Friday, April 29, 2011

Classic Quotes, Twain

"I am a proud tax paying American. I could be just as proud for half the price."
-Mark Twain

HT:  Jason "Jakers" Parent via Facebook

Thursday, April 28, 2011

Fears of China - Overblown

Since China is in the middle of its harshest crackdown on independent thought in two decades, I thought that on this visit I might write about a woman named Cheng Jianping who is imprisoned for tweeting.
Ms. Cheng was arrested on what was supposed to have been her wedding day last fall for sending a single sarcastic Twitter message that included the words “charge, angry youth.” The government, lacking a sense of humor, sentenced her to a year in labor camp.
So I tried to interview her fiancĂ©, Hua Chunhui, but it turns out that Mr. Hua was recently arrested and imprisoned as well. That’s the way it goes in China these days. The government’s crackdown is rippling through the country, undercutting China’s prodigious growth and representing the harshest clampdown since the crushing of the Tiananmen democracy movement in 1989.
The reason? Surprising as it may seem, the government is worried that China could become the next Egypt or Tunisia, unless security forces act early and ruthlessly.

Costs of Production

But if you were just examining recent press releases and interviews, you might get the mistaken impression that punishing oil companies was the principle plank in the Democrats' energy platform. And while there might be good reasons to eliminate the oil industry's special treatment in the federal budget and tax code, it's impact on the cost of gasoline is not among them. That's because it would increase gas prices not lower them. I believe it's still an immutable law of free market economies that if the costs of producing and selling a commodity increase, the price charged customers will as well.

Reversoswabbie Weighs in on "The Fight of the Century"

One of the YouTube commenters posted the following about the "Fight of the Century" rap video:
"I feel like this piece was pretty free-market biased."  I have to support that assertion.

@dwils27 I agree, you can't trust those goons at Cafe Hayek to produce a video that doesn't advocate their belief in human freedom, and their conviction that the government's role is to protect individual liberty.  That's why we cannot allow them to not force us to do anything - we have to keep electing leaders who will use the coercive power of government to enrich their cronies while pretending to give us entitlements (that clown de Tocqueville pejoratively termed this as "bribed by our own money", but what do French economists know?  I wish I knew the French word for moron).  Freedom after all isn't free, it requires shared sacrifice, and I'm more than happy to elect people to decide what the meaning of the word "shared" is.  And no more quibbling that freedom is violated by legislative fiat, we know that markets are not perfect - it takes powerful elected officials to get perfection and root out all that nasty influence from special interests.  All that Constitutional blather about limited government - that's for utopian dreamers!!  If I and my team can just get control, we'll solve everything and best of all, we'll use other people's money (the bad people whom I'm sure we all can agree are not paying their share) to do it!

State Death Spiral By The Numbers

As the Register Watchdog detailed last month, the average pension benefit for state workers is below $30,000 only when taking into account workers who retired well before pension benefits skyrocketed in the past decade. As Register reporter Teri Sforza put it: "While the average pension in [the California Public Employees Retirement System] is less than $30,000, that figure includes all retirees from all prior years – including those sane years before 1999. (It wasn't until the 2000s that elected officials lost their minds and boosted public pension benefits to the moon and stars.) For state workers retiring in 2008-09 with more than 30 years of service, the average pension was more than $66,000. In a five-year comparison of public pension distributions from 2006-10, the number of retirees increased by 17 percent, while the number receiving pensions of $100,000 and above increased by more than 230 percent."

Keynes v. Hayek Rematch

These things are genius - head over to the Cafe Hayek to weigh in with your opinion of the video.

Classic Mencken

What H.L. Mencken wrote about the dirigiste economic ‘planning’ and interventions uncorked in France in 1848 by that country’s best and brightest geniuses applies to America today: 
“Every day they announced some new and grander scheme to bring in the millennium, and every day they abandoned some busted one.  Meanwhile, the plain people went on looking for jobs, and not finding them….  Its goat was the French taxpayer.  He had to pay, in the end, for all the crazy building of gaudy railway stations, and all that frantic dredging of rivers and digging of canals.  Starting out with the thesis that the Rotten Rich were scoundrels and ought to be squeezed, the Brain Trust proceeded easily to the thesis that any man who had any property whatsoever was a scoundrel, too, and ought to be squeezed equally.  The rich, in the main, managed to escape, but the little fellow could not get away, and squeezed he surely was.”*
HT - The Cafe Hayek

Wednesday, April 27, 2011

Harsanyi: The Pres Should Be Cheering

Harsanyi's latest is as good for a laugh as always:

The left's "energy" initiatives of the past decade -- the entire purpose of energy policy, in fact -- have been aimed at artificially driving fossil fuel prices up to incentivize the bitter clingers to embrace the government's Utopian energy schemes. No secret has been made of it. In 2008, candidate Barack Obama was asked by CNBC's John Harwood, "So could the (high) oil prices help us?" Obama: "I think that I would have preferred a gradual adjustment." Sudden spikes are bad (politically speaking), but gradual price spikes? Helpful. That same year, current U.S. "Energy" Secretary (then just a zany professor) Steven Chu clarified that "somehow we have to figure out how to boost the price of gasoline to the levels in Europe."
Who says this administration doesn't get things done?
What we need are clean energy investments, properly inflated tires, Chinese-style rail systems -- all free of the distraction of capitalism. Also, we must rid the nation of oil subsidies. This I completely support, as long as the funds are reinvested into projects beneficial for the struggling American worker, say, bike paths or public service announcements.
This is the Darwinian political calculus of the Left:  We sell our souls to unions to appeal to the "workers", while we sell our souls to the Greens to get their votes, and we lie like a rug to cover up the cognitive dissonance required to be "for" both groups while working against both of their interests.  But whichever group they coopt, the results is more government control.

