Category Archives: Economics

A sane look at abortion…

For years now there has been something that bothers me about the abortion argument.

I tend to view it as a symptom of a larger problem caused by the entitlement culture devaluing life, its meaning, getting rid of virtue based ethics, offering incentives for short term thinking.  Abortion isn’t the problem it’s the government spending and rules that encourage it that are.  So I find the near obsession with abortion to be a distraction from the real cause.  But what’s worse is that in the desperation to win, the religious wing of the Republican Party to whom I tend to refer to as Progressives for Jesus are giving progressives every bit of ammunition they need to further wreck society.

 

Did we forget we’re conservatives and we want to limit the power of the federal government?

I have noticed for the last few years a disturbing trend—and that trend is the biggest problem I have with these progressives for Jesus, they have given in to the leftist materialism.

Here is the problem with the modern anti-abortion movement: they hold as gospel truth the idea that life begins at conception.  They maintain this because somehow just because a sperm cell and egg cell join together then you have a full genetic code and the modern anti-abortion movement is based on this idea that if you have a full genetic code then you’re a human being.  Thus every single embryo frozen in fertility clinics is a human being—I’m sorry but this is certainly one of the dumbest, and certainly in the running for the dumbest, idea I have ever heard.  A human being is something far more than just a genetic code.   But the modern abortion movement in its desperation to oppose all abortion and prove that abortion at any time, for any reason, under any circumstance, for any purpose, in any place, by any person, in any manner, way, shape or form is evil has given into the leftist materialism.  They hold that human life is nothing but genetics.  That it is our genetics that make us special.  That the complexity of genes somehow puts us above all other forms of life.  You know that .1% that sets us off from a chimp can’t be the source of our uniqueness in the universe.  (Nor can even the 30% of our DNA we don’t share with the sea sponge).    I’m sorry this is wrong, this is as wrong as wrong can be.  What makes a human life have value has nothing, not a single thing, to do with DNA.   It has to do with having a soul; the human soul is what makes a human being have value…so unless you can PROVE that the human soul enters the embryo at conception then you have no case that human life begins at conception.  None.

Now an intelligent person realizes that a human is more than just an animal with a certain genetic code, no, what makes humans humans and not just mere animals is our souls.  When the soul is present in the body of a homo sapien you have a human being, when it leaves you have a corpse…before the soul takes up residence, you have something that could become human, but is still lacking the single most important quality of human existence.
Okay, so if it’s the presence of the soul, when does the soul take residence?  Well if you read the Bible it seems to associate the soul with breath, so that might suggest the soul takes up residence only upon birth…but we’re not really going to deal with Judeo-Christian beliefs, we’re New Agers, we try for more.
Now in most studies of life-after-death and reincarnation, which I think it’s safe to say, the idea that there is more than a single body surrounding your body but several “etheric” shells that are each shed  through the process of death (see the Tibetan Book of the Dead for a more complete discussion) but conversely these bodies take time to form.  And from what little science can glean from life-after-death and reincarnation studies (see Life After Death by Chopra and Evidence of the Afterlife by Long) and tradition (see God Talks with Arjuna: The Bhagavad Gita by Yogananda) the soul is not directly tied to the body until well into the third trimester, sometimes not taking full residence up until birth itself.  (This does however vary).  However, as any New Ager is likely to believe evidence from respected mediums, it appears that the souls attached to fetuses that may be aborted know what they’re getting into and bear no ill will if the fetus is aborted (see Talking to Heaven by Van Praagh).
Thus the best way to describe the soul’s relationship to the body before birth is  at best a lease with an option to buy, with a not so hidden clause in the lease where the owner may terminate the lease and the house if they so choose.   So in this respect it is not murder and certainly in favor of abortion.

So from my New Ager perspective it’s pretty clear the soul does not enter the body until the third trimester…but Progressive for Jesus will not even entertain what I consider evidence so it’s really not relevant to this conversation.  You could argue that it’s still living cells but that doesn’t work because if you remove my kidney for a transplant it’s still a living clump of cells, but it does not have rights in and of itself because the soul is not directly attached to the kidney.

 

cute baby

This is a human being. Not because of genetics. Not because of its brain. But because of its soul.

 

Now why have social conservative done this?  They didn’t use to hold this line.  But I think they got tired of having to argue a spiritual point with people who aren’t very spiritual…and you can’t really prove when the soul enters the body (at least not from a traditional Judeo-Christian viewpoint)…and then there is that problem that as far as I remember the Bible only ever associates the soul with breath (as was the common metaphor in the ancient world), which kind of has that problem of suggesting the soul only enters upon birth.  Of course that would at least suggest a far more logical God than the idiot that the modern abortion movement implies—an idiot who despite infinite prescient knowledge will stick a soul into a frozen embryo that could sit there for years (think of that soul’s existence, that’s about as close to Hell as you could possibly get if God is really that dumb). I refuse to believe in an idiot God.  God does not follow arbitrary rules for the sake of following reason, because to do so would mean that God does not believe in reason.  And if that is the case, then God is not God.

But instead they chose to go with a simple scientific argument and completely ignore the soul.  You can get people in the middle with a purely scientific argument.  You can get them to more than agree to ban 2nd trimester abortions and put even more regulations on first trimester abortions if you’re just making the argument that life begins at conception because of genetics.

Yeah, they could prove that the soul is there before hand if you turned to modern science and studies on life after death and reincarnation, or just to modern psychology which shows that children learn even in the womb…but none of that evidence goes back to conception, and remember that the unwavering goal of social conservatism is that ALL abortion must be outlawed. THERE MUST BE NO EXCEPTION.

The goal is that all abortions will eventually be banned (as if you can stop black markets, but let’s ignore the economics for a moment*).  And all other points of policy, philosophy and goals are secondary to abortion when it comes to social conservatives.   Since social conservatives can only win with the genetic argument that life is nothing but a full genetic code and living cells, the soul and its importance gets left behind.
And this is where it gets dangerous.  What have we seen in history?  We have seen, time and time and time again that when the soul is not valued, that when religion or spirituality does not have a place in society, that when government and society say that human life is merely a pack of genes and a group of cells then you see the value of a human being fall apart.  Why?  Because genes are chemicals. They have no intrinsic value except what you can use them for, what you can get out of them.  They become merely a means to an end, and cease being the end in itself.  You see ethics fall aside and utilitarianism prevail. You see eugenics or transhumanism say these genes aren’t any good or aren’t good enough, let’s get rid of them and replace them with something we deem better (who deems what is good is only guided by utilitary value, because if human life had intrinsic value you’d never go down this road).  You see the argument of let’s get rid of these people because they are of no value and aren’t getting rid of themselves fast enough on their own.  You see this or that group is deemed inferior because they do not serve the utilitarian needs of those in power.  Let us sterilize and put them off to the side because we can get nothing from them…you see tyranny, fascism, communism.  The argument of that life is just being living cells, an argument detached from the soul, leads to a mind-set based in materialism.  I would be foolish to claim all atheists are unethical, but history has shown that when society embraces that kind of materialism that denies the soul (1930’s Germany, Russia, China) you get that kind of mass genocide, without exception.  You could say that religious people could never lead us down the path where the soul isn’t valued, but look to every time that religion has gone insane, it is always in the name of dogma and policy on Earth that leads to religious bloodbaths—it never comes from a side that believes that the soul, by virtue of being a human soul, has value.  The places that believe people are equal throughout history (from an early version of this ideal in the Hellenistic Era, to Poland not giving into Europe’s anti-Semitism, to the spread of religious liberties seen during parts of the Enlightenment, to America stating “that all men are created equal”**), when people value human life because of the soul (whether that’s the word they use or not) you see prosperity…when they don’t you see misery.  Without exception.

 

you are a soul

I love the picture and the quote, because it’s true… but C.S. Lewis probably did not say this .

It is the eagerness of Progressives for Jesus to win on this one little issue of abortion that affects a miniscule amount of society that is giving this kind of materialism the long range tools of philosophy to devalue all life.  They have given progressives the inroad to destroy the true value of human life. They devalue life with their argument and they perpetuate it…sure we don’t see a lot of it now (although caring more about body counts than liberty when it comes to foreign action, when a country doesn’t go into full on demands for heads to roll when some asks “what difference does it make” to the administration aiding and abetting murder, where people care only about their right to put poison into their body more than the need to fix the system…you could say we’re already seeing the devaluation of human life, but maybe I’m reading too much into that).    And to save lives they have given their enemies the greatest tool to destroy life. And I am seriously worried that in the desperation to win the abortion argument by giving up the religious based argument and going for gross materialism social conservatives are actually sowing the seeds for a worse blood bath than the one they believe they are stopping.  And all for bans on 2nd term abortions. What a bargain!
What profit social conservatives should they gain abortion but lose liberty?

Of course their support of a man who admires and wants to be a tyrant shows they don’t really care about liberty in the first place.
**Yes, none of these are perfect examples and you will always be able to point to people or groups or policies that contradict the value of the soul.  It’s because people and society are a mass of contradictions, but in the eras I list they were more dominated by valuing the soul than not.

