Meyerson's Wrong. Again.
Harold Meyerson of The Washington Post yet again flaunts his economic ignorance as political insight. Meyerson concludes in his latest column:
But is a new federal public works program really that unsalable? Consider the experience of Perry County, Tenn., where the closing of an auto parts factory had increased unemployment to a staggering 27 percent this spring. Tennessee Gov. Phil Bredesen, a Democrat, decided to use federal stimulus funds to immediately subsidize hundreds of new jobs -- some public, some private -- which reduced the local unemployment rate five percentage points by June. "If I could have done a WPA out there," Bredesen told the New York Times' Michael Cooper in July, referring to the New Deal's largest job-creation program, "I would have done a WPA out there."
Yeah, that sounds like the kind of country the Founders had in mind.
But is a new federal public works program really that unsalable? Consider the experience of Perry County, Tenn., where the closing of an auto parts factory had increased unemployment to a staggering 27 percent this spring. Tennessee Gov. Phil Bredesen, a Democrat, decided to use federal stimulus funds to immediately subsidize hundreds of new jobs -- some public, some private -- which reduced the local unemployment rate five percentage points by June. "If I could have done a WPA out there," Bredesen told the New York Times' Michael Cooper in July, referring to the New Deal's largest job-creation program, "I would have done a WPA out there."
Tennessee is not, by most accounts, a sleeper cell of socialists, yet its reversion to New Deal economics has been met with approval from residents. It's too small, though, to do its own Work Projects Administration. Only the federal government can do that -- and it should.
Why should it? Because a politically-motivated governor used money legally plundered funds from a lot of people to artificially deflate the unemployment rate over the short-term for the benefit of a select few people who happen to have enormous control over said governor's political future?Yeah, that sounds like the kind of country the Founders had in mind.
More Stimulus and Unemployment
Wisdom from Chicago Boyz.
In a recent meeting, my boss made the obvious but true point that it would make no sense for us to hire someone who would provide $0.90 worth of value per $1.00 of cost. In a similar vein but from a consumer perspective, I would never spend $1.00 on a candy bar that I valued at $0.90 (trivial prices aside).
I assume the New York Times would agree that the above logic makes sense. So then why do they invoke government to do the exact opposite at taxpayer's expense?
The stimulus bill was $787 billion. The bill is estimated (by Obama administration) to "create" 3 million jobs. Forget the fact that these jobs are all temporary and for the most part are involved in sectors of the economy that see very little current demand, and thus will provide very little short-term value (and more likely than not long-term as well). The fact is each job will cost taxpayer's $262,333.33 per job.
How again does this make sense?
In a recent meeting, my boss made the obvious but true point that it would make no sense for us to hire someone who would provide $0.90 worth of value per $1.00 of cost. In a similar vein but from a consumer perspective, I would never spend $1.00 on a candy bar that I valued at $0.90 (trivial prices aside).
I assume the New York Times would agree that the above logic makes sense. So then why do they invoke government to do the exact opposite at taxpayer's expense?
The stimulus bill was $787 billion. The bill is estimated (by Obama administration) to "create" 3 million jobs. Forget the fact that these jobs are all temporary and for the most part are involved in sectors of the economy that see very little current demand, and thus will provide very little short-term value (and more likely than not long-term as well). The fact is each job will cost taxpayer's $262,333.33 per job.
How again does this make sense?
Stimulus and Unemployment
Professor at the University of California at Berkeley and former Secretary of Labor Robert Reich claims on his personal blog, "the stimulus is working but it is far from adequate. Before the stimulus, we were losing more than 500,000 jobs a month. Now that 40 percent of the stimulus has been spent, we are losing more than 250,000 jobs a month."
There are numerous problems with this assertion with the most significant being the lack of source or explanation of the data. And assuming the data is correct, there is the problem of correlation does not mean causation. However you lean, the jury is clearly still out.
But I would just point out the above graph (discovered via Greg Mankiw's blog) which is now being widely circulated around the net. I would really like to know where Reich found his data and how it was compiled.
Roman Deininger on Healthcare
Roman Deininger comments in a recent The Philadelphia Inquirer op-ed, "if there is to be an honest discussion about universal health care - as provided by nearly every industrialized nation - we must dispel the myth that it infringes on individual rights."
As many of us have come to realize, the term "universal health care" means different things to different people. The difference between the modern liberal's definition of the term and the classical liberal's is not that the classical liberal believes reaching such a goal is impossible, but he believes only that to achieve it through government coercion and against the will of the individual is immoral. Deininger would most likely make the opposite argument, claiming that it would in fact be immoral not to do such a thing; that we have the moral imperative to help others in this vastly important area.
And i do believe we who are more fortunate should help others who are less fortunate. But I think that only should be done through our own voluntary action. To mandate morality, in my eyes, is inherently contradictory and immoral (if one views liberty as a moral principle and end in and of itself).
Deininger's argument is based on the idea of positive rights, that all human beings have the right to basic necessities such as food, water, shelter, health care, education, etc... It is a wonderful notion and one I think we all impulsively believe to be true. But it forgets a fundamental truth: these amenities (yes, as the modern liberal describes they are amenities, not necessities) all come at some cost to other parties. And a right, which is something that cannot be denied, cannot come at a cost to others. If such a system existed then the world would be a system of constant debt where everyone perpetually owe everyone. Individual determinism would have no place in such a world and liberty would cease to exist.
I understand Deininger's sentiment and from reading his well-written article I believe he has his heart in the right place. But I do think he needs to think the issue through on a deeper level.