Classic Quotes, Wilson

"Once politics was about only a few things; today, it is about nearly everything." 
-- James Q. Wilson "American Politics, Then and Now"


Tuesday, April 26, 2011

Classic - Kinsley

The question remains: If the deficit doesn't matter, why have any taxes at all? And if there is some point at which the deficit does start to matter, and become dangerous, when is that point if $1.6 trillion isn't it?,0,7244720.column

Inflation, Debt, Wealth - McArdle

And I cannot disagree too strongly with the notion that the US can't default because we can always print money.  It isn't even technically true--Zimbabwe eventually ran out of hard currency to buy the ink it needed to print the money to sustain its hyperinflation.
Moreover, the dismissive way that Galbraith treats this problem looks only at the stock of debt, not the flow of funds.  Inflation is only a good way to get out of your debts if you aren't planning to borrow any more money.  Otherwise, investors simply recover their losses--and then some--by requiring higher interest rates on all your new borrowing.  "All your new borrowing" eventually includes all of the money you borrowed before, because unless you're running a surplus, you're going to have to roll over every penny of that old debt into new loans as it matures.

Inflation was a good way to ease the burden of our World War II borrowing--once the war was over.  But it is not a good way to ease the burden of an increasingly expensive entitlement program that shows no signs of winding down.
You can pull all sorts of tricks to force bondholders to eat some losses on the money they lent you--but you can't pull them over and over.  America was able to wriggle its way out of a substantial portion of its WWII debts in large part because it was otherwise pretty fiscally sound.

Debt held by the public is in the range of $9 trillion, or about 64% of GDP.  The average maturity of our public debt holdings is under 5 years, meaning that roughly half of our debt will have to be rolled over within that time frame.  You can see how short-lived our ability to inflate away our debt would be--and how quickly the budget could be severely compromised by higher interest costs, even if we are using our "means of production" to the hilt.  
You can argue that a small amount of inflation is preferable to the alternatives, distributing the pain very broadly in order to avoid the intense dislocations of a sudden shock.  I might even agree with someone who argued this. But small amounts of inflation are not going to rid us of $10 trillion in debt.  And the pain of large amounts of inflation is extremely painful--arguably, more so, not less so, than technical default.

Indeed, in large amounts, inflation is just default by another name.  And it retains many of the problems of default.  Either way, we'll be forced to suddenly slam on the brakes of our deficit finance--either because no one will lend to us, or because the higher interest rates they demand will make such borrowing impractical.  (Just look at Ireland).  

Inflation, Debt, Wealth - Kinsley

Kinsley on inflation impacts on debt and wealth:
Here's an easy prediction: Soon, many of the people who have been talking about how the return of high inflation is terribly unlikely will start talking instead about how a bit of inflation is harmless or even healthy for the economy. In fact, it's already started. This is from a news article in the New York Times: "[T]he purchases [of debt by the Federal Reserve Board] have improved economic conditions, all but erasing fears of deflation…. Inflation, which is beneficial in moderation, has climbed closer to healthy levels since the Fed started buying bonds."

Why are people talking this way? Here's the missing explanation: Inflation reduces the value of debt. If poorer people are on balance borrowers and wealthier people are on balance lenders, inflation can help to reduce one of our most serious economic problems, which is the increase in income and wealth inequality. More important, inflation is the only conceivable easy way we can pay down the national debt to a manageable size, or at least slow its growth.

This is how it works: The debt ceiling we're about to crash through is $14.3 trillion. But even as we borrow more (about $1.6 trillion this year), inflation erodes the value of what we already owe. At an inflation rate of 2.7%, $14.3trillion will be worth about $13.9trillion in today's dollars a year from now. That's nearly $400billion wiped away from the national debt without fuss, without debate and seemingly without cost or pain. A quarter of the deficit. And that's with inflation at record lows. If inflation were 5%, it would wipe out $715 billion; at 10%, nearly the entire projected annual increase in the national debt, even at its current record high of $1.6 trillion.

Of course, it would also wipe out people's savings at the same rapid clip. Anyone who lived through the inflation of 1979-81 knows that there are noxious social effects as well. To say that inflation, at 2.7%, has "climbed closer to healthy levels" is insane.

Unions: Protecting Workers From Workers

Tennessee's Lamar Alexander tells a story, piggy backing on the Boeing v. NLRB story, of how "right to work" enabled the birth of an industry in a state which none previously, at least, no auto manufacturing industry.  It is seemingly telling that Saturn failed where Nissan thrived, one saddled with union rules and the other just having to compete in a market for talented workers - and winning. 

The bigger picture is also telling - about how unions don't contest with management, they contest with other workers.  In this case, Boeing's union force is doing its best to avoid having to compete with workers from South Carolina. 

That's the key union illusion - the unions help workers by protecting them from competition with other workers, workers which may be willing to work harder or for lower wages. 

Unions are wrong in the pragmatic sense because they hurt people by reducing employment.  They are wrong in the idealoigical sense because they allow workers to obtain a coercive government monopoly on labor, which they use against other workers.  They are wrong spiritually because they create a system which feeds on the entitlement mentality - there's no one more miserable than a rich union man griping about how the company is putting it over on him (ALPA being the biggest offender, perhaps followed by the louses at the Boeing machinists' union complaining about their "palty" benefits). 

The best thing about private sector unions is that the union experiment has about run its course and enough folks realize unions do not represent their best interests.  The unions will continue to die from self inflicted gunshot wounds.