*Now let’s deal with the economics
Then comes the economic facts.
Fact 1:  Making things illegal has never stopped the market; it only creates a black market.
What does this mean?  Well, aside from the extreme image of back alleys and clothes hangers (I think overdoses on birth control are more likely…not to mention that the upper middle class and rich can always get a D&C at their OBGYN, just as they did before Roe) it means you’ll still have abortions being performed by doctors.  Now I don’t think that, like with most black markets, you’ll see an increase in demand, but you will see an increase in supply.  Doctors who don’t do abortions now because they can always refer a patient to someone else will take a stand and start doing them so I doubt you’ll see any major decrease in numbers in abortions from accidental pregnancies (I’ll get to why I make this distinction in a minute)
Fact 2: Black Markets can’t be regulated and are open to more corruption.
Which do you think stops more abortions a 48 hour waiting period or making it a blackmarket under absolutely no regulation?  Having to see a sonogram of the fetus or going to a doctor’s office in the dead of night for a procedure that is done as quickly as is humanly possible?  Banning late-term abortions or making the whole thing a thriving underground industry?
An intelligent person knows that regulation is a greater killer of any industry as most people are willing to jump through preposterous legal hoops before they consider illegal means.   And I think most people are open to sane requirements like having to view a sonogram or having a waiting period or banning late-term abortions…whereas underground markets are a free for all.
Or how about banning gender selective abortions?…which apparently are going on in this country.  Now while I’m sure we can all agree that anyone who would abort a fetus because it was the wrong gender is too sick to be allowed to have a child of either gender, I’ll simply settle for making it illegal to even ask for one…maybe with heavy jail time involved.
But if you just outlaw abortion en masse, you won’t have any of those controls.
Fact 3: Enforcement costs on black markets are insane.
As we saw with Prohibition and with the war on drugs, enforcing rules against a black market are prohibitively expensive.  Prohibitively expensive.  Not to mention making it a federal law requires federal enforcement…like we need another government agency getting involved with our medical choices.  Then you have the costs of prosecution, which I promise you will have a remarkably low conviction rate, and probably the cost of suing states which rightly believe this is a state’s rights issue and legalize it.  (Yes that would be the one benefit to outlawing abortion at a federal level, liberals would finally believe in state’s rights and the limits of federal power.)
Fact 4: A good portion of abortions now are caused by subsidies.
And the final fact that most conservatives miss.  Right now an unhealthy portion of abortions (especially late-term abortions) are because there are extra welfare benefits to being pregnant…get more money for a few months, abort the fetus (on the taxpayer dime), and keep the money without the hassle of a kid.  We subsidize abortion.
Now the majority of abortions are women for whom their pregnancy is an unplanned accident, they have an abortion, and probably are more careful in the future and never have another abortion.  Bully for them.  Unfortunately about 20% of women who have abortions are having 3+ in a life time I don’t have the figures on this group, but I’ll lay even money that Uncle Sam is picking up most of the tab for that 20%.  Why?  Because there is no cost for this idiotic kind of behavior.  Because Uncle Sam subsidizes it.  And as any economic conservative knows when you subsidize a behavior you get more of it.
So what should we do?  Well, eliminate all taxpayer money going to abortions.  (And if I had my druthers I would also ban any welfare support on a second unplanned pregnancy.  The first time was a mistake and I’m willing to be generous…the second time it’s stupidity on the part of the mother.)  This would dry up the well very quickly for those who are abusing the system.

 

In short.  It is not ethical or possibly to ban abortion and anyone who cares about limiting the size and power of governemnt (which should be everyone) should stop trying to outlaw it and work more on creating a society where people don’t feel the need to do this (may I suggest economic growth through things like balanced budget and free trade).

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Filed under Conservative, Constitution, Economics, God, New Age, Uncategorized

In the season of giving a quick word on charity (both old and new)…

Charity.jpg

“A generous man will prosper; he who refreshes others will himself be refreshed. “

Proverbs 11:24-25

“Be careful not to do your `acts of righteousness’ before men, to be seen by them. If you do, you will have no reward from your Father in heaven.  “So when you give to the needy, do not announce it with trumpets, as the hypocrites do in the synagogues and on the streets, to be honored by men. I tell you the truth; they have received their reward in full.  But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. Then your Father, who sees what is done in secret, will reward you.“

Matthew 6:1-4

“Give up kindness, renounce morality,
 And men will rediscover piety and love.”

Tao Te Ching 19

“Charity given for the sake of righteousness, without expectation of return, at the proper time and place, and to a worthy person is considered to be in the mode of goodness. But charity performed with the expectation of some return, or with a desire for fruitive results, or in a grudging mood, is said to be charity in the mode of passion. And charity performed at an impure place, at an improper time, to unworthy persons or without proper attention and respect is said to be in the mode of ignorance.”

Bhagavad-Gita  Ch17. 20-22

“The teacher of God is generous out of Self interest.”

A Course in Miracles Manual For Teachers Chapter 4 Part VII

Give till it hurts?: The Great Recession, tax policy, and the future of charity in America

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Filed under Charity, Christmas, Economics, Uncategorized

Taxes, Benefits, and Reality…

Liberals like to excuse our excessive taxes and say that it provides important services. Now, common sense, experience and even a modicum of intelligence tells us that this is a load of bunk. But, for argument’s sake let’s actually take a look at the claim.

Here’s a good representation of their silly arguments.

taxes 1

Since I like all the things taxes bring us I shouldn’t complain.

Of course here is the problem. When people are talking about taxes they’re usually talking about federal taxes, not state, county or city. And to lump all of these together would be silly as they are not the same thing, not controlled by the same legislatures, and you have a choice of states to live in if you don’t like the taxes in your state. (And don’t give me that you can move to a different country, it’s not true, the United States is the only nation on Earth that taxes the income of expatriates who are still citizens but not living in the nation—You can never escape U.S. federal taxes if you want to remain a U.S. citizen).

So the first thing we need to do on this list to make it more honest to take out the issues which should be purely state issues. Yes some of these things that should be state issues are currently federal issues, but the federal government interference in them only breeds inefficiency, corruption and waste—thus they should only be state issues, and even if the state needs to raise their tax rates to compensate for the lack of federal spending it will be less than the what the federal government is taking from you.

On the list the things that states or local governments should be responsible for are schools (which can privatized), roads (which can privatized), firefighters, police officers, hospitals (which can privatized), Paramedics (which can privatized), HAZMAT Teams, Child protection, safe products (capitalism does a better job of ensuring this than government), Flood defense, Universities (which can privatized), museums (which can privatized), science (which can privatized), public parks, medical research (which can privatized), national forests (which can be privatized), care for the elderly and disabled.

So really that’s a lot that states, local government and the private sector can easily provide for less cost, more efficiency , less corruption, and lower taxes. Not much left on this.

taxes 2

Okay so what is left? So let’s deal with clean air and clean water. Now I will admit that government does have a responsibility in this. Milton Friedman himself would point out that water and air often suffer from the tragedy of the commons and to keep them clean you need some regulation and enforcement. But of the 10 Billion the EPA took in 2012 let’s be honest here most did not go to clean water and air. Most went to enforcing rules against clean coal thus not only doing nothing to help the air but also increasing the cost of energy. And they also spend money, lots of money, on suing people over endangered species. For instance they sued farmers in California to deny the farmers water because it would save an endangered fish. So they ruined a farming industry, raised the prices of your food, on your tax dollars, all to save an animal that violated the first rule of evolution: adapt or die. And they’ve done this more than once in California alone. And let’s not forget what they did to rivers recently…oh yeah, we’re really getting our money’s worth.  The fact is that most species are not endangered because of humans, they’re endangered because in the history of Earth 99.999999% of all species have died—it’s what nature does, it gets rid of things that can’t adapt. Don’t like it, tough, that’s nature and you can’t praise nature while refusing to allow its natural processes to go on. (Also, as with the Buffalo, it’s pretty much only when the private sector gets involved that you actually save endangered species). I have no problem with reasonable clean air, water, and other pollution controls (although our modern EPA seems to freak out about even healthy levels of some chemicals) but those wouldn’t cost a fifth of what the EPA’s budget is.

Then of course we come to the safe food and safe drug part. Yes because the yearly recalls and scares of salmonella or this or that in food shows the government is doing such a bang up job. For a second let’s stop to remember that the FDA was created only because of a lying sack of crap book written by a pathologically lying progressive who published a book saying that all of our food was unsafe to eat. I’m so glad that was the reason for creating a huge federal bureaucracy. But for sake of argument let’s say that like air and food you need some regulation here (you don’t actually since companies concerned about their reputations have their own internal checks on this and you wouldn’t see an increase in contamination if the FDA went defunct). The FDA and most of its resources don’t go into looking at the safety of food or drugs, the majority of the FDA’s resources go into the efficacy of drugs. All those drugs trials they conduct aren’t primarily about the safety of drugs they’re about how well the drug works. Now, whether a drug works or not, shouldn’t that be up to your doctor? Or how about all the research the FDA shuts down on cancer research, for instance stopping experimental trials with willing volunteers who have terminal cancer because the drugs MIGHT kill them (because the FDA really doesn’t understand the term ‘terminal cancer). Do you know how much research that has retarded? Probably decades worth. Do you know how much their endless trials for their arbitrary standards of efficacy raise the price of your drugs? Massive amounts. So not only do they take your money, but they cost you more on drugs in the process. Now if we reduced the FDA to merely the safety of drugs that would slash their budget by a massive amount, you would still be as safe, medical science would leap forward, and you would probably have a better quality of life in the long run. Boy I’m glad I’m paying taxes to prevent all of those things.

Now let’s turn to diplomacy with other nations and criminal justice. Fair enough these are responsibilities of the federal government. Of course, even without cutting the pork, the Departments of State and Justice are just under 1.8% of the federal budget.

So really what’s left.

taxes 3
Ah the military and the Department of Justice. Military spending is about 20% of the budget and Justice not even 1%.

And let’s be honest here, a lot of their spending is bunk. Like pork projects to build engines the military doesn’t want. Or pork spending to build ships the Navy doesn’t want. Or wasting money on using environmentally friendly fuel for the Navy that wastes money and is actually more harmful to the environment than conventional fuel.

Or with Justice, there was of course the problems of buying weapons for Mexican Drug Cartels.

These are very needed functions of government, but there is pork here. And you could probably shave at least 10% from each of their budgets.

In fact, if you really look at the budget and look at the things that the federal government should only be concerned about then the budget wouldn’t even be half of what it is now* and cutting taxes by half would not only stimulate the economy but bring in enough revenue to begin paying into the principal of the debt.

So really what you’re left with when you look at costs that are only the federal government’s responsibility and can stand a few cuts (major or minor) is

taxes 4

Nothing. You’re left with nothing. A little bit of reason and all you’re left with is a whiny liberal who doesn’t know what is important, how things work, or that things can be done better than they are now.

But maybe I’m being unfair, maybe it’s just the person who put this stupid picture together that doesn’t know shit about shit. A possibility for sure. So let’s look at another liberal rant about taxes, services and the economy.

TAXES 5Okay so let’s go through his list. Public hospital, public schools, public loans, tax breaks, inheritance.

Okay and let’s take these one at a time.

Public Hospitals. This is a widely misunderstood term. Almost are hospitals are public in that they are open to the public. However of the 5,724 hospitals in the US, only 1,045 are owned and operated by government (state or local). The rest are as follows: 2,903 are non-profit (usually owned by religious organizations such as the Catholic Church or the Seventh Day Adventists) and the rest are for profit hospitals. So in reality there is a less than 1 in 5 chance he went to a tax payer funded hospital. Further it’s also a fun fact that stays in government hospitals costs more than in private hospitals, so if he was born in a government run hospital they were fleeced. And quite frankly if government got out of the healthcare business medicine all around costs would go down (good place to put link for why cost of healthcare is what it is). But this is not the only place where we’ll find that government provided goods not only take your money but offer inferior products.

