more life experience than any man I know, and I would love to be your vice president.”
Reinhardt then went on to propose some unconventional policy positions. “We’ll turn the country around. We’ll start sending water to the polar ice caps so they build ‘em back up.”
“I think you should give me your resume,” Clinton said, after a brief pause.
“Just call me,” Reinhardt replied. “Because I’m very computer unfriendly.”
W-O-W. "So they build ‘em back up." Who are "they"? I'm really just being mean. And I think Washington Wire is just making fun of Clinton (and by extension the guy) by putting it up.
Wednesday's interesting reads
"Obama compares housing crisis to Great Depression" Reuters:
"Obama said the U.S. housing crisis resulted from a lack of regulation of mortgage lenders and investment banks who ended up with worthless assets, leading people to panic.
'As your president my job is to regulate what happens in the financial markets to make sure that people aren't taking these kinds of risks and that we're having full disclosure,' he said.
'If we do that then I think we can feel pretty confident we're going to avoid a depression.'"
The Audacity of Arrogance. I'd like him to show me in the constitution where it says the president's job is to "regulate what happens in the financial markets". I'd like to add that if "we" don't "do that then I think we can feel pretty confident we're going to avoid a depression".
This leads me to this...
"The Cult of the Presidency" by Gene Healy for Reason (HT: Radley Balko):
"To understand is not to excuse: No president should have the powers President Bush has sought and seized during the last seven years. But after 9/11 and Katrina, what rationally self-interested chief executive would hesitate to centralize power in anticipation of crisis? That pressure would be hard to resist, even for a president devoted to the Constitution and respectful of the limited role the office was supposed to play in our system of government.In the current presidential race, none of the major-party candidates comes close to fitting that description. Aside from the issue of torture, there’s very little daylight between John McCain and George W. Bush on matters of executive power. For her part, Hillary Clinton claims she played a key role in her husband’s undeclared war against Serbia in 1999. “I urged him to bomb,” she told Talk magazine that year. In 2003 she told ABC’s George Stephanopoulos: “I’m a strong believer in executive authority. I wish that, when my husband was president, people in Congress had been more willing to recognize presidential authority.”
Barack Obama has done more than any candidate in memory to boost expectations for the office, which were extraordinarily high to begin with. Obama’s stated positions on civil liberties may be preferable to McCain’s, but would it matter? If and when a car bomb goes off somewhere in America, would a President Obama be able to resist resorting to warrantless wiretapping, undeclared wars, and the Bush theory of unrestrained executive power? As a Democrat without military experience, publicly perceived as weak on national security, he’d have much more to prove...
Our system, with its unhealthy, unconstitutional concentration of power, feeds on the atavistic tendency to see the chief magistrate as our national father or mother, responsible for our economic well-being, our physical safety, and even our sense of belonging. Relimiting the presidency depends on freeing ourselves from a mind-set one century in the making. One hopes that it won’t take another Watergate and Vietnam for us to break loose from the spellbinding cult of the presidency."
A long, but very interesting article. For me, I have to vote for the one who I think will inflict the least damage.
"Peace and Free Trade" by Don Boudreaux:
"[A] vital course is for Uncle Sam to immediately eliminate all trade and investment restrictions with China, and for politicians to stop threatening further restrictions. Such moves would speed the integration of China's economy with our own. Being economically integrated means being economically reliant on each other - a happy recipe for prosperity and peace.
Want evidence?...Ask yourself how likely are even a well-armed Canada or Japan to have any interest in shooting their countless customers and suppliers throughout the U.S.? The answer, of course, is no more likely than we are to want to shoot our customers and suppliers throughout those countries."
"Getting the right picture" by Don Boudreaux for the Pittsburgh Tribune-Review (HT: Don Boudreaux):
"[O]ne of the most common of these "interpretation differences" involves labor and jobs. When I write, as I do in the previous paragraph, of "scarce domestic labor," many readers will wonder what I'm talking about. These readers see labor as expendable, as resources not especially valuable. Think about it. The overwhelming objection to imports is that the domestic workers whom they displace are unlikely ever again to find employment at wages close to those that they once earned in their now-defunct jobs. This objection rests on the presumption that these workers were overpaid in their former jobs...
When freer trade eliminates some jobs, it releases labor and capital to produce things that previously were too costly to produce. The result: Consumers eventually get not only the imports, but also the additional domestic production made possible by those imports. Also, these domestic resources become more productively employed because competition shifts them from less-productive to more-productive enterprises and industries. The snapshot perspective of trade skeptics causes them to miss these future benefits."
"Prevention is Better than Cure: More on That Veto Override" by Sallie James with Cato:
"An article in today’s The Hill notes:
'[L]obbyists said members were being told to “vote their districts,” meaning they could support the measure without fearing any consequence from leadership.'
What’s worse is that the bill probably could have been improved upon, much earlier in the process. The Republican leadership has full discretion over committee assignments. Instead of seating on the Agriculture Committee a balanced array of viewpoints, the House GOP leadership has chosen a collection of members that hail almost universally from farm-heavy districts and are greatly predisposed to support an increase in agricultural spending."
When I read/listened to Master of the Senate, I remember a part when Hubert Humphrey begged LBJ to let him be on the Ag committee because his constituents expected it. Having all congressmen and women from farming districts on the Ag committee stacks the deck in their favor, allowing them to pay off their special interests in a way that keeps them in power. It's rigged in favor of incumbents.
"Credit where it's due" by Janet Albrechtsen for The Austrialian (HT: Real Clear Politics):
"The resentment that comes from needing the military and economic might of the US translated into the most absurd criticism. Jan Egeland, the former UN boss of humanitarian affairs, cavilled about the stinginess of certain Western nations. His eye was on the US. Former British minister Claire Short was equally miffed, describing the initiative by the US and other countries as "yet another attempt to undermine the UN", which was, according to her, the "only body that has the moral authority" to help.
I love moral authority as much as the next guy, but the UN's moral authority is a mighty hard sell...
The need to paint Americans as a greedy, selfish, war-mongering superpower cannot be disturbed by facts. It matters not that, in the year before the tsunami, the US provided $2.4 billion in humanitarian relief: 40per cent of all the relief aid given to the world in 2003. Never mind that development and emergency relief rose from $10 billion during the last year of Bill Clinton's administration to $24 billion under George W. Bush in 2003. Or that, according to a German study, Americans contribute to charities nearly seven times as much a head as Germans do. Or that, adjusted for population, American philanthropy is more than two-thirds more than British giving.
There is a teenaged immaturity about the rest of the world's relationship with the US. Whenever a serious crisis erupts somewhere, our dependence on the US becomes obvious, and many hate the US because of it. That the hatred is irrational is beside the point."
I saw this at Free Exchange yesterday that compared private (non-governmental) aid among countries. The numbers are staggering.
"Too "Complex"?: Part II" by Thomas Sowell:
"So long as politicians can get some people's votes by publicly feeling their pain when it comes to housing costs, and other people's votes by restricting the building of housing, they can have a winning coalition at election time, which is their bottom line.
Economists may point out that the different members of this coalition have conflicting interests that could be better resolved through competition in the marketplace. But how many economists have ever put together a winning coalition?
So long as voters prefer heroes and villains to supply and demand, this game will continue to be played."
"McCain Raises Concerns About Subsidies for Solar Power" WSJ Washington Wire:
When asked of Sally Jewel, CEO of REI, what she would like McCain as president to do she replied:
The problem is there are no federal incentives to help defray the costs. “There isn’t anything significant on the federal side to help us make the right decisions,” she said. “We’re trying to do the right thing without really any incentives.”
To me, this sounds a little like a college freshman telling his parents he's trying to do the right thing by going to school, but he's lacking incentives to stay. He needs money. The feeling REI gets by saving the environment isn't enough incentive. After all, REI is a company with shareholders, so money (ie profits, for those who think that's a dirty word) is a pretty good incentive, but saving the environment costs so much money and they want taxpayers to subsidize the company's do-gooding.
"Who Will Pay For Promises Of Politicians?" IBD op-ed by Walter Williams:
"Most of the great problems we face are caused by politicians creating solutions to problems they created in the first place.
Politicians and a large percentage of the public lose sight of the unavoidable fact that for every created benefit, there's also a created cost, or, as Nobel Laureate Milton Friedman put it, "There's no free lunch."
While the person who receives the benefit might not pay or even be aware of the cost, as sure as night follows day, there is a cost borne by someone...
Americans are rightfully angry about higher energy and food prices, but their anger should be directed toward the true villains — the Congress and the White House."
"Gotta Love Sanford" Club for Growth:
SC Governor Mark Sanford sent out a press release that, among other things, lists his state's 10 craziest laws. Here are my favorites:
"1. State law requires an individual to complete 1,500 hours of instruction to become a cosmetologist. It takes more hours of licensing to become a cosmetologist in SC than it does to become a police officer (396 hours) or carry a concealed weapon (8 hours)."
"8. Circuses cannot exceed 48 hours at one place in any one year."
"10. Musical instruments are not allowed to be sold on Sunday."
