Wednesday, November 9, 2011
Blue Splitsville?
Our liberal friends are quick to detect splits in Republican ranks, particularly between the kind of Republican they like--the moderate, compromising kind--and the kind they don't--the social conservative kind.
Now Walter Russell Mead has unearthed a split in the Democratic ranks. It has arisen in a police corruption case in New York City. The folks at The New York Times are shocked, shocked that police out in the Bronx have been fixing tickets, and worse. They were even more shocked when police, prompted by their union, demonstrated outside the courthouse where the accused ticket-fixers were being tried.
But here is the kicker. Across the street from the courthouse was a welfare office, and the welfare recipients jeered at the cops: "Fix our tickets!" they cried. Not to be outdone, the cops returned the compliment. "EBT! EBT! EBT!" they chanted. "EBT," for you innocents, is the way that food stamps and the like are distributed electronically these days.
The fact is, Mead tells us, the folks in the Democratic coalition don't like each other. The cops hate the welfare cheats, especially the way that they are not allowed to really police the poor, and the welfare chappettes obviously have hated police brutality since the invention of urban police forces. The relation between the public service workers and the goo-goo liberals is interesting. You might say that the liberals fill the pockets of the public union workers with cash to shut their mouths. Scratch a policeman, a teacher, a welfare worker, a health worker, and you'll hear war stories of the scum they are paid to baby sit. You need good money to put up with that and not actually do anything about it but just sit there saying "yes, sir, no, sir" to your liberal masters, never knowing what crazy twist they will introduce into the care of the poor next week.
One underappreciated component in the Democratic coalition is Wall Street. The Wall Street guys are the middle-men that provide the cash for the welfare state in the form of bonded indebtedness. Every public official needs a good relationship with his banker, and vice versa. So it's a bit shocking that the young libs in the Occupy movement are blaming Wall Street.
Of course, there's a reason for that. The young skulls full of mush actually believe the line that their liberal daddies give them about evil Republican fat cats on Wall Street. They are too dumb to realize that all the bankers are Democrats.
Still, it's important to realize that all these people that hate each other, and are united only in their pursuit of money--taxpayers money. That is why Democrats talk about nothing but revenue increases.
Unfortunately the money has run out, and so the folks in the Democratic coalition won't be getting the full amount they have in mind in the future. There is every prospect that they will start to fight amongst themselves over the diminishing spoils.
No need to discourage that.
Tuesday, November 8, 2011
Movements, Crowds, and Obama
Everywhere we look we see movements, writes sociologist Peter Berger. But what is a movement? It is a crowd, but a special type of crowd, for "A movement is the preservation of a crowd experience over time."
But what is a crowd? Quoting Gustave LeBon, Berger defines a crowd as a collective event, and
But the point to get from this is that when any social animals experience themselves in danger they form into crowds, for in dangerous times you need to surrender some or all of your individuality for the benefit of the whole. That is what happens in armies, and any fighting unit. The individual must be persuaded to accept his own death or injury in the process of fighting for victory, for if every individual thought only of his own safety, an army would dissolve when the first shot is fired.
The Tea Party spontaneously formed as conservative Americans sensed danger immediately upon the election of Barack Obama. They came together in crowds, and formed a movement to "preserve that crowd experience over time." That movement helped cause the big 63 seat change in the US House of Representatives in 2010.
The Occupy movement is a similar movement on the left. Its members feel danger in the threat of budget cuts, so they are crowding together to find the collective courage to oppose them. They have chosen Wall Street as the symbol of their fear. Walter Russell Mead writes that it is curious that the Occupy folk see Wall Street as the enemy, since Wall Street is as vital an element in the blue Democratic coalition as the goo-goo upper middle class, the public sector union employees and the welfare beneficiaries.
The trick, of course, is for your movement to be effective. If it progresses immediately into a lynch mob then it may provoke opposition from another movement. If it is too individualistic it may not accumulate the collective power to make changes.
The reason that the United States is dividing into two opposing movements is instructive. It is because the current ruling class, the "vital center," has failed to govern well. It has failed to moderate the demands of conflicting movements and interests to a level that can be comfortably afforded by the overall society. Thus the United States is dividing into two extremes that feel profoundly threatened by the other.
President Obama seems to be doing his darnedest to accelerate the process.