Then of course we go to public school. Now we all know that public schools are shit. We all know that homeschooling, charters, and private schools offer better results on the whole than their public counterparts for less money. (And those people who home school or send their children to private school are still getting the bill for public school). So I wouldn’t be bragging about the public school system. They took your parents money and gave them an inferior education for you pal.

Then of course he wants to talk about his federal loans. Ignoring the fact that those federal loans are the very reason that college costs so much. If government had never gotten in the school loan business it is likely that college costs would be a fraction of what they are. So, my dear idiot liberal, don’t act like that was such a blessing either.

And then we get to the tax deduction. Those tax deductions are part of a large part of the government’s plan to get people to buy houses, because the government feels it needs to encourage people to get houses. And I think we know what this led to, don’t we? It led to people getting houses they couldn’t afford on government backed loans which led to the whole housing market collapsing. The better question would be, why should I, a person who rents because he does not have the down payment necessary for a low interest rate yet be taxed at a higher rate than a person who makes a stupid decision to get a loan they can’t afford. That’s what deductions often do, they subsidize idiotic choices. This is why intelligent people want us to go to a flat rate with ZERO tax deduction for anyone for any reason, or just go to a national sales tax because while a high tax rate is stupid and idiotic, tax deductions allow the government to control people’s choices…but if it was an intelligent move you should do it with or without the deduction, and if it’s not intelligent then you shouldn’t do it no matter what the deduction is. All deductions do is encourage behavior that retards the growth of the economy, encourages dumb moves, and overall costs people more for everything.

And finally inheritance. Guess what, I will scream bloody murder at the thought of an inheritance tax…do you know why? Because if I choose to leave my property to anyone I have already paid income tax, paid capital gains tax (which already had corporate tax paid), paid sales tax, and possibly paid property tax on anything I leave to my heir. By the time property has passed from parent to child it has already been taxed several times! And the government coming in to take another bite on property they didn’t earn, they didn’t work for, they didn’t do anything for isn’t just unfair it’s idiotic and unethical. And it is based on the liberal assumption that you only have things due to the government not by your own effort.

So really it’s not that tax payers are also getting something for nothing, what they’re getting is robbed and they’re paying the robber to rob them again. Oh, what a deal! Can’t imagine why I would want less of that. So yeah I will bitch about the people who get welfare, they haven’t worked for it, they are only benefitting from the labors of the robbed—whereas the actual taxpayer is getting hit by the taxes and by the destructive force on the economy those taxes are being used for.

So liberals praise taxes all you want, but understand they hurt more than they help, they provide almost nothing as well as the private sector can, and unless we do complain about them they will not be used efficiently or effectively.

Without Taxes

*Obviously this will take time. About 54% of the budget is entitlements of one form or another that should be destroyed…however you would have to be an idiot to destroy them in one fell swoop. They need to be drawn down over time to nothing (the shortest you could even theoretically do this to prevent massive economic disasters would be 15 years…but you could start today and make major headway in just stopping growth and raising the bar for who can apply).

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Filed under Economics, Taxes, Uncategorized

Limit the Power of Bureaucracy

shackles

Shakespeare was wrong. It’s not lawyers, but bureaucrats that need to go first.

Often I hear the call from conservatives that we should impose term limits on Congress. This sounds nice but when you think about it, such actions have never been shown to lead to better legislation and only have resulted in having a higher percentage of idiots in bodies of parliament. I know it sounds nice but it just doesn’t want to work…now if you want to go back to having the Senate elected by state legislatures we might get better laws, but I don’t think most people are willing to admit that basic truth…so let’s get back to term limits. Term limits on elected officials will do nothing to actually improve anything…but what about term limits on federal and state employees.

Think about it.

Who is more dangerous? The idiot legislator who poorly words a bill about needing a business license? Or the worthless little fascist who thinks it is anywhere in the realm of civilized behavior to cite a child for having a lemonade stand on their lawn? (Hint one might need to be voted out of office, and one needs to be beat to death with a crowbar. Take a guess which is which.)

Who is more to blame? The Congressman who votes for a terrible addition to the tax code because it was tied to a bill that would ensure the military in a combat will get live bullets…or the IRS agent who takes a malicious glee in fining you because you could not deduce what the regulations they wrote above and beyond the law in Navajo code actually meant? (Hint: one can be forgiven for being in an impossible position, the other would be joining the S.S. if they were still hiring.)

Who should you worry about more? The politician who breaks their promise? Or the VA official who lets veterans die so they can get a bonus. (Dante would have to create a new level of hell just to deal with some of the shit we have seen go on the last few years from bureaucrats.)

Who ruins your life? The arrogant Senator who just is so vain he will do anything to get on TV, even going as far as arguing that we should arm ISIS? Or jackbooted thug who thinks it’s okay to call out a SWAT team on people who are selling raw milk? (Tough call, but John McCain is a particularly vile politician, far worse than most politicians ranking below most rodents, whereas I would go as far as to that 99% of all state and federal employees are scum.)

My point is that bureaucrats are far more dangerous than the people who write the laws. Because bureaucrats are the ones who write the regulations that determine how those laws will be enforced (that’s also something that needs to change, but we’ll get to that some other time) and the ones who enforce those laws and those regulations. No system in history has ever been constructed without the assumption that some competence and common sense will go into the enforcement…the problem is there is no way to encourage any of that in the system we currently have. You hire people for passing a basic civil servants entrance exam and they basically have a job for life. They can kill people intentionally or through incompetence (as the VA, ATF, and CDC have shown) and nobody loses a job. They can break law after law, violate basic Constitutional principles, and blackmail and intimidate citizens like this were a cheap Banana Republic and while in a just society there would be scores of bureaucrats swinging form gallows they know they’re all protected because their criminal boss plead the Fifth in front of Congress (oh and let’s not forget the destruction of evidence…)

These are people who have no incentive to justly enforce laws, to use common sense, or to even show the slightest bit of human decency. They have a job for life and pension after that. This has to stop. And the simplest way to do that is put term limits for all state and federal employees*. For all non-management staff the most you can serve in government is 15 years or two nonconsecutive terms of 10 years.   For management you need to receive a promotion at least once every 4 years or clearly you’re not good enough to keep.

big governmentFor the non-management staff this has several benefits. First every bureaucrat knows that there is no such job security…and they will be more concerned with making connections in the private sector than making the private sector’s existence a living nightmare. Second they will not act with impunity…the person you write up today could be conducting your interview tomorrow.   Third, you actually have to do your job well and in a way that will get compliments given to your boss about you that they can put on the letter of recommendation that you’ll need when you’re booted out of government service. Trust me, no little girls are going to be written up for a lemonade stand under this system…because no one would ever hire that sociopathic son of a bitch if they had that albatross hanging around their neck. You’d have just about the same job prospects as a child molester…and I don’t really see anything wrong with that (seriously, how mentally disturbed do you have to be to do that?)

As for management positions in government…the system I have set up that requires constant advancement…well there is no way faster to make sure there is a position open to get promoted into than being the whistle blower to point out that Ms. Lerner is breaking more laws than you thought a human being possibly could and oh, that’s right, I made sure to bring copies of all the email she sent me where she admits to breaking the law. The upper echelons of government will self-police with a ruthless efficiency that Congressional Oversight could never hope to match.

Now I’m sure someone will argue that the high turnover will result in far more open positions and low skill employees…this is true. This will result in Congress shrinking the responsibilities of these offices or just outsourcing their functions to the private sector just to make the pissed off voters go away. Win-win.

Now I will admit that this may cause the welfare rolls to swell slightly (as many government employees aren’t exactly qualified for private sector work) but I think the cost saving of them not getting in the way of my life may justify this.

Stop lifetime employment in government and actually get much better government.

*I am willing to exclude county and local government as these will be harder to fill, and jobs like police, district attorney’s office, and teacher you may not want to have high turnover as these are just functions of local government. Similarly I am willing to concede similar exemptions for the federal government for the Defense, State, and parts of the Justice Department (attorney’s and FBI), and anything in the Intelligence branch—these again are

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Filed under Economics, Government is corrupt, Government is useless, Laws the GOP should pass

Raising the minimum wage is always stupid and always a bad idea…and here’s why

One of the issues that Obama (and the left in general) has been hitting a lot recently is raising the minimum wage. This is a profoundly stupid idea (even though Republicans I like* and don’t like have suggested it as well). Despite the left’s insistence on banging this drum (because it sounds really nice, pay poor people more money…but only if basic-math-for-liberalsyou ignore anything beyond the shortest of short term consequence) it is an idea that has its origins in racism and today only hurts the people it claims to help (you know, like most liberal policies). Now in reality the only reason liberals love this is that they love to play up the class-warfare that they rely on (they don’t have any real ideas to run on), but they get repetitive and feel if they say the same thing in numerous ways that makes it true…as such this blog will get a little repetitive knocking down the arguments over and over again.

 

Now before we get into too much detail there are 7 points I would like to make.

 

1. Raising the minimum wage will increase unemployment.

2. Raising the minimum wage will increase inflation. 

3. Raising the minimum wage will hurt people with the least amount of skills, the very people liberals claim it will help.

4.  The opposite of all of this is also true (lowering the minimum wage will reverse all of these; less inflation, more employment, more people in all brackets having jobs).

5. If you want to whine about the poor people not having enough, go sell your computer and give the money to the poor.  But liberals won’t as they are less generous than conservatives.

6.  There is no short term fix that can wave a magic wand and give people more money without causing long term harm.

7. The free market is the only long-term solution.

 

These are all facts and they are not disputed by people who actually know something about economics.

 

So let’s start dealing with these in greater detail.

 

  1. Raising the minimum wage will increase unemployment.

This is the most obvious. There are no cases where raising the minimum wage did not lower employment.**

 

None. You raise the minimum wage, and you will see fewer people employed.

 

Especially with small businesses, if you can only afford to pay so much for employees then raising the cost of employing people would mean they’re just going to lay off employees and expect more from the employees who are left. And with large businesses that employ lots of minimum wage employees…well I would get used to ordering your fast food from a kiosk and checking yourself out at Walmart and the supermarket. Technology gets cheaper every year and what keeps big businesses from switching over to automation right now is that it’s simply cheaper to keep using the minimum wage labor…but hey, go ahead, raise the minimum wage and make it even more attractive to convert right now.

If you raise it then you make workers less attractive…businesses are not there to provide jobs, they are there to tumblr_mx5otbWwGS1s4tkgno1_500make a profit while providing a service to the public, if you have a problem with this simple fact of reality you are too stupid for words…and when you make it impossible for businesses to make a profit at their current staffing levels they will ALWAYS choose to fire people rather than go bankrupt (which also tends to result in firing everyone).

 

 

Raising the minimum wage hurts the middle class – they get no raises but have increased costs both from raised prices in the economy and the potential of tax increases because long term it never works for the lower class. Regardless what people are told/think the middle class does not receive comparable raises to match minimum wage increase.

2. Raising the minimum wage will increase inflation. 

 

Now liberals like to claim things like: “If you raise minimum wage then large companies will only have to raise their prices a little to defer the costs and there won’t be any real increase in inflation.”

 

Even if the math were accurate in this statement, which it isn’t even remotely (but let’s play in the left’s delusional ballpark for just a second) the left apparently don’t understand little things like supply and demand.  Even a small increase in price will result in a large drop in sales which means that not only have prices gone up (inflation) but people will have to be laid off, because far fewer hamburgers are being sold, to maintain profits (which have been dropping if you haven’t heard) or even just breaking even, lots of employees would have to be laid off due to reduced sales.  So once again, due to a lack of understanding in economics your desire to help people without doing anything yourself has resulted in inflation and, again, higher unemployment.  Typical liberal tripe.

 

And the worse yet, there are idiots who suggest we tie the minimum wage to the rate of inflation.

 

So a minimum wage increase will cause inflation and inflation will cause a minimum wage increase and a minimum wage increase will cause inflation and inflation will cause a minimum wage increase and a minimum wage increase will cause inflation and inflation will cause a minimum wage increase and a minimum wage increase will cause inflation and inflation will cause a minimum wage increase and a minimum wage increase will cause inflation and inflation will cause a minimum wage increase and…

…well, the next thing you know it’s looking a lot like Zimbabwe or Germany in the 1920’s where a couple trillion dollars will get you something off what used to be called the dollar menu…but it certainly won’t buy a whole loaf of bread.

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It would be a lose-lose for everyone.  For the people trying to live off minimum wage they would not see a real increase in wages but they would also have an even higher unemployment rate (which will also hurt everyone due to more welfare applicants being funded by money we don’t have). (do we want to comment on the actual number or type of person that is actually trying to live on a minimum wage job, which is REALLY low)   For the lower middle class the inflation caused by the minimum wage hike will hurt them drastically as they were probably already having problems paying bills. For the upper middle class the inflation increase will probably only result in less money for nonessentials (dinners out, movies, vacations, etc.) but this in turn will have dire consequence for the industries and the people that they employ that see lower revenue.  I would say that unless you’re in the top 2% you’re going to see some kind of belt tightening with the inflation another minimum wage increase would cause, and even then you’ll see major hits to investments (unless you’re in that top 2% because you own a small business in which case you will be more likely to have to close down).

 

 

3. Raising the minimum wage will hurt people with the least amount of skills, the very people liberals claim it will help.

 

Raising the minimum wage will hurt people with the least amount of skills as businesses will only hire people who have someone who can vouch for them (thus it becomes more of a game of who you know).  This means minority unemployment will go up and upper middle class take-home pay (but not in real pay, due to the inflation) will also increase as in the children in these families with the connections to get hired.  Not exactly the egalitarian push liberals were hoping for.

 

Due to the fact that liberals have engineered an education system that systematically hurts minorities to ensure they don’t have stable homes or quality education (yes it’s liberal plans like the New Deal and the Great Society that are responsible for this) this makes them the groups that will most be hurt by a minimum wage increase as they are statistically the groups with the least education and work experience.

 

The current US unemployment rate is 7.5% the unemployment rate for those with a BA is only 4.5% (so sayeth the Dept. of Labor).  We all know that college graduates are underemployed (though maybe not to the degree that liberals would like to suggest) but even if all the minimum wage jobs aren’t going to people with Bachelor’s as the left likes to portray the fact is that a raise in the minimum wage will only increase this disparity. After all who would you fire from a job the guy with the B.A. who might make a manager one day or the single mom who is often a little late because of her kids? Yes the example takes two extremes, but it points out that the raise in minimum wage will hurt the very people that liberals think they’re going to help with this idiotic law.

 

 

But then again we knew this as the original point of minimum wage wasn’t to help improve the quality of life for workers but to help keep lower skilled minority workers from competing with union employees. By forcing people to pay a minimum wage they wouldn’t take the risk of lower skilled labor which ensured that minorities never had the capital to invest in their own education or their children’s. But let’s keep this policy of liberal discrimination in place.

 

 

4.  The opposite of all of this is also true (lowering the minimum wage will reverse all of these; less75068181143 inflation, more employment, more people in all brackets having jobs).

 

And if you really care about those people you should push for LOWERING the minimum wage, thus making it MORE attractive for employers to hire people.

 

If you were to lower or eliminate the minimum wage you will reduce the risks of hiring new employees (and thus make employers more willing to hire inexperienced employees). This will mean more low skilled people looking for jobs will have an opportunity to get a job and thus get the job experience and skill necessary for them to get out of minimum wage jobs.   This in turn means that not only will more people be earning more than minimum wage (and likely keep moving up the payment ladder) but turn over in minimum wage jobs will be faster (as people get promoted) and that there will be more job openings.

 

Now the obvious argument against this is that “minimum wage is supposed to supply a living wage.” First that has never been true.

 

Well, the first Federal Minimum wage was $0.25 an hour.  For 40 hours a week that’s only $10 (after adjusting for inflation that’s $166, hardly what I would call enough to support a family). Also economist Walter Williams often points out that the real reason originally for minimum wage was to hurt black workers and push them out of the market.

But in the final evaluation it doesn’t matter what the intention was, intentions don’t matter.  What matters are the effects/results.

Minimum wage laws lower employment rates so fewer people are able to support themselves and/or their families.

Minimum wage laws increase inflation thus making it harder for everyone to support their families on whatever wage they have.

People can raise minimum wage all they want, the effect of any increase, of any size will only be more people unable to support themselves and those dependent on them.

 

Second, you think people should be able to live off the absolute minimum skills you should have to get hired.  Minimum wage is a statement that “If I could pay you less, I would because you have no skills worth paying you more.”  And if you didn’t keep raising it then teenagers could get minimum wage jobs when they don’t have to live off it, and have the skills necessary to earn livable wages when they’re older.  But you know that’s only a thought that deals in reality.

 

 

5. If you want to whine about the poor people not having enough, go sell your computer and give the money to the poor.  But liberals won’t as they are less generous than conservatives.

 

Charity is at it highest when economic freedom is high and that conservatives have ALWAYS been more charitable than liberals (please see the book Who Really Cares by Arthur C. Brooks for endless proof on this point).

 

Capitalism is the only system that has been shown to raise people out of poverty. It is the only system that benefits the rich, the middle class, and the poor. It is the only system that can bring a nation out of destitution. It is the only system that works long term. It is the only system compatible with human nature. It is the only system of economics that is ethical. It is the only system of economics that is sustainable because only capitalism creates and encourages the innovation and imagination needs to deal with the constant slew of problems that life brings.

 

In conjunction with everything I’ve already pointed out, if you raise the minimum wage you will be hurting everyone and more people will be out of work, people will be earning less in terms of real dollars, business will be expanding less and less and that will result in far less charity.

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Don’t claim to care about people needing to make a living wage when you are doing everything in your power to hurt them and nothing to help them.

Trying to destroy the free market through rules like minimum wage will only further hurt people. If you’re so concerned for them either advocate policies that will really help people in the long run, and do your bit in helping people. Don’t demand that other people pay for things that you don’t want to pay for.

 

 

6.  There is no short term fix that can wave a magic wand and give people more money without causing long term harm.

But some liberals will claim that this or that person will be hurt if we dropped the minimum wage or that someone can’t pay their bills right now. Because to liberals that’s the only thing that matters right now.

 

And to those liberals whose childish demand for immediate solutions shows your intellect and those like you are below contempt.

 

You cannot solve long term problems that were created over decades by one inane and ludicrous short-term solution with another short term solution.

There is no solution to the problem RIGHT NOW.  Why?  Because the problem RIGHT NOW was created by the shortsighted looking to solve the problem RIGHT NOW with no concern whatsoever for the long term consequences.

If $10 is good this should be great.

If $10 is good this should be great.

Only the most brainless of idiots (you and the loons in Washington) look for solutions to the problem RIGHT NOW.

Does that mean some people will suffer RIGHT NOW, yes, yes it does.  Life can suck, and can be grossly unfair.  It’s a damn shame that you never learned this…it’s probably more of a tragedy that people did try to teach you this but you didn’t learn it.  But it’s more of a tragedy when you cause more people to suffer in the long run because you fail to admit this point and try and prevent things with shortsighted solutions.

Any solution to fix the problem right now in the immediate present will cause even more grievous problems for the future…just as all the short term fixes have caused the current problem.  Now you can look for an immediate solution and hope that it won’t cause more problems in the long term (doing something the exact same way and expecting a different outcome is the common definition of insanity)…or like an adult you could admit that short term fixes don’t work, that they will only cause more long term suffering, and look for a solution that will fix the problem long term and ensure this situation does not happen.

So the question is that will a few suffer now or will generation upon generation suffer in a shortsighted attempt to stem the problem in the short term (which won’t work).

I, like an adult, choose the long-term solution. And that solution is, has always been and will always be the free market.

I suggest we actually let the free market do what it does best: create wealth.

If we lower or eliminate the minimum wage businesses will be more willing to hire people, yes it will be for lower wages, but people who are good at their jobs will have more opportunities to shine and get promoted to jobs that pay more (employers actually do appreciate good employees and will give them raises to try and keep them).

Since more people will be employed (even at lower wages) you’ll find that overall there is more money flowing through the system, thus the velocity of money will increase, investment will increase, more high paying jobs will be available and those people who shined in lower level jobs will be able to use that as references for better jobs (which will also open up their old positions letting more people shine).

As more people earn more, more services will be needed more products will be sold and this whole thing becomes cyclical.

If we let the free market rule and don’t drown it in a million and one ways through centralized control.