Another Cassandra

This is a good read, a sobering read.  But there's a good reason why no one listens to the doom and gloom predictions - there are always doom and gloom predictions.  They don't come from the same voices and the voice that accurately predicts one DGP won't be able to pick the next.  The authors loud and self important voice makes a compelling argument, but I think he misses the key point - no one knows, and those who think they do have the fatal conceit. 

The crux of the human condition - we can consider the future, but we can't know enough to predict.  We think we must act on what we know, we even convince ourselves that we CAN predict - but we'll be wrong in our predictions more than we're right.  This is so essential to the human condition - the anxst over forecasting - that entire industries are built on our obsession with this experience - gambling, sports casting, pre-game predictions that never come true but are still such money makers and audience grabbers that they happen each week as we agonize over "what will happen?"

The way that the author is completely correct however, is that we're morons if we trust those who sit in the seats of power when they tell us "it's all ok."  They don't know either, but even if they could, they couldn't tell us.  Imagine the panic that would result if the Fed Chairman said anything other than "Hey it's great!  I'm in complete control!"  And everyone knows that.  So the human game that is played boils down to how well he can seduce us, how well can he sell us, how authentic can he appear to be, in his reports? 

I seems stranger each day.  We think there are people who are smarter than we are who are running things, and take comfort in that.  I believe it is more likely they are as clueless as we are, but don't realize it - or if they do, the realize it too late when they cannot afford to admit to their ignorance.  It's a house of cards founded on the fatal conceit!

Monday, April 25, 2011

Hiding Taxes

How convenient for politicians to tax "corporations" instead of you or me?!?  And we let them, nevermind the fact that we pay the taxes every time we do business with any corporation.

Unintended But Still Rotten

A similar family earning $93,699 (400% of poverty) gets a subsidy of $14,799. But a family earning $1 more—$93,700—gets no subsidy.
Economists call large, discontinuous changes in program benefits like this "notches." Although notches might be administratively convenient, they have terrible incentive effects. As Prof. Raj Chetty of Harvard points out in a recent National Bureau of Economic Research working paper, prior research on notches show that they induce sharp reductions in labor supply. 
Consider a wife in a family with $90,000 in income. If she were to earn an additional $3,700, her family would lose the insurance subsidy and be more than $10,000 poorer. In addition, she would also pay more in income and Social Security taxes. Taken together, these policies impose a substantial punishment on work effort.
Notches also lead to unfairness. The principle that families of the same size with similar incomes should be treated similarly by tax law and transfer programs has deep philosophical roots and appeals to basic notions of equity. The notch turns this principle on its head. Next-door neighbors with virtually identical circumstances could receive very different levels of government assistance, depending on which side of the notch they happen to fall. This feature will justifiably increase public cynicism about the law and government in general.

"Defined" Benefit

"Defined benefit" meaning if the organization making the promises gives enough to the pension fund such that it delivers on the promise forty plus years later, AND assuming that organization actually survives that long, AND assuming that organization doesn't make incorrect economic assumptions (demographics, longevity, birthrates), AND assuming that organization doesn't lose its tax base (in the case of government retirements), AND assuming that organization doesn't promise so much to so many (death spiral) that ALL of the promises are meaningless. 

Well, what could go wrong with that plan?

Give The Devil His Due

This is a perfect example of the phenomenon that once government has a particular power, it must be fought over.  Boeing would not be smart to stay out of the political arena; it must try to exert influence because to do so is 'easy money.'  But when you make a deal with the devil, you know the payment's coming due sooner or later ...

Boeing is not free to make its jets at the factory of its choosing, according to the National Labor Relations Board -- it must make them in Washington state, using union labor.
This extraordinary abridgement of economic freedom might suggest an anti-Boeing vendetta from President Obama, except that this administration's Export-Import Bank has subsidized Boeing with nearly $15 billion in loan guarantees in the past two years -- roughly three-quarters of all of Ex-Im's guarantees during that time.
This puts Boeing in an awkward position. The NLRB is surely overreaching in trying to block Boeing from making some of its 787s in South Carolina, a right-to-work state (NLRB calls this illegal retaliation against the machinists and aerospace workers union for its 2005 and 2008 strikes). In its effort to fight back, Boeing could be defanged by its reliance on big government. It's a cautionary tale for Obama's other corporate allies -- from the drug industry that benefits so much from Obamacare to the tech, agrichem, coal, and other industries that have benefitted from the president's corporatism.

Read more at the Washington Examiner:

You Want Everyone But Americans To Be Jobless?

"There are 13 million Americans who are counting on Congress to do something."

Actually, there are 13 million Americans suffering from what the government has done, but I don't expect many elected officials to say that, it would controvert their raison d'etre.

I'm surprised that this question does not come up more often:
"Mr. Elected Official, are you saying that Americans have a right to make iPads and the Chinese do not?  Are Americans more entitled to jobs than people born in other nations?  If so, why do we give so much anxst to the underemployment and unemployment in impoverished nations, the governments of which we give money, taken by force from citizens via taxation, ostensibly to reduce their suffering?  Wouldn't it be better that we not tax the citizenry, not give the governments of these nations money, and celebrate the employment of their formerly impoverished citizens?"

What do you want - impoverished nations or not?  If not, why would you begrudge their success in manufacturing, which actually reduces poverty?  This is cognitive dissonance on display, but we ignore it.