"Specter wants independent probe into NFL’s ‘Spygate’" by Taylor Rushing for The Hill:
"Specter said the NFL “owes the public a lot more candor and a lot more credibility” in its handling of the controversy. The senator stopped short of alleging a cover-up but said he may press the Senate to hold hearings on the NFL’s antitrust exemption if the league does not launch a credible outside inquiry like the probe into steroids in baseball led last year by former Sen. George Mitchell (D-Maine)."
They really must be bored up there with nothing to do. Why is this the business of Congress? I don't fully understand how the antitrust exemption even applies to professional sports. They compete with different sports, such as MLB, the NBA, the NCAA, the PGA, the NHL, tennis, and numerous other entertainment activities. What would happen if they took away the exemption? I don't know, but I do know that the exemption has nothing to do with whatever ill Spector thinks happened.
"Who Wants to Be a Millionaire?" WSJ editorial:
The article is an argument for income caps in the farm bill. I posted the following comment:
"I'll admit that I don't fully understand all of the idea of income caps on those who receive subsidies. It seems to me, though, that farmers who are capped out due to farm income are those with large farms and those who are capped out due to non-farm income are simply people who own the farm but actually do something else for a living. My comments are made with that understanding, so if that is wrong, well...so am I.
I see why conservatives, of whom I am one, prefer to see income caps in place -- it's an excuse to give fewer subsidies -- but I also think it's harmful to the subsidy debate in its entirety.
First of all, when we say we're only going to give subsidies to those with small incomes, it seems to me to be saying that we only care to subsidize inefficiency. Is the justification of not giving subsidies to larger, corporate farms because they have enough economies of scale or capital for investment to be more productive than smaller farms, making the subsidies unnecessary? If a farmer gets close to the cap and has the opportunity to invest in a piece of machinery that will increase output, and consequently income, will he face incentives not to so invest because he doesn't want to lose his subsidies? Is this any different than the argument against a highly progressive income tax?
Second, I think it plays into the class warfare battlefield, a place that I never like, not because of the arguments but because of its divisiveness. Pitting "big" vs. "small" or "the millionaires" vs. "the rest of us" is never a helpful talking point.
Ultimately, I think talking about income caps is simply an attempt to turn typical liberal arguments of fairness against themselves. Maybe income caps are the only way to avoid paying even higher subsidies, but to me it seems a little intellectually dishonest coming from conservatives. I would rather us stick to our guns of no subsidies and avoid using emotional and populist appeals. But I'm no politician."
"Obama said the U.S. housing crisis resulted from a lack of regulation of mortgage lenders and investment banks who ended up with worthless assets, leading people to panic.
'As your president my job is to regulate what happens in the financial markets to make sure that people aren't taking these kinds of risks and that we're having full disclosure,' he said.
'If we do that then I think we can feel pretty confident we're going to avoid a depression.'"
The Audacity of Arrogance. I'd like him to show me in the constitution where it says the president's job is to "regulate what happens in the financial markets". I'd like to add that if "we" don't "do that then I think we can feel pretty confident we're going to avoid a depression".
This leads me to this...
"The Cult of the Presidency" by Gene Healy for Reason (HT: Radley Balko):
"To understand is not to excuse: No president should have the powers President Bush has sought and seized during the last seven years. But after 9/11 and Katrina, what rationally self-interested chief executive would hesitate to centralize power in anticipation of crisis? That pressure would be hard to resist, even for a president devoted to the Constitution and respectful of the limited role the office was supposed to play in our system of government.In the current presidential race, none of the major-party candidates comes close to fitting that description. Aside from the issue of torture, there’s very little daylight between John McCain and George W. Bush on matters of executive power. For her part, Hillary Clinton claims she played a key role in her husband’s undeclared war against Serbia in 1999. “I urged him to bomb,” she told Talk magazine that year. In 2003 she told ABC’s George Stephanopoulos: “I’m a strong believer in executive authority. I wish that, when my husband was president, people in Congress had been more willing to recognize presidential authority.”
Barack Obama has done more than any candidate in memory to boost expectations for the office, which were extraordinarily high to begin with. Obama’s stated positions on civil liberties may be preferable to McCain’s, but would it matter? If and when a car bomb goes off somewhere in America, would a President Obama be able to resist resorting to warrantless wiretapping, undeclared wars, and the Bush theory of unrestrained executive power? As a Democrat without military experience, publicly perceived as weak on national security, he’d have much more to prove...
Our system, with its unhealthy, unconstitutional concentration of power, feeds on the atavistic tendency to see the chief magistrate as our national father or mother, responsible for our economic well-being, our physical safety, and even our sense of belonging. Relimiting the presidency depends on freeing ourselves from a mind-set one century in the making. One hopes that it won’t take another Watergate and Vietnam for us to break loose from the spellbinding cult of the presidency."
A long, but very interesting article. For me, I have to vote for the one who I think will inflict the least damage.
"Peace and Free Trade" by Don Boudreaux:
"[A] vital course is for Uncle Sam to immediately eliminate all trade and investment restrictions with China, and for politicians to stop threatening further restrictions. Such moves would speed the integration of China's economy with our own. Being economically integrated means being economically reliant on each other - a happy recipe for prosperity and peace.
Want evidence?...Ask yourself how likely are even a well-armed Canada or Japan to have any interest in shooting their countless customers and suppliers throughout the U.S.? The answer, of course, is no more likely than we are to want to shoot our customers and suppliers throughout those countries."
"Getting the right picture" by Don Boudreaux for the Pittsburgh Tribune-Review (HT: Don Boudreaux):
"[O]ne of the most common of these "interpretation differences" involves labor and jobs. When I write, as I do in the previous paragraph, of "scarce domestic labor," many readers will wonder what I'm talking about. These readers see labor as expendable, as resources not especially valuable. Think about it. The overwhelming objection to imports is that the domestic workers whom they displace are unlikely ever again to find employment at wages close to those that they once earned in their now-defunct jobs. This objection rests on the presumption that these workers were overpaid in their former jobs...
When freer trade eliminates some jobs, it releases labor and capital to produce things that previously were too costly to produce. The result: Consumers eventually get not only the imports, but also the additional domestic production made possible by those imports. Also, these domestic resources become more productively employed because competition shifts them from less-productive to more-productive enterprises and industries. The snapshot perspective of trade skeptics causes them to miss these future benefits."
"Prevention is Better than Cure: More on That Veto Override" by Sallie James with Cato:
"An article in today’s The Hill notes:
'[L]obbyists said members were being told to “vote their districts,” meaning they could support the measure without fearing any consequence from leadership.'
What’s worse is that the bill probably could have been improved upon, much earlier in the process. The Republican leadership has full discretion over committee assignments. Instead of seating on the Agriculture Committee a balanced array of viewpoints, the House GOP leadership has chosen a collection of members that hail almost universally from farm-heavy districts and are greatly predisposed to support an increase in agricultural spending."
When I read/listened to Master of the Senate, I remember a part when Hubert Humphrey begged LBJ to let him be on the Ag committee because his constituents expected it. Having all congressmen and women from farming districts on the Ag committee stacks the deck in their favor, allowing them to pay off their special interests in a way that keeps them in power. It's rigged in favor of incumbents.
"Credit where it's due" by Janet Albrechtsen for The Austrialian (HT: Real Clear Politics):
"The resentment that comes from needing the military and economic might of the US translated into the most absurd criticism. Jan Egeland, the former UN boss of humanitarian affairs, cavilled about the stinginess of certain Western nations. His eye was on the US. Former British minister Claire Short was equally miffed, describing the initiative by the US and other countries as "yet another attempt to undermine the UN", which was, according to her, the "only body that has the moral authority" to help.
I love moral authority as much as the next guy, but the UN's moral authority is a mighty hard sell...
The need to paint Americans as a greedy, selfish, war-mongering superpower cannot be disturbed by facts. It matters not that, in the year before the tsunami, the US provided $2.4 billion in humanitarian relief: 40per cent of all the relief aid given to the world in 2003. Never mind that development and emergency relief rose from $10 billion during the last year of Bill Clinton's administration to $24 billion under George W. Bush in 2003. Or that, according to a German study, Americans contribute to charities nearly seven times as much a head as Germans do. Or that, adjusted for population, American philanthropy is more than two-thirds more than British giving.
There is a teenaged immaturity about the rest of the world's relationship with the US. Whenever a serious crisis erupts somewhere, our dependence on the US becomes obvious, and many hate the US because of it. That the hatred is irrational is beside the point."
I saw this at Free Exchange yesterday that compared private (non-governmental) aid among countries. The numbers are staggering.
"Too "Complex"?: Part II" by Thomas Sowell:
"So long as politicians can get some people's votes by publicly feeling their pain when it comes to housing costs, and other people's votes by restricting the building of housing, they can have a winning coalition at election time, which is their bottom line.
Economists may point out that the different members of this coalition have conflicting interests that could be better resolved through competition in the marketplace. But how many economists have ever put together a winning coalition?
So long as voters prefer heroes and villains to supply and demand, this game will continue to be played."