But what is a crowd? Quoting Gustave LeBon, Berger defines a crowd as a collective event, and
a crowd creates a sort of collective mind, which is impulsive, impervious to reason and potentially murderous. Put in different terms: The crowd is inherently de-individuating, dismantling the moral restraints of civilization and reverting to a primitive state of unquestioned solidarity. There is a lethal progression from crowd to mob to lynch mob.We can see the proto-crowd in the great apes and early humans.
Chimpanzees, our closest anthropoid relatives, engage in group dancing if faced with danger. So do tribal warriors as they go into battle... The individual surrenders his separateness to the sacred unity of the group, an experience often including possession by a divine being.So it is with modern crowds and movements. Berger isn't too pleased with this, and he doesn't like the Tea Party or the Occupy movement, preferring the "vital center, spread across the two major political parties, thus marginalizing the extremes to their right and left." No doubt, and in this vital center, of course, the intellectual elite gets to call the shots.
But the point to get from this is that when any social animals experience themselves in danger they form into crowds, for in dangerous times you need to surrender some or all of your individuality for the benefit of the whole. That is what happens in armies, and any fighting unit. The individual must be persuaded to accept his own death or injury in the process of fighting for victory, for if every individual thought only of his own safety, an army would dissolve when the first shot is fired.
The Tea Party spontaneously formed as conservative Americans sensed danger immediately upon the election of Barack Obama. They came together in crowds, and formed a movement to "preserve that crowd experience over time." That movement helped cause the big 63 seat change in the US House of Representatives in 2010.
The Occupy movement is a similar movement on the left. Its members feel danger in the threat of budget cuts, so they are crowding together to find the collective courage to oppose them. They have chosen Wall Street as the symbol of their fear. Walter Russell Mead writes that it is curious that the Occupy folk see Wall Street as the enemy, since Wall Street is as vital an element in the blue Democratic coalition as the goo-goo upper middle class, the public sector union employees and the welfare beneficiaries.
The trick, of course, is for your movement to be effective. If it progresses immediately into a lynch mob then it may provoke opposition from another movement. If it is too individualistic it may not accumulate the collective power to make changes.
The reason that the United States is dividing into two opposing movements is instructive. It is because the current ruling class, the "vital center," has failed to govern well. It has failed to moderate the demands of conflicting movements and interests to a level that can be comfortably afforded by the overall society. Thus the United States is dividing into two extremes that feel profoundly threatened by the other.
President Obama seems to be doing his darnedest to accelerate the process.
Monday, November 7, 2011
Klein's Obamanomic Lament
Young Ezra Klein is a coming man in LiberalLand, and so he's the chap The New York Review of Books selected to push back on Ron Suskind's White House tell-all Confidence Men.
Take an Obama announcement in September 2010 where Treasury Secretary Tim Geithner was "looking sheepish," according to Suskind.
OK, so we liberals can ignore Ron Suskind. But Klein has bigger fish to fry: the failure of Obamanomics. What went wrong? It wasn't the clash of the "confidence men." It was political reality. Theoretically, if your program isn't big enough to turn the economy, you make it bigger.
Sound great, but this ignores political reality. The reality is simply that there is no way that Obama could have got a bigger stimulus through Congress.
And then there is Ben Bernanke; he's too "timid." A more activist chairman could have goosed QE2 with a bigger boost.
Of course, what Klein doesn't do is question the caloric content of the Keynesian menu. Suppose "stimulus" is just empty calories that leaves the economy hungry after a quick sugar high? Then a bigger stimulus wouldn't have made a difference. Suppose that Fed easing just feeds through into inflation. Suppose that supporting the housing market just puts off the inevitable need to clear the overhang of underwater mortgages? Klein doesn't even consider that.
The reason the Republicans oppose the Obama economic menu is that we believe that Reaganomics showed that Keynesian fiscal and monetary stimulus isn't nutrititous for the economy. When you have a big crash the Reagan menu says you need to cut government spending and lower tax rates and reduce government regulation.
The Obama menu says you should fatten up on subsidies to Democratic client groups, get ready to raise taxes on the rich, and boost government regulation on energy and health care.
Young Ezra Klein never even begins to wonder if that kind of food is economic poison.
But don't despair. Ezra Klein is young. But surely he is smart enough to know the difference between science and pseudo-science. When he has reached the age of wisdom.
Take an Obama announcement in September 2010 where Treasury Secretary Tim Geithner was "looking sheepish," according to Suskind.
