Posts categorized “Economics”    (PAGE 2)

#OWS, Educate Thyself - Introduction (Part 1)

October 16, 2011   9:52 pm

This is the first in a series doing the education that the colleges which the Occupy Wall Street gang (#OWS hereafter, taken from the shortened version of their #OccupyWallStreet Twitter hash tag) failed to impart. I have two in the queue behind this one, but there may be more.

For those living under a rock, a group has been camped out in New York, protesting Wall Street. There was a list of demand published, but many protesters were quick to point out that there was no official list. However, there have been recurring themes. Corporations are greedy. The rich get richer while the poor get poorer. Debt is bad. People aren’t hiring them even though they have a college degree. A job is a right.

Dear #OWS, your parents and your colleges have failed you. Before we dig into details of why your demands are unworkable, there are a few big-picture things we need to discuss.

Welcome to the Real World

This is where your parents have failed you. You are the generation who grew up “safer” than ever, protected from terrible things like concrete under your playground equipment, lack of head protection when you rode your bike, having to suffer the indignation of losing your soccer match because they didn’t keep score, etc. You are the result of a social experiment gone horribly, horribly wrong, where a bunch of too-smart people decided that the way children were reared for generations had to change. They were going to do it better. They were going to do it more safely. They remembered how bad they felt as children, when they were picked last for sports, or struck out and helped their team lose a game; or how they were made fun of during the awkward stages as they grew from children to adults; or how they never fit in with the “in” clique at school. So, they tried to eliminate all these things. No scorekeeping, and everyone gets a trophy. “Don’t say that word!” “Bullying is wrong!”

Where they went wrong is that by their attempts to eliminate bad things, they did not teach you how to deal with these bad things. I’m all for the elimination of bullying, but you can’t wish that and make it go away; you should be trained on how to deal with it. In real life, there are winners and losers; there is no “no scorekeeping” option. Everyone does not get a trophy. There are attempts, and there are failures. You have tragically had your opportunities to learn how to deal with this as a child snatched from you. Now, you’re behaving as children would normally behave; you’re just a lot bigger. You’re adults, so you think that your demands aren’t childish. Sadly, I’m here to inform you that they are. Railing against the real world is futile; you are not going to change it, at least not much. You would be much better served applying yourself and learning how things work.

A College Degree Is a Tool, Not a Guarantee

Here is one area where your college has failed you. No matter what the admissions adviser told you, a college degree is not a guarantee of a good job. Even in good economic times, a college degree is likely to get you in the door, at an entry-level position. (You understand where the term “entry-level” comes from right? The level you start, when you enter a company?) The people that have been there for 10 years beg to differ with your assertion that you should start out at the level to which they have worked themselves up. And, if your degree ends with “Studies,” you’re probably 1/4 as employable as someone with a degree oriented toward something a business would actually need.

The Corporations You Decry Have Made Your Protest Possible

You have utilized the services of several public and private companies. Let’s take a look at the evil that’s made this protest possible, shall we?

  • Twitter - Still a private company, Twitter was valued at $10B earlier this year.
  • Facebook - Also a private company, Facebook’s valuation at early 2011 was $50B.
  • Google (GOOG) - You know, the owners of YouTube, the developers of the Android mobile operating system, and the target of your “Google It!” chants? They are a publicly-traded company valued at $57.85B (plus assets, minus liabilities)
  • Did you drive, or take public transportation, to get to the site of your occupation? Those evil oil companies made that possible.

Now, what you’re not going to read in future installments are claims that the “real world” is perfect. There is room for change, and there are people running companies who have no business running them. However, if you want to maintain the lifestyle in America to which you’ve become accustomed, or improve it, you really don’t want to be throwing the baby out with the bath water.

I’m sorry your parents and colleges have failed you. If you stay tuned to this spot, I’ll help educate you on why the things you’re so worked up about, contrary to what your “I wish communism worked because it’s just such a good idea” professors taught you, are actually good for you.

Next in this series - Part 2 - Credit and BanksPart 3 - Income Inequality

Health Care - From the Folks Who Brought You "Cash for Clunkers"

August 4, 2009   9:12 pm

I made a Facebook status update earlier today where I said I hoped that the mismanaged “Cash for Clunkers” program (C4C hereafter) had caused some people to think about whether they wanted the same people in charge of their health care. Of course, with the limited space for status updates, and my double-dose of verbosity (which is genetic, I thnk), I really didn’t have room to flesh out my thoughts on the matter.

A review would be in order here. C4C is a government program that gives incentives for people to trade in cars deemed older and less fuel-efficient on a new car that is more fuel-efficient. A consumer group has a FAQ. A controversial provision of this bill is that these trade-ins must be completely destroyed - no parts can be salvaged at all, no tires, no body parts, nothing. One of my Facebook friends described the process they used - drain the oil, replace it with water, and run the engine until it seizes up. Anyway, this program was funded at $1 billion to go from July 24th to November 1st of this year. Yet, a short week later, the news begins to break that the program is almost out of money. There is talk of adding another $2 billion - that’s $3 billion of our tax dollars to buy and destroy perfectly functional cars, because they don’t fit someone’s idea of a “good car.”

Regarding the way these cars are being destroyed - this is the classic broken window fallacy, the economic theory that says that vandalism is good for the economy. A boy breaks a window; the shopkeeper must get it replaced. This benefits the window maker, which can benefit others in turn. However, the fallacy is that it does not look at what the money that the shopkeeper had to use to fix the window might have otherwise been used to do. For example, while the window maker advances, the shoe maker and baker, who might have received the money the shopkeeper would have spent, are hurt. (As an aside - wouldn’t it be better to keep the window maker in business by providing windows for new business? Oops - that was the greedy capitalist in me.)

Now, let’s look at the health care issue. Nearly every proposal I’ve heard coming from Washington decries the number of uninsured people in this country, how much we pay for health care, and how bad the insurance companies are. There are many ways to go about this; I’ll look at each of these in turn. As we do, keep in mind what happened to the “bad” cars in C4C.

We hear bad, bad things about the number of uninsured Americans - the latest numbers have it about 47 million. That’s a lot, right? Maybe, but maybe not. One thing that these stats do not take into account is the number of people who choose to be uninsured. Many college students are uninsured by choice (or by lack of giving it a thought - that would have been me right after high school!). The census bureau said that the number of college students was 15.9 million in 2004. How about single people? I certainly didn’t worry about health insurance when I was single. The census bureau said in 2007 that of the 92 million single people, 60% had never been married at all, and 15 million were over 65. Certainly not all of these are without insurance, but a good many may very well choose not to have it. That leaves the ones that can’t afford it - we’ll look at ways to make it more affordable in our third point.

Next up is how much we pay for health care. Yes, just like our military prowess, America is #1 in the world at spending per-capita on health care. We are also #1 in the world at medical advances and technology. These things do not come for free - what is the incentive for a company to develop the newest bang-up drug if they aren’t going to be able to make enough money on it to fund the research it took to develop it? Altruism may be nice, but it doesn’t put food on the table. While the exchange of money for services seems to be distasteful to some people, you’ll look long and hard to find a better motivator. Why do doctors put themselves through years and years of education after most people are already out working? For a few, they may just love their fellow man that much, but for the most part, it’s that American dream of making it, and having the things they want. How does one acquire things? Money.

All this talk about money brings us to those evil, horrible insurance companies. I’ve dealt with them just as many of you have, and it’s frustrating to have things denied because a t wasn’t crossed or an i dotted. However, let’s look at what we expect from insurance. Does homeowner’s insurance cover carpet cleaning, painting inside and out, and re-weatherstripping the windows? Does auto insurance cover oil changes, new tires, detailing, and radio upgrades? Then why must any health insurance cover check-ups? The litany of required services on some insurance providers is astounding - and, the consumer has no choice. I don’t think I could go to a state in the Union and get an insurance plan that didn’t cover maternity; as a male, I really don’t think that’s coverage I need. People view health insurance completely different from any other insurance. Why is it that, if something exists, people think that their health insurance should cover it? Some of these treatments or experimental procedures weren’t even in existence when the policy was written, but people think that they’re entitled to them.

This is where affordability comes in. Let insurance companies customize plans, so that people can buy just what they want (catastrophic coverage, for example) and exclude what they don’t (TMJ). End the ridiculous “discounted rate” on the billing - doctors have artificially raised their rates because they know that, for the most part, their patients’ insurance will only pay a portion of it. The price should be the same for someone paying out-of-pocket as it is for the insurance companies. (Back to auto insurance, does Ford offer Allstate a discount? Yeah right.)

What happens with this is the regular free-market benefits. First, the availability of health care goes up, because the people who opted out of “hypochondriac” coverage will not take up a doctor’s time for every sneeze and sniffle. Second, there is an incentive for providers to get into the business, as the playing field is more level and less laden with red tape. Third, people will be so happy that we’ll never have to hear about this ridiculous socialized health care mess ever again! (Well, okay, maybe that last one is a stretch.)

Now, let’s look at C4C health care. You’ll have politicians and government paper-pushers determining what’s covered and what isn’t, with their decisions holding the force of law. The thresholds will be hard - the qualifying line is drawn in the cement as it hardens. It will cost 10 times what “they” estimate - at least. Wait times will be through the roof, as anyone who qualifies for something will get in line for it, whether they need it or not. Over five or ten years, there will be a shortage of providers, because doctors will decide that law is a much more lucrative field. And, one of the founding principles of our nation will have been sacrificed on the altar of good intentions.

I know which one I’d prefer.

Paying for Facebook: A Lesson in Economics

May 10, 2009   10:32 pm

This is the first time my blog and Facebook accounts have crossed. If you’re not a member of Facebook, you may not know exactly what I’m talking about. However, you know my enjoyment of economic discussions, and this is a good learning opportunity.

Recently, several of my Facebook friends joined a group called “We Will Not Pay for Facebook.” They’re not alone - this group boasts over 4.4 million members. The group had articles referring to the profit that the current owner is making on the site, and various purchase offers. Then there was this…

Because of Facebook’s huge popularity Mark Zuckerberg is getting a lot of offers from people wanting to buy Facebook. People Who WILL turn it into a paysite.

The assumption here is that if anyone buys the service, they will change it to a pay site. This is FUD*, and to illustrate this, we’ll look at Facebook compared to another site, Classmates.

What makes Facebook valuable is its large (and exponentially growing) user base. Facebook can charge advertisers a premium for ads placed there, and if they make it paid-per-view, they make even more money, because they get lots of eyes on them. There are people who, like me, pay for very few websites (the only one I’m currently paying to use is Geocaching), and were Facebook a pay site, would not have signed up it. With this high user base, and high business value, comes the innovation - while few people I know like the new “stream” home page, there are things that Facebook can do that few other sites can match.

Contrast this with Classmates - this site has been up longer than Facebook, does pretty much the same thing as Facebook, yet is nowhere near as hot a commodity or as valuable a business as Facebook. Why is this? The fee model. Classmates requires a fee for an account (or at least they did when I looked at them, which hasn’t been recently).

If someone bought Facebook and changed it to a fee model, it would kill the business value of the site. Sure, you’d have people who got addicted to the free stuff and would pay to maintain their addiction, but you’d have other people (myself included) who would simply let the account go. I have other ways of doing pretty much anything that site can do. It’s nice to have it all in one place, but it’s not worth $3.95/mo to me. All this would severely stifle the growth of the site, thereby reducing its business value.

If this happened, there would then be demand - demand for another free bring-it-all-together social networking site. The entire science of economics is defined as the study of the allocation of scarce resources. Demand causes resources to be allocated - whether it was “iShare,” or “Friends and Family,” or “Facepedia,” some other site would sprout up that would provide the services that Facebook used to provide.

That being said - I don’t see Facebook going to a fee model, whether it changes hands or not. It just doesn’t make economic sense. And, if the owners decide to go that route, it still won’t be a big deal, as something else will rise up to replace it. Don’t believe the FUD. :)

* Fear, Uncertainty, and Doubt - rumors of impending doom not based in fact

100 Day Report Card: D-

April 29, 2009   11:03 pm

Yes, in 100 days I’ve gone from “skeptically optimistic” to hoping that 3 terms of Republicans can stem the tide from 4 years of our current administration. For all of the left’s making fun of Bush, and VP Biden’s history of gaffes, who knew that the current administration would make them look downright composed? It’s Amateur Hour at the White House, and our kids get to pay billions of dollars for us to watch!

Bar Graph showing a $2T budget deficit projection for 2009, with the highest ever before being less than $500B

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Economics: F (only because F- isn’t technically a grade)

You would think that this would be the current administration’s strong spot, seeing that they won the election last year based on the crappy economy (or so they’d have you believe). Yes, the fiscal irresponsibility of the final year of the Bush v2 administration looks miserly compared with this stimporkulus and budgets we’re being asked to finance. The graph to the right gives an illustration of the impact of the current budget, compared to budgets under Reagan, Bush 1, Clinton, and Bush 2. Just as the New Deal lengthened the Great Depression, these artificial attempts to “fix” the economy are actually doing it more harm. Then they label those who are against it as dangerous - but more on that later.

National Security: D-

This one was not an F due to his quick response to the Somali pirates who had captured the captain of a US ship. Regarding the F/A-22 cutbacks, these were being discussed even in the previous administration, and even so, the “cutback” still result in more airplanes being built and delivered to fill the order. I don’t really have a good feeling one way or the other. The F/A-22 has been in work a long time, and had a lot of money already. To throw that away, when we used its predecessor for over 30 years, seems foolish to me. However, with the services merging more and more operations, perhaps it’s smart to have a plane that’s built to specifications from all interested parties. Time will tell. The release of the CIA memos, though, was a bad move, which I discuss in the next subject below.

Foreign Affairs: F

How many ways are there to mess this up? Maybe we should bow to another head of state. Maybe we should give the Queen of England an iPod with your speeches? How about giving 25 Region 1 DVDs to someone who can only legally play DVDs from Region 2? Maybe we could use the term “England” to tick off a good portion of one of our strongest allies. And these are the people who made fun of Bush? Maybe they should’ve left some folks from the White House Protocol Office on staff to train the new folks. I know that it was Kerry’s slogan and not Obama’s, but isn’t this the party that wants to make us “respected around the world”? Ignoring years of tradition and protocol is not the way to make that happen.

And, the release of the CIA memos has made us look even worse. We have people hyperventilating on both sides over whether waterboarding is torture. The ones who do us harm know that they don’t have to do anything for a while, because we’re doing it to ourselves. What the administration doesn’t seem to have thought through is that, though in this country, it may be easy to pin all that on the Bush administration, to the rest of the world, it’s still “America” that did it. And, if they know that we don’t have the stomach for it (would it really have been that out-of-line to put a caterpillar in a room with a terrorist?), their job is easier. The CIA agents are demoralized, and the enemy is emboldened. Call it what you will - naive, oblivious, amateur hour - it’s dangerous, and it’s made our country weaker because of it.

And, to those hyperventilating - if you’re ever captured by them, you’d better pray that waterboarding is the worst thing they do to you. Because we’re humane, we’ve come up with ways to make people think that they’re being tortured, when they’re really not. Torture has lifelong implications to your health and mobility; John McCain can’t lift his hand above his shoulder - that didn’t come from waterboarding.

(Even the decision to stick by the Iraqi withdrawal timetable couldn’t raise his grade in this subject.)

Domestic Affairs: F

Janet Napolitano is a joke. “Nonetheless, to the extent that terrorists have come into our country or suspected or known terrorists have entered our country across a border, it’s been across the Canadian border. There are real issues there.” “Crossing the border is not a crime….” Tax Day Tea Party protestors are dangerous right-wing extremists, and they could easily recruit returning combat veterans. I don’t feel that our homeland is very secure - I feel that this department is now being run as a playground for political paybacks. Then there’s Hilda Solis, the Labor Secretary confirmed because the Republicans just got tired of fighting. I saw one interview on TV where she must’ve claimed “but we’ve only been here 5 weeks” about 7 different times. That’s not the way a leader talks. An amateur hour two-fer.

Social Affairs: F

I believe I covered Obama’s revocation of the Bush executive orders regarding federal funding for embryonic stem cell research. (I’ve bolded the important parts, because I’m sick and tired of the liberal “You’re opposed to science!” mantra. No, we’re not - we’re opposed to the government paying for research that destroys unborn humans, especially when it has shown no signs of finding anything, but other, similar, non-lethal-to-the-donor research has. (And, check out #1 under “Adult Stem Cell Advantages.”) What you fund, you get more of - fund more experiments on dead babies, you get more dead babies. I happen to be against dead babies, born or unborn.) When Obama rescinded that executive order, he also rescinded one that allows funding of ethical experiments. A good analysis of what that means is here.

He gets a pat on the back for supporting traditional marriage; however, I think that battle is lost. The demise of marriage came not from non-traditionalists, but from people who decided that a promise of forever can be undone by a piece of paper signed by a judge.

Well, he’s got a solid 0.2 GPA headed into day 101 - nowhere to go but up, eh?

Quick Hits II

March 11, 2009   8:20 am

First up is the latest column from Thomas Sowell entitled “Subsidizing Bad Decisions” in which he asks a very good question - “Why should taxpayers who live in apartments, perhaps because they did not feel that they could afford to buy a house, be forced to subsidize other people who could not afford to buy a house, but who went ahead and bought one anyway?” Read the whole thing, particularly the part where he talks about “saving for a rainy day” and “sadder but wiser.” I’d planned a longer post on the economy (and I still may do that), but this is pretty much the way I feel about it.

And, backing him up is some timeless advice from Adrian Pierce Rogers, via Neal Boortz

You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that, my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.

If only Washington, D. C. understood that simple truth.

2008 Year in Review - The Ridiculous

December 29, 2008   12:00 pm

This past year has been one of the most eventful years I can remember in the recent past. Continuing a now 3-year tradition, this is the first of three posts that comprise “2008 Year in Review - The Good, the Bad, and the Ridiculous.” I post them in reverse order, so that they make sense when reading them in the archives.

So, let’s look at that the things that went beyond bad (AKA ridiculous) this past year…

Sarah Palin’s Treatment

In August, John McCain announced his running mate - a virtually unknown Alaskan Governor Sarah Palin. However, she was not unknown to those of us in conservative circles (even if we thought her name was pronounced PAL-inn instead of PAY-lin). In fact, I still credit Cassy Fiano with being prescient on this - she posted about her way back on June 23rd. We knew her story, her accomplishments, and her attitude. Although this was her first national campaign, she already had a nearly 20-year career in governmental leadership. With the opposing party running someone with 120-some-odd days in a legislative office, one would think that she would be dealt with on her merits.

But, as we all know, that’s not how it went down. From day 1, she was called inexperienced. Remember this press release from the Obama campaign, released the day her selection was announced?

Today, John McCain put the former mayor of a town of 9,000 with zero foreign policy experience a heartbeat away from the presidency. Governor Palin shares John McCain’s commitment to overturning Roe v. Wade, the agenda of Big Oil and continuing George Bush’s failed economic policies - that’s not the change we need, it’s just more of the same.

And, it didn’t stop there. The women who get attention from the media, AKA radical feminists, piled on, calling her everything but a woman. I’m not lumping the Saturday Night Live satires in with this; they spoof everyone, and they invited both McCain and Palin to be on the show (and they both did a great job). Her experience was ridiculed, her wardrobe maligned, her children jeered - and the list at this point is charitable. Rumors swirled that Gov. Palin’s special-needs child was actually borne by one of her daughters, fathered by her husband; and the rumor of her daughter Bristol’s pregnancy, while proved true, was played to make her look like a backwards hillbilly redneck. It was all truly despicable, which is why it leads this year’s list.

Don’t Taze Bail Me Out, Bro!

Government interference in the private sector came to a head this year in a bad, bad way. Fannie Mae and Freddie Mac, entities that helped provide “sub-prime” mortgages (a euphemism for “loans people can’t really afford”), were providing these loans the same way they were in the late 1990’s, at the crest of the Internet wave. I remember a scare after 9/11, when the housing market really went south - but, we didn’t learn from that. Banks continued making loans they had no business making, to people who had no business seeking out such loans to begin with, for real estate that, contrary to the view of some in this country, is not an entitlement.

The bubble burst! (surprise, surprise) With the downturn in the economy (which even Bill Clinton understood - “It’s a crisis of confidence”), banks were having to foreclose on these loans to get their money, and people were being evicted from their homes (technically “the bank’s houses” at that point). I’m not completely heartless - losing a home stinks; but, the true heartlessness was letting them get it in the first place. Politicians demagogued the issue - how many times did you hear “Owning a home is the American dream!” - and people bought it, literally. With lots of foreclosures and slow sales, this snowballed from Fannie Mae and Freddie Mac to Lehman Brothers and AIG, and soon we heard about impending financial collapse.

Fast-forward to November - the “big three” auto makers say “Hey, we need a bail-out too!” The CEO for GM actually apologized for their making crappy cars (in a manner of speaking). The cause in this case is related in mind-set to the mortgage problem - an entitlement mentality. The United Auto Workers union had strong-armed these companies into providing compensation packages for their employees that, given their sales and profits, were unsustainable. The UAW refused to match packages that are successful for Toyota, Hyundai, and other manufacturers outside of Detroit, and Congress refused to give them money (quite possibly the best thing this current Congress has done). The Bush Administration has opened up money design for financial loans for these companies - we’ll have to see how that pans out into 2009; GM and Chrysler took it, Ford did not.

The biggest problem with all this is something I’ve been saying for years, which was only confirmed when I took my Microeconomics class last year. Government interference in free markets only causes problems. Oppressive regulations suppress innovation, and incentives create bubbles that cannot be sustained. So, in my opinion, the best way out of this is to let the bubble burst, clean up the mess, learn these important lessons, and move on. These packages, whether you call them “stimulus” packages or “bail-outs,” what they really are is rewarding irresponsible behavior, by taking money from those who have been more responsible.

The 2008 Olympics

No, I’m not talking about Michael Phelps’ ridiculous diplay of athleticism. :) This is more for China and its show. The opening ceremony was certainly impressive, to the point of being creepy. Fake fireworks? Isn’t this the land known for it’s fireworks? Just because communist countries get Olympic games doesn’t mean that I have to like it - I remember the USSR games in 1980. But, to watch the coverage of these games, you wouldn’t know about China…

…except for their women’s gymnastics team. Although the IOC eventually determined that all of their team members were 16 years old, I’m not buying it. However, I’m glad they tried it - it brought their “reality is what we say it is” style of heavy-handed government to the attention of many, many people.

Burma Refuses Aid after Cyclone

In the spring, a horrible cyclone hit Burma (AKA Myanmar), a nation in southwest Asia. Aid workers and aid began to pour in from all over the world, only to be rebuffed by the militaristic governmental dictatorship. Visas were held up or denied for many aid workers, and the government refused to allow aid to go directly to the people; rather, it mandated that all aid be given directly to the government, for it to distribute.

This is absolutely ridiculous. Even when nearly half a million (yes, that’s 500,000) of its citizens have lost their lives, the government continues to keep a stranglehold on this country. By not allowing aid into the country, the after-effects of disease brought on by contaminated water only added to the death toll. Even today, the country is still stiff-arming offers for aid, insisting that things are back to normal. I’d rather live through 100 Obama presidencies than live one day under a government like that!


What did you think was ridiculous in 2008? (Just a note - I’ll have the 2008 election in the “bad” entry…)

Effect, Meet Cause

August 5, 2008   11:27 pm

Neal Boortz provides validation today for those of us who claim that a higher minimum wage leads to lower employment. It turns out that July turned out to be a really bad month for teenage employment - the typical person seeking minimum-wage employment.

Last month, President Bush lifted the ban on offshore drilling, and crude prices dropped $10/barrel almost overnight. We can’t drill our way out of this situation, we kept being told (Morgan Freeberg makes mincemeat of that ridiculous phrase); but, when one of the two restrictions on offshore drilling are lifted, the price plummets.

The Godfather points out an AP release in which, all of a sudden, they determine that “trickle-down economics” actually exists! When “rich” people don’t get as much money, they don’t give as much, or they don’t hire as much.

Hmm…

Why I Write About Economics

June 11, 2008   10:50 am

Via Neal Boortz (4th item - archive page will work tomorrow), there is a perfect example on why I write about economic theory and policy. The question to the man on the street was “Should Congress continue to fund National Public Radio?” (NPR, for those of you in Rio Linda.) The response from one person, that was selected and printed…

Congress should continue paying for it because if they don’t, the taxpayers will end up paying for it.

I so wish that was a joke, but it’s not. This person is merely indicative of a large segment of our society that does not realize that Congress has no money to spend but the taxpayer’s money.

Happy Tax Day

April 15, 2008   8:28 pm

Wouldn’t it be great if today was just another day? (A pay day, no less, if you get paid on the 1st and 15th like I do!) There is an alternate tax plan called the FairTax that eliminates the IRS and the millions of dollars spent complying with today’s extremely complex tax code. (Do you realize that the cost of this compliance is embedded in both the cost of things you buy, and in the wages that your employer can pay you?) Neal Boortz, one of the co-authors of The FairTax Book and FairTax - The Truth: Answering the Critics, has put chapter 13 of the latter book online, where it can be read for free. It paints a vivid contrast between our current tax system and the FairTax.

If you’re ticked about the money you had to pay, take a look at the FairTax. If you like it, tell your friendly Congress-critter so.

On Government and Private Business

April 14, 2008   9:07 pm

This past weekend during Sunday School, we briefly discussed the raid of the polygamist compound in Texas. During this discussion, one very good point was raised - those handling this situation need wisdom. Previously decided cases hold a lot of weight in the judicial realm, and while, by all accounts, what was going on at that ranch was illegal and immoral, they are claiming it is part of their religion. It is good that those people have been stopped - however, what is to stop the government from deciding that something most mainstream churches do is illegal?

That led the discussion to this story about a photographer in Albuquerque, New Mexico who refused to photograph a “commitment ceremony” between two people of the same gender. There are lots of ironies in this story, and I would expect that this decision would be quickly vacated / overturned / made null. Can you really legally force someone to photograph an event that’s illegal by nature? However, if it stands, there are much more troubling questions, some of which we have already seen. In California, a Catholic-run hospital was sued for refusing to perform gender reassignment surgery, and the state has sued the US government over a provision that strips Federal funds from states that force medical practitioners to perform or refer abortions.

During the course of the discussion, I took the (somewhat unpopular) opinion that a business should have the right to refuse service to whomever the business owner wanted. (I also did that a bit strongly at one point - if you’re reading this, sorry about that.) Someone asked “What if they say they’re not going to serve Jews?” My reply was that, if that was their stance, the word would get out, and those who found that abhorrent would also not patronize them, and they would go out of business. (And yes, I think I did actually use the word “abhorrent” in class… heh…) In further discussions with other people, including my wife, my position continued to be unpopular. I heard things like “What about people in the South not serving blacks?” and “I just think discrimination is wrong.”

I still cannot see the government requiring a private business to serve, sell, or perform any good, service, or person that the owner does not want. Why should I invest my money and time in an enterprise if the government is going to come and mandate to me how I do it? However, by the same token, I also feel that racial discrimination is bad. However, for anyone to say, unqualified, that “discrimination” is wrong simply doesn’t realize how much discrimination occurs on a day-to-day basis.

Let’s imagine I’m a photographer. I don’t like trying to get kids posed for a picture, so I create a policy of no more than one child per pose. That’s discrimination - I am discriminating against large families (though not completely - they’re just not going to get an entire family portrait from me). Maybe I don’t want to photograph some people because I feel they’re unattractive - do “Uglo-Americans” have a right to have me photograph them? Maybe I’m a really popular photographer, and I can’t be in two places at once. I’ll have to be discriminating in how I set up my schedule. There simply isn’t a scenario that convinces me that the government has an overriding interest in forcing me to photograph someone I don’t want to. The “right to photography” is nowhere in the Constitution.

Now - let’s put the brakes on that and look at the government. While I believe that a business owner has the right to discriminate pretty much however he or she feels like, I also just as strongly believe that the government should not be in the discrimination business. Equal protection under the law should be just that - equal. Firefighters should (and do) respond just as quickly to fires in desirable neighborhoods as they do to fires in undesirable neighborhoods. Everyone should (and does) have access to their legislators, and the right to vote for the ones they think will best represent them. Everyone should have access to government-run educational facilities, with the same requirements for everyone. (OK, we need to work on that last one…) The bottom line is, government should not discriminate on anything other than merit and scarcity (i.e., we can’t give everyone $1k if we don’t have it).

But, in reality, this isn’t the way it is; I alluded to it above regarding education. When the government starts trying to play identity games, “level the playing field,” or any other sort of tinkering, they invariably get it wrong. According to the NM government, this photographer “violated human rights” by refusing to photograph a same-sex commitment ceremony. Would the pastors of my church be guilty of the same if they refused to officiate one? In finding this photographer guilty of discrimination, the state is, in effect, discriminating against her free exercise of religion. (See? Every choice is discrimination!) This is the danger of giving the government the power to decide what’s “good” discrimination versus what’s “bad” discrimination.

The solution? From my view, I believe that there are very powerful forces at work in the economic marketplace. Eliminating “Jim Crow” laws was a good thing - they were a violation of the equal protection clause. Forcing state-run universities to integrate was a good thing - again, equal access to government resources. Forcing businesses to cater to those to whom they do not wish to cater? That’s bad. Sure, I believe that businesses shouldn’t discriminate based on race - but is it the government’s place to tell them they can’t? Some people think that discrimination based on gender is wrong; in fact, a few years back, there was a big kerfuffle over Augusta National not allowing women to become members. How many of those people would advocate my joining Curves? It’s all perspective, and because one person’s perspective may be different than another’s, the government should stay out of it.

To me, this is a heart thing. Sure, you can pass a law and make people comply, but all you’ve done is made people upset by forcing them to do something that they didn’t want to do. I believe in giving people enough rope so that they can hang themselves (figuratively speaking, of course) - if someone wants to open a racially-discriminatory business, that’s their own stupidity in eliminating a big chunk of their potential customer base. If someone wants to open the “No Purple Pants Club” and refuse to admit anyone wearing purple pants - well, it’s their money and time they’re pouring into the business. And, if someone wants to refuse to provide their goods and services to those they find morally reprehensible, more power to 'em.

In each of these cases, one of two things will happen. One, they may flourish as a business, which will prove there was a market for their goods and services, even without the people they excluded. Two, they will fail, and learn via the “school of hard knocks” that they shouldn’t restrict their pool of potential customers. Either way, the business owner gets out of his business exactly what he put into it, and I really don’t have a problem with that.