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January-February 2010
Vol. 24, No. 1
Reflections
Leap of faith — The proposed “public option” for health insurance has raised fears about how it might crowd out private insurance and so worsen the options open to consumers. Proponents have offered compromises.
One would activate the government program only when performance by private companies was judged inadequate. Another would allow individual states to opt out of the national plan. That compromise is particularly meaningless, even ridiculous — one reason being the mobility of people across state lines.
The whole discussion, reflected in the 1,500-page-or-so bill pending in Congress, illustrates the incoherence of ambitious government programs. Political horse-trading displaces informed analysis of how a program’s components might fit together.
Many years ago I kept Professor Wassily Leontief company for a couple of hours before he gave a speech. Leontief was famous for his input-output tables supposedly showing how the many sectors of an economy fit together and for his advocacy of “national economic planning.” Citing examples in farm policy, trade policy, price controls, subsidies, and the like, I tried to counter with “public-choice” explanations of why coherent planning was hardly to be expected from politics-driven government. Acknowledging the examples, Leontief said that they only underlined the need for his “planning.” In short, planning would overcome the inconsistencies of ambitious democratic government. This vain hope invites Ayn Rand’s favorite dismissive word: “somehow.” Similarly, the mishmash of healthcare proposals might work well — somehow. — Leland B. Yeager
False profits — A popular rationalization for the Republican and Democratic bailouts was that any losses to the taxpayers will probably be temporary and that the “government might actually make money.”
On October 21, the independent watchdog of the Treasury Department’s TARP program, Neil Barofsky, poured a bucket of cold water on this dubious claim. He found it “extremely unlikely” that the taxpayers will recoup their losses, much less make a “profit.” — David Beito
Not so noble — A few Norwegians on the Nobel Prize for Peace committee decided to give President Obama an award, the nominations for which concluded when he had spent just 12 days in office. Since he hadn’t accomplished anything in that time (or since), presumably he received the prize wholly for not being Bush. Okay, not being Bush is good, but I thought the award was about something more substantial, you know, like actually doing something. Even then those wise and good Norwegians were wide of the mark; if the award was for a president who was not Bush, it should have been given to the American people who elected that president.
It’s clear that Obama should have declined the honor. Whether the American people deserve the prize remains to be seen. We may live to remember the old adage, “Be careful what you ask for.” — Bob Marcus
When satire fails — I have enjoyed offering Liberty my sardonic Reflections over the years, lampooning our country’s political and cultural descent into the maelstrom.
Sadly, over the last week, two events have complicated matters. First, CNN felt it necessary to present a fact check on Saturday Night Live for the accuracy of jokes told about President Obama. Then, just a few days later, President Obama was awarded the Nobel Prize for Peace.
Clearly, one cannot satirize our world any longer. I thus regretfully withdraw my services. — Ross Levatter
Political gauge — As reported by recent polls, the number of people scared by the global-warming alarmists continues to drop. The latest complaint of those trying to scare us into more government control over all economic and everyday activities is that people just don’t understand the difference between weather and climate.
Apparently it’s very simple: any observed cooling is weather; any observed warming is climate change. — John Kannarr
Union label — Under the egregiously unjust Obama bankruptcy-takeover of Chrysler and GM, secured creditors got stiffed, and the UAW along with the federal government took virtually all the stock in the new, reorganized companies. Of course, since the UAW virtually owns Obama and Congress, having purchased them with millions in union dues poured into Democratic campaign coffers, this means that the UAW now virtually owns two of the three domestic auto companies.
The most obvious injustice is that the very union that did so much to destroy those companies was rewarded for its longstanding irresponsible demands by being given control of the successor companies, reorganized at the taxpayer (not union) cost of many tens of billions of dollars. It is as if (as I have said elsewhere) the court forced a rape victim to marry the rapist. But it is also unjust because, in giving his supporters what they demanded, Obama grossly violated — indeed, urinated upon — the rights of the secured debt holders, formerly established by a century of bankruptcy law.
He set the stage for many undesirable consequences. One of these is that the UAW now has both the motive and the power to target Ford. After all, since the union controls the other two car companies, why shouldn’t it pick up Ford as well? Why not complete its monopoly over the domestic auto industry?
The UAW has obviously set its sights on doing precisely that. In its most recent contract with Ford, the union abandoned its longstanding “principal of parity.” Up until now, the UAW would put the same provisions in its negotiated contracts with all three auto makers. But now Ford is being hammered. For example, the new contract with Ford doesn’t include the cuts to retiree benefits that the UAW conceded to Chrysler and GM. Ford is stuck with more expenses, hence is at a competitive disadvantage.
So, under the new deal, preference is clearly given to the companies that the unions and government own over the one they don’t. How very convenient.
This, in my view, is yet another reason why Americans should boycott Chrysler and GM, until those firms are once again in private hands. — Gary Jason
The price of silence — We are all familiar with the saying “nothing in life is free.” Yet many American citizens forget this bit of common sense when it comes to government spending. Most of us have, no doubt, seen the recent video clips of Detroit locals lined up for “some of that Obama money.” When asked where Obama gets this money, one of the people in line replied “from his stash.” But Obama’s and Congress’ “stash” is not free money. It’s made up of money they took from productive citizens.
Even the most educated among us, on either side of the political aisle, are not immune from the thoughtlessness of the Detroit resident in the face of “free” money from the government. In fact, the government is usually returning something that was originally yours — for example, the first stimulus checks (ranging from $300 to $1,200) doled out during the Bush administration. That pittance was a meager return of the vast amounts of money confiscated by the government. With the exception of deceased recipients (there were a few of them), most folks receiving the checks regarded them as if they were found money, not money that had previously been taken from them.
Few of us would accept or be fooled by a friend, family member, or stranger taking a portion of our money or possessions and then magnanimously “giving” it to us as if we had never seen it before. Why should this be any different when the government does it? We’d all be much more “stimulated” if the state kept its hands off our money in the first place.
You’re probably thinking that libertarians don’t need this lecture. We, of all people, should know these things. I agree, but that’s not why I raise the issue. Many American citizens are unhappy with the government’s economic meddling, and many of them are looking for an ideology or party that articulates their hands-off view of the economy. Libertarians tend not to be “evangelical”; and I am not recommending that we become a bunch of “Road to Serfdom” or “Atlas Shrugged” thumpers, as other people are Bible thumpers. But in this highly unsettled time, when so many people are questioning the current administration’s policies and motives, we can take each complaint from our fellow citizens as an opportunity to remind them that nothing in life is free. We can let them know that when the government gives you something, not only is that something not free, it comes at a steep cost — most often to our liberty. — Marlaine White
Governmental Domestic Product — The New York Times’ front page story on October 30, 2009, was headlined, “Economy Grew 3.5%.” It contained this surprise definition of Gross Domestic Product (GDP): “the broadest measure of the government’s total goods and services produced.”
I count three errors in that one sentence.
First, GDP does not measure “total” goods and services produced in a year, but only the value of “final” output. It deliberately nets out all intermediate production.
Second, it is not the “broadest” measure of national output. The Bureau of Economic Analysis at the U.S. Commerce Department also releases annual Gross Output figures, which measure output at all stages of production. Gross Output is almost twice the size of GDP.
Third, The New York Times may well like “the government” to produce the entire GDP, but it doesn’t — yet. Current government spending represents approximately 20% of GDP. Thank heaven, the remaining 80% is privately produced.
Maybe this is the point at which New York Times reporters should take a refresher course in Econ 101. — Mark Skousen
Lazarus syndrome — Americans have been conditioned to value medical care more than it is worth. Medicine has become the new religion.
People believe that doctors can prolong lives, delay the normal aging processes, and make life better throughout. They have been sold on these superstitions by media hyping high-tech advances in medicine that may help only a tiny percentage of the general public. Americans ascribe the general prolonging of life spans to medical care, whereas the real reasons include public health measures against infectious diseases, better diets, and lessening of physical stress. Doctors thump the pulpit by talking gullible families into doing “what we can do” to keep Granny alive, when in actuality they officiously prolong Granny’s dying.
Europeans don’t read American catechisms. It may be that Europeans got “free medical care” at a time when medical care could do little to alter the course of illnesses. Comforting the dying and their relatives was what they expected from doctors a hundred years ago when many of these schemes were introduced. The modest accomplishments of their medical systems have not led Europeans to alter their creed.
But I agree with the Europeans. There are a few surgical procedures, such as appendectomy, that save lives. Many orthopedic procedures can make life more enjoyable. Occasionally an antibiotic or an antihypertensive helps. But frying the brains of Ted Kennedy and Robert Novak stretched their lives from 6 months to a year as steroidal zombies.
The Democratic proposals don’t do anything to make Americans reject salvation, so I suppose that the special interests will continue to prosper, and medical costs will climb. The Republicans ripped off some libertarian ideas that would force individuals to confront the cost-benefit calculus, but few of their politicians understand consumer-driven health care, and most would reject it if they did.
I don’t see anything in my lifetime curbing the American appetite for the marvelous. — Erwin Haas
Presidential hopeful — Second only to Ron Paul, Gary Johnson, former governor of New Mexico (1995–2003), is the most pro-liberty politician of any prominence. It looks as if he may be considering a presidential run.
On the face of it, Johnson comes right out of libertarian central casting. He has fought tenaciously for the 2nd Amendment and for marijuana legalization. He slashed taxes and spending, and he opposed the Iraq War from the beginning. He also supported Ron Paul for president in the primaries last year.
Johnson’s photogenic demeanor and extracurricular activities are grist for the media mill (in a good way). Among his accomplishments was the scaling of Mount Everest with a broken leg.
Sounds too good to be true? Let’s hope not. If Johnson stands by his dovish foreign policy views, he might be the only candidate to appeal to Americans in both parties who are sick and tired of the Afghan and Iraq quagmires. — David Beito
Flyaway — The Obama White House stumbled this fall when it issued an ill-advised press release claiming that the $787 billion federal economic stimulus plan had “created or saved 650,000 jobs.” This resulted in media criticism over the simple-math conclusion that each of those jobs cost $1.2 million.
Then the White House clarified its position. Those jobs were really affected by only one part of the stimulus package — the $150 billion that had been transferred through . . . about September. That meant that each of the jobs “created or saved” (itself an obfuscatory phrase) actually only cost $230,000.
After that, White House economist Christina Romer stood in front of cameras and hedged away from any jobs claim, mumbling some nonsense about how “it’s very hard to say exactly because you don’t know what the baseline is, right, because you don’t know what the economy would have done without” the stimulus billions.
As the Washington Examiner pointed out, it would have been more efficient to open a special unemployment office that issued checks for $230K to the first 650,000 unemployed people who could fog a mirror.
The lesson: statists have no bloody idea how to connect their boondoggles with practical outcomes. Their first assumption is that people are too stupid to divide expenditures by claimed results. Their response is to debase all data with confused spin.
In the meantime, markets speak with clarity. In late October, the Boeing Corp. gave the state of Washington a nasty Halloween present. CEO Jim McNerney announced that the company was locating its new plant (designed for building the oft-delayed 787 Dreamliner jet) in South Carolina.
The addled twits who run Washington politics — embodied, in this case, by inexplicable Gov. Christine Gregoire and halfwits-need-representation-too Sen. Patty Murray — claimed “shock, dismay and outrage” at Boeing’s move.
In 2002, Alan Mulally (who was at the time executive VP at Boeing and CEO of Boeing Commercial Airplanes) told the Washington State House Labor Committee that “the state of Washington is not competitive. . . . meaning it costs us more to operate [here].” Specifically, he mentioned the state’s inefficient unemployment insurance and workers’ comp systems. He didn’t mention the screwed-up labor union situation, but he was probably thinking it.
Boeing’s Everett, Washington factory has had to weather strikes by its machinists’ union four times since 1990. The most recent strike — a 57-day shutdown in 2008 — cost Boeing over $5 billion in deferred revenue and (additional) delays in production of the 787. The union eventually caved on its absurd demands for higher wages and richer perks. But the damage was done.
In the pretend world of Beltway policy, billions of dollars can be explained away by inarticulate economists. In the real world of building airplanes, a $5 billion opportunity cost means that things change. Production lines move to right-to-work states.
And more than one Boeing analyst predicted that, when demand for the 787 softens, the Everett plant will be the first to be shut down.
Statist union agitators can try such threadbare tricks as “card check,” vote-counting manipulation, and shop floor intimidation. But these are a loser’s tactics. They lead to desperate nonsense about jobs “created or saved” and mumbled evasions about how the numbers don’t really mean anything. In the meantime, the featherbedding collectivists of the International Association of Machinists and Aerospace Workers, AFL-CIO, District 751, have fewer stooges from whom to steal. — Jim Walsh
Title tattle — Once again it’s almost that magical time of year — that’s right, time for the convention catalog of the Modern Language Association to thud into faculty mailboxes all over the country. And that means it’s also time for that annual squabble in which some journalist or another rattles off the most ludicrous paper titles he can find, and some self-appointed white knight of academia issues a retort that pretends those papers aren’t ludicrous.
As I am both an aspiring academic, and a journalist all too inclined to the easy joke, I have a foot in both camps — indeed, judging from my own paper title, “Scandalous Searches: Rhizomatic Authorship in America Online’s Unintentional Narratives,” I am uniquely positioned to mock my own pretensions. But to engage in such pointless (and schizophrenic) squabbling would be to continue the content-free back-and-forth that passes for “cultural debate” in much of our national media — and, worse, to miss the really ripe targets that such events have on offer. Why take time to scour the list in search of some poor jargoneer’s overcomplicated last-minute cobbling, when there’s such low-hanging fruit as the social-event list, with entries like Monday night’s “Cash Bar Arranged by the Marxist Literary Group”?
At conferences, as in life, the simple pleasures are the most savory. — Andrew Ferguson
Summary judgment — I have occasionally used Reflections to inform readers about free-market publications and thinktanks with which they might have been unacquainted. I would like to do this again, pointing to the estimable American Enterprise Institute and its web-based journal, The American. And as it happens, four pieces recently published in that journal have to do with topics I’ve written about in these pages.
Consider first Michael Barone’s excellent piece, “An Immigration Tipping Point?” (Sept. 29). Barone points out something interesting: the percentage of foreign-born Americans (FBAs) has declined this past year for the first time since 1970. Not a huge amount, to be sure — from 12.6% in mid-2007 to 12.5% in mid-2008 — but a definite decline, one that represents 40,000 fewer foreign-born people in the country.
Barone notes that in the second half of the 19th century, the percentage of FBAs rose from 9.7 (in 1850) to 14.7 (in 1890), then — after dropping a bit — again hit 14.7 in 1910. After anti-immigration laws were passed in 1921 and 1924, the percentage of FBAs started dropping, hitting a low of 4.7 in 1970. With the passage of the 1965 immigration act (and along with the amnesty program of 1986, I would add), the percentage nearly tripled in less than two generations. Barone says that this was contrary to the intentions of the framers of the 1965 act, but I am not so sure: the act gave preference to immigration applicants with family already in this country, so it set the stage for ever-increasing numbers of immigrants.
Barone attributes the recent drop to the recession and to tighter enforcement of immigration laws. Indeed, his data go only to mid-2008, before the explosion of unemployment; he thinks the census for mid-2009 will show an even steeper drop. I think he’s right.
Barone raises the interesting question of whether immigration will increase when the recession ends. He notes that the tighter enforcement will probably continue, and that birth rates in Mexico and Latin America have been dropping over the past two decades. I would add that in Asia, there has been another major change: the embrace of market economic systems in large countries that had formerly eschewed them (such as China, Vietnam, and to some extent India). Economic improvement tends to keep potential immigrants home, and even attract some immigrants back.
The second piece I want to mention is “Making Bush Look Like a Piker,” by Veronique de Rugy (Sept. 30). De Rugy makes the simple point that Bush ran high deficits, but Obama’s deficits will dwarf them. She has some credibility here, since she was a vocal critic of Bush’s spending. And the Congressional Budget Office figures show that for each of Obama’s years in office, his projected deficit will vastly exceed any of Bush’s years.
In fact, de Rugy notes that these deficits are apt to be even worse, because Obama keeps increasing his spending, while the budget figures are based on the assumption that the stimulus spending will have stopped by 2011. The budget estimates are also based on the assumption of a rapid and robust recovery from the recession, something that seems increasingly doubtful.
The third article, “Our Uncrowded Planet” (Oct. 1), by Ronald Bailey, takes on a Malthusian prophet, Paul Farrell. Farrell, following neo-Malthusian biologist Jared Diamond, cites 12 factors that supposedly forecast our doom. The factors include overpopulation, food shortages, water shortages, farmland shortages, deforestation, chemical pollution, and ozone layer depletion; there is even an “alien species” factor. Bailey neatly debunks each source of concern.
He observes, for example, that both Farrell and Diamond fail to note that during the past century, crop yields grew at about 2% per year, double the current rate of population growth. Bailey doesn’t mention the pivotal role played by the Green Revolution, the dramatic increase in crop yields pioneered by the late Norman Borlaug, but he does quote the agronomist Paul Waggoner, who calculates that if the average world farmer achieved the productivity of the average American corn farmer, the world could feed 10 billion people at the current caloric level of the American consumer — on one-half the farmland used today. Bailey’s rejoinders to the other eleven points are equally thought provoking.
Finally, there is Charles Johnson’s informative article, “Blood Money” (Oct. 2). Johnson writes about the history and prospects of the private market for blood. Before the 1940s, he says, private blood banks were common in America, with people selling their blood on the open market. But during World War II, many people began to worry about blood being donated by victims of hepatitis and jaundice. In 1947, the Journal of the American Medical Association set out guidelines to help blood banks screen donors (such as not taking blood from anyone with a history of hepatitis, or anyone who had received blood or had been hospitalized during the past year).
Then two dubious studies appeared. In 1959 an American doctor purported to show that hepatitis rates were dramatically higher among recipients of paid than of unpaid donor blood. In 1971 a British social scientist argued that paid blood donation would crowd out volunteer (unpaid) donation. Johnson refutes each study in detail. Nevertheless, the studies started a chain of federal and state regulations, leading to an effective ban on paid donor blood in 1978.
Never mind that these studies were dubious. Never mind that the science of screening blood was improving year after year. The logic of regulation took over: to prevent harm, pass a regulation, then another, then another, until you arrive at the “safest” approach: prohibition. Of course, the “safest” approach — the one with the fewest bad consequences — is different from the “best” — the one with the most favorable balance of bad and good consequences. Johnson concludes by offering some valuable suggestions for how a free market in blood might be reinstated safely.
The American is a useful source of ideas and information. Check it out. — Gary Jason
Short-run society — Economists understand (or should) the distinction between what often is true or desirable in the short run and what is true or desirable in the long run. Examples are how an expansive monetary policy affects interest rates and employment, how currency depreciation affects a country’s balance of payments, and how a tax change affects government revenues. Even many laymen understand “moral hazard,” especially how government rescues of “too big to fail” firms encourage excessive risk-taking and cause the apparent need for further and bigger bailouts later on.
Too often, though, the short vs. long distinction escapes pundits and policymakers, including politicians seeking reelection. So-called Keynesian policies to boost spending may alleviate recession in the short run, but at longer-run cost. The “stimulus” of government deficit spending, if it works, wastes resources on projects not worth the cost in other public and private activities crowded out. The “cash for clunkers” program and the subsidy to first-time homebuyers shift demand forward in time (while incidentally redistributing wealth not to really poor people but to people well enough off to afford cars or houses). If an increased government deficit is a (short-run) good idea, sending a $250 check to old people is not as good a way of increasing it as cutting marginal tax rates to improve incentives. (But perverse though the program is, I won’t send my own check back.)
Appraising measures to promote business recovery should take account of what a recession is. When Vice President Biden and other spokesmen claim that their “stimulus” program has created millions of jobs — or, rather, has saved many jobs that would otherwise have been lost — they are making a claim rendered empty by its built-in protection against being proved wrong. Commentators show impatience when they report the failure of the Federal Reserve’s currently very easy monetary policy, forgetting Milton Friedman’s explanation of why monetary policy typically works with long and variable lags. The task of reversing the Federal Reserve’s vast creation of bank reserves in time to prevent severe inflation, or even a panicky flight from the dollar, is another example of short-run vs. long-run contrast.
A recession is a disruption of the intricately coordinated nationwide, even worldwide, web of buying and selling, employing and working, and lending and borrowing that links business firms to one another and to workers and consumers. Time, not government, brings recovery as firms and people grope for a new market-clearing pattern of prices and wages and as they restore or replace disrupted business relations — all on condition that a perverse monetary policy does not impede this mending of contacts. Regrettably, employment is usually one of the last signs of business recovery.
Capricious experimentation with measures to restore prosperity threatens to impair business confidence in the longer run and so the investment that would bring greater production and employment. New Deal measures, for example, prolonged the Great Depression of the 1930s until the start of World War II.
The viewing and reading public provides another example of short-run orientation when it demands and seems to take seriously the many mutually contradictory stock-market predictions supplied every day on TV and in the newspapers. Their unreliability is encapsulated in the old maxim (attributed to various skeptics): “If you must predict, predict often.” — Leland B. Yeager
Media blackout — As part of the brouhaha over the failed bid by radio personality Rush Limbaugh to become part owner of an NFL team, Howard Kurtz, hosting CNN’s “Reliable Sources,” interviewed Washington Post columnist Michael Wilbon, who is black. Wilbon was one of several journalists who attributed unconfirmed racist statements to Limbaugh, statements that Limbaugh has denied he ever made and for which no proof exists that he ever said them. Wilbon is one of the few journalists who, at the time of this Reflection, claims to have apologized to Limbaugh, though as of yet the apology (unlike the slur) is not in print.
On “Reliable Sources,” Wilbon explained that while the particular remarks he’d attributed to Limbaugh may have been incorrect, Limbaugh is “universally reviled” by blacks. He made that claim more than once. Yet he also indicated that he had an ongoing acquaintance with Limbaugh, such that the radio show host contacted him directly to assure him that the alleged comments were false.
This did not strike Kurtz as sufficiently strange — a black man having an ongoing acquaintance with a person whom all black people revile — to require follow-up questioning on that point. Neither did the fact that two common substitute hosts for Limbaugh when he is on vacation are economists Thomas Sowell and Walter Williams, both of whom are black. Presumably, Kurtz isn’t knowledgeable enough about Limbaugh’s show to ask follow-up questions of this sort: “Why would Sowell and Williams, who must revile Limbaugh because blacks ‘universally revile’ him, be willing to sub for, and speak highly of Limbaugh? Why have Justice Clarence Thomas and Secretary of State Condoleezza Rice appeared as guests on Limbaugh’s show if they, as blacks, revile him?”
I love learning about media errors from someone as well informed as Howard Kurtz. — Ross Levatter
Two wolves and a lamb — I have heard that a large number of our citizens don’t have to pay income tax. In fact the poorest 43% of the populace pays no federal income tax, and many get payments from the government in addition. Polls have shown that these folks are not worried about the cost of a government-run healthcare system. It is the 57% who do pay taxes that are worried about the cost of things like Medicare, Social Security, and now government-sponsored healthcare. Because of their fears, the great reforms that President Obama wants to give us all are being blocked.
When you look at it in this way — 43% pay nothing and 57% pay everything — the solution is obvious. There are too many people being taxed. Let’s just adjust the tax rates so that only 43% will pay income tax. This would make a lot of people happy and reduce the number of people who are worried about tax rates.
There would be solid majorities in favor of healthcare benefits, universal preschool, fixed-rail mass transit, fixes for global warming, and the like. There would also be solid majorities in favor of passing taxes to pay for these things. That would be helpful, because the income-tax rates on the wealthy would probably have to go back up to 70%. Michael Moore has shown us why that is just. After all, the wealthy have more money, so asking them to pay a higher percentage of their income is only fair.
And certainly there would be much less bickering in Washington. There wouldn’t be so much partisan politics, and much good could be done in a short time.
Some naysayers might argue that there is a conflict of interest for people who don’t pay any taxes, yet vote in favor of programs to benefit themselves. Actually, there is no conflict; there is a confluence of interests — people voting in favor of things they want and need. Don’t we usually ask our loved ones, just before Christmas or birthdays, what things they’d most like to receive as gifts? How is this any different?
If you took the “conflict of interest” argument to its logical end, you would end up arguing that people who don’t pay any taxes shouldn’t be able to vote. But how un-American is that? — Don Crawford
Choicing literacy — Denver’s recent municipal election included a two-way race for an at-large school board seat. Neither candidate would win a “Libertarian of the Year” contest, but surprisingly, each expressed a tinge of libertarian thought. Mary Seawell is open to charter schools. While not exactly embracing them, she seems to show an understanding of the need for them as part of school system reform. Christopher Scott does not embrace charter schools, but believes that educational decision-making is too centralized and should be driven back down to the neighborhood level.
So which of these candidates should be in charge of our children’s education? The following comment from Seawell settled my vote: “Somewhere between 40–50% of students in the North designated area are choicing into a school other than their assigned high school.” Excuse me? They are what?
If I still had children of school age in this district, I would be happy if they learned how to choose a school. It wouldn’t bother me to find that they had eventually chosen a school. But I certainly would not want to risk the possibility that they might end up “choicing into” anything.
My wife, a wonderful teacher, retired after 30 years of service (hate the system, not the teacher!), assures me that this type of language and much worse is simply standard education jargon. It could well be that the people who communicate through incoherent babbling really don’t mean any harm by it, but it still makes me queasy.
I voted for Seawell’s opponent. Seawell won in a landslide. — Doug Gallob
There goes the neighborhood — You know those small, almost subliminal details, the things that you may not consciously notice when you walk through your neighborhood, but that you may later recall as portents of doom? A broken window, a lawn that isn’t mowed much anymore, a roof that slopes where it didn’t use to slope . . . They’re unimportant in themselves. You’d be a fool to worry about them. Nevertheless . . . is this when the slide begins?
I’ve begun to notice one of these possible portents in our common neighborhood, America. It may not mean anything, but still . . . Have you observed that the letter “T” is now appearing where it didn’t appear before? I mean “T’ as an abbreviation for “trillion.”
We’re used to expressions like “5K” for 5,000, and “5M” for 5,000,000, and even “5B” for 5,000,000,000. But “trillion” was formerly so unusual that it was always written out as a whole word. Now, more and more, one sees “5T,” or “8.6T,” or even larger, less imaginable T’s. And they don’t appear in news releases about astronomy; they appear in news releases about the United States’ so-called budget.
This can’t be good. Heaven forbid that we ever see that letter “T” printed on what used to be a dollar bill. — Stephen Cox
Liberal discretion — Ever since George McGovern took on Richard Nixon in the 1972 election, Republicans have tried to smear Democratic candidates as “card-carrying ACLU liberals.” While the charge wasn’t true for most, it did apply to a few members of that party.
Unfortunately, Obama is not one of them. In the Democratic tradition of Woodrow Wilson and Franklin D. Roosevelt, he too will sacrifice civil liberties on the altar of “social justice.”
Most recently, Obama has endorsed a UN resolution that calls on governments to criminalize “any advocacy of national, racial or religious hatred that constitutes incitement to discrimination, hostility or violence.”
Aside from the question of whether it’s any of the UN’s business to advocate criminalizing things, the resolution constitutes a hunting license for governments to jail anyone who doesn’t like anyone else, and says so — thus, perhaps, inciting “hostility” in someone. I am sure that governments already have laws on hand that are sufficient to indict genuine perpetrators of “violence.” The resolution is simply agitprop, and should be denounced, not sponsored. — David Beito
Fresh blood and ideas — This year’s crop of Nobel Prizes in the sciences gives rise to some interesting thoughts.