"McCain Raises Concerns About Subsidies for Solar Power" WSJ Washington Wire:
When asked of Sally Jewel, CEO of REI, what she would like McCain as president to do she replied:
The problem is there are no federal incentives to help defray the costs. “There isn’t anything significant on the federal side to help us make the right decisions,” she said. “We’re trying to do the right thing without really any incentives.”
To me, this sounds a little like a college freshman telling his parents he's trying to do the right thing by going to school, but he's lacking incentives to stay. He needs money. The feeling REI gets by saving the environment isn't enough incentive. After all, REI is a company with shareholders, so money (ie profits, for those who think that's a dirty word) is a pretty good incentive, but saving the environment costs so much money and they want taxpayers to subsidize the company's do-gooding.
"Who Will Pay For Promises Of Politicians?" IBD op-ed by Walter Williams:
"Most of the great problems we face are caused by politicians creating solutions to problems they created in the first place.
Politicians and a large percentage of the public lose sight of the unavoidable fact that for every created benefit, there's also a created cost, or, as Nobel Laureate Milton Friedman put it, "There's no free lunch."
While the person who receives the benefit might not pay or even be aware of the cost, as sure as night follows day, there is a cost borne by someone...
Americans are rightfully angry about higher energy and food prices, but their anger should be directed toward the true villains — the Congress and the White House."
"Gotta Love Sanford" Club for Growth:
SC Governor Mark Sanford sent out a press release that, among other things, lists his state's 10 craziest laws. Here are my favorites:
"1. State law requires an individual to complete 1,500 hours of instruction to become a cosmetologist. It takes more hours of licensing to become a cosmetologist in SC than it does to become a police officer (396 hours) or carry a concealed weapon (8 hours)."
"8. Circuses cannot exceed 48 hours at one place in any one year."
"10. Musical instruments are not allowed to be sold on Sunday."
"Specter wants independent probe into NFL’s ‘Spygate’" by Taylor Rushing for The Hill:
"Specter said the NFL “owes the public a lot more candor and a lot more credibility” in its handling of the controversy. The senator stopped short of alleging a cover-up but said he may press the Senate to hold hearings on the NFL’s antitrust exemption if the league does not launch a credible outside inquiry like the probe into steroids in baseball led last year by former Sen. George Mitchell (D-Maine)."
They really must be bored up there with nothing to do. Why is this the business of Congress? I don't fully understand how the antitrust exemption even applies to professional sports. They compete with different sports, such as MLB, the NBA, the NCAA, the PGA, the NHL, tennis, and numerous other entertainment activities. What would happen if they took away the exemption? I don't know, but I do know that the exemption has nothing to do with whatever ill Spector thinks happened.
"Who Wants to Be a Millionaire?" WSJ editorial:
The article is an argument for income caps in the farm bill. I posted the following comment:
"I'll admit that I don't fully understand all of the idea of income caps on those who receive subsidies. It seems to me, though, that farmers who are capped out due to farm income are those with large farms and those who are capped out due to non-farm income are simply people who own the farm but actually do something else for a living. My comments are made with that understanding, so if that is wrong, well...so am I.
I see why conservatives, of whom I am one, prefer to see income caps in place -- it's an excuse to give fewer subsidies -- but I also think it's harmful to the subsidy debate in its entirety.
First of all, when we say we're only going to give subsidies to those with small incomes, it seems to me to be saying that we only care to subsidize inefficiency. Is the justification of not giving subsidies to larger, corporate farms because they have enough economies of scale or capital for investment to be more productive than smaller farms, making the subsidies unnecessary? If a farmer gets close to the cap and has the opportunity to invest in a piece of machinery that will increase output, and consequently income, will he face incentives not to so invest because he doesn't want to lose his subsidies? Is this any different than the argument against a highly progressive income tax?
Second, I think it plays into the class warfare battlefield, a place that I never like, not because of the arguments but because of its divisiveness. Pitting "big" vs. "small" or "the millionaires" vs. "the rest of us" is never a helpful talking point.
Ultimately, I think talking about income caps is simply an attempt to turn typical liberal arguments of fairness against themselves. Maybe income caps are the only way to avoid paying even higher subsidies, but to me it seems a little intellectually dishonest coming from conservatives. I would rather us stick to our guns of no subsidies and avoid using emotional and populist appeals. But I'm no politician."
5.13.2008
Tuesday's interesting reads
"Clinton Wants to ‘Connect Up’ America" WSJ Washington Wire:
"We need to finish off high-speed Internet connection, broadband connection, cellphone usage, BlackBerry usage, all across West Virginia."
Why does she think it's the federal government's responsibility to make sure everyone in America has cell phone coverage? I don't necessarily want to subsidize, through my taxes, the technological advancement of West Virginia. If West Virginians want it, let them pay for it through their state taxes.
"Too "Complex"?" by Thomas Sowell (HT: Club for Growth):
"With all the commotion in the media and in politics about the high price of gasoline, is there really some terribly complex explanation?
Is there anything complex about the fact that with two countries-- India and China-- having rapid economic growth, and with combined populations 8 times that of the United States, they are creating an increased demand for the world's oil supply?
The problem is not that supply and demand is such a complex explanation. The problem is that supply and demand is not an emotionally satisfying explanation. For that, you need melodrama, heroes and villains...
What about those "obscene" oil company profits we hear so much about?
An economist might ask, "Obscene compared to what?" Compared to the investments made? Compared to the new investments required to find, extract and process additional oil supplies?
Asking questions like these are among the many reasons why economists have never been very popular. They frustrate people's desires for emotionally satisfying explanations.
If corporate "greed" is the explanation for high gasoline prices, why are the government's taxes not an even bigger sign of "greed" on the part of politicians-- since taxes add more to the price of gasoline than oil company profits do?"
Politicians want to blame anyone but the voter/consumer. And they certainly don't want to think that what they are doing may actually hurt the voter.
"Wall Street IS Main Street" by John Tamny for Real Clear Markets:
"Many might say that protecting Wall Street is different from protecting Main Street. And there lies a persistent myth. Indeed, lost in the absurd “Wall Street” versus “Main Street” discussion is the basic truth that Main Street’s interests fully intersect with those of Wall Street. For those who doubt this, they need only consider the microscopic percentage of Americans who actually lack exposure to the stock and capital markets. To the extent that any Americans don’t possess brokerage accounts, 401(k)s or pensions with stock-market investments, they frequently work for companies and/or individuals whose ability to pay them has a Wall Street origin. In the end, Wall Street is Main Street...
Forgotten amidst all the housing hysteria is the certainty that both borrowers and lenders have strong incentives (credit ratings for borrowers, earnings for lenders) to avoid foreclosure. That being the case, our minders in Washington should step aside and let those two interested parties work out a deal; one that by definition will aid Wall Street and Main Street entities that are inextricably linked."
"An Ugly Regulatory Bill" letter from Pat Toomey of the Club for Growth to members of the U.S. House:
"The [Credit Card Fair Fee Act of 2008] bill's innocuous sounding title hides an ugly reality -- establishment of a new all-powerful bureaucracy inside the Antitrust Division of the U.S. Department of Justice. These bureaucrats would set prices for the credit card business, and they would publish their rate determinations in the Federal Register...
We can understand the frustration of retailers who feel that credit card fees are too high. Yet the answer is not to run to Congress and ask that it set up a new government apparatus to set prices. The answer should instead be more competition and to identify and eliminate laws that might inhibit such competition. This bill takes one step in that direction -- allowing retailers to band together without fear of violating antitrust laws. If the bill had stopped there, then we would not oppose it.
Instead the bill moves in a more sinister direction, giving defacto control on innovation and prices to "Electronic Payment System Judges" in the Justice Department. The standard for their price setting would be cost plus a "normal rate of return in such a hypothetical perfectly competitive marketplace." This, of course, is absurd. Businesses do not run on a hypothetical, they are run in the real world."
The idea that some government beauracratic body can determine a fair or normal rate of return is ludicrous. Socialism at its...er...worst. If government really feels there is a monopoly, they should, as Pat alludes, consider why. If the card providers have more pricing power than they should, let's think of ways that equalize some of that power or look to see if something can be done to encourage more card providers to enter the marketplace, though that wouldn't be ideal.
"Huddles Masses Yearning to Assimilate" at Free Exchange at economist.com:
"That the pull factor of economic conditions is key has important implications for the prospects of the immigrant population. A new study from the Manhattan Institute has found that today's immigrants are assimilating—in economic, cultural, and civic terms—much faster than did previous immigrant cohorts. One reason for the increase in assimilation rates may be that the educational and income level at which today's workers enter is lower than in the past, allowing for faster catch-up. But it helps that immigration increases in economic boom periods—when the economy is best able to absorb new labour.
And, the study's leader concludes, efforts to physically block immigration not only do little to stem the flow of migrants, they also retard assimilation by cutting off economic and cultural opportunities. Taller fences may be popular, but they're also antithetical to the broader goals of the restrictionists."
I would also add that additional money, time, at spent on immigration enforcement also takes the resources from more important efforts such as violent crime.
"Haggling" by Will Wilkinson:
"I understand the price discrimination argument for haggling, especially in a country with a lot of poverty and tourism. But probably hundreds of my dollars stayed in my pocket because I didn’t have good information about the quality of products and I knew the retailer is better at bargaining over the surplus than I am, so… there was no transaction and no surplus. Sure, there is a lot of successful gouging going on, but add up millions of instances of “I know you’re going to screw me,” and I suspect that the average retailer is doing worse rather than better under the haggling system. And how about the average native consumer? In competitive posted-price markets, the system basically pre-haggles the price down to the point where the consumer gets most of the surplus. This is why Wal-Mart is a humanitarian triumph, and a shining symbol of civilization. In the world of Wal-Mart, when it comes to divvying up the surplus from exchange, the retailer has very little freedom to try to take you to the cleaners, but profits by assuring you that you will win the argument."
"We need to finish off high-speed Internet connection, broadband connection, cellphone usage, BlackBerry usage, all across West Virginia."
Why does she think it's the federal government's responsibility to make sure everyone in America has cell phone coverage? I don't necessarily want to subsidize, through my taxes, the technological advancement of West Virginia. If West Virginians want it, let them pay for it through their state taxes.
"Too "Complex"?" by Thomas Sowell (HT: Club for Growth):
"With all the commotion in the media and in politics about the high price of gasoline, is there really some terribly complex explanation?
Is there anything complex about the fact that with two countries-- India and China-- having rapid economic growth, and with combined populations 8 times that of the United States, they are creating an increased demand for the world's oil supply?
The problem is not that supply and demand is such a complex explanation. The problem is that supply and demand is not an emotionally satisfying explanation. For that, you need melodrama, heroes and villains...
What about those "obscene" oil company profits we hear so much about?
An economist might ask, "Obscene compared to what?" Compared to the investments made? Compared to the new investments required to find, extract and process additional oil supplies?
Asking questions like these are among the many reasons why economists have never been very popular. They frustrate people's desires for emotionally satisfying explanations.
If corporate "greed" is the explanation for high gasoline prices, why are the government's taxes not an even bigger sign of "greed" on the part of politicians-- since taxes add more to the price of gasoline than oil company profits do?"
Politicians want to blame anyone but the voter/consumer. And they certainly don't want to think that what they are doing may actually hurt the voter.
"Wall Street IS Main Street" by John Tamny for Real Clear Markets:
"Many might say that protecting Wall Street is different from protecting Main Street. And there lies a persistent myth. Indeed, lost in the absurd “Wall Street” versus “Main Street” discussion is the basic truth that Main Street’s interests fully intersect with those of Wall Street. For those who doubt this, they need only consider the microscopic percentage of Americans who actually lack exposure to the stock and capital markets. To the extent that any Americans don’t possess brokerage accounts, 401(k)s or pensions with stock-market investments, they frequently work for companies and/or individuals whose ability to pay them has a Wall Street origin. In the end, Wall Street is Main Street...
Forgotten amidst all the housing hysteria is the certainty that both borrowers and lenders have strong incentives (credit ratings for borrowers, earnings for lenders) to avoid foreclosure. That being the case, our minders in Washington should step aside and let those two interested parties work out a deal; one that by definition will aid Wall Street and Main Street entities that are inextricably linked."
"An Ugly Regulatory Bill" letter from Pat Toomey of the Club for Growth to members of the U.S. House:
"The [Credit Card Fair Fee Act of 2008] bill's innocuous sounding title hides an ugly reality -- establishment of a new all-powerful bureaucracy inside the Antitrust Division of the U.S. Department of Justice. These bureaucrats would set prices for the credit card business, and they would publish their rate determinations in the Federal Register...
We can understand the frustration of retailers who feel that credit card fees are too high. Yet the answer is not to run to Congress and ask that it set up a new government apparatus to set prices. The answer should instead be more competition and to identify and eliminate laws that might inhibit such competition. This bill takes one step in that direction -- allowing retailers to band together without fear of violating antitrust laws. If the bill had stopped there, then we would not oppose it.
Instead the bill moves in a more sinister direction, giving defacto control on innovation and prices to "Electronic Payment System Judges" in the Justice Department. The standard for their price setting would be cost plus a "normal rate of return in such a hypothetical perfectly competitive marketplace." This, of course, is absurd. Businesses do not run on a hypothetical, they are run in the real world."
The idea that some government beauracratic body can determine a fair or normal rate of return is ludicrous. Socialism at its...er...worst. If government really feels there is a monopoly, they should, as Pat alludes, consider why. If the card providers have more pricing power than they should, let's think of ways that equalize some of that power or look to see if something can be done to encourage more card providers to enter the marketplace, though that wouldn't be ideal.
"Huddles Masses Yearning to Assimilate" at Free Exchange at economist.com:
"That the pull factor of economic conditions is key has important implications for the prospects of the immigrant population. A new study from the Manhattan Institute has found that today's immigrants are assimilating—in economic, cultural, and civic terms—much faster than did previous immigrant cohorts. One reason for the increase in assimilation rates may be that the educational and income level at which today's workers enter is lower than in the past, allowing for faster catch-up. But it helps that immigration increases in economic boom periods—when the economy is best able to absorb new labour.
And, the study's leader concludes, efforts to physically block immigration not only do little to stem the flow of migrants, they also retard assimilation by cutting off economic and cultural opportunities. Taller fences may be popular, but they're also antithetical to the broader goals of the restrictionists."
I would also add that additional money, time, at spent on immigration enforcement also takes the resources from more important efforts such as violent crime.
"Haggling" by Will Wilkinson:
"I understand the price discrimination argument for haggling, especially in a country with a lot of poverty and tourism. But probably hundreds of my dollars stayed in my pocket because I didn’t have good information about the quality of products and I knew the retailer is better at bargaining over the surplus than I am, so… there was no transaction and no surplus. Sure, there is a lot of successful gouging going on, but add up millions of instances of “I know you’re going to screw me,” and I suspect that the average retailer is doing worse rather than better under the haggling system. And how about the average native consumer? In competitive posted-price markets, the system basically pre-haggles the price down to the point where the consumer gets most of the surplus. This is why Wal-Mart is a humanitarian triumph, and a shining symbol of civilization. In the world of Wal-Mart, when it comes to divvying up the surplus from exchange, the retailer has very little freedom to try to take you to the cleaners, but profits by assuring you that you will win the argument."
5.12.2008
Monday's interesting reads
"The Biggest Housing Losers" WSJ editorial:
"You may not know it, dear reader, but Congress is playing you for a sap. During the housing mania, you didn't lend money at teaser rates to borrowers who couldn't pay, or buy a bigger house than you could afford. You paid your bills on time. As a reward for that good judgment and restraint, Barney Frank is now going to let you bail out the least responsible bankers and borrowers...
'I want to put the servicers on notice," the celebrated liberal [Frank] declared at a recent hearing. "If we see a widespread refusal on the part of servicers to cooperate voluntarily in what we see as an important economic problem . . . they can expect much tougher regulation in the future.'"
Nice threat. If you don't do something we want you to do voluntarily, you'll pay the price later on with increased regulation. Pick your poison.
"The Union Police" WSJ editorial:
"Unions that organize private companies are at least subject to market competition. If they make their employers uncompetitive, the union workers lose their jobs. Public unions have far more clout because there is no competition for government services; they are by law a monopoly. This is especially true of police and firefighters, who can do great harm to public safety if they strike. Unionization gives them enormous clout that drives up costs and eventually the tax burden."
"Keep America Open to Trade" WSJ op-ed by Carlos Guitierrez and Arnold Schwarzenegger:
"In every state of the union, such a[n isolationist] retreat would be disastrous for jobs, economic growth and consumer choice. Nowhere is this more clear than here in Torrance, Calif., where today we are visiting a Hitachi plant that remanufactures auto parts. This "foreign" company employs 16,000 Americans -- 8,000 in California alone -- and is just one of hundreds of overseas firms that invest directly in the U.S. From where we're standing, what America needs is more openness here and abroad -- not less...
Yet in the global trading system, America isn't just a buyer and seller, we're a huge investment magnet. That giant cash register sound you're hearing is the nearly $200 billion pumped into U.S. businesses from abroad in 2006 alone. Foreign-owned companies operating in the U.S. employ more than five million Americans, and a third of foreign direct investment is in the manufacturing sector. For the 8,000 Hitachi employees here in California, some of whom we will visit today, and the other 8,000 spread across the U.S., foreign investment is a no-brainer."
"Red ties and boys' pride" The Economist:
"Urban Prep Charter Academy opened in 2006, part of an effort to bring 100 new schools to Chicago's bleakest areas by 2010. Richard Daley, the city's mayor, announced Renaissance 2010 (“Ren 10”) in 2004; Chicago's business leaders created the Renaissance Schools Fund (RSF) to help support it. Backers of this ambitious scheme hope it will spur competition across the school district. On May 6th RSF held a conference to discuss the “new market of public education”.
At the core of Ren 10 is the desire to welcome “education entrepreneurs”, as RSF calls them. Ren 10 lets them start schools and run them mostly as they choose (for example, with longer days and, in some cases, their own salary structure); it also sets the standards they must meet. Schools receive money on a per pupil basis, and may raise private funds as well."
"Get Over The Gap" IBD editorial:
"[T]he deficit appears to be declining — after hitting repeated records in recent years. Exports are booming while import growth has slowed noticeably, due mainly to the slumping dollar.
On the surface, this looks like a good thing. After all, don't we want to buy less from abroad and more from our own country? The answer is no if it means that the U.S. economy has slowed and is no longer pulling its weight in the world.
Journalists and pundits call the smaller deficit an "improvement," or "good news." It isn't. We run a trade deficit not because we're uncompetitive or others protect their markets, two great economic myths; we run deficits because we're such an attractive place for investors from around the world to park their money. The deficit, in other words, is a sign of strength."
"Man Accused Of Providing Illegal Taxi Service" from Local10.com in Miami (HT: Club for Growth):
"A man who said he thought he was just helping a woman in need is accused of running an illegal taxi service.
Miami-Dade County's Consumer Services Department has slapped Rosco O'Neil with $2,000 worth of fines, but O'Neil claims he is falsely accused.
"I ain't running nothing illegal," O’Neil said.
The 78-year-old said he was walking into a Winn-Dixie to get some groceries when he was approached by a woman who said she needed a ride.
"She asked me, 'Do I do a service?'" O'Neil said. "I told her no. She said, 'I need help getting home.'"
O'Neil told the woman if she was still there when he finished his shopping, he would give her a ride. She was, so he did.
As it turned out, the woman was an undercover employee with the consumer services department targeting people providing illegal taxi services."
Why would this be illegal in the first place?
"Obama thinks we can be perfect (?)" by Arnold Kling at EconLog:
"I suppose that to most people, this is just another nice, feel-good statement [Obama: I believe in our ability to perfect this union]. But it alarms me. The desire for perfection is an excuse for endless intervention. Although earlier in the speech, Obama said,"I trust the American people to realize that while we don't need big government," perfectionism justifies unlimited increases in government power. If every flaw is curable, then it follows that we need to give government all the power it needs to implement the cure."
"More disasters in Asia" by Megan McArdle:
"There's an unreality to the horrific numbers that emerge from developing country disasters--Americans could be told that 500,000 had died in a Bangladeshi apartment building fire, and we'd just sort of nod and say how awful it all is. But Jesus, we are lucky. Economic development does a lot of things, but one of the best things it does is give us the means to cope with adversity. It's tempting to think that subsistence farming is less fragile than complex economies--after all, you can rebuild everything yourself. But development gives us surplus food. Roads for evacuees to get out and relief workers to get in. Doctors and drugs. Mosquito nets. Earthquake proof houses. Advanced storm warnings, and communications systems to distribute them. Construction equipment. Trucks, boats and cars. Emergency generators. Spare people to flood the disaster area with help. And lots of spare room for people whose homes and livelihoods have been destroyed.
It also--arguably--gives us democratic governments that have to worry about public opinion. There was a lot of noise after Katrina about how America didn't care about the poor people who were affected. I won't argue that we couldn't have done better before and after the storm; we could have, and should have. But the picture of America as oblivious to its people's pain looks pretty fatuous in comparison to a Burmese government that seems ready to let hundreds of thousands die rather than allow relief workers to infect its people with news of the outside world."
"Rethinking Ethanol" NY Times editorial (HT: Indur Goklany with Cato):
"The time has come for Congress to rethink ethanol, an alternative fuel that has lately fallen from favor. Specifically, it is time to end an outdated tax break for corn ethanol and to call a timeout in the fivefold increase in ethanol production mandated in the 2007 energy bill.
This does not mean that Congress should give up on biofuels as an important part of the effort to reduce the country’s dependency on imported oil and reduce greenhouse gas emissions. What it does mean is that some biofuels are (or are likely to be) better than others, and that Congress should realign its tax and subsidy programs to encourage the good ones. Unlike corn ethanol, those biofuels will not compete for the world’s food supply and will deliver significant reductions in greenhouse gases."
I think its funny they think they can pick the next thing that will work. Scientists, et al thought that corn ethanol would be it. They were wrong. They'll likely pick something that, as of now, will be a can't miss. Who knows what the adverse effects of that will be. It reminds me of FDR. I read it in The Forgotten Man and was reminded of it last night on a PBS documentary. FDR liked to experiment. If one thing didn't work, he'd try something else. If that didn't work, he'd try another thing. All the while, though, he didn't realize was that his large-scale experimentation prevented the rest of the people from small-scale experimentation. It's the small-scale experimentation (read: innovation) that drives recovery and problem-solving.
"You may not know it, dear reader, but Congress is playing you for a sap. During the housing mania, you didn't lend money at teaser rates to borrowers who couldn't pay, or buy a bigger house than you could afford. You paid your bills on time. As a reward for that good judgment and restraint, Barney Frank is now going to let you bail out the least responsible bankers and borrowers...
'I want to put the servicers on notice," the celebrated liberal [Frank] declared at a recent hearing. "If we see a widespread refusal on the part of servicers to cooperate voluntarily in what we see as an important economic problem . . . they can expect much tougher regulation in the future.'"
Nice threat. If you don't do something we want you to do voluntarily, you'll pay the price later on with increased regulation. Pick your poison.
"The Union Police" WSJ editorial:
"Unions that organize private companies are at least subject to market competition. If they make their employers uncompetitive, the union workers lose their jobs. Public unions have far more clout because there is no competition for government services; they are by law a monopoly. This is especially true of police and firefighters, who can do great harm to public safety if they strike. Unionization gives them enormous clout that drives up costs and eventually the tax burden."
"Keep America Open to Trade" WSJ op-ed by Carlos Guitierrez and Arnold Schwarzenegger:
"In every state of the union, such a[n isolationist] retreat would be disastrous for jobs, economic growth and consumer choice. Nowhere is this more clear than here in Torrance, Calif., where today we are visiting a Hitachi plant that remanufactures auto parts. This "foreign" company employs 16,000 Americans -- 8,000 in California alone -- and is just one of hundreds of overseas firms that invest directly in the U.S. From where we're standing, what America needs is more openness here and abroad -- not less...
Yet in the global trading system, America isn't just a buyer and seller, we're a huge investment magnet. That giant cash register sound you're hearing is the nearly $200 billion pumped into U.S. businesses from abroad in 2006 alone. Foreign-owned companies operating in the U.S. employ more than five million Americans, and a third of foreign direct investment is in the manufacturing sector. For the 8,000 Hitachi employees here in California, some of whom we will visit today, and the other 8,000 spread across the U.S., foreign investment is a no-brainer."
"Red ties and boys' pride" The Economist:
"Urban Prep Charter Academy opened in 2006, part of an effort to bring 100 new schools to Chicago's bleakest areas by 2010. Richard Daley, the city's mayor, announced Renaissance 2010 (“Ren 10”) in 2004; Chicago's business leaders created the Renaissance Schools Fund (RSF) to help support it. Backers of this ambitious scheme hope it will spur competition across the school district. On May 6th RSF held a conference to discuss the “new market of public education”.
At the core of Ren 10 is the desire to welcome “education entrepreneurs”, as RSF calls them. Ren 10 lets them start schools and run them mostly as they choose (for example, with longer days and, in some cases, their own salary structure); it also sets the standards they must meet. Schools receive money on a per pupil basis, and may raise private funds as well."
"Get Over The Gap" IBD editorial:
"[T]he deficit appears to be declining — after hitting repeated records in recent years. Exports are booming while import growth has slowed noticeably, due mainly to the slumping dollar.
On the surface, this looks like a good thing. After all, don't we want to buy less from abroad and more from our own country? The answer is no if it means that the U.S. economy has slowed and is no longer pulling its weight in the world.
Journalists and pundits call the smaller deficit an "improvement," or "good news." It isn't. We run a trade deficit not because we're uncompetitive or others protect their markets, two great economic myths; we run deficits because we're such an attractive place for investors from around the world to park their money. The deficit, in other words, is a sign of strength."
"Man Accused Of Providing Illegal Taxi Service" from Local10.com in Miami (HT: Club for Growth):
"A man who said he thought he was just helping a woman in need is accused of running an illegal taxi service.
Miami-Dade County's Consumer Services Department has slapped Rosco O'Neil with $2,000 worth of fines, but O'Neil claims he is falsely accused.
"I ain't running nothing illegal," O’Neil said.
The 78-year-old said he was walking into a Winn-Dixie to get some groceries when he was approached by a woman who said she needed a ride.
"She asked me, 'Do I do a service?'" O'Neil said. "I told her no. She said, 'I need help getting home.'"
O'Neil told the woman if she was still there when he finished his shopping, he would give her a ride. She was, so he did.
As it turned out, the woman was an undercover employee with the consumer services department targeting people providing illegal taxi services."
Why would this be illegal in the first place?
"Obama thinks we can be perfect (?)" by Arnold Kling at EconLog:
"I suppose that to most people, this is just another nice, feel-good statement [Obama: I believe in our ability to perfect this union]. But it alarms me. The desire for perfection is an excuse for endless intervention. Although earlier in the speech, Obama said,"I trust the American people to realize that while we don't need big government," perfectionism justifies unlimited increases in government power. If every flaw is curable, then it follows that we need to give government all the power it needs to implement the cure."
"More disasters in Asia" by Megan McArdle:
"There's an unreality to the horrific numbers that emerge from developing country disasters--Americans could be told that 500,000 had died in a Bangladeshi apartment building fire, and we'd just sort of nod and say how awful it all is. But Jesus, we are lucky. Economic development does a lot of things, but one of the best things it does is give us the means to cope with adversity. It's tempting to think that subsistence farming is less fragile than complex economies--after all, you can rebuild everything yourself. But development gives us surplus food. Roads for evacuees to get out and relief workers to get in. Doctors and drugs. Mosquito nets. Earthquake proof houses. Advanced storm warnings, and communications systems to distribute them. Construction equipment. Trucks, boats and cars. Emergency generators. Spare people to flood the disaster area with help. And lots of spare room for people whose homes and livelihoods have been destroyed.
It also--arguably--gives us democratic governments that have to worry about public opinion. There was a lot of noise after Katrina about how America didn't care about the poor people who were affected. I won't argue that we couldn't have done better before and after the storm; we could have, and should have. But the picture of America as oblivious to its people's pain looks pretty fatuous in comparison to a Burmese government that seems ready to let hundreds of thousands die rather than allow relief workers to infect its people with news of the outside world."
"Rethinking Ethanol" NY Times editorial (HT: Indur Goklany with Cato):
"The time has come for Congress to rethink ethanol, an alternative fuel that has lately fallen from favor. Specifically, it is time to end an outdated tax break for corn ethanol and to call a timeout in the fivefold increase in ethanol production mandated in the 2007 energy bill.
This does not mean that Congress should give up on biofuels as an important part of the effort to reduce the country’s dependency on imported oil and reduce greenhouse gas emissions. What it does mean is that some biofuels are (or are likely to be) better than others, and that Congress should realign its tax and subsidy programs to encourage the good ones. Unlike corn ethanol, those biofuels will not compete for the world’s food supply and will deliver significant reductions in greenhouse gases."
I think its funny they think they can pick the next thing that will work. Scientists, et al thought that corn ethanol would be it. They were wrong. They'll likely pick something that, as of now, will be a can't miss. Who knows what the adverse effects of that will be. It reminds me of FDR. I read it in The Forgotten Man and was reminded of it last night on a PBS documentary. FDR liked to experiment. If one thing didn't work, he'd try something else. If that didn't work, he'd try another thing. All the while, though, he didn't realize was that his large-scale experimentation prevented the rest of the people from small-scale experimentation. It's the small-scale experimentation (read: innovation) that drives recovery and problem-solving.
5.09.2008
The weekend's interesting reads
"Workers and Employers" by Don Boudreaux at Cafe Hayek:
"So in this view – what we might call the “Progressive” view - workers are seen as contributing little to their employers (which is why employers can so blithely fire workers). At the same time, employers are seen as contributing enormously and philanthropically to their workers. “Enormously” because the presumption is that the typical worker’s next-best employment option would pay him or her much less than he or she makes in the current job, and “philanthropically” because the presumption is that the worker is paid more than he or she is worth to the employer."
I mentioned the other day about the flight attendants union employees at Delta and how they were complaining that the merger would hurt them. My question is "So what? What do they owe you?".
"Back to the Past" by John Samples with Cato:
"Question: How do these two [quotes by LBJ in 1964 and David Brooks in 2008] differ?
Answer: They don’t. Both “hunger for community.” Both condemn a “soulless wealth.” Both promise decentralization. Both believe in the end that community can and should be created by coercion."
You can't make people be friends just because they live in the same state, country. Community has a tendency to evolve fairly nicely on its own.
"Religion and Freedom" by Mitt Romney at Townhall (remarks made at the Metropolitan Club in New York City where he accepted the Becket Fund’s Canterbury Medal for his defense of religious liberty.)
"I had missed an opportunity [in my speech] to clearly assert that non-believers have just as great a stake as believers in defending religious liberty.
If a society takes it upon itself to prescribe and proscribe certain streams of belief--to prohibit certain less-favored strains of conscience--it may be the non-believer who is among the first to be condemned. A coercive monopoly of belief threatens everyone, whether we are talking about those who search the philosophies of men or follow the words of God.
We are all in this together. Religious liberty and liberality of thought flow from the common conviction that it is freedom, not coercion, that exalts the individual just as it raises up the nation."
After reading this article in The Economist last year, talking about how those "with no religious beliefs are shut out from political power", I've become more and more leery of people pushing their religious agendas through politics. Of the three main conservative legs the Republican Party currently purports to stand on, social conservatism stands behind economic conservatism in importance for me. In my view, economic conservativism and social conservatism ultimately stand at odds in that economic conservatism relies on small government and gives freedom of choice to the individual while social conservatism relies on large government and takes choice away from the individual (except in the case of abortion, but I won't go into that now).
"So in this view – what we might call the “Progressive” view - workers are seen as contributing little to their employers (which is why employers can so blithely fire workers). At the same time, employers are seen as contributing enormously and philanthropically to their workers. “Enormously” because the presumption is that the typical worker’s next-best employment option would pay him or her much less than he or she makes in the current job, and “philanthropically” because the presumption is that the worker is paid more than he or she is worth to the employer."
I mentioned the other day about the flight attendants union employees at Delta and how they were complaining that the merger would hurt them. My question is "So what? What do they owe you?".
"Back to the Past" by John Samples with Cato:
"Question: How do these two [quotes by LBJ in 1964 and David Brooks in 2008] differ?
Answer: They don’t. Both “hunger for community.” Both condemn a “soulless wealth.” Both promise decentralization. Both believe in the end that community can and should be created by coercion."
You can't make people be friends just because they live in the same state, country. Community has a tendency to evolve fairly nicely on its own.
"Religion and Freedom" by Mitt Romney at Townhall (remarks made at the Metropolitan Club in New York City where he accepted the Becket Fund’s Canterbury Medal for his defense of religious liberty.)
"I had missed an opportunity [in my speech] to clearly assert that non-believers have just as great a stake as believers in defending religious liberty.
If a society takes it upon itself to prescribe and proscribe certain streams of belief--to prohibit certain less-favored strains of conscience--it may be the non-believer who is among the first to be condemned. A coercive monopoly of belief threatens everyone, whether we are talking about those who search the philosophies of men or follow the words of God.
We are all in this together. Religious liberty and liberality of thought flow from the common conviction that it is freedom, not coercion, that exalts the individual just as it raises up the nation."
After reading this article in The Economist last year, talking about how those "with no religious beliefs are shut out from political power", I've become more and more leery of people pushing their religious agendas through politics. Of the three main conservative legs the Republican Party currently purports to stand on, social conservatism stands behind economic conservatism in importance for me. In my view, economic conservativism and social conservatism ultimately stand at odds in that economic conservatism relies on small government and gives freedom of choice to the individual while social conservatism relies on large government and takes choice away from the individual (except in the case of abortion, but I won't go into that now).
"Farm Bill Fails to Cultivate Reform" on The Foundry blog at the Heritage Foundation (HT: Club for Growth):
You really just have to look at the table comparing food commodity prices in 2002 (the last time a farm bill was passed) to 2008. The price increases of rice and corn, for example, are 281% and 256%, respectively. Why are we still giving subsidies to the farmers who grow these? They then give eight reasons why the bill should be vetoed. The one that always bothers me is the "stop subsidizing millionaires" argument. I don't like it for two reasons. First, if we're going to give out subsidies, it should be based on acres or output, not income. Subsidies should be incentive to produce, assuming we need to subsidize to keep some food production domestic, not a safety net. Second, because most of those who are millionaires likely own lots of land, they are probably more efficient. If you decide to subsidize small so they can compete with the big, you're effectively subsidizing inefficiency.
"Stamping Our Feet" by Don Boudreaux at Cafe Hayek:
"It has been suggested that, because the nominal price of first-class postage is about where it was in the late 18th century, Americans who complain about the proposal to increase postal rates are merely whining wimps who are lacking in historical perspective.
However, the real price of transportation (a key input in postal service) has plummeted over the last 200 years. In 1799 it took 53 days for an Army courier to travel from Detroit to Pittsburgh.
Today the same trip can conveniently be made in minutes. Likewise, the productive efficiency of the United States is vastly greater now than it was even a few decades ago.
Given the plunge in transportation costs, joined with other technological improvements and a large increase in the scale of postal activity, the price of postage should have fallen dramatically."
This is a reprint of a letter he sent in 1994 in response to an earlier postage increase. A comment noted that it costs $.40 to buy a kiwi grown in New Zealand but $.42 to mail a piece of paper.
"Oceans Apart: Mergers and Dominant Firm" The Economist:
"The difference in approach is partly explained by economic philosophy. In America there is a greater faith that markets will fix the problem of monopolies and a belief that market leadership in high-tech is transient. A new product may make today's dominant technology redundant tomorrow. Firms compete for the market as much as in it: temporary monopoly is the reward for innovation.
Alongside this belief is another: that if regulators interfere they need to be sure that they are helping competition. That is not easy when behaviour that could bolster monopoly is indistinguishable from vigorous competition. Bundling, one of the sins for which Microsoft was punished, is common practice: every fast-food outlet charges more for separate items than for combined meals. And when a local print shop offers discounts or rebates for bulk orders—Intel's transgression—few imagine it is plotting against consumers.
But in a market where one firm is king, such practices can take on a sinister guise. Dominant firms might use loyalty rebates to stop others from becoming large enough to pose a serious threat. Bundling can be a tactic to compel consumers to buy several things from a firm with a monopoly in one product. It is hard to establish whether such strategies are pro-competitive or nefarious. Antitrust watchdogs have to gauge the tangible short-term benefits of lower prices and convenience against theoretical long-term harm."
Friday's interesting reads
"March trade gap narrows more than expected" Reuters (here is another article in the WSJ):
"In a sign the current U.S. economic slowdown is taking a toll on consumer and business demand, major import categories like autos and auto parts, industrial supplies and materials, consumer goods and capital goods all showed declines in March."
Isn't this just an effect of the weak dollar? It's the price we pay for letting the dollar fall so precipitously that we import less. It's one of the reasons inflation is becoming a larger issue of late.
"SENATE Key Vote Alert - Flood Insurance" Club for Growth:
"This proposal would direct the Treasury Secretary to offer subsidized funding for state-run insurance programs, whether responsibly designed or not, potentially putting taxpayers on the hook for more billions of dollars in losses.
This amendment is fiscally irresponsible, and would further distort insurance markets and encourage unwise risk taking that would endanger lives and property. Perhaps the worst feature of this amendment is that it would encourage an irresponsible design of state catastrophe funds.
This reckless add-on to an already bankrupt national flood insurance program could dramatically increase spending and lead to higher taxes. It would clearly crowd out private reinsurance coverage, allowing government to increase its bureaucracy at the expense of the private sector. This amendment should be vigorously opposed."
Darn right it should be opposed. Just like the farm bill, if a certain group wants a certain something, they should pay the costs. If they want to live somewhere, they should pay the full costs to live there. Don't ask me to subsidize it for you.
"Bush Will Veto $296 Billion Farm Bill, Schafer Says " by Alan Bjerga for Bloomberg (HT: Sallie James with Cato, who simply said "Excellent"):
"President George W. Bush will veto the farm bill proposed by congressional agriculture leaders because it exceeds spending guidelines and offers no ``real reform,'' Agriculture Secretary Ed Schafer said."
I actually saw something like this last night on the WSJ, but I couldn't find it this morning. I hope he does and I hope he holds strong. And I hope Senator Chambliss and the others can't raise the votes to override, though I'm sure they handed out enough favors to make sure they can. Ugly.
"Global Warming and the Burmese Cyclone" by Indur Goklany with Cato:
"So I checked the sea surface temperature (SST) “anomalies” (that is, differences in temperature from the long-term average) along the track of Cyclone Nargis to see if SST might have been unusually warm from April 28th to May 3rd (when it hit Burma) of this year compared to last year. Comparing the SST anomalies from NOAA for April 28, May 1, and May 5 of 2008 against April 28, May 1, May 3, and May 7 of 2007, SSTs along the track of Cyclone Nargis don’t look that much different from last year. And for April 30, May 3, and May 7 of 2005, the Bay of Bengal seems to have been noticeably warmer."
This is in response to Al Gore suggesting the cyclone is due to global warming. I can't find it right now, but Paul Krugman said the same thing about the drought in Australia. An editorial at IBD had this to add:
"So why the hype? Well, global warming is a growth industry designed to keep Earth and some bank accounts green.
Gore himself joined the venture capital group, Kleiner Perkins Caufield & Byers just last September. On May 1, the firm announced a $500 million investment in maturing green technology firms called the Green Growth Fund.
The group announced another $700 million to be invested over the next three years in green-tech startup firms. But if the green technology business, uh, cools down, there will be no return on that investment."
"Will They Vandalize the Pepsi Machines This Time, Too?" by Andrew Coulson with Cato:
"Needless to say, the bill has earned the “intense opposition” of New Jersey’s large and powerful public school employees union. The last time somebody offered Jersey’s poor kids an escape from the union-dominated public schools, the union made that somebody an offer that was difficult to refuse.
The 'somebody' in question was PepsiCo. As I wrote in Market Education:
'In late October of 1995, officials of the Pepsi company announced at Jersey City Hall that their corporation would donate thousands of dollars in scholarships to help low-income children attend the private school of their choice. The immediate response of the local public school teachers’ union was to threaten that a statewide boycott of all Pepsi products could not be ruled out. Pepsi vending machines around the city were vandalized and jammed. Three weeks later, company officials regretfully withdrew their offer.'"
Are unions good for nothing but protecting their own turf?
"NCAA starving small schools with APR" by Spencer Hall for the Sporting News (HT: Dan Shanoff):
"Rather than some sort of conspiracy, the APR and its sanctioned, slow strangulation of smaller schools unable to pay for massive academic support centers is the result of something even more unstoppable and faceless: bad policy.
The NCAA and its members, faced with the legitimate issue of measuring how well schools balance athletics and academics, created a well-intentioned system. Like many well-intentioned systems -- such as President Bush's No Child Left Behind Act -- its actual effects are disastrous.
APR penalties slowly will erode a smaller school's ability to recruit athletes who likely will need academic support to make it through four years of balancing school work and athletics.
In short, the APR is all sticks and no carrots, a penalty-laden system with few outs for small schools struggling to get programs off the ground. (See: Florida Atlantic and Florida International.)
Like No Child Left Behind, it hits the worst of the worst, penalizing them from the starting line and all but encouraging a new variety of fraud by attaching the school's progress to a single number -- a number that could, in crafty administrative hands, become a fiction the NCAA would rubber-stamp happily ... especially in the cases of larger schools that seem to escape punishment year in and year out."
After listening to this podcast with Michael Lewis, I'm convinced players should be paid. I'd even go so far as to not even call them student athletes by absolving them from the responsibility of having to go to class. If they want to go to class and get a degree, let them. Academic eligibility would no longer be an issue. Lewis made the same point, but if a guy is 6-6, 340 lbs and would be a tremendous left tackle, why tie his ability to realize the full value of his abilities to academics? A player can't enter the NFL until he's been out of high school for at least two (or is it three?) years, so he has to go to school. I know they're doing it because they think it's in the best interest of the kids, but I think it just invites corruption.
"Vladimir Putin pledges to transform economy of Russia into a world leader" by Carl Mortished for TimesOnline (HT: CFAI Financial NewsBrief):
"Mr Putin vowed to tackle inflation, fight corruption and bring down taxes in a speech that differed from the low-key inaugural presidential address delivered by Mr Medvedev."
If he does this, he will be well on his way.
"China's Undervalued Currency Benefits Americans" by Terry Miller for The Heritage Foundation (HT: Club for Growth):
"The China Currency Manipulation Act of 2008 accuses China of engaging in 'protracted large-scale intervention in currency markets, thereby subsidizing Chinese-made products and erecting a formidable nontariff barrier to trade for United States exports to the People's Republic of China.' This is a novel use of the term 'subsidy,' which normally refers to government payments to producers of an item. In this case, the government of China is purchasing U.S. dollars or U.S. government securities, so the Chinese government payment is ultimately going to the U.S. government. To the extent that the renminbi is undervalued as a result, the benefit goes to U.S. consumers and businesses, which pay lower prices for Chinese goods imported into the United States. Chinese manufacturers get less for what they sell as a result of the process. If there is a subsidy here, the beneficiaries are U.S. consumers and taxpayers...
The measures proposed by some in Congress to pressure the Chinese to inflate the value of their currency would help some Americans—those few manufacturers that compete directly with Chinese firms—and hurt many others, including producers who use Chinese imports in their U.S. production processes, and American consumers buying Chinese goods. An inflated renminbi won't punish the Chinese; it will, on balance, punish Americans.
For the American economy as a whole, the currently undervalued Chinese currency brings a double benefit. We get both more goods and services, and more investment capital to help our economy grow and keep our unemployment rate low."
"Vets deserve free college tuition" AJC editorial by Jay Bookman:
"U.S. Sen. James Webb, a Virginia Democrat and Vietnam combat veteran, is championing legislation to improve college tuition benefits for those who volunteer to serve their country in the U.S. military...
Our men and women in uniform —- less than 1 percent of the American population —- bear a vastly disproportionate share of the burden of the wars in Iraq and Afghanistan. Giving them the chance to earn a college degree is not too great a reward for that service."
I have a problem with this. First of all, they aren't volunteers. The last I heard, they do get paid. They volunteered for their job no more than I volunteered for mine. No one forced them to join the military (though I'm grateful they did). Second, this only makes sense to me if the armed forces aren't getting enough enlistments at the current pay rates for military personnel. I would think that if they gave a free education to everyone who enlists, we'll see a tremendous increase in enlistments. Is this what the military needs? I don't know. (As a side note, the article mentions how Sec of Defense Robert Gates is afraid that giving free education would decrease re-enlistments, presumably because they would opt for school over service. My takeaway from that is they prefer experienced soldiers.) And last, if we do need an increase in enlisted men and women, why not simply raise their pay and let them decide how to spend it? That way we give the benefit to everyone who enlists, whether they have a college degree or not, and we aren't on the hook for potentially high education costs.
I don't want this to be a slight to our military men and women; I personally pray for them often. I just don't think this is wise policy.
"In a sign the current U.S. economic slowdown is taking a toll on consumer and business demand, major import categories like autos and auto parts, industrial supplies and materials, consumer goods and capital goods all showed declines in March."
Isn't this just an effect of the weak dollar? It's the price we pay for letting the dollar fall so precipitously that we import less. It's one of the reasons inflation is becoming a larger issue of late.
"SENATE Key Vote Alert - Flood Insurance" Club for Growth:
"This proposal would direct the Treasury Secretary to offer subsidized funding for state-run insurance programs, whether responsibly designed or not, potentially putting taxpayers on the hook for more billions of dollars in losses.
This amendment is fiscally irresponsible, and would further distort insurance markets and encourage unwise risk taking that would endanger lives and property. Perhaps the worst feature of this amendment is that it would encourage an irresponsible design of state catastrophe funds.
This reckless add-on to an already bankrupt national flood insurance program could dramatically increase spending and lead to higher taxes. It would clearly crowd out private reinsurance coverage, allowing government to increase its bureaucracy at the expense of the private sector. This amendment should be vigorously opposed."
Darn right it should be opposed. Just like the farm bill, if a certain group wants a certain something, they should pay the costs. If they want to live somewhere, they should pay the full costs to live there. Don't ask me to subsidize it for you.
"Bush Will Veto $296 Billion Farm Bill, Schafer Says " by Alan Bjerga for Bloomberg (HT: Sallie James with Cato, who simply said "Excellent"):
"President George W. Bush will veto the farm bill proposed by congressional agriculture leaders because it exceeds spending guidelines and offers no ``real reform,'' Agriculture Secretary Ed Schafer said."
I actually saw something like this last night on the WSJ, but I couldn't find it this morning. I hope he does and I hope he holds strong. And I hope Senator Chambliss and the others can't raise the votes to override, though I'm sure they handed out enough favors to make sure they can. Ugly.
"Global Warming and the Burmese Cyclone" by Indur Goklany with Cato:
"So I checked the sea surface temperature (SST) “anomalies” (that is, differences in temperature from the long-term average) along the track of Cyclone Nargis to see if SST might have been unusually warm from April 28th to May 3rd (when it hit Burma) of this year compared to last year. Comparing the SST anomalies from NOAA for April 28, May 1, and May 5 of 2008 against April 28, May 1, May 3, and May 7 of 2007, SSTs along the track of Cyclone Nargis don’t look that much different from last year. And for April 30, May 3, and May 7 of 2005, the Bay of Bengal seems to have been noticeably warmer."
This is in response to Al Gore suggesting the cyclone is due to global warming. I can't find it right now, but Paul Krugman said the same thing about the drought in Australia. An editorial at IBD had this to add:
"So why the hype? Well, global warming is a growth industry designed to keep Earth and some bank accounts green.
Gore himself joined the venture capital group, Kleiner Perkins Caufield & Byers just last September. On May 1, the firm announced a $500 million investment in maturing green technology firms called the Green Growth Fund.
The group announced another $700 million to be invested over the next three years in green-tech startup firms. But if the green technology business, uh, cools down, there will be no return on that investment."
"Will They Vandalize the Pepsi Machines This Time, Too?" by Andrew Coulson with Cato:
"Needless to say, the bill has earned the “intense opposition” of New Jersey’s large and powerful public school employees union. The last time somebody offered Jersey’s poor kids an escape from the union-dominated public schools, the union made that somebody an offer that was difficult to refuse.
The 'somebody' in question was PepsiCo. As I wrote in Market Education:
'In late October of 1995, officials of the Pepsi company announced at Jersey City Hall that their corporation would donate thousands of dollars in scholarships to help low-income children attend the private school of their choice. The immediate response of the local public school teachers’ union was to threaten that a statewide boycott of all Pepsi products could not be ruled out. Pepsi vending machines around the city were vandalized and jammed. Three weeks later, company officials regretfully withdrew their offer.'"
Are unions good for nothing but protecting their own turf?
"NCAA starving small schools with APR" by Spencer Hall for the Sporting News (HT: Dan Shanoff):
"Rather than some sort of conspiracy, the APR and its sanctioned, slow strangulation of smaller schools unable to pay for massive academic support centers is the result of something even more unstoppable and faceless: bad policy.
The NCAA and its members, faced with the legitimate issue of measuring how well schools balance athletics and academics, created a well-intentioned system. Like many well-intentioned systems -- such as President Bush's No Child Left Behind Act -- its actual effects are disastrous.
APR penalties slowly will erode a smaller school's ability to recruit athletes who likely will need academic support to make it through four years of balancing school work and athletics.
In short, the APR is all sticks and no carrots, a penalty-laden system with few outs for small schools struggling to get programs off the ground. (See: Florida Atlantic and Florida International.)
Like No Child Left Behind, it hits the worst of the worst, penalizing them from the starting line and all but encouraging a new variety of fraud by attaching the school's progress to a single number -- a number that could, in crafty administrative hands, become a fiction the NCAA would rubber-stamp happily ... especially in the cases of larger schools that seem to escape punishment year in and year out."
After listening to this podcast with Michael Lewis, I'm convinced players should be paid. I'd even go so far as to not even call them student athletes by absolving them from the responsibility of having to go to class. If they want to go to class and get a degree, let them. Academic eligibility would no longer be an issue. Lewis made the same point, but if a guy is 6-6, 340 lbs and would be a tremendous left tackle, why tie his ability to realize the full value of his abilities to academics? A player can't enter the NFL until he's been out of high school for at least two (or is it three?) years, so he has to go to school. I know they're doing it because they think it's in the best interest of the kids, but I think it just invites corruption.
"Vladimir Putin pledges to transform economy of Russia into a world leader" by Carl Mortished for TimesOnline (HT: CFAI Financial NewsBrief):
"Mr Putin vowed to tackle inflation, fight corruption and bring down taxes in a speech that differed from the low-key inaugural presidential address delivered by Mr Medvedev."
If he does this, he will be well on his way.
"China's Undervalued Currency Benefits Americans" by Terry Miller for The Heritage Foundation (HT: Club for Growth):
"The China Currency Manipulation Act of 2008 accuses China of engaging in 'protracted large-scale intervention in currency markets, thereby subsidizing Chinese-made products and erecting a formidable nontariff barrier to trade for United States exports to the People's Republic of China.' This is a novel use of the term 'subsidy,' which normally refers to government payments to producers of an item. In this case, the government of China is purchasing U.S. dollars or U.S. government securities, so the Chinese government payment is ultimately going to the U.S. government. To the extent that the renminbi is undervalued as a result, the benefit goes to U.S. consumers and businesses, which pay lower prices for Chinese goods imported into the United States. Chinese manufacturers get less for what they sell as a result of the process. If there is a subsidy here, the beneficiaries are U.S. consumers and taxpayers...
The measures proposed by some in Congress to pressure the Chinese to inflate the value of their currency would help some Americans—those few manufacturers that compete directly with Chinese firms—and hurt many others, including producers who use Chinese imports in their U.S. production processes, and American consumers buying Chinese goods. An inflated renminbi won't punish the Chinese; it will, on balance, punish Americans.
For the American economy as a whole, the currently undervalued Chinese currency brings a double benefit. We get both more goods and services, and more investment capital to help our economy grow and keep our unemployment rate low."
"Vets deserve free college tuition" AJC editorial by Jay Bookman:
"U.S. Sen. James Webb, a Virginia Democrat and Vietnam combat veteran, is championing legislation to improve college tuition benefits for those who volunteer to serve their country in the U.S. military...
Our men and women in uniform —- less than 1 percent of the American population —- bear a vastly disproportionate share of the burden of the wars in Iraq and Afghanistan. Giving them the chance to earn a college degree is not too great a reward for that service."
I have a problem with this. First of all, they aren't volunteers. The last I heard, they do get paid. They volunteered for their job no more than I volunteered for mine. No one forced them to join the military (though I'm grateful they did). Second, this only makes sense to me if the armed forces aren't getting enough enlistments at the current pay rates for military personnel. I would think that if they gave a free education to everyone who enlists, we'll see a tremendous increase in enlistments. Is this what the military needs? I don't know. (As a side note, the article mentions how Sec of Defense Robert Gates is afraid that giving free education would decrease re-enlistments, presumably because they would opt for school over service. My takeaway from that is they prefer experienced soldiers.) And last, if we do need an increase in enlisted men and women, why not simply raise their pay and let them decide how to spend it? That way we give the benefit to everyone who enlists, whether they have a college degree or not, and we aren't on the hook for potentially high education costs.
I don't want this to be a slight to our military men and women; I personally pray for them often. I just don't think this is wise policy.
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