So I went back to the tape... I paid special attention to Geithner. Suskind’s right: his suit is too big. But he doesn’t look sheepish or ashamed. He looks, by turns, bored and interested. He clasps his hands behind his back. He nods attentively. He tries not to fidget. He looks like every experienced bureaucrat looks when they’re asked to stand like a prop near the president. Blank, and trying not to make any news. He failed.
OK, so we liberals can ignore Ron Suskind. But Klein has bigger fish to fry: the failure of Obamanomics. What went wrong? It wasn't the clash of the "confidence men." It was political reality. Theoretically, if your program isn't big enough to turn the economy, you make it bigger.
If the initial stimulus is too small, you make it bigger. If your housing policies are too modest, you toughen them up. If the private sector sheds jobs and long-term unemployment becomes a problem, you begin hiring workers directly.
Sound great, but this ignores political reality. The reality is simply that there is no way that Obama could have got a bigger stimulus through Congress.
When Obama angrily dismisses Romer’s umpteenth argument for more stimulus, it’s not because he disagrees. It’s because he can’t get it passed. “Enough!” Suskind quotes him as shouting. “I said it before, I’ll say it again. It’s not going to happen. We can’t go back to Congress again. We just can’t!”
And then there is Ben Bernanke; he's too "timid." A more activist chairman could have goosed QE2 with a bigger boost.
This raises the question of whether the Obama administration made a mistake in reappointing Bernanke. If it had managed to install a more activist chairman at the Federal Reserve, then its inaction might have been more effectively offset by the Fed’s actions.
Of course, what Klein doesn't do is question the caloric content of the Keynesian menu. Suppose "stimulus" is just empty calories that leaves the economy hungry after a quick sugar high? Then a bigger stimulus wouldn't have made a difference. Suppose that Fed easing just feeds through into inflation. Suppose that supporting the housing market just puts off the inevitable need to clear the overhang of underwater mortgages? Klein doesn't even consider that.
The reason the Republicans oppose the Obama economic menu is that we believe that Reaganomics showed that Keynesian fiscal and monetary stimulus isn't nutrititous for the economy. When you have a big crash the Reagan menu says you need to cut government spending and lower tax rates and reduce government regulation.
The Obama menu says you should fatten up on subsidies to Democratic client groups, get ready to raise taxes on the rich, and boost government regulation on energy and health care.
Young Ezra Klein never even begins to wonder if that kind of food is economic poison.
But don't despair. Ezra Klein is young. But surely he is smart enough to know the difference between science and pseudo-science. When he has reached the age of wisdom.
Friday, November 4, 2011
Good News on Employment
For donkey's years, we have concentrated on the Unemployment Rate as the measure of economic wellbeing. But the Unemployment Rate has always been a problem. As right now.
The Unemployment Rate today declined from 9.1 percent to 9.0 percent. More of the same, it seems. But if you look at the BLS Household Survey you see that employment has been rising solidly for three months in a row. Here are the numbers.
There are no two ways about these numbers. They are good numbers and show that there is solid increase in employment in the economy. So why has the Unemployment Rate stayed so high? The reason is that the labor force is also increasing as more people start to look for work. Here are the numbers.
The Unemployment Rate is the employment level divided by the labor force. If both employment and labor force are increasing at the same rate, in this case by about 300,000 per month, then the Unemployment Rate won't change.
There is more good news here. Our friends in the mainstream media will doubtless soon find it necessary to tell us the good news. In the past, in the early 1970s, early 1980s, and early 1990s, recessions and recoveries usually occurred during Republican administrations, so the MSM was delighted to put the worst face on the economic numbers. But now that a Democrat is suffering from bad economic numbers things must change. And the best way to do it is to show that the solid increase in job numbers is good news that is more important than the continuing bad news in the Unemployment Rate.
The Unemployment Rate today declined from 9.1 percent to 9.0 percent. More of the same, it seems. But if you look at the BLS Household Survey you see that employment has been rising solidly for three months in a row. Here are the numbers.
| Month | Employment (000s) | Change (000s) |
| Jul | 139334 | |
| Aug | 139296 | -38 |
| Sep | 139627 | 331 |
| Oct | 140025 | 398 |
| Nov | 140302 | 277 |
There are no two ways about these numbers. They are good numbers and show that there is solid increase in employment in the economy. So why has the Unemployment Rate stayed so high? The reason is that the labor force is also increasing as more people start to look for work. Here are the numbers.
| Month | Labor Force (000s) | Change (000s) | |
| Jul | 153421 | ||
| Aug | 153228 | