The Liberal Order

Thomas Sowell On Responsibility

When you socialize the outcome of decision making you can indeed expect to see an increase in irresponsible choices made and a decrease in responsible choices. Thomas Sowell says it nicely:

We seem to be moving steadily in the direction of a society where no one is responsible for what he himself did but we are all responsible for what somebody else did, either in the present or in the past.

I love big government . . .

. . . unless, of course,  I have to pay for it.

Incentives Matter

First, from the New York Post:

Last week I spent 90 minutes doing a couple of simple things -- registering to vote, changing my driver's license, filling out a domicile certificate and signing a homestead certificate -- in Florida. Combined with spending 184 days a year outside New York, these simple procedures will save me over $5 million in New York taxes annually.
By moving to Florida, I can spend that $5 million on worthy causes, like better hospitals, improving education or the Clinton Global Initiative. Or maybe I'll continue to invest it in fighting the status quo in Albany. One thing's certain: That money won't continue to fund Albany's bloated bureaucracy, corrupt politicians and regular special-interest handouts.

Second, from Blloomberg:

Pacific Investment Management Co., Barclays Capital and Fridson Investment Advisors have joined Schultze Asset Management LLC in saying lenders may be unwilling to back unionized companies with underfunded pension and medical obligations, such as airlines and auto-industry suppliers, because Chrysler’s creditors failed to block Obama’s move. The reluctance may put additional pressure on borrowers seeking capital in the worst financial crisis since the Great Depression.

HT: Dan Mitchell from Cato@Liberty Blog for the former and Wilson Mixon from Division of Labour on for the latter.

Lou Zicker Has It Backwards

Lou Zicker argues that Republicans "need to acknowledge government has a role to play and it is the responsibility of all elected lawmakers to get it right." His justification objection:

[Republicans] need to turn toward the center. Among other things, this means coming to grips with the role of government in our lives. For nearly 30 years, the party's position in this regard has been clear and absolute -- government should be smaller. But Katrina and Iraq and Walter Reed brought to light a simple truth -- government needs to be more efficient, too.

Zicker has turned logic on its head. His argument erroneously presumes that a) Republicans have been stalwarts of limited government, especially while in power, and b) that government is capable of producing good results, but its failings have simply been due to inept bureaucratic bungling. Ignoble bureaucratic intent and innate incompetence have little to do with the examples of government failure to which Zicker alludes; politicians and bureaucrats have little incentive to get it right.  Zicker's are only a few examples among many of government failure. These failures, however, were not due to incompetence and/or lack of will; government failure never is. 

Government suffers from both information and incentive problems. "Who needs what and how do we best get it to them?" Even if politicians and bureaucrats were to have perfect information, what incentive do they have to get it right? The bigger the budget, the greater the rent-seeking. Consequently, the greater incentive to serve political interests at the expense of the public's interest. Steve Horwitz provides an outstanding example of this problem. In fact, in most cases bureaucrats have the perverse incentive to make things worse. (See Niskanen)  

If voters are too inept to see this, is it Zicker's position that Republicans should capitalize on voter ignorance simply to attain power? What glory is there in that?

This isn't to say that all government is totally inept, just that for almost every problem there is no reason - none whatsoever - to believe that politicians and bureaucrats have better information and/or better incentives to come up with efficient and effective solutions relative to private firms and individuals. There may be times when free riding make government provision more effective, but those instances are rare and exhibit fairly standard properties. (i.e., Government can fight the wars, but let's not leave the innovation and production of tanks, jets, carriers, etc., in the hands of politicians and bureaucrats.)

Californians recently demonstrated that they have not abandoned principles of limited government . . . at least not as long as they have to pay for the government services people profess they want. Yes, under Bastiat's adage that "Government is that great fiction by which everybody endeavors to live at the expense of everybody else," people demand more expansive government, and why not, it's free. 

What we've experienced in this country over the past eighty years is not democracy and a free society, but instead tyranny, tyranny that's enabled many people to live at the expense of others. Without effective constraints, which have been eroded throughout most of the twentieth century, democracy is little more than two wolves and a sheep voting on what's for dinner. We shouldn't be surprised then to see the wolves seeking more and politicians responding and consequently government expanding. Eventually, however, you run out of other people's money and the wolves have to find more willing sheep to victimize. Now that more Californians find they have become fodder for the wolves, they're fighting back. They may outnumber the wolves, but we'll see who wins. I'm mot optimistic. 

Republicans need to make the moral and ethical stand for limited government, yet they can't. As Bryan Caplan demonstrated, and Republicans so beautifully proved over the past eight years, Republican self-interest and ideology run in opposite directions. How do you argue for limited government after eight years of Bush and Republican control of both houses for nearly that duration? (How does that saying go? "Republicans are the party that rails about how government doesn't work, then once in power prove it.") 

The lack of constraints on democracy inevitably lead to irresponsible government action and voter acquiescence. Zicker, as well as the likes of David Brooks, Colin Powell, and the vast majority of Republicans in Congress, call for Republicans to placate voters by acquiescing to more of the same so that they can captain the ship that is running aground (and for which they are largely responsible for its heading). Again, what glory is there in that? Out-of-control spending, huge budget deficits, failing schools, overcrowded roadways, impending catastrophes in both state pension funding and the Social Security system, corruption, abuse of power, and on, and on, and on.

Maybe democracy has failed and we're at the precipice of what Alex Fraser Tytler warned about more than 200 years ago:

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the Public Treasury. From that moment on the majority always votes for the candidates promising the most benefits from the Public Treasury with a result that a democracy always collapses over loose fiscal policy always followed by dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through the following sequence:

• From Bondage to Spiritual Faith
• From Spiritual Faith to Great Courage
• From Courage to Liberty
• From Liberty to Abundance
• From Abundance to Selfishness
• From Selfishness to Complacency
• From Complacency to Apathy
• From Apathy to Dependency
• From Dependency back into Bondage

     

The Cult of Environmentalism

It was discouraging to read how many of the kids who entered Google's Doodle 4 Google Contest professed an environmentalist reason as their biggest concern for the future of our world. 

Second to environmentalism was world peace. Penn and Teller aired an excellent episode on this recently. 

Although there were some good entries, I did not see one discussing the importance of freedom and voluntary cooperation/exchange as a means of improving the world and leading to a more prosperous society. It is a sign of how indoctrination permeates our government schools.

Here is Steven Landsburg's excellent essay, "Why I Am Not An Environmentalist."

David Harsanyi on the New CAFE Standards

Whereas the push and pull between environmentalists and business interests once led us to some middle ground on public policy, there is now hardly any opposition. It has been purchased with tax dollars.

While using California's tough fuel efficiency standards for the entire nation (and hasn't that state excelled?) brings some certitude to Detroit, why would the auto industry suddenly change course and drop its opposition to onerous regulations?

According to Forbes magazine, less than two years ago Chrysler put the cost of meeting similar standards at $6,700 per vehicle. Cerberus, the private equity firm, threatened to walk away from the auto giant because the requirements would have meant the end of Chrysler.

Yet Tuesday, there was Chrysler's CEO with a gaggle of other paid-off shills at a Rose Garden press conference falling in line with Obama.

You may argue that this is what we voted for. But when we look at the decisions people make with their own dollars — rational, discriminating and "selfish" decisions — we learn something quite different. You don't buy the kinds of small cars that government is demanding Detroit start producing. Rather, you weigh tradeoffs in efficiency, comfort and safety.

You may take into consideration — though cars continue to get safer — a 2002 National Academy of Sciences study, which stated that lighter cars following CAFE standards contributed to between 1,300 and 2,600 traffic deaths every year. How many lives will be lost to new government mandates? Who knows?

Column here. 

Red House Furniture

What is it about furniture company commercials?

"Storm Warning" or Back to Sunny Skies?

Here's my response to this editorial in the Raleigh News & Observer. 

After reading your editorial, "Storm Warning," [May 14], I couldn't stop thinking about Mark Twain's famous quip, "If you don't read the newspaper you are uninformed, if you do read the newspaper you are misinformed." A "40 percent decrease" in tax revenues "from a year earlier"? Oh my! How will this state's politicians survive?

First, according to the AP story to which your editorial referred, the "40 percent decrease" applied to tax receives due April 15th only. This is not equivalent to the state's annual tax revenue, which is projected to decline 11 percent this year relative to last.

Second, according to Federal Reserve data, between 2003 and 2008, real per capita tax revenues in North Carolina increased nearly 14 percent, from about $2,188 to about $2,470 (2008 dollars). An 11 percent decline in tax revenue this year takes us almost back to 2003 in terms of per capita tax revenue, just at the onset of the housing bubble, which drive tax receipts from various sources unsustainably high. 

Where were your editorial lamenting the irresponsible increases in government spending during these boom times rather than putting money away for periods when the economy is in decline?

And Whose Responsibility Is This?

Alison Stuebe, an ob-gyn at the UNC School of Medicine, is concerned with women and breast feeding.

As an obstetrician, I see these consequences every day. When mom and baby leave the hospital, dad goes back to work, and older children get pulled from day care to save money. Saddled with responsibility for housework, older children and baby care, mothers fight for even a few minutes to nurture their infants.
Three-quarters of American mothers start out breastfeeding, but more than half wean early, unable to reach the goals they set for themselves. It's not difficult to understand why -- stress interferes with the hard-wired brain circuitry responsible for mothering and nurturing babies. 

Is this any different than what women experienced in this country in the past? Were women under any less stress 100 years ago? Are there lifestyle changes the women can make that would put them under less stress? (Cut the cellphone plan. Basic cable. Fewer dinners out and movies.) 

Have they abandoned their goals because life is so much more stressful these days or is it because there are plenty of acceptable alternatives? 

In contrast to modern America, many traditional cultures celebrate and protect mothers and babies in these crucial first few months. Consider the rural Philippines: After a birth, a mother does not work for two months. Her own mother tends to mom and baby and does all the housework for eight weeks, while neighbors plow the family's fields.

Catch that last part of the last sentence? O.K., women in this country may not breast feed as long as women in other countries, which according to Stuebe has shown to have deleterious health effects (I would like to see the magnitude of her findings), but they also don't have the stresses of these other women. (From where will my next meal come? Do we have medicine to cure my child's abscess? How many of my children died while giving birth? How many will die before they reach the age of five? Will they have adequate dental care?) We don't worry about having to plow our fields, only about whether snowflake's designer jeans and iPod Touch cover have matching patterns. There are tradeoffs. Maybe American women are not making the choices I would make, but I'm not willing to impose my life preferences onto others.

So, what does Stuebe recommend? 

And then there's what we could all do, every day, to support moms and babies. At baby showers and religious ceremonies, we lavish families with embroidered onesies and engraved baby rattles, yet we leave too many new mothers home alone, trying to squeeze in a few minutes of nurturing between loads of laundry, dirty dishes and jealous older siblings.
So in honor of your mother -- and all the mothers in your life -- find some time this week to take a new big sibling to the playground, fold a load of laundry or drop off a casserole for the newly expanded family in your neighborhood.

That's pretty reasonable. People voluntarily helping those whom they love is certainly likely to produce a positive experience for both.

But alas, I only gave you the secondary recommendation. Here's her preferred resolution.

What might such a tradition look like in modern America? We could start with paid parental leave. The United States shares with Swaziland, Lesotho and Papua New Guinea the dubious distinction of being the only countries without it. Paid leave would allow mothers to spend those first months nurturing their infants, rather than cobbling together a few weeks of sick leave and disability to make ends meet.

- - -

And then call your legislator and explain that it's time to outlaw discrimination and guarantee paid family leave in the United States. Our future depends on it.

But of course, let's force our will onto others and forget about the unintended consequences.

First, if firms are forced to guarantee paid family leave, because women who wish to have kids are not incurring the true cost of their choice, they are more likely to have more kids - it's about incentives. (And won't this just contribute to global warming?) Additionally, such legislation makes it more costly for firms to hire women, especially those in their child bearing years. Consequently, they will hire fewer women, especially younger women. This decreases the potential lifetime incomes and career opportunities for all women since they are less able to get on the bottom rung of the career ladder until later in life. This means that those women who plan on not having kids in their lifetimes are made most worse off in the form of lower pay and job opportunities - they are essentially subsidizing women who desire having kids. 

The FBI Investigating former NC Governor Mike Easley?

Why is this a federal issue at all. I'm all for investigating what appears to be gross improprieties, a trait that is rampant in North Carolina politics. But what business is this of the FBI?

The FBI issued a subpoena to the state Highway Patrol today, ordering the agency to produce all records related to private air travel of the Easley family.
The request is made as part of a grand jury investigation, according to the documents. The grand jury meets next week, according to the subpoena.
Besides seeking information about the private travels of former Gov. Mike Easley, his wife Mary Easley and his son Michael Easley Jr., the subpoena requests documents relating to:
Payments made in exchange for the air travel.
Communications with the Easley family regarding the private travel.
Communications regarding public inquiries surrounding the air travel.
The state Highway Patrol's records retention policy.
The retention or destruction of records related to travel by the Easley family.