Get That Monkey Of Your Back

In Monkeys on Our Backs, Richard Tokumei thoroughly explains how the policies endorsed by liberals, who believe in evolution, not only go against its principles, but, because they do, are doomed to failure.  Policies endorsed by conservatives, on the other hand and unbeknownst to them, are actually derived from the principles of evolution which they publicly denounce, and, because they are, they have a better chance of working than liberal policies.  The book is full of such astute observations, peppered with a sense of humor.
For someone who is not a scientist and has no background in evolutionary biology, Tokumei has a deep understanding of evolution and how it operates.  And he is able to express the fundamental principles of evolution very clearly.  In fact, Part One of the book, where he explains how evolution works, is simultaneously so accurate and so lucid that I believe it should be used as a biology textbook in junior high schools..

This sounds like a great book!

Instinct to Tyranny

How many pieces of political opinion or commentary amount to just an expression of this meme:

"Give me control of everything and I'll solve everyone's problem."  

In other words, how many bits of the political blah blah are simple expressions of the instinct to tyranny?

We've all been soaked in statism so long, most folks don't realize when they are advocating that someone take their liberty via legislation, or hoping that someone do so.  Most are not even aware that liberty is in opposition to legislation.
This video is a reasonable example.  The speaker will solve the problem of lost jobs, he's smart enough to fix it, just let him have control.

Classic Quotes, Smith

From Adam Smith's The Theory of Moral Sentiments:

            The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.

In other words, "the man of the system" has the fatal conceit.

Friday, April 22, 2011

Friedman's Demonstration of the Fatal Conceit

The key to Friedman's analysis is the word "theoretically." Because, in reality China did no such thing. The country is still awash in plastic bags. And though you can be sent to the state's dungeons for innumerable crimes, using such bags isn't one of them -- yet.
Still, at least in theory, China is awesome because it can efficiently impose the right policies, right?
For years, I've been going after Friedman hammer and tongs for his authoritarian fetish. But perhaps the most damning critique is that banning plastic bags isn't necessarily the optimal policy.
A new study by the Environment Agency of England finds that those thin plastic bags have a smaller carbon footprint than reusable plastic or cotton satchels as well as disposable paper bags. According to "Evidence: Life Cycle Assessment of Supermarket Carrier Bags," you'd have to reuse a fashionable cotton bag at least 131 times to equal the low carbon footprint of a simple plastic bag.
If you reuse a plastic bag -- as a wastebasket liner perhaps -- they pull even further away as the most green technology.
Also, as other studies have shown, those trendy reusable bags provide a wonderful breeding ground for E. coli and other bacteria. That is, unless you wash them regularly. But if you do that, as my American Enterprise Institute colleague Ken Green notes, all that bleach, soap and hot water expand their carbon footprint as well.

Read more: Fads & myths make for poor public policy - Pittsburgh Tribune-Review

Demonstrations of Hayek's observations are everywhere.  Beware the nice guy with a fetish for authoritarianism.

The superiority of undirected design is unquestionable - "the result of human action, but not the execution of any human design."

The HC Debate, Big Questions
In a response to the discussion that followed the post above, TDP posts this very cogent summary of the issues that result from single payer or universal health care systems:
The reason people live longer overseas is because 1)They’re not as obese 2)They have lower homicide rates 3)They have lower traffic accident fatality rates, and 4)They take better care of themselves in general. It has nothing to do with the quality or extent of care they receive.

So I ask you - if the report that damns our health care "system" as being the most costly and minimally effective counts accidental deaths in longevity calculations, does that seem legit to you? 

More on that study here:

Thursday, April 21, 2011

Do You Want Liberty??

Do you want to live in a place in which the government is the tool used by one group to take power and or money away from another group?  Or do you want liberty?

What's the Problem with the FAA? The FAA

Conducting investigations! Changing procedures! You go, guy. Compare that sort of constipatory bureaucratese with how Southwest Airlines (arguably the safest airline flying domestically in the U.S.) responsed when one of its fleet went kerflooey earlier this month: Southwest promptly grounded its entire operation and did checks of everything. They were back up in the air quickly, with minimal (though not zero) disruption to travelers and its reputation.
Of course, LaHood is much more interested in touting bull-dinky new laws about luggage fees and tarmac waiting times, where the government can squeeze the airlines on behalf of flyers. Oddly, LaHood seems to have no good ideas about reforming the air traffic control system (ATC) which the government fully controls and is one of the major reasons for tarmac waits.
Like too many of not just Obama's cabinet but every president's cabinet, LaHood seems blissfully uninterested in actually making things under his purview better. Rather, he spends most of his time going from cover-your-ass mode to laying on new fines and regs to anyone he can. The deregulation of air travel back under St. Jimmy of Plains and a bunch of other Dems (including Ted Kennedy!) is one of the great unalloyed success stories of the past 40 years. Thanks to the end of really idiotic top-down control dictating where airlines could fly, how much they could charge, and even what sort of food they served, air travel is cheaper and safer than ever.

The only way to get the politics out of our air traffic system is to take the system away from the politicians. Why not let a private corporation manage the skies?
That may sound like a far-out, free-market idea, but Canada doesn't think so.
Our neighbors to the north often take pride in their lavish government programs, yet they allow a private corporation called Nav Canada to manage their air-traffic control system. Canada's approach, often called commercialization, has some surprising supporters in the U.S., including Al Gore, who pushed for commercialization when he was Bill Clinton's vice president.

Buffoons R US

Laffer - Thirty Cents
There is a lot more to taxes than simply paying the bill. Taxpayers must spend significantly more than $1 in order to provide $1 of income-tax revenue to the federal government.
To start with, individuals and businesses must pay the government the $1 in revenue plus the costs of their own time spent filing and complying with the tax code; plus the tax collection costs of the IRS; plus the tax compliance outlays that individuals and businesses pay to help them file their taxes. 
In a study published last week by the Laffer Center, my colleagues Wayne Winegarden, John Childs and I estimate that these costs alone are a staggering $431 billion annually. This is a cost markup of 30 cents on every dollar paid in taxes. And this is not even a complete accounting of the costs of tax complexity.

In short, the US tax code is unfair, serves no one's best interest and literally wastes THIRTY PERCENT of the money!!!  Would we need any greater example to know with certainty that our government is inept?  Criminally inept?  Why would we trust an organization which has as its history Viet Nam, Medicare, Social Security and the US Tax Code?  If you do trust this organization, allow me to introduce you to my new bridge repair company, Buffoons Are Us.  We take billion dollar government contracts only.

Where The Money Is

The mathematical reality is that in the absence of entitlement reform on the Paul Ryan model, Washington will need to soak the middle class—because that's where the big money is.

Where The Money Is

Unsustainable, That's What You Are

Think we can just raise taxes on the rich to save the welfare state?  That's a negative, ghostrider, because the retiree patten is full and getting moreso.  The welfare state is not sustainable.  - excerpts follow:

Kamikatsu shows in microcosm what Japan and several other nations now face—and what others soon will. For decades, demographers and economists have watched the world’s fertility rate plunge as countries grew wealthier and more urban. These days, fertility rates in much of the industrialized world are far below replacement levels—that is, the number of kids that parents must have to replace themselves and adults who remain childless. Though the steepest declines happened first in wealthy countries like Japan, Italy, Germany, and Spain, even many developing countries have seen their fertility rates head downward.

Demographers are scrambling to adjust their population projections, with little notice in the press. In the early 1990s, United Nations researchers projected that the world’s population would reach a maximum of 10 to 12 billion people (up from about 6.7 billion today). They subsequently scaled back that projection to 9.5 billion and then to about 9.1—adding, however, that it might be as low as 7.9. But the truth is that no one knows how this massive reversal will end. The UN demographers optimistically claim that the world’s fertility rate, currently at 2.6 children per woman, will decline to replacement level and then stabilize. But there’s no clear reason for that to happen; dozens of countries have seen their rates sink far lower. In his book Fewer, Ben Wattenberg estimates that if the rate were to stop at 1.85 births per woman, the world’s population could shrink to 2.3 billion by the year 2300.

Unfortunately, getting people to work longer won’t solve countries’ fertility-related economic difficulties, even if it will have a modest impact on pension spending. The Japanese, for instance, already boast a nearly 70 percent labor-force participation rate for those aged 55 to 64. But because of the country’s extreme birth dearth, by mid-century the average Japanese would need to work until age 83 to keep a constant ratio of workers to retirees. Europeans would need to work until their late seventies.

Cafe: There Their?

Cafe: Their There?
I love this breakdown.  It shows how speedily one can confuse the discussion using meaningless terms like "the rich" and including telling statistics. 

In other words, if "the rich" are getting it over on the rest of us over the last 25 years because they are getting even more of the pie than they were before, does that demonstrate a built in level of unfairness and abuse that justifies government bullying? 

Not if the rich of 25 years ago are not the same people that are rich today.

And nevermind the fact that the rich doing better does not necessarily mean the rest of us are doing worse.  Further, when all of the "us" we're discussing (citizens of the USA) are in the world's 95th percentile, how much more fair can it get?  And if we're really going for fairness, why aren't we giving all our money to poor folks in China, India, North Korea and Iran?

Wednesday, April 20, 2011

Carts, Horses, and Dionne's Economic Misunderestimation

This article by E.J. Dionne is so full of incorrect assumptions it serves as a proverbial barrel for an economic falsity fish shooting contest.  Which is to say, the article is as freakily incorrect as my use of that old saw. 

Where to start?!?

The premise is the rich and powerful who, behind the scenes in the oh so genteel way of the rich, run the government, are not as good, and wise, and idealistic and loving and/or as practical as they used to be in the good old days, as they are now afflicted by greed and pursue only their unenlightened self interest rather than the well being of all.  This is not only bad for all of us who are not part of the "ruling class", it is bad for that class itself since it will apparently not make as much money as it otherwise would have if there were more "equality." 

An enlightened ruling class understands that it can get richer and its riches will be more secure if prosperity is broadly shared, if government is investing in productive projects that lift the whole society, and if social mobility allows some circulation of the elites. A ruling class closed to new talent doesn't remain a ruling class for long.

Granted that this is just an opinion piece and so of course it is not expected that there would be references or even an explanation of how one might go about justifying the author's supposed understanding of how the rich used to behave compared with how they behave now, but truly, how could one suppose to prove a statement like: "A ruling class closed to new talent doesn't remain a ruling class for long."

Is this an opinion formed after years of studying ruling classes of representative republics within which ruling classes lost their status/wealth after becoming "closed to new talent"?  Nevermind - how would the author define "ruling class" and how would the author establish when that class is or became "closed"? 

This is where the author's carts and horses get all jumbled - while there's little evidence that government "investing" (a code word describing politicians who take citizens' money by force and spend it in ways that politicians think will help them get re-elected) results in any net gain, when governments quit "investing" but instead focus on providing economic liberty with property rights, wealth improves and wealth mobility improves very rapidly.  Hong Kong, Taiwan, Singapore, Korea and Japan are my examples of how a 'nation' gets more wealth and more equality.  The common characteritics?  Not democracy, not political freedom - rather, economic liberty and property rights.

In short, most of this opinion piece is paper thin and little more than a rant - and if you said "what were you expecting from Dionne, serious work?" I would have to say "no."

And it's certainly not here - "governments investing in investing in productive projects that lift the whole society" is the intellectual equivalent of saying "governments that incorporate unicorns in free mass transit programs".  I'm sure there's a program somewhere that was in effect an investment, and not a net loss, and a few have not been massive net losses.  But those types of government programs are as difficult to prove as are unicorns, and the author wisely avoids any specific examples of same, presumably because for the author, the existance of such projects are articles of faith and require no proof.

Here's another funny one: 
But a funny thing happened to the American ruling class: It stopped being concerned with the health of society as a whole and became almost entirely obsessed with money.

Hooo doggy, now that's a kneeslapper.  It is an absurd thing to say because it could not possibly be measured were it true or false.  It's an opinion pulled out of thin air, certain to please those who want to sit in judgement of others who presumably have the power to do good.  It is an opinion which allows those who hold it to enjoy a sense of self righteousness rather than actually doing anything that helps another human being.  The argument, after all, that the author makes most often is that government should be responsible for helping people so that folks like us don't have to. 

Frankly, since the rich can see as well as I can that the government of the US is totally out of control and will spend any amount of money over which it can gain control, the rich would be idiots to do anything other than tend to their own well being any way they can.  Even were it a monolithic entity, a "ruling class" as the author describes them, they couldn't pay the bills the US government has promised - not a fragment of it.  I would love to see the author or anyone cite the example of a nation that taxed itself into prosperity. 

Here's one of the author's cart/horse issues, clarified:
Yet when it comes to governing, the ruling class now devotes itself in large part to utterly self-involved lobbying. Its main passion has been to slash taxation on the wealthy, particularly on the financial class that has gained the most over the last 20 years. By winning much lower tax rates on capital gains and dividends, it's done a heck of a job.

Self involved lobbying amounts to nothing but self defense with a government as over-reaching as ours is, but in any event, if they were lobbying for fiscal responsibility, the author would condemn them just as soundly because the ONLY way to get there is to reform the entitlement system, which would no doubt be criticized as "attacking the poor." 

Nevermind the price the poor pay for inflation, which is the time honored way that governments extract themselves from their unkeepable financial promises.

Listen to David Cay Johnston, the author of "Free Lunch" and a columnist for Tax Notes. "The effective rate for the top 400 taxpayers has gone from 30 cents on the dollar in 1993 to 22 cents at the end of the Clinton years to 16.6 cents under Bush," he said in a telephone interview. "So their effective rate has gone down more than 40 percent."
He added: "The overarching drive right now is to push the burden of government, of taxes, down the income ladder."
And you wonder where the deficit came from.
If the ruling class were as worried about the deficit as it claims to be, it would accept that the wealthiest people in society have a duty to pony up more for the very government whose police power and military protect them, their property and their wealth.

In other words, no matter how much largesse the politicians serve up to their constituencies to further their political careers - and regardless of how absurdly ineffective those programs are, and no matter how unsustainable said programs are at any rate of taxation - the 'more fortunate' should step right up and happily pay the bill. 

And there's no need to wonder where the deficit came from.  The deficit came from decades of politicians who will find a way to spend as much money as they can take from the citizenry plus a healthy dose of money they will take from those not yet voting age and then go ahead a take some more from those not even born yet - but at least those politicians will be dead before those unborn children can be born and sue for taxation without representation.

I know that articles like the one in question are not written for a critical audience and that the author might be a fabulous human being.  The exasperation results from the supreme lack of clarity which is presented as analysis but which is simply a sad justification for more government, and less liberty. 

Climate Models, A Glimpse of Understanding

This is the core idea of every official climate model: For each bit of warming due to carbon dioxide, they claim it ends up causing three bits of warming due to the extra moist air. The climate models amplify the carbon dioxide warming by a factor of three -so two-thirds of their projected warming is due to extra moist air (and other factors); only one-third is due to extra carbon dioxide.
That's the core of the issue. All the disagreements and misunderstandings spring from this. The alarmist case is based on this guess about moisture in the atmosphere, and there is simply no evidence for the amplification that is at the core of their alarmism.

The official thermometers are often located in the warm exhaust of air conditioning outlets, over hot tarmac at airports where they get blasts of hot air from jet engines, at waste-water plants where they get warmth from decomposing sewage, or in hot cities choked with cars and buildings. Global warming is measured in 10ths of a degree, so any extra heating nudge is important. In the United States, nearly 90% of official thermometers surveyed by volunteers violate official siting requirements that they not be too close to an artificial heating source.
Global temperature is also measured by satellites, which measure nearly the whole planet 24/7 without bias. The satellites say the hottest recent year was 1998, and that since 2001 the global temperature has levelled off. Why does official science track only the surface thermometer results and not mention the satellite results?
The Earth has been in a warming trend since the depth of the Little Ice Age around 1680. Human emissions of carbon dioxide were negligible before 1850 and have nearly all come after the Second World War, so human carbon dioxide cannot possibly have caused the trend. Within the trend, the Pacific Decadal Oscillation causes alternating global warming and cooling for 25 to 30 years at a go in each direction. We have just finished a warming phase, so expect mild global cooling for the next two decades.

Quotes for Laughs

Such as: 
“He has all the virtues I dislike and none of the vices I admire.”
Winston Churchill

Read more:

Reality - Not Optional

Free markets are based on risk and will always be prone to particular failure. Only government attempts to prevent or compensate for particular failure can threaten the systemic variety.

Harsanyi Never Fails to Amuse

And isn't it about time we shared responsibility and kicked in our share for the extraordinary benefits provided to us by Washington? And by "all" of us, of course, I mean the folks who make more money than I do.

Another jewel:
This mystifying phrase, I came to discover after a thorough investigation, translates to this: "Hey, let's tax the rich because everyone hates those bastards anyway."

Mencken Via Boudreaux

"They will all know by then, even supposing that some of them don’t know it now, that votes are collared under democracy, not by talking sense but by talking nonsense, and they will apply themselves to the job with a hearty yo-heave-ho.  Most of them, before the uproar is over, will actually convince themselves.  The winner will be whoever promises the most with the least probability of delivering anything.”*
* H.L. Mencken, “The Politician” (1940), in A Mencken Chrestomathy (New York: Knopf, 1949), pp. 150-151.
HT:  Cafe Hayek

Masters of The Meaningless
Scientists are now saying leave the nuclear waste where it is, in deep ground storage. And when I say deep ground, (I mean) 10 feet underground. The new nuclear power plants are going to be built, and it's terrific that the president stepped forward on this. I'm not against nuclear power. I'm against bringing nuclear waste to Nevada. Scientists say leave it where it is. That's what we have to do.
This is standard polspeak of course, but next time you hear a politician speak like this, won't you be thinking as I do:
-Which scientists? 
-How many? 
-What if 49 say "leave it where it is" and 48 say "move it to one location"? 
-What if the 49 who say "leave it" are conservative voters from near the Yucca mountains and the 48 who say "move it" are all liberals from states other than Nevada? 

In short, beware the politician who appeals to a faux authority.  Yes, faux authority is convenient for a fella that has to appear to know everything about everything - that's why we must distrust those who use it just as instinctively as they use it.

However, I'm going to find a scientist who says that we need to restore the constitution to it's historical limitations on the power of the federal government and introduce that guy to every politician I can find.

The New QE2 Decelleration Concerns

Jubak on QE2
Oh what a tangled web we weave, when first we practice to manipulate global financial markets with other people's money.

Navy China

America’s Navy and the rise of China
We could get rid of quite a few ships if we were not planning on defending Taiwan.  I wonder how many Americans are really comfortable with the idea of going full tilt with China over that island?  

Tuesday, April 19, 2011

Government is Suicidal

"Government is suicidal because it breeds expectations that cannot be met."

Samuelson - Government On The Brink

I'm Going To Sue For the Death of Unicorns
I wonder if this case will even address the facts of the AGW conjecture, which is:
-The climate is warming
-The climate is warming more than it naturally would
-The climate is warming more than it naturally would due to human activity
-The anthropogenic climate warming will do more harm than good
-Reducing the human contribution to climate warming would do more good than harm

If the complainants have to prove these points, they are going to be in big trouble.

Cafe H on The Housing Boom
Civilized analysis of what when wrong - which was, mostly, government interventions with good intentions but an insufficient understanding of unintended consequences (as always).

AGW Myths

Despite claims that global warming will reduce human well-being in developing countries, there is no evidence that this is actually happening.  Empirical trends show that by any objective climate-sensitive measure, human well-being has, in fact, improved remarkably over the last several decades.  Specifically, agricultural productivity has increased; the proportion of population suffering from chronic hunger has declined; the rate of extreme poverty has been more than halved; rates of death and disease from malaria, other vector-borne diseases, and extreme weather events have declined; and, consequently, life-expectancy has more than doubled since 1900.
And while economic growth and technological development fueled mainly by fossil fuels are responsible for some portion of the warming experienced this century, they are largely responsible for the above-noted improvements in human well-being in developing countries (and elsewhere).  The fact that these improvements occurred despite any global warming indicates that economic and technological development has been, overall, a benefit to developing countries [pp. 181-182].

Fantasy, Let Me Introduce You to Reality

Fantasy, Meet Reality
This is a great read, and a great opening photo, both worth indulging in.  Sad?  Yes, it is that when fantasy is revealed and hope for long delayed suffering arrives.  These are great examples of why as little as possible should be entrusted to the feeble human minds of those who would be the leaders of a coercive monopoly state.

Can't Anyone Help? You Can? Nevermind
Ms. Lind is funny.  First she asks if anyone can help fix the economy.  Then she points out that if fixing the economy means reining in the insanity of the entitlement programs, she doesn't want the economy fixed.  Heck no - let's just ride this insolvency/government dependency thrill ride as far as it will go!!!

Classic Quotes, Ts-an

If you want the truth to stand clear before you, never be for or against.  The struggle between "for" and "against" is the mind's worst disease.
--  Sent Ts-an, c. 700 CE

Monday, April 18, 2011

Devil's In The Details
Does the US spend more than any other nation but get worse health care outcomes?  Is the US really ranked 37th in healthcare in the world?

That's what the World Health Organization said, and the data the WHO published has been used by the President to good effect in the battle over whether the government should run our health care via coercion, rather than allowing liberty and choice to decide how we get cared for.

Bottom line - it reminds one of the old saw about "lies, damned lies, and statistics."

Wednesday, April 13, 2011

Classic Quotes, Browne

We must ask of every politician, "Where in the Constitution does it give you the right to decide how people must spend the money they've earned with their own sweat and blood?  Who decided that you're so smart that you can decide for all of us the most intricate questions involving life and death?"  Harry Browne, Liberty A To Z

Tuesday, April 12, 2011

Palin Driving the Left Batty

That sounds like Sarah Palin's new plight. She's running fifth in the 2012 presidential polls, and that's just among Republicans. Sixty percent of Americans view her "very unfavorably." She's getting close to being politically radioactive.
How could such a star burn out so fast? Two reasons: She started out with a lot to learn about national and international affairs, and she didn't bother. And she's got a mean streak.,0,1812061.story?obref=obinsite

Was she ever really a star?  I couldn't believe how afraid of this lady the left was, now it's still a surprise to see how they are enjoying what should have been an obvious and mediocre appeal as a presidential candidate. 

I was one of many who enjoyed her nomination, but primarily, because of her contrast to both McCain and her opponent - Veep nominee Biden.  I'd take her in a heartbeat over him if that were the choice.  But I never thought, and have never been able to see why others thought, she would be a standard bearer for the GOP.  If I were her though, I'd be happy about that - could there be a fate worse than being elected President?  TV news gal or President - TV news gal wins on all counts except that I think TV news folk are more encumbered by their sense of their own significance.

The left should be celebrating that their neanderthal opponents on the right are finally shedding their desire to send women back to the kitchen barefoot, but instead they have worked themselves into a lather over Ms. Palin.  Weird.

Monday, April 11, 2011

Hurts the Most Vulnerable

Deep Budget Cuts Hurt Most Vulnerable

This is the hole card of the statists.  And who could deny it after all, once you make entire classes of folk dependent upon political largesse, their fates are certainly impacted by 'cuts.'  This is, however, a truth of no consequence.  The most vulnerable are damaged by almost all unpredictable events, as they have fewer means to adapt.  They are hurt by overbearing regulations that make it hard to hire unskilled, less capable folks.  They are hurt by all manner of government interventions - the artificial currency fluctuations, the uncertainties in operations that reduce the capitalists' inclination to take risks, etc etc etc.  In other words, this "budget cuts hurt the most vulnerable' is another proof of the broken window fallacy and its primary lesson - that economists, or any truth seeker, must consider not only what is seen (eductions in the rate of increases in federal spending, what is know in the political vernacular as a "cut") but what is unseen: poverty caused by offenses to liberty via overbearing government being the first and largest sinner. 

Sunday, April 10, 2011

Classic Quotes, Hawking

"The greatest enemy of knowledge is not ignorance; it is the illusion of knowledge."
--Stephen Hawking

Wednesday, April 6, 2011

Classic Quotes, Rand

"It stands to reason that where there's sacrifice, there's someone collecting sacrificial offerings. Where there's service, there's someone being served. The man who speaks to you of sacrifice, speaks of slaves and masters. And intends to be the master."  Ayn Rand

Monday, April 4, 2011

Just No Shame

The Institute for Justice, a libertarian public interest law firm defending Roos, notes that signs may be the oldest form of mass communication — Gutenberg made advertising posters — and they remain an inexpensive means of communicating with fellow citizens. St. Louis says that it regulates signs for “aesthetic” reasons and to promote traffic safety, but it admits that it has no guidelines for the bureaucrats exercising aesthetic discretion and no empirical evidence connecting signs with traffic risks. And why would Roos’s mural be less aesthetic and more distracting to drivers than, say, a sign — exempted from any permit requirement — urging the election of the kind of city officials who enjoy censoring Roos?
St. Louis is not the problem; government is. Many people go into it because they enjoy bossing people around. Surely this is why a court had to overturn a decision by the government of Glendale, Ohio, when it threatened a man with fines and jail because he put a “for sale” sign in his car parked in front of his house. The city said that people might be distracted by the sign and walk into traffic.

The alderman’s horror of uncontrolled speech is an example of what Elizabeth Price Foley, law professor at Florida International University, calls “an ineluctable byproduct of disregarding the morality of American law.” In her book “Liberty for All” (2006, Yale), she says that the growing exercise of legislative power “in the name of majoritarian whims” has eroded America’s “twin foundational presumptions” — limited government and residual individual sovereignty.
The original constitutional structure has, she says, been inverted: Citizens are required to convince the courts that laws restricting liberty are “irrational”; government should be required to articulate justifications for limiting liberty. The Founders’ goal — in John Adams’s formulation, a nation of “laws, and not of men” — has, Foley believes, “been taken much too far.”

Cooperation, Who'd Have Thunk It

Because her site is only one of thousands of venues to which pundits can peddle their prose, and because many lesser-known pundits continue to eagerly write for the HP without expecting money from the HP, the HP clearly provides ample value to its contributing writers. Tit for tat.  Voluntary trade with mutual benefits.  All parties to the transactions gain and no one loses.  Works out nicely; it truly does.
A lesson here that I hope Ms. Huffington and her colleagues will take to heart is that third parties, even when well-intentioned, are poorly positioned to assess the merits of – and to second-guess the detailed terms of -  capitalist acts among consenting adults.

Another Friedman Tour de Force

He had a gift for explaining these things clearly, without anger, and without attacking the participants.  Powerful.

Friday, April 1, 2011

Airplanes Safer If Gravity Reduced

There are two ways to reduce the connection between politicians and money. One is to reduce the role of money. The other is to reduce the role of politicians. I choose the latter. I contend that reducing the role of money of politics in order to make politics more honest is like trying to make airplanes safer by reducing the role of gravity. Let's get money out of politics by making politicians less powerful.  
Russell Roberts from

April Fool?

Nope.  Put this one in your pipe and smoke on it.

In case anyone missed it, let me repeat something that is of a magnitude of 10 on the scale of news-quakes for Joe Public USA: America’s combined energy resources are, according to a new report from the Congressional Research Service (CSR), the largest on earth. They eclipse Saudi Arabia (3rd), China (4th) and Canada (6th) combined – and that’s without including America’s shale oil deposits and, in the future, the potentially astronomic impact of methane hydrates.

The energy facts in the CRS report should be making front page news all over America. Mostly it isn’t. Given the devastating news from Japan and New Zealand, it may be right to postpone dancing in the streets. But something else is going on. Even though they are going to dominate global energy supply for decades to come the insidious war on vital fossil fuels continues apace.

April Fool?