Time and time and time again if you study history or economics you will see that freer the market, the lower the povertythe lower the corruption, increase in social mobility,  and a whole host of other things.  Fact and reality dictate that the more of a free market you have the more of things you want (for the poor, the middle class, and the rich) occur and less of the things you don’t want.  Facts also dictate that government intrusions like minimum wage ALWAYS WITHOUT EXCEPTION lead to less of the things you want (like prosperity for all) and more of everything you don’t want (like the starving children you complain about).

Caring about these people and acting out of best intentions as you do is one thing. But if you really want to help them learn that throughout all of history more economic freedom has prevented the things you complain about.  Stop advocating for the very things that cause the suffering you complain about.

But liberals claim that without a raise in the minimum wage people will be stuck in poverty through no fault of their own. This is wrong for two reasons. The first is that time and time again, despite liberal efforts to hurt economic mobility through their asinine policies, economic mobility still exists and most people born into poverty do not stay there through their entire life.

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But perhaps you mean the people who are chronically in poverty and who don’t escape.  Well first let’s look at what causes those things, because chronic poverty isn’t a cause of suffering it’s symptom of other things.  (Even though that’s not really ‘poor’ as obesity is a real problem among America’s poor…if you can afford more than what you need to survive you’re not really poor…or would you like to tell people who live under the kind of control economies you seem to be touting where starvation is a real problem not just a conceptional one as it is here in America that people living on minimum wage aren’t making enough?)

Now the liberal Brookings Institute found three things that lead to chronic poverty, none of them had to do with minimum wage.  I could go into detail but I think it’s summed up best by a Democrat:

“You need only do three things in this country to avoid poverty – finish high school, marry before having a child, and marry after the age of 20. Only 8 percent of the families who do this are poor; 79 percent of those who fail to do this are poor.”

– William Galston, advisor to Bill Clinton.

Hmmm…which of those will raising the minimum wage solve?  Ummm…none of them.

But perhaps you’ll claim I’m blaming the victim, your stupid shaming, or something, to which I respond:

But, just for fun, let’s play in your delusional ballpark for just a second.

Let’s say you raise the minimum wage.

This will of course cause inflation.  So not only would the real wage of minimum wage works not go up, but you would hurt everyone else who isn’t making minimum wage and will now actually have less money.  So the question isn’t why do I hate the poor, it’s why do you hate the middle class and want to hurt them so much?

Of course minimum wage also dries up potential jobs. This disproportionately affects minorities leaving fewer and fewer jobs for them.  So the question isn’t why do I hate poor people, it’s why do you hate black people?

And of course since there are fewer jobs all around it will of course leave fewer jobs for the poor.  So the question isn’t why do I hate the poor, it’s why do you hate the poor.

Your policy will also hurt people on fixed incomes (mainly the elderly) and those without skills in search of an tumblr_msik9ea2Hh1rxlva7o1_500entry level job (the young)…Jesus, is there anyone but middle age rich white guys you don’t hate?

I would love to help the poor have more money. I could do that by dropping tariffs which would either lead to lower prices at stores or higher profits which could be invested back into the company or in banks and from there other companies which will lead to more jobs somewhere. Same goes for sales taxes. I would love to help the poor by ending subsidies for colleges which would cause the hyper inflating bubble of tuition to burst which would thus make higher education much more affordable to the poor (added bonus it would leave the middle class without huge debt which again would stimulate spending and thus the economy).  I would love to help the poor by making better schools through disbanding the teachers unions, getting rid of foolish credential requirements for teachers and putting sane common standards for all schools thus attracting better teachers and thus helping ensure more students will stay in school thus breaking cycles of chronic poverty.

I would like to do a thousand things to help the poor.  But the problem with all these solutions is that it will take time to fully work, and they all will work, but they take time.

For you however, you would rather say you want to help the poor and do something you can see right now, with all the self control of a two year old, because you to have it right now.  To hell if it hurt the poor in the short and the long term.  Why should that matter, you feel you have to do something NOW, even if doesn’t actually work, so you can feel good about yourself…why is this?

 

7.The free market is the only long-term solution.

But again let’s get back to real long term solutions.

 

How about this? Go to a flat income tax, that will give everyone more money…add to that a reverse income tax then we can make sure everyone has a “living wage” without taking away the incentive to work (and get rid of a massive portion of the federal budget in the process).

 

Or perhaps get rid of regulations that required to enter into numerous fields and let employers decide if they want to pay your or not (instead of the government). (This does not read properly) (I think it reads ok – maybe you could give an example for people that do not understand – easy one is beautician/cosmetologist – some people are talented without school and it goes up from there.)

 

Tort reform thus reducing everyone’s overhead.

 

States should try cutting sales taxes to give everyone’s buying dollar more power.

 

Or perhaps you could get rid of the massive amounts of red tape you have in every business in every level freeing up money in business which will lower the risk on return for taking a chance. (removal of government unions /prevailing rates, etc. would trickle down to providing a better economy all the way around)

 

Or the most important thing you can do if you want people to have jobs: get rid of the minimum wage and get rid of all the idiots at all levels of government who advocate for it.

 

*If you watch the news you know who I’m talking about. I am really hoping he meant in his usual inarticulate way of “I would offer a raise in minimum wage for a concession of less regulations or lower taxes or this or that tit for tat” as I know his thinking tends to work. And maybe in that case I would be willing to offer a minimum wage if I were to get something I wanted more…but I’ll admit the statement that was getting passed around the internet was either not well phrased or just stupid.

**Now there are cases where the minimum wage is higher in one place than another but has a lower unemployment (such as when liberals like to point to Australia having a higher minimum wage but lower unemployment)…but in every one of these cases you will find it’s not even remotely an apples to apples comparison. All things being equal raising the minimum wage will always lower employment, but seldom are all things equal. There are numerous issues like tax policy, regulation, tort law, power of unions and government intrusion on business, to name just a few, that affect unemployment. In the case of Australia, ranked as the 5th most economically free nation (even with their higher minimum wage) on Earth it should come as no shock they have lower unemployment rates than the US which is ranked 18th. Now if liberals would like to change policy and law at the federal, state, and local level to make the US regain its rightful place as the most economically free nation on Earth, I would be more than willing to concede a $10.10 minimum wage. The minimum wage increase would still be stupid, but one stupid thing to get a thousand others that will counter it, that would be a fair deal. Strangely I’m not seeing any such willingness to even compromise on even a few of those issues coming from the left…as usual they want everything they want and to not give them everything is to be against compromise…and to be against anyone who isn’t rich is their usual claim.

 

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Filed under Economics

Oh god, Ricky Santorum is back. Why?

Rick Santorum is like something to walk out of a Richard Condon novel. He claims to be a conservative, but then never misses a chance to praise his Marxist family members for people of principle. He claims to want to revitalize the economy, but advocates for trade barriers and economic models that are now a century out of date. He claims to be moral and horseeye santorumclearly cares only for himself and his own accumulation of wealth and power at the expense of others.   He is a walking version of liberal lies about conservatives. So when this man who views America as only a vessel for propagating religious extremism and collectivism came back into the lime light you can imagine the groan of exasperation I made.
Then I heard some of the unspeakably imbecilic things that Ricky actually started saying.

 

Let’s start with what is not his most egregious argument, but at least the one that hits the closest to home. This idiot is so delusional he claims that if he had won the nomination he would have won. So let’s just ignore the fact that Romney got the largest portion of general public of any Republican in the last few decades , let’s ignore that if Romney, a man who doesn’t have a racist or sexist bone in his body could fall victim to false claims of a bullying and a war on women that a lunatic who almost used the N word on film and who views women in such high regard that he said he would not allow his adult daughter have an abortion (because, in Ricky’s mind women are just property) would have been a very easy target. Let’s ignore that he with only 2 exceptions, the only states he won in the primary were open primary states where Democrats voted en masse to get the weakest candidate in. Let’s ignore that moderates loathed this man (and rightfully so).  No, Ricky says that Obama’s minions told him they were afraid of him and Rick is just dumb enough to have believed them…no Rick they loved you, they loved that you had no class, were willing to repeat any lie, smear any Republican, and drag your party down if you couldn’t get the White House.   You’re a Democrat’s dream. Ricky they wanted you as the candidate so badly I can only conclude they have something on you that would make you the easiest person in the universe to defeat…now my imagination goes to compromising photos of you and someone else, maybe in some way related to Ricky’s fashion sense, his constant flamboyant hand gestures, his clear overcompensation in the number of children he has, and the rampant homophobia (you know the kind that only comes from someone who has trouble admitting something)…but I don’t know for sure. That or they’ve spent five minutes looking at you put your foot in your mouth more than a drunken Joe Biden…either way, you are a liberal’s dream candidate. Completely un-electable, a stain on the Republican party with moderates, and even if by some act of Satan you actually got in then they would still have all their big government plans put into place by you.

 

 

But he continues to declare things like “Republicans needed to connect with Americans who did not like President Barack Obama during the 2012 election but could not bring themselves to vote for Mitt Romney.” Really Ricky? Who was that? I have never seen any statistical proof of all the voters that idiots like Levin claim to have stayed home…and of the people who voted for Obama even though if they were dissatisfied with his job, ignoring the fact that there are always people who give contradictory answers (when talking about Rick Santorum logic, you have to ignore a lot of facts), that would have switched the vote by only about 2%…and Obama still would have won. If you’re going to comment on things, Rick learn to read at any level because your gross ignorance of, well, everything under the sun is getting really old.

 

The fact of the matter is that only one thing exceeds Rick Santorum’s complete uselessness as a human being when it comes to understanding elections…and that would be his understanding of economics…which we’ll deal with over on Elementary Politics

 

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Filed under Economics, Election 2012, Elections, People Are Stupid, Problems with the GOP, Rick Santorum

I’m getting tired of some of the populists out there who claim to be conservatives…

In a recent article on Brietbart:

‘Renee Ellmers Thinks For Herself’: Rep. Calls Ingraham ‘Ignorant’ In Pro-Amnesty Meltdown

There are several very bizarre things.

1. Is this bullshit that all reform is amnesty?  The Republican principles are quite clear that they will not be amnesty.  If you can read you can see that…clearly most of the media and 100% of talking heads are effectively illiterate as they seem to miss this point.

 

2.  From the headline you’d think that it was pro-reform Ellmers who had a breakdown when to anyone with two good ears it was obviously Ingraham who got overly emotional about the issue from the get go and started responding irrationally.  The hack who wrote up this article was quite stupid to include the audio as his attack of Ellmers was as unjustified as Ingraham’s points.

 

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Keep in my by Laura Ingraham’s logic…Heritage is a liberal organization in line with La Raza because they said the system is broken. Now I am having some issues with Heritage’s social and education issues…but I wouldn’t go as far as to say they’re liberal.

3. Ellmers was attacked for saying we have a broken system, which Ingraham took offense to because that is something La Raza and liberals say.  Millions of people and drugs coming over an unprotected border no matter who is in control, huge welfare payments to illegals, public services being ruined because of exploitation by illegals, no effective way of dealing with this in the short term…you know I don’t care if La Raza and Chuck Schumer or even Karl Marx, Adolf Hitler and Satan were the ones who first said the words “broken system”…it’s a broken system, just because the opposition also uses the term doesn’t change the fact that it’s broken.

It’s broken.  This is a fact.  If it were any more broken we’d have to call it Obamacare.

 

I’m really convinced that Laura Ingraham doesn’t have the first clue what the free market is.

 

4.  Ingraham starts going off that businesses just need to start providing a living wage if they want to attract workers…remind me again exactly who sounds like a liberal here.

 

5.  Ingraham says it’s terrible that businesses are being driven out of existence because illegals are offering the same service for less money…and that anyone who doesn’t support her side of deport them all is against the free market.  So being for undercutting your competition is against the free market…wait, what?  The fact that people who are willing to work for less get the job isn’t conceding that the free market doesn’t work it’s 100% proof that it does.  The free market has no bias to where you’re from or how you got here, it only cares about what you do and what you’re willing to pay or work for.  Yes they broke the law to get here, and yes a functioning free market requires rule of law in terms of property rights and contract law…but the laws being broken here are not the laws specifically tied to the idea of the free market Laura.
6.  Also apparently according to Ingraham the government is there to ensure that higher wages are paid.  And this is from a Tea Party person…and to think I claim the Tea Party has ceased being conservative and is now 100% a populist movement.

 

7. Ingraham also seems fairly pissed off about the idea that Americans are lazy, and that to say this is somehow un-American.  Laura, the vast majority of the country either sat at home or voted for Obama.  Ispo facto.  Americans are lazy.  At least some of them are.  To deny this is just preposterous.
Its great Laura your mom was a hard-working blue collar worker who did low paying jobs to get you through life.  Just because your mom exists doesn’t mean that everyone in the nation has a strong work ethics.  They don’t.  This is also a fact.

Further the problem isn’t the illegals who want to work.  For decades, hell generations, no one cared about people coming up from Latin America (legally or illegally), working and earning money.  That was the free market and for the most part everybody loved it because everyone benefitted.

The problem is not the illegals who want to work.  It’s the ones who bring their kids to get educated and families to get food stamps and medical care on our tax dime.

I’m sorry but if you want to deal with this real problem then you have to do a few things.

(A)  You have to build a way to keep new illegals from getting into the country…oh, look, that would be the first part of the plan that Boehner, Paul Ryan, Renee Ellmers are actually proposing…too bad Laura that in your mob mentality you were ignorant of this fact.

(B)  Then you would have to reform the immigration code to reward people coming here who want to work and who have the skills to work.  Again that is part of the Republican plan that any non-ignorant person would know…obviously not Ingraham.

(C)  You would then have to deal with the illegals who are here…and that leaves a few options…Deport them all at astronomical cost, which the Republicans being the fiscally sane party are not for… or amnesty, Reagan tried that because he still thought that all illegals were the kind that just wanted to work, experience has shown that doesn’t work and that’s why the Republican plan doesn’t include amnesty (and to claim it does isn’t just ignorance, it’s an out and out lie)…or the Republican plan fines them and lays huge restrictions on them if they want to stay, deport the relatively small amount that don’t want to take this option, and never allow those who came here illegally to have citizenship if they don’t want to go to the back of the line and start the way everyone else has to.

Anyone with a brain can see that the Republican plan is exactly what we need.  Yes we need to work out the details. But just saying that nothing needs to be fixed by denying that the system is broken is foolishness and idiocy.  And I am getting tired of this very kind of idiotic populism that seems to have infected so many supposedly conservative pundits and voters.

 

 

 

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Economics 101: Opportunity Costs and the GOP

 

 

One of the basics of economics is the idea of opportunity cost. Opportunity cost is the idea that you have 5 dollars and you can buy a latte at Starbuck or you can buy 5 widgets (because as an economics example there is an unspoken rule that I must include the selling of widgets).  But you can’t have both.  Now for most of us the latte will be a better investment because no one has ever figured out what you can do with a widget.  But you have to lose the opportunity to buy one when you but the other.

You can save money or you can spend money but you can’t do both with the same dollar.

You can invest in  all your money in Company A or you can invest all you money in  Company B, or you can split your money between the two, but you can’t give all your money to both companies.

The idea in economics is that whenever you move resources to one thing (be it time, money, capital or people) that same resource can’t be used somewhere else. So you have lost the opportunity to spend that resource on the other thing…preferably because where you did spend money was a better choice.

Why do I bring this up?

Because we have a limited amount of time to talk to voters. People tune you out after a while.   So in that limited amount of time you can only discuss a certain number of things.

Logically we would want to discuss the issues that will most likely convince voters to vote for us, that will most change the nation for the better, and have will affect the most number of people.

But regrettably many Republicans are anything but logical.

Think about it.  Of these options which one does your average Republican choose to argue?

You can bitch about Common Core or you could actually push for the elimination of the federal Department of Education.  The latter might actually improve education.

You talk about gay marriage or you can could actually push to end the incentives against marriage in entitlement programs.   The latter might actually increase marriage rates, reduce poverty and increase social stability.  The former will just allow liberals to make you look like an ass to moderates.

You could talk about abortion or you could talk about the economy and actually win an election.

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Why do Republican always pick the snatch defeat from the jaws of victory option that leaves me like this?

 

You can whine about RINOs or you can attack Democrats.  A RINO from a purple district/state still gets us control of the House and/or Senate.  A RINO will vote with us some of the time, a Democrat will not.

You call things that aren’t amnesty, amnesty and hurt your own party or you can push for any effort to secure the border.

 

You can whine about “Oh but we always give, and we need to take a stand now even if that stand will mean shooting ourselves in the foot” or you could be a sane person and learn from the past (as opposed to living in it)…and the past teaches me to pick and fight my battle, not run away from every battle or fight every battle (both extremes are dumb)

Oh, for libertarians:

You can whine about the drug war’s ineffectiveness or you could secure the border.  Hmmm which one will benefit country more?  Let me think.

The fact is that this is a party that time and time and time again want to “take a stand on principle” even where there are other issues that defend the very principle they care about and when they have a choice they will either divide their time between the unimportant stuff and the relevant stuff or they will focus almost entirely on the issues that won’t win, won’t work, and won’t help anyone.

Please Republicans, get your act together.   And I’m not talking just about the politicians and the pundits, I’m talking about the rank and file reading this.  How often do you waste a chance to win someone with an argument that might work  and doesn’t violate a single one of your principles because you have some pet issue. I hate to tell you winning votes isn’t about your pet issue, it’s about the pet issues of the person you’re trying to convince…unless you can adapt to that reality don’t get into politics.

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Milton Friedman on the problems of government in medical care

This is a rather long lecture by Milton Friedman on the issues of government in medical care.  As it is so long I’m not going to write a lot, but you should watch it because, despite being over 3 decades old, every word is still very relevant.

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Movies that understand Economics #25: The Fifth Element

Fifth ElementOkay, taking The Fifth Element seriously might be a stretch but there is a great moment where the movie gives a perfect recounting of Keynesian economics. The idea that disasters and catastrophes lead to economic growth and prosperity because cleaning up the mess is good for the economy. It is at the heart of all Keynesian principles—the market can’t exist on it’s own it needs outside stimulus.

Now you may be wondering why I would view this as understanding economics as Keynes and all his disciples are, at best, out of their minds and at worst functionally retarded (seriously given the absolute stupidity of every word out of Krugman’s mouth it’s a miracle the man is able keep from drooling all over himself)…but I point to this as an understanding of economics because this filth is put in the mouth of the movie’s villain, Zorg (played by Gary Oldman, although as with most Oldman parts you wouldn’t recognize him if you were told) and it is meant to be the words of a villain.

Zorg: Where are the stones?
Priest Vito Cornelius: I don’t know. And even if I did know, I wouldn’t tell someone like you.
Zorg: Why? What’s wrong with me?
Priest Vito Cornelius: I try to serve life. And you seem to want to destroy it.
Zorg: Oh, Father. You’re so wrong. Let me explain.
[Puts and empty water glass on his desk]
Zorg: Life, which you so nobly serve, comes from destruction, disorder and chaos. Now take this empty glass. Here it is: peaceful, serene, boring. But if it is destroyed
[Pushes the glass off the table. It shatter on the floor, and several small machines come out to clean it up]
Zorg: Look at all these little things! So busy now! Notice how each one is useful. A lovely ballet ensues, so full of form and color. Now, think about all those people that created them. Technicians, engineers, hundreds of people, who will be able to feed their children tonight, so those children can grow up big and strong and have little teeny children of their own, and so on and so forth. Thus, adding to the great chain of life. You see, father, by causing a little destruction, I am in fact encouraging life. In reality, you and I are in the same business. Cheers. [chokes on a cherry]

What Zorg is talking about is called the broken window fallacy. That destruction brings about prosperity. Now for people with a functioning cerebral cortex it only takes a few seconds to realize that the money spent to rebuild could have been spent somewhere else…but hey, as I’ve pointed out Keynesians are special kind of crazy/stupid/evil. And yes evil is appropriate, because as shown in the film, this argument is just a cover for a wish to destroy (or you’re really stupid if you actually believe that).

And the movie shows that at some level the writers understood economics because within 30 seconds they tear down Zorg’s entire philosophy when it is not destruction (in the case of a cherry Zorg is choking on) that brings about results but rather human action to prevent destruction.

Father Vito Cornelius: Where’s the robot to pat you on the back? Or the engineer? Or the children, maybe? There, you see now, how all your so-called power counts for absolutely nothing now, how your entire empire can come crashing down because of one… little… cherry.

It’s nice to see Keynesian idea so perfectly destroyed as they deserve to be.

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Movies that understand economics #22: The Company Men

Copmany Men“[Next year] I’m worried about our stock price tomorrow.”

The Company Men is probably one of those films you missed. It has terrible publicity and was rolled out in a January (probably the worst month for movies). It’s the story of several mid to high level executives at a ship building construction firm (Ben, Affleck, Chris Cooper, and Tommy Lee Jones) as they are each downsized by the failing company and how they react to the problems of living in a recession. As you can probably guess this movie is a bit of a downer for most of the film. But in amongst the almost melodramatic moments, it does illustrate some of the economic facts and principles of the current world.
The first, as Milton Friedman was wont to point out, is that business is often the worst enemy to the defense of the free market. What do I mean by that? Well the fact is that the free market is run by three things: self interest, long term planning and competition. Self interest drives us to want the most out of what we can get, and since we want things in a free market we have to offer other people things. Competition causes us to offer the best product at the best price for both ourselves and our customer. And long term thinking causes us to create companies, products, and systems that will keep the money pouring in for years; that will grant us prosperity through prosperous times and security through the down turns. And it is this last one that the business and business in general often fail at. In general business will often foolishly push for things like tariffs or legislation that helps them and puts up barriers against their competitors…never stopping to ask what will happen in the long run after we have helped to give government the power to regulate business (despite the fact that I would say almost everyone has heard the warning “A government big enough to give you everything you want, is a government big enough to take away everything that you have.”) In this film the company at the center of the film keeps making stupid short term mistakes, constantly undercutting its ability to make anything by repeatedly downsizing all in the interest of short term gains in stock price (ignoring the fact in the long run you can only downsize until you hit rock bottom and then your stock price doesn’t go much of anywhere). Not to say that all downsizes are merely the result of short term thinking, they’re not always, but this company had no long term plans, or even desires, to keep going long term, only the short term concern for stock price.

Now the fact that people are short sighted may be disappointing, but it’s hardly surprising. That’s why the free market is great; it chews up the people without only short term thinking and rewards those with long term thinking. But the problem is that when looking at any particular business you don’t see the beauty of the free market that creates new jobs and new opportunities. (Remember this recession is more due to piles and piles of government intervention more than anything else.) Otherwise there are always ups and downs in life, only government intervention makes them worse and more obvious.

Another simple fact of economics is that people who look to the stock market as a perfect marker of the economy are really dumb. The stock market is based more on emotion and hype than any reality. Throughout the movie we see a company move its stock price up as it further and further destroys its long term prospects. I’d like to say this is just something relegated to movies and pre-Great Depression stock markets…but right now when business is about to collapse under the weight of Obamacare and all the other BS this idiot is shoveling the stock market has never been higher. And liberals keep telling me the economy is doing great… after all the DOW is above 16,000…yeah, let’s see how long that lasts. Insurance companies right now are an example of short term thinking – they are going along with Obamacare as government has promised money but this can not continue forever and so this is very short term thinking and the long term result will be exactly what government wants and insurance will be destroyed and annihilated. Wonder what that will do to the stock market?

And of course, as with all things economic it shows that the ones who survive and thrive are the ones who adapt…in this case the employees who start a new, smaller company that fills the space left by the fact that, low and behold, just firing people without any long term plan did not prevent a buyout and liquidation. Adapt or die. Adapt or die. It is the central rule of economics that can never be ignored.

“We work as hard in here every day as we did when we were trying to get a job, we’ll be alright. What’s the worst thing they can do, fire us?”

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Movies that understand economics #20 and 21: Atlas Shrugged & The Fountainhead

Review of Atlas Shrugged Part ISomehow I would be remiss not to mention the movies based on Ayn Rand’s novels when discussing movies about economics. The problem here is that while the movies, like Rand herself, have a solid understanding of the broad strokes of economics (liberty, limited government, low taxes and regulation lead to innovation, adaptation and prosperity), they don’t seem to actually get why this actually works. Rand’s understanding of economics is a lot like most people’s understanding of how the CPU of a computer works (“uh…uh…there’s some ones and zeroes and, and, and it translates into ons and offs and…um…uh…it just works. Why do I need to know why it works it just works.”) And, granted, that could make Rand seem really ignorant…but keep in mind that there are people who don’t even get that it works. How stupid do they have to be? (Krugman, I mean you and your mentally challenged drivel.)
But for all of her flaws she does have some correct ideas.
Probably because they seem to be having one problem after another with Atlas Shrugged (I am holding out zero hopes for part three, so I hope I won’t be disappointed…) it might be best to turn to The Fountainhead. Where, though somewhat shorter than in the book, the case for intellectual property is made in very clear terms. (It’s particularly interesting that some modern libertarians seem to be against the very necessary protection of intellectual property rights.)

Howard Roark: Thousands of years ago the first man discovered how to make fire. He was probably burned at the stake he had taught his brothers to light, but he left them a gift they had not conceived of, and he lifted darkness off the earth. Throughout the centuries there were men who took first steps down new roads, armed with nothing but their own vision. The great creators, the thinkers, the artists, the scientists, the inventors, stood alone against the men of their time. Every new thought was opposed. Every new invention was denounced. But the men of unborrowed vision went ahead. They fought, they suffered, and they paid – but they won.
No creator was prompted by a desire to please his brothers. His brothers hated the gift he offered. His truth was his only motive. His work was his only goal. His work, not those who used it, his creation, not the benefits others derived from it. The creation which gave form to his truth. He held his truth above all things, and against all men. He went ahead whether others agreed with him or not. With his integrity as his only banner. He served nothing, and no one. He lived for himself. And only by living for himself was he able to achieve the things which are the glory of mankind. Such is the nature of achievement.
Man cannot survive except through his mind. He comes on earth unarmed. His brain is his only weapon. Howard RoarkBut the mind is an attribute of the individual, there is no such thing as a collective brain. The man who thinks must think and act on his own. The reasoning mind cannot work under any form of compulsion. It cannot not be subordinated to the needs, opinions, or wishes of others. It is not an object of sacrifice.
The creator stands on his own judgment. The parasite follows the opinions of others. The creator thinks, the parasite copies. The creator produces, the parasite loots. The creator’s concern is the conquest of nature – the parasite’s concern is the conquest of men. The creator requires independence, he neither serves nor rules. He deals with men by free exchange and voluntary choice. The parasite seeks power, he wants to bind all men together in common action and common slavery. He claims that man is only a tool for the use of others. That he must think as they think, act as they act, and live is selfless, joyless servitude to any need but his own. Look at history. Everything thing we have, every great achievement has come from the independent work of some independent mind. Every horror and destruction came from attempts to force men into a herd of brainless, soulless robots. Without personal rights, without personal ambition, without will, hope, or dignity. It is an ancient conflict. It has another name: the individual against the collective.
Our country, the noblest country in the history of men, was based on the principle of individualism. The principle of man’s inalienable rights. It was a country where a man was free to seek his own happiness, to gain and produce, not to give up and renounce. To prosper, not to starve. To achieve, not to plunder. To hold as his highest possession a sense of his personal value. And as his highest virtue, his self respect. Look at the results. That is what the collectivists are now asking you to destroy, as much of the earth has been destroyed.
I am an architect. I know what is to come by the principle on which it is built. We are approaching a world in which I cannot permit myself to live. My ideas are my property. They were taken from me by force, by breach of contract. No appeal was left to me. It was believed that my work belonged to others, to do with as they pleased. They had a claim upon me without my consent. That it was my duty to serve them without choice or reward. Now you know why I dynamited Cortlandt. I designed Cortlandt, I made it possible, I destroyed it. I agreed to design it for the purpose of seeing it built as I wished. That was the price I set for my work. I was not paid. My building was disfigured at the whim of others who took all the benefits of my work and gave me nothing in return. I came here to say that I do not recognize anyone’s right to one minute of my life. Nor to any part of my energy, nor to any achievement of mine. No matter who makes the claim. It had to be said. The world is perishing from an orgy of self-sacrificing. I came here to be heard. In the name of every man of independence still left in the world. I wanted to state my terms. I do not care to work or live on any others. My terms are a man’s right to exist for his own sake.

As I said she gets the broad strokes. That liberty, limited government and the human mind should be valued. But anything more detailed than:

My name is John Galt. I live in a place we call Atlantis, and I think you’d fit in there. It’s a place where heroes live; where those who want to be heroes live. The government we have there respects each of us as individuals and as producers. Actually, beyond a few courthouses there isn’t much government at all. Bottom line, Mr. Wyatt; if you’re weary of a government that refuses to limit its power over you, if you’re ready at this moment to claim the moral right to your own life, then we should leave, and I’ll take you there. I’ll take you to Atlantis.

And you’re really pushing it. She understood capitalism and individualism worked and any form of collectivism and socialism didn’t. And if you’re looking for a moral pick me up, her quotes can work quite well…if you’re looking for a technical answer as to why they work…you might want to dig into other economists and movies.

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Movies that understand economics #17, 18 and 19: A few movies with only a couple lines of understanding

 

 

Okay so there are a few movies with a brief glimmer of understanding about economics that I wanted to cover.  It’s not that the rest of the movie doesn’t understand economics…it’s that it really isn’t an issue so it felt better to just lump them all together.

 

 

#17 The Count of Monte Cristo

Count of Monte Cristo Cavill CavizelWhile digging out of the Chateau Dif Edmund Dantes is taught among other things, economics, which results in this little bit of banter:

 

Abbe Faria: Define Economics.

Edmond: Economics is a science that deals with the production, distribution, and consumption of commodities.

Abbe Faria: Translation?

Edmond: Dig first, money later.

 

It’s not a lot, but it has both the technical and the pragmatic side of economics, and most importantly, that nothing is free…so dig.

 

 

#18 The Dark Knight Rises

dark-knight-rises-cast-1920x1080

The Dark Knight Rises, in fact the whole series, has some wonderful things to say about ethics, politics, sociology, and human nature…but it doesn’t often deal explicitly with economics, except in this one place, right after Bane has taken over the Gotham Stock Exchange.

 

Exchange Security Chief: You’ve gotta get in there!

Foley: This is a hostage situation.

Exchange Security Chief: No! No! No! This is a robbery! They have direct access to the online trading desk.

Foley: I’m not risking my men for your money.

Exchange Security Chief: It’s not our money, it’s everybody’s!

Police Officer: Really? Mine’s in my mattress.

Exchange Security Chief: You don’t put these guys down, that stuffing in your mattress might be worth a whole hell of a lot less.