A comforting thought is that out of the nine winners, eight were Americans. Once again, America maintains its lead in science and technology.
Worrisome thoughts start when you notice that most of these eight American Nobelists are immigrants. Five moved here from abroad (one each from Australia, Britain, Canada, China, and India). This is nothing new — since 1901, one fourth of all American Nobel Prize winners have been immigrants. Today, over 40% of all Ph.D.-level scientists working in America are foreign-born, as are one-third of the engineers and scientists in Silicon Valley. A quarter of all international patents filed from our country in 2006 had a noncitizen listed as inventor or co-inventor.
The worry about these stats is twofold. First, they raise the suspicion that the American educational system is weakening when it comes to producing home-grown scientists. Second, they raise questions about our immigration policy.
Under existing law, we are nationalizing fewer than a million new citizens a year, turning away millions of highly educated people. And of those who do get naturalized, preference is given to relatives of existing citizens. We give out visas for highly trained knowledge workers (such as non-university-employed engineers) to only a fraction of the tens of thousands who apply.
We need to increase the number of legal immigrants dramatically, and do so in the way many other countries do: admit immigrants under a points system. Anyone with a degree in engineering, science, or medicine gets points — the higher the degree, the more the points. Speaking English well would also get the candidate points, as would objective indicators of success (such as possession of patents, capital, or business ownership). Take the top two million applicants each year, after doing background checks.
Far from increasing unemployment, this would help get America out of the doldrums. A recent study by the National Foundation for American Policy found that each H-1B visa (that’s the one for high-tech foreign workers) granted by the government increases employment in American firms by five employees. — Gary Jason
Requiem for 2009 — It was a rotten year, politically speaking. It didn’t start out so badly; I was not unhappy about Obama’s election. The Republicans had abandoned all principle, and I could feel, and share, the excitement of African-Americans as Obama’s victory neared. But then, I didn’t think his policies would be as awful as they have been — one reckless government takeover program after another, aided by his minions, Nancy Pelosi and Harry Reid.
Economically, it was a rotten year too, and the rottenness is conjoint. It will only get worse if the magicians in Washington pull off more rabbit tricks, with their “stimulus,” bailouts, card-check, healthcare revamps, cap-and-trade, and more.
The modest rise in the stock market reminds me of the market’s rebound 80 years ago. In August 1930, the Dow Jones average came close to what it had been in early 1929. But then the economy was battered by New Deal programs, from killing piglets to forcing the “public option” of electric power. (The piglets were killed to prop up farm prices; today’s $8,000 tax credit for supposedly first-time homebuyers is a taxpayer-funded way of propping up housing prices.)
Superficially, things today are different from the 1930s, because Ben Bernanke “learned the lesson” that the Federal Reserve created the Great Depression through lack of liquidity. Now he is pouring money into the system to “restore” liquidity. But who in his right mind will invest in an economy being strangled by inflation and high taxes?
We haven’t seen the inflation yet, and we can keep hoping that somehow it won’t materialize — that, for some reason, the vast rivers of printing-press money won’t flood the currency. But the price of gold keeps going up. In mediaspeak (here’s a passage from the Associated Press), that’s because “hopes for an improving economy fed a broader rally in commodities.” Gold is just another commodity? No. Even my stock adviser, who brilliantly invested in blue chips for more than 40 years, is recommending “some” gold. And he’s a Democrat. — Jane S. Shaw
Candy Keynes — British economist John Maynard Keynes (1883–1946) is all the rage these days. Time magazine rated him the number 1 economist of the 20th century, and he seems to be number 1 in the 21st century too. A few years ago, I gave a lecture at West Point and asked my free-market host why they used the William Baumol-Alan Blinder textbook, which is strongly pro-Keynesian. His answer: “We need to use the economic model that is most popular in Washington DC.”
Recently I had dinner with Keynes’ biographer, Lord Robert Skidelsky, who until a few months ago lived in Keynes’ country estate, Tilton House. It was a magical night at Delmonico’s (Wall Street’s oldest restaurant) with Jeremy Siegel, the Wizard of Wharton, and my wife Jo Ann. We spent the entire night in high theory. Keynes would have been pleased, although Jo Ann was a bit bored by it all.
The biggest debate was over Keynes, and the Fed’s application of the Keynesian ZIRP (zero interest rate policy). Siegel was surprisingly favorable about Keynes’ contributions to macroeconomic theory, but was shocked to learn that Keynes advocated a “permanent cheap credit policy” and, in fact, wanted central banks to keep rates close to zero as a sign of the good life. Skidelsky confirmed that this was Keynes’ view.
Skidelsky has written a new book, “Keynes: The Return of the Master.” Unlike his three-volume biography, it is quite hagiographic. Skidelsky stated that “Keynes was not an inflationist,” but later wrote that Keynes advocated a “permanent cheap credit” policy and zero-percent interest rates. Clearly you can’t have it both ways.
The whole idea of eliminating interest rates is heretical, and just plain bad, economics. Hayek’s major criticism of Keynes was that he didn’t understand the complexity of capital theory, and this naive view of zero-interest rates and permanent cheap money proves it.
Keynes would be pleased to learn that the Fed has adopted a zero-interest rate policy for the near future. It’s crazy to keep rates far below the natural rate, a policy that will lead again to asset bubbles and structural imbalances. It’s like giving candy to kids, getting them high but eventually sick.
Siegel and I also lambasted Keynes and his followers for adopting the antisaving mentality that continues to plague Keynesians today. His “paradox of thrift” — the idea that by reducing consumption, saving can slow the economy and reduce further saving — denies an understanding of how savings and investment work to encourage entrepreneurship and economic growth. University of Virginia economist Ken Elzinga made this point to me: Keynes failed to appreciate the value of entrepreneurial creativity and the capitalist process of “creative destruction” that Joseph Schumpeter discussed. — Mark Skousen
Modern husbandry — I have several pets — dogs, cats, horses. Some of my pets are fat, but they are all, I believe, happy. They rely on me for their food, care, and shelter. I am a benevolent provider; my pets want for nothing. But all these animals are conceivably capable of taking care of themselves. If they had been born free they would not look to me for any need — although it’s unlikely they would lead such pampered lives. These animals, however, weren’t offered a choice between freedom and domestication.
As human beings capable of reason, we have the mental and physical capacity to choose between liberty and captivity. When the choice is between two such stark alternatives, I am fairly certain that many people would find the decision for liberty an easy one to make.
But there is a considerable gray area between those two alternatives. The gray area between a free society and a captive society might aptly be termed a domesticated society. A domesticated society accepts a large degree of state presence in, and control over, each citizen’s life in exchange for the state’s providing, or at least guaranteeing, some minimum level of shelter, food, and so on. Those who populate such a society are conceivably capable of providing for their own needs and wants, but the drive to do so wanes in the face of government largesse. One can take a trip to Western Europe and experience domesticated societies of varying degrees.