As many of us have come to realize, the term "universal health care" means different things to different people. The difference between the modern liberal's definition of the term and the classical liberal's is not that the classical liberal believes reaching such a goal is impossible, but he believes only that to achieve it through government coercion and against the will of the individual is immoral. Deininger would most likely make the opposite argument, claiming that it would in fact be immoral not to do such a thing; that we have the moral imperative to help others in this vastly important area.
And i do believe we who are more fortunate should help others who are less fortunate. But I think that only should be done through our own voluntary action. To mandate morality, in my eyes, is inherently contradictory and immoral (if one views liberty as a moral principle and end in and of itself).
Deininger's argument is based on the idea of positive rights, that all human beings have the right to basic necessities such as food, water, shelter, health care, education, etc... It is a wonderful notion and one I think we all impulsively believe to be true. But it forgets a fundamental truth: these amenities (yes, as the modern liberal describes they are amenities, not necessities) all come at some cost to other parties. And a right, which is something that cannot be denied, cannot come at a cost to others. If such a system existed then the world would be a system of constant debt where everyone perpetually owe everyone. Individual determinism would have no place in such a world and liberty would cease to exist.
I understand Deininger's sentiment and from reading his well-written article I believe he has his heart in the right place. But I do think he needs to think the issue through on a deeper level.
Economic Thinking (Or Lack Thereof)
While heating up some pizza I caught part of an MSNBC examination of this video, which I think may be the most watched video on Youtube. If you haven't seen it, watch. It truly is fascinating.
What caught my eye (or ear) though in watching this show, which was mostly an interview of those who filmed the scene and a summary of how it got to be so popular via Youtube, was the characterizing of it. "Feel good story", "Disney-movie like", and "miracle" were three descriptions. And yes, from a Disney movie perspective where typically the higher you are on the food chain the more evil you are as a character perspective, it is very much like that. But this is real life, so what are the real life consequences of this event? Presumably the lionesses and their mates and cubs went hungry that night. While the bull pup's odds of surviving shot up astronomically, the odds of the pride of lions surviving all went down a little.
The point is I think this lack of thinking beyond decision one, to the consequences and economic ratifications of decisions and consequently their ratifications, is a serious problem in both this country and around the world. The minimum wage is a perfect example. Putting a price floor on how much unskilled laborers should be paid sounds like a wonderful idea in theory. But what are the real consequences? Put much too simply, the real cost of unskilled labor is raised by an arbitrarily determined amount for all employers and any employer who does not value their UL at that arbitrarily determined price will lay off workers and/or hire less in the future.
I belive this is one of the fundamental weaknesses of the modern liberal philosophy.
What caught my eye (or ear) though in watching this show, which was mostly an interview of those who filmed the scene and a summary of how it got to be so popular via Youtube, was the characterizing of it. "Feel good story", "Disney-movie like", and "miracle" were three descriptions. And yes, from a Disney movie perspective where typically the higher you are on the food chain the more evil you are as a character perspective, it is very much like that. But this is real life, so what are the real life consequences of this event? Presumably the lionesses and their mates and cubs went hungry that night. While the bull pup's odds of surviving shot up astronomically, the odds of the pride of lions surviving all went down a little.
The point is I think this lack of thinking beyond decision one, to the consequences and economic ratifications of decisions and consequently their ratifications, is a serious problem in both this country and around the world. The minimum wage is a perfect example. Putting a price floor on how much unskilled laborers should be paid sounds like a wonderful idea in theory. But what are the real consequences? Put much too simply, the real cost of unskilled labor is raised by an arbitrarily determined amount for all employers and any employer who does not value their UL at that arbitrarily determined price will lay off workers and/or hire less in the future.
I belive this is one of the fundamental weaknesses of the modern liberal philosophy.
Charter School Success Story
Here's a wonder short reason.tv video on a public school to charter school success story:
Understanding Consumption vs Production
Here's a comment I recent posted on Cafe Hayek:
Hawkins writes: "Production must be the center of policy because it not only provides goods and services but also generates the income for those who work so they can become consumers (and savers). We have before us the ruins of an economy that has for a generation been based on consumption funded by debt rather than on income from production."
The flaws in this paragraph are numerous, but I would just point out the first: "Production must be the center of policy..." Neither production nor consumption should be the "center of policy" (whatever this means). Individuals should simply determine and act on their own preferences and other individuals should meet those preferences via supplying them with what they desire for an agreed upon price. The only role for "policy", (and I assume Hawkins means government here) is to protect property rights, maintain the sanctity of contract, and invoke appropriate judicial measures when necessary. To purport the need for centrist policy, as Hawkins does, is to only advocate the restriction of liberty and prosperity.
Hawkins writes: "Production must be the center of policy because it not only provides goods and services but also generates the income for those who work so they can become consumers (and savers). We have before us the ruins of an economy that has for a generation been based on consumption funded by debt rather than on income from production."
The flaws in this paragraph are numerous, but I would just point out the first: "Production must be the center of policy..." Neither production nor consumption should be the "center of policy" (whatever this means). Individuals should simply determine and act on their own preferences and other individuals should meet those preferences via supplying them with what they desire for an agreed upon price. The only role for "policy", (and I assume Hawkins means government here) is to protect property rights, maintain the sanctity of contract, and invoke appropriate judicial measures when necessary. To purport the need for centrist policy, as Hawkins does, is to only advocate the restriction of liberty and prosperity.
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