 

It wonderfully takes on the idiocy of the mentality that economics isn’t a massive single thing.  That what happens in one place doesn’t happen elsewhere and that what affects one sector is completely unrelated to others.  Economics is a single mass where everything is connected, and to think that isolationism or just hiding your money in your mattress (both equally stupid) are going to protect you is absolutely foolish.*

 

#19 Casablanca

Casablanca Rick's Cafe

Again a great movie more for politics than for economics, but which in one brilliant moment understands economics than most of Washington D.C.

 

Woman Selling Her Diamonds:  But can’t you make it just a little more…?

Buyer:  Sorry, madame, but diamonds are a drag on the market:  everyone sells diamonds; there are diamonds everywhere …Two thousand four hundred.

Woman Selling Her Diamonds:  All right…

 

I love this scene because it shows something very realistic.  Nothing has intrinsic value.  Diamonds are only as valuable as they are rare (and that is only because the cartels keep the supply very fixed).  But if the market is suddenly flooded the price of diamonds, or gold or silver or anything valuable, drops. One only has to look at the massive inflation in Spain during the days the Conquistadors where they were shipping gold back by the ship-full to know this.

 

And if one were very intelligent they would know that this is why just basing currency off precious metals or stones would be foolish.  Any new discovery of a large mine could cause massive inflation, any industrial need for that metal could cause a massive shortage that would in turn result in massive deflation (which can often be worse than inflation).  Anyone who has read Friedman and Schwartz’s A Monetary History of the United States 1867-1960 knows that the gold standard was no guarantee against inflation or deflation (and often the cause of it) and thus anyone who argues returning to such practices knows nothing about basic facts of monetary policy.

 

And it’s all shown in that little moment where diamonds are not worth as much as they were a few years before.

 

*Okay what this movie does with Wayne’s stock trades makes no sense, but I’ll forgive it because it was something required to move the plot forward.

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Movies that understand economics #16: A Beautiful Mind

 

A Beautiful MindIt is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages. —Adam Smith, Wealth of Nations

 

 

A lot of A Beautiful Mind doesn’t deal with economics…but there is that one beautiful scene…

 

 

Nash: Adam Smith needs revision.

Hansen: What are you talking about? 

Nash: If we all go for the blonde…we block each other. Not a single one of us is gonna get her. So then we go for her friends, but they will all give us the cold shoulder because nobody likes to be second choice. Well, what if no one goes for the blonde?  We don’t get in each other’s way, and we don’t insult the other girls.  That’s the only way we win.  Adam Smith said the best result comes from everyone in the group doing what’s best for himself, right? That’s what he said, right?

Others: Right. 

Nash: Incomplete.  Incomplete, okay?  Because the best result will come…from everyone in the group doing what’s best for himself…and the group.

Hansen: Nash, if this is some way for you to get the blonde on your own, you can go to hell

Nash: Governing dynamics gentlemen. Governing dynamics. Adam Smith…was wrong.” 

Now I will forgive them a little that they’re wrong about ““In competition, individual ambition serves the common good.”  I can’t find that anywhere in Adam Smith so it’s clearly made up by the writers, but it is the general impression of the quote that started this blog.  Even if in all actuality, Adam Smith both implicitly and explicitly said that we are at our best when we act out of self-interest AND concern for others in both Wealth of Nations and The Theory of Moral Sentiments.  But let’s ignore this small part (Hollywood is full of idiots, and besides it makes for more impressive drama if he figures out something new rather than just proving it mathematically).

The central argument is two-fold.  The first is that competition leads to better results. When guided by rational self-interest people create things that benefit not only themselves but everyone else.  It’s just that when we act out of self-interest AND concern for others, when we look for win-win solutions as opposed to just win-lose ones we all do better.

Now as I said, you could already find this in Wealth of Nations but it’s nice that this movie showed that not only is it a philosophical and economical fact but also a mathematical one.

Now compare this to most politicians today who suggest that self-interest is wrong or needs to be tempered.  Or that only when subjugating our self-interest to the interest of the whole works.  Or worst of all that some have to suffer for progress to be made so let’s pick the rich, or this or that group to suffer.  They’re not only looking at a win-lose scenario it’s one where the person who produces wealth is the loser.  And if that didn’t kill innovation, keep in mind that in reality their plans always turn out to be a lose-lose.

The basic facts of reality is that self-interest is needed to progress in society.  It is even better if we look for the win for ourselves as well as others…but we must always be looking for the win for ourselves.

Oh…and here is the full quote from Adam Smith…it’s a little more thoughtful than just the sentence taken out of context:

 

It is not from
the benevolence of the butcher the brewer, or the baker that we expect our
dinner, but from their regard to their own interest. We address ourselves,
not to their humanity, but to their self-love, and never talk to them of our
own necessities, but of their advantages. Nobody but a beggar chooses to
depend chiefly upon the benevolence of his fellow-citizens. Even a beggar
does not depend upon it entirely. The charity of well-disposed people,
indeed, supplies him with the whole fund of his subsistence. But though
this principle ultimately provides him with all the necessaries of life
which he has occasion for, it neither does nor can provide him with them as
he has occasion for them. The greater part of his occasional wants are
supplied in the same manner as those of other people, by treaty, by barter,
and by purchase. With the money which one man gives him he purchases food.
The old clothes which another bestows upon him he exchanges for other
clothes which suit him better, or for lodging, or for food, or for money,
with which he can buy either food, clothes, or lodging, as he has occasion.

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Movies that understand economics #15: Dune

Arrakis. Dune. Wasteland of the Empire, and the most valuable planet in the Universe. Because it is here and only here, where spice is found. Without the spice, there is no commerce in the empire, no civilization. Arrakis. Dune. Home of the Spice, most valuable treasure in the universe. And he who controls it, controls our destiny.

DuneNow before we begin I’ll fully admit that a lot of this discussion will be shaded by a knowledge of the book that it is based off of.  I will also be confining my comments to the 2000 sci-if channel miniseries and not pulling anything from the 1980’s film…why?  Because pulling from a miniseries with some questionable production values but where the writers have actually read the book is far better than pulling from a movie that comes off as a bad acid trip that not only makes you wonder if the writers ever read the book, but if they even speak any of the languages the book has ever been translated into.  Also the movie doesn’t seem to understand any of the economic implications of the plot whereas the mini-series did.

For those of you not familiar with the story, shame on you, this is one of the greatest novels of the last century, go read it. But fine, I will give a brief summary of the events of the story.  Over 10,000 years in the future human beings have spread across the galaxy.   A galactic empire is maintained through commerce and the emperor’s elite personal military. Society has regressed into a form of feudalism with noble houses having control of whole planets. And all of this is maintained by faster than light travel made possible through the use of a chemical known as the Melange, or simply referred to as Spice. Without Spice faster than light travel becomes almost impossible, the empire will fall apart and humanity will fall into a new dark age. And Spice can only be found on one planet in the whole galaxy, the desert world of Arrakis. Better known as Dune. And this inhospitable world is populated only by the people who mine the Spice and a group of religious fanatics who live in the deep desert, the Fremen.  (Unless you’ve read the book you have no idea how much I’m leaving out just so I can focus on the economics.)

The fact that the entire universe is dependent on this one planet and its resources make it a contention point for every feudal house to desire control over Arrakis, for as the movie and book make quite clear, he who controls the Spice controls the universe.

So just to recap the entire universe is dependent on a single resource only found in a desert surrounded by religious fanatics. So for all the complicated sci-fi elements it’s just a metaphor for oil, and the stranglehold it has on our economy.  The Spice allows the economy of the future to run, just as our economy is based on cheap energy.  Without either the economy falls apart.

Now one should keep in mind that when this was written in the 1960’s a far greater portion of the world’s oil came from the OPEC cartel when they had the power to act almost as if they were a monopoly. And this is one of the things dealt with time and time again in Dune, the problems of monopolies.  There are lots of monopolies in Dune.  The emperor’s monopoly on military power, the Spacing Guild’s monopoly on interstellar travel, the Arrakis monopoly on Spice.  Lots and lots of monopolies throughout the universe.  And the problem is that when you have monopolies on essential items and services the entire system becomes very unstable. So unstable that one genius and/or lunatic with the power and will to destroy one of these could demand complete obedience from all the other parts—such is the hero of Dune.  But these downsides to monopolies are the ones you learned in high school, the ones designed to make you think the government was supposed to break up monopolies.

Of course what Dune makes clear, that your high school economics class did not, is that monopolies can’t exist without the presence of government power helping to sustain those monopolies and keeping competition down. That there are relatively few natural and permanent monopolies, and even they need government to sustain them.  All that is needed to break monopolies are the pressures that are usually provided by a functioning free market.    In reality most monopolies only come into existence with government help and are only sustained by government intervention.  The railroad of the 1800 are often touted as monopolies that needed to be broken up, but they were heavily subsidized and protected by the government in the early day.  Had the government not been involved at all no monopoly would have formed and no justification for government intervention would ever have been present. Even then you don’t need government to break up monopolies, the market will do that for you.  Just look at AT&T.  In the 1980’s it was broken up because it was one those terrible monopolies…the silly point about this is that as we now knew cellphones were just around the corner and would have destroyed the telephone monopoly on their own. OPEC exists only because a group of tyrannies and a few nations they bully hold a large portion of a needed resource…guess what, they over played their hand so much that we developed an efficient way to get at shale and now the US is the world’s largest producer of oil (sorry Saudi Arabia, but you’re still in the running for leading producer of fanatics…).

The fact is that for all the problems they create, monopolies are easily defeated by an unfettered free market. Even in Dune (if you read far enough) it is competition, not government mandates and regulations, that create alternatives to Arrakis, the Spice, and the Spacing Guild.   (In fact the universe is shown to do much better when there is no central empire but rather just free planets dealing with each other on a free market.)* If a market is so desirable that someone would want a monopoly, then by nature I will show you a field where there are multiple competitors who will prevent that very thing from happening. You show me a monopoly and I will show you a string of government acts and interventions that helped to create it.

The movie Dune, and more so the books, show among many basic economic principles** that not only are monopolies terrible things that cause problems but that they are due to the lack of free markets which create competition not because of them.

*Okay yes, the books also make it clear that organization is key when facing large scale evil, like an all encompassing evil empire bent on universal tyranny…but no sane person said the military wasn’t a just function of any government.

**There are at present 17 volumes in the Dune series with at least 4 more expected.   You could probably write volumes on any one of them about what they can show about politics, economics, ethics, psychology, sociology and a slew of other fields.

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