Thinking about American political and social condition and how they have changed over time, it is not hard to discern a gradual taming of our free society. How did this come about? Many factors contributed: technological progress, increased leisure time, greater pressures in the workplace, the general complexity of life. A major factor, however, was that as a population, American citizens accepted the Rule of Law — the imposition of more and more state control over, and legal presence within, their lives.
Over the course of the past century, statutes, ordinances, laws, and regulations expanded and multiplied exponentially. Such an overwhelming legal morass — backed by the coercive power of the state (federal or local) through fines and other measures — produces the specter of fear: fear of litigation, fear of criminal penalties for previously unregulated behavior, fear of civil fines, fear of increased insurance costs. Fear, as our politicians know, is a very compelling tool.
For that reason, politicians and other government-employed elites traffic in fear. A free society is unruly, not submissive. A fearful population is tame. A tame society conforms to rule quite easily. Politicians’ and other elites’ reactions to recent popular protests over the government’s proposed healthcare measures demonstrate their preference for a domesticated society. Politicians, like many pet owners, wish their domesticated charges to see them as benevolent providers doing what’s best for their chattels. The recent Massachusetts “health emergency” house bill is one example.
Whatever the degree of social domestication, it jeopardizes citizens’ liberty. It is within the gray area of domesticity that politicians are most adept at whittling away our freedoms. As a libertarian, I have no faith in the benevolence of the state, especially as currently controlled by the Democrats.
This past year of hopey-dopey, government-forced, largely unwanted change has demonstrated our governing elites’ preference for a domesticated, easily ruled society. Yet, as the growing prevalence of the “Don’t Tread On Me” flag shows, people who believe in this still-free society are not willing to be tamed. We must keep up the fight. As I write this reflection, I am reminded of a pretentious mid-’90s song (go figure!), featuring the chorus “we’ll make great pets.” Let’s build on this past year’s reawakening to liberty, and in 2010 show that we will not make great pets. — Marlaine White
Market correction — The mess hall on the Army base where I live has a reputation for poor-quality food, which is what you might expect for a government-contracted monopoly. The company that operates the mess hall has long charged $5 for breakfast and $7.50 for lunch and dinner. Rumor has it that recently-visiting high-ranking officers, using standard military colloquialisms, made disparaging remarks about the ratio of quality to price. This was apparently an embarrassment to our commander, who told the company to correct the ratio. The company complied. We now pay $4 for our poor-quality breakfasts and $6.50 for our poor-quality lunches and dinners. — Jeff Wrobel
Searching for Pyrrhus — On the morning after the election of November 2009, the one that put Republicans in charge of Virginia (by a landslide of 18 points) and of New Jersey (of all places), Democratic speaker of the House Nancy Pelosi gleefully proclaimed a Democratic Party victory.
Huh? How?
Well, according to her, it was because the Democrats (narrowly) won a congressional district in a remote area of New York, where, in a series of freak events, the Republican candidate withdrew and endorsed the Democrat.
Presidential kingmaker David Axelrod came up with the same happy spin, although he, unlike Pelosi, wasn’t smiling.
There used to be an idea that modern liberals were smart. I believe we’ve outlived that idea. I don’t think that Pelosi, even Pelosi, is dumb enough to believe that the Democrats won. But she’s dumb enough to believe that she can get other people to buy the idea. And so is the president’s bosom buddy, Mr. Axelrod. It doesn’t look good for the Democrats. — Stephen Cox
Channeling Sir Gresham — The Swiss franc has recently been quoted on the foreign-exchange markets at within a cent or two of one U.S. dollar. In the heyday of the gold standard, the mint par was 5.2 francs per dollar, 19.3 cents per franc. Since then the dollar has lost four-fifths of its value against the franc, even though the franc itself has been devalued against gold.
Like all other countries, Switzerland has suffered price inflation since World War II. Episodes of imported inflation have resulted from efforts to keep the exchange rate fixed in the face of inflation abroad. But Swiss inflation has been less extreme than elsewhere, even in the United States, where inflation has been low by international standards but where consumer prices are now twelve times as high as at the end of the war.
Have the monetary policies that caused this inflation supported output and employment here? Would the United States be economically worse off without it? Of course not. Exchange rates and price levels provide a striking example of the short-run outlook and the irresponsibility of policymakers driven by politics. — Leland B. Yeager
The pension tetralemma — A tetralemma is a situation in which one must choose among four options, each having drawbacks. That’s the situation faced by workers contemplating their retirement prospects.
Historically, workers had four choices about who would collect and protect their retirement savings: the government, the company, the union, and themselves. None of them was exactly problem-free.
We have all heard of cases of workers mismanaging their 401ks by investing in a ditzy way — investing in bull semen, say, or putting all their money in just one stock. And we have seen any number of companies fail, leaving their workers with no pensions at all.
But the idea that unions or governments are better at handling retirement money than individuals or companies is risible. Consider a report by Kevin Mooney in the Washington Examiner (June 7). Since the Pension Protection Act of 2006, unions have had to file forms revealing the financial shape of their funds, and Mooney was able to review the 2007 documents. He reveals that nearly half of the 20 largest unions have grossly underfunded pension funds
In fact, the unions with underfunded pension plans are among the very biggest: the International Association of Machinists, the International Brotherhood of Electrical Workers, the International Union of Operating Engineers, the Laborers International Union of Northern America, the National Plumbers Union, the Service Employees International Union, and the United Food and Commercial Workers. The Pension Benefit Guarantee Corporation estimates that the average union pension fund has only 62% of the assets needed to cover promised benefits.
And these reports are based upon the filings through 2007, before the major market correction and jump in unemployment!
Mooney notes that the desperate, fanatical push for card-check legislation by organized labor may be an outgrowth of the union pension crisis. Unions are looking to empower arbitrators to force companies and nonunion workers into the underfunded union pension plans. I would add that by increasing their membership and consequently their political clout, they can elect more Obama types, who will step in and rescue the underfunded pension plans by shoveling taxpayer cash at them.
Consider now a report by David Cho in the Washington Post (Oct. 11) on the crisis facing public employee pension funds. The financial downturn has resulted in state and municipal employee pension funds losing $1 trillion in the value of their assets. A recent analysis by PricewaterhouseCoopers estimates that within 15 years, public employee pensions will have less than half the assets needed to pay the benefits that they are on the hook for.
In many cases this is because the pension fund managers gambled on risky investments, such as outré hedge funds or arcane mortgage-backed securities. This is ironic, no? — considering that the first objection that statists offer to any proposal to privatize pensions is that ordinary workers are not wise enough to pick sound investments.
Even more ironic is that some of these pension funds are now tempted to make still riskier investments to cover the gap. In other words, they want to go back to dicey ways of chasing a high return. Bull semen, anyone?
But even if these funds managed to average an 8% annual return, Kim Nicholl of PricewaterhouseCoopers estimates that they would still have less than half of what is required to cover pensions by 2025.
It is overwhelmingly likely that taxpayers will be stuck with paying for those pension benefits from increased taxes. To put this bluntly, the retirement of the many will be ruined to pay for the entitlements of the privileged few.
Meanwhile, Chile has gone through three decades with a privatized pension system, in which each citizen owns his or her own retirement account, but investments are limited to broad index funds. It has averaged something like 10% on the up side per year, and it is so popular that even the left-of-
center governments that have been in power since its enactment have left it alone. — Gary Jason
A blind pig finds an acorn — Lou Dobbs has an atrocious track record on issues related to immigration and economics, but now he has done something courageously sensible on a defining issue of our time. As pundits from Fox and CNN settle into a non-debate about how just how many additional troops to send to Afghanistan, Dobbs has broken from Punditry Central by promoting a petition on his website calling for the United States to bring home all troops from overseas.
Could it be that some elements on the right are beginning to question Obama’s wars? I’ve never thought I would say it, but thank you, Lou Dobbs. — David Beito
Joke’s on us — The morning it was announced that President Obama had won the Nobel Prize for Peace, I thought it was a joke. When I saw it on the internet I thought I’d stumbled onto The Onion’s site. Everyone I mentioned it to thought it was a joke. And it is a joke.
A few years ago I heard Walter Williams, the economist, make a joke like that. The difference is that Walter Williams is a lot more intelligent than the Nobel Prize committee. He knows when he’s making a joke. He was talking about how busy he was those days, visiting his mailbox, looking for his check. He’d discovered that the government sent money to farmers because they were not raising pigs. So he started watching his mail, waiting for his own money to come. “After all,” he said, with his inimitable down-home drawl, “I’m not raisin’ pigs, either.”
And that’s how I feel about President Obama’s prize. I don’t see why I didn’t get a prize, too. After all, I’ve done as little for peace as he has.
It’s certain, of course, that he should have refused the thing. If I got a prize for, say, carpet weaving or belly dancing, I would turn it down. It would be too embarrassing to show up at the belly dancers’ convention and say how grateful I was — for what? For the stupidity of the prize committee?
But presidents aren’t that way. At least they haven’t been that way for quite some time. Bill Bradford used to say that he still believed in the old idea of the job seeking the man, instead of the man seeking the job. He was old-fashioned enough to think that there was something unseemly about people running around yelling, “I want to be president.” If a lot of people wanted you to be president, then maybe it would be polite for you to think about running — but not until then.
He divided presidents and presidential candidates into two categories. You could call them psychological categories. In one category were people whom many other people actually liked. Politically, it was a varied list: Daniel Webster, Henry Clay, Robert LaFollette, Adlai Stevenson, Barry Goldwater; and, among winning candidates, George Washington, Andrew Jackson, Ulysses Grant, Dwight Eisenhower, Ronald Reagan. The other list was composed of people who were virtually nobody’s first choice for president, outside of their own. Some of the winners in this group were Woodrow Wilson, Lyndon Johnson, Richard Nixon, Jimmy Carter, George Bush, Bill Clinton, and the other George Bush. I think you see a pattern: lately, the List B’s have been greatly in evidence.
Of course, you need to think for a while before deciding which list some people should be on. The two Roosevelts started off on List B. They were pushy people whom few others really liked. Then, in the White House, they capitalized on the opportunities that the presidency affords for ingratiating oneself with the electorate, and they soon landed themselves on the A list. John Kennedy spent much of his political career as a denizen of B; the only people who really wanted him to be president were his family, their paid assistants, other fanatical Irish Catholics, and (sometimes) himself. While running for president against the archetypically list-B Nixon, however, he became, by contrast, an exemplary resident of List A, beloved of crowds.
What of Obama? Did I say that Nixon was the king of the list B folk? He was — but make way for Obama. Nobody wanted Obama to be president — nobody except Obama, who probably wanted it from about the age of six. Yes, many people wanted an African-American president. Many people wanted a left-liberal president. Many people wanted anyone but Bush as president. But nobody really wanted Obama, except Oprah Winfrey. And why should they want him, just him? He had no political accomplishments, no special political ideas, no special political insight, no special political significance. He was intelligent, but so was Nixon. And like Nixon — like Bush, like the miserable Carter, like even the much more interesting Kennedy — he had something inside him that needed to call itself president.
Now, how do you think a person like that will react to an award, any award? He’ll grab it, of course.
It’s said that John Kennedy — who had a moderate and equable temperament, not at all given to tantrums — angrily refused to tolerate disagreement on one point: his authorship of “Profiles in Courage,” a book that he did not write, but for which he collected the Pulitzer Prize.
In the same vein, imagine trying to persuade the emotionally needy Barack Obama that the Nobel Prize was misplaced, that he clearly had done nothing to earn it, that he could derive enormous political benefits by modestly declining it . . . All those statements are beyond obvious. But imagine him agreeing with that logic. No, never in a million years! That award is his. He wants it. He needs it. He would never be able to see it as something like a prize for not raising pigs. — Stephen Cox
In praise of the stick — Much has been said lately about hope, some of it quite inspiring. The best passages give one the heady feeling that all things are possible, even the things that clearly aren’t. But I’m not here to quibble, at least not about that. For the moment, I’m willing to grant that hope is a good thing, most of the time anyway. But what about fear?
Not much has been said lately about fear, and what has been said hasn’t been very nice. One is left with the impression that fear is a sordid little emotion conjured up by nasty people who want to use it to block out sweet reason and thwart progress. We are given to believe that fear has nothing good to offer. What follows is an attempt to balance the ledger.
In a nutshell, hope is the feeling that things will turn out well and fear is the feeling that they won’t. What a fitting twist, then, that fear can, and often does, nudge people to behave in ways that help things turn out well. To be fair, it is rare for extreme forms of fear to help in this way. Terror and paranoid delusions contribute little to happy endings. But a measured, homeopathic dose of fear, whether of death, pain, suffering, or even inconvenience, can render us cautious and help us avoid tragic outcomes. Fear of this sort fosters both prudence and diligence. It is the small voice that asks the pertinent questions on the eve of ventures great and small.
“Did you fill the tank?” Yes. “Check the oil?” Yes. “Check the weather forecast?” Looks good. “Did you turn off the hot water heater?” Yes. “Set the security system?” I did. “Are the bars in the windows?” Yup. “Does Michael know he has to move the garbage cans?” Uh-huh. “Is all the gear here?” Yes. “Did you restock the first-aid kit?” Er. “Oh, hell.” (Funny, that small voice sounded a lot like my wife’s.)
Or consider the fears that a young couple may face when they set out to buy a home. Is the price too high? Foundation cracked? Market falling? Termites? What’s the current rate on a 30-year adjustable? Is the neighborhood going downhill? Graffiti? Is the HOA payment reasonable? What’s that smell? The list is endless.
Things may, in fact, not turn out well. Just think: foreclosure, bankruptcy, having to move back in with the parents. What should a young couple do? Listen closely to the small voice. Look for a good deal. Check out the house and neighborhood thoroughly and then, when the little voice mumbles, “Oh, okay,” buy the house. And yes, they should probably pass on the adjustable rate mortgage. Those things can bite.
Let’s broaden the scope. Is it possible that an inoculation of fear could benefit a larger group of prospective homeowners?
In the run-up to the bursting of the latest housing bubble, millions of new homeowners were filled with hope. They felt that things would turn out well. Home prices were going crazy, fancy mortgages fitted out with booby traps were being touted on every street corner, and the air was thick with risk. But giddy optimism prevailed. (Alan Greenspan, referring to an earlier bubble, called the feeling “irrational exuberance.”) Now, hope is a good thing, most of the time, but in this case, for millions of new homeowners, things did not turn out well at all. Even Treasury Secretary Geithner rented out his house in June after failing to sell it for less than he had paid.
Did it have to happen? No, not if people heeded the little voice. Here is what it was saying: “Look out below.” Had people listened, there probably wouldn’t have been a bubble to burst.
But let’s broaden the scope again. Besides safer road trips, successful home hunting, and more stable housing markets, how else might fear contribute to a healthy economy?
At the most fundamental level, fear and hope make the wheels of prosperity turn. Among the fears are hunger, bankruptcy, homelessness, and unemployment. People work very hard to see to it that fears such as these never materialize. Among the hopes are a round-the-world cruise, a 10,000-square-foot mansion, a 700-series BMW, rhinoplasty, and a key to the executive washroom. People will go to incredible lengths to see to it that hopes like these are realized. This is very old stuff, really. It’s straight out of “Poor Richard’s Almanack.”
Of course, things are not as simple as that. People differ. Their hopes and fears differ. While some crave shiny and sparkling things, others long to cure swine flu. Some don’t really like to work at all. Others want a hot car. Some are keen on salvation. Many harbor the fear that they will be thought uncool. Then there are those who want to remake the world as it should be. Because of this diversity, generalizing about human motivation and behavior is difficult. But not impossible.
Here is a fairly safe generalization: if hope were removed from the economic equation, many people just wouldn’t work very hard. But what would happen if fear were removed? Here the consensus breaks down.
There are those who think that fear does nothing good for the economy, that what we really have to do is get rid of all the impediments to things working out well. They feel sure that if only good clothes, good food, a good home, a good education, and good medical care were provided to everyone, then fear itself would disappear. Franklin Roosevelt included these things in what he called the Second Bill of Rights. The strategy proposed is, very cleverly, to fine-tune the tax rates and entitlement programs in such a way that everything is guaranteed to turn out well for everyone. Sounds simple enough, right?
Before the merits of this strategy are weighed, please note that it is not the goal of easing human suffering that is under scrutiny, but the strategy proposed for achieving it. Moreover, it should not be assumed that certain methods — say, the threat of starvation — should be endorsed even if they were judged likely to achieve the goal. Having said that, and accepting for the moment the premise that fear can be excised from the beating human heart, a few questions arise.
If fear were eliminated, would its benefits disappear as well? With little or nothing to fear, would people be less prudent, less diligent? Would the people who worked so hard to ensure that their fears did not materialize put their shoulders to the wheel with a tad less oomph when those fears were gone? People differ, but it’s probably safe to say that a good chunk of humanity would experience a detectable slackening of resolve. They’d lose their edge. If you did not know it already, let me assure you, there are many here among us who do not wish to do much more than they absolutely must. The passage of the Second Bill of Rights would, for them, be party time. Others, of course, might press the wheel harder, if their absent fears were replaced by hope.
But if the good clothes, food, home, education, and medical care were paid for with money taken from people who already had these things, wouldn’t those same people be less able to realize their own hopes? Sure, not all hopes come with a visible price tag, but those that do would suddenly become less affordable. To be blunt about it, if you were one of those people, unless your fondest hope was to give back to the community, it would be less likely that your fondest hope could be realized, if it cost much. There is no free lunch and no free Second Bill of Rights.
Whether by raising taxes, adding to the public debt, or debasing the currency, the bill for the goods would have to be paid. As a result (here’s the kicker), the path to prosperity, even for the newly hopeful, would be precisely that much steeper. In other words, any reduction of fear would cause a roughly proportional reduction of hope. When combined with the lost diligence, it devolves into a less-than-zero-sum game. Economics is not called the dismal science for nothing.
A sustainable, comfortable standard of living is the product of thrift, forethought, industry, and perseverance, not of government largesse. It would be nice if these virtues could be bought with a government check, but, sadly, such a check is more likely to erode them than to build them up. And when these virtues erode, eventually, the checks stop coming.
Fear and hope together turn the wheels of prosperity. Take away fear and its benefits go with it, slowing the wheels. Try to bury the fear in cash and what you get is less hope, not more. Take away hope and fear? The wheels of prosperity grind to a halt, and then fall off. The strategy is sure to backfire. Ask the Chinese; they know. Hope is a good thing, most of the time anyway, and fear is not all bad. — Scott Chambers
A place of my own — British Sea Captain John Marshall sailed into my region of the world in 1788 and, despite the fact that there were thousands of people living here, claimed to have discovered it. As a result, this region is called the Marshall Islands. Likewise, there were thousands of people here when I “discovered” the region upon my arrival. But being much more modest than Captain Marshall, I’ve decided that I shall only rename my one tiny island as Jeffland. — Jeff Wrobel
Norman Jay Levitt, R.I.P. — I want to take a moment to note with sadness the recent death of a remarkable man, Norman Jay Levitt (1943–2009).
Levitt was a brilliant mathematician. He received his doctorate from Princeton when he was 24, then stayed on there, doing first-rate work, especially in topology. Outside the world of mathematics he was known for his defense of science and its method against postmodernism and other trendy doctrines emanating from the academic world. He wrote for the New York Review of Books and especially for Skeptic magazine, a publication I never miss.
Now, people who defend science from the pseudoscientific and political attacks mounted by ordinary people are common enough. There is no end to exposes of such nonsense as ESP, flying saucers, creationism, numerology, and astrology. The Skeptic Society, of which I am a proud member, has done great work in this area.
But I am convinced that the silly beliefs held by ordinary folk do nowhere near as much damage to society as the intellectual crap that is accepted by large numbers of academics, especially leftist ones. (And these days, there are hardly any other kinds of academics.) For example, outside of a few Latin American dystopias, where in the hell is Marxism still considered scientific economics? Only in certain departments of American universities.
This is where Levitt was so outstanding. An eminent academic and self-described leftist, he defended science from leftist academic attacks. This took unusual guts.
He wrote or co-wrote a number of books in this vein, such as “Higher Superstition: The Academic Left and its Quarrels with Science” (co-authored with biologist Paul Gross in 1994), “The Flight from Science and Reason” (1997), and “Prometheus Bedeviled: Science and the Contradictions of Contemporary Culture” (1999). It was in “Higher Superstition,” in particular, that he took on postmodernist critiques of science. That book in turn inspired physicist Alan Sokal to write his brilliant parody of po-mo nonsense, “Transgressing the Boundaries: Towards a Transformative Hermeneutics of Quantum Gravity” (1996) in the journal Social Text — a send-up that did much to discredit postmodernist pretense.
Levitt was a rare combination of brilliance and intellectual honesty. His death is a great loss. — Gary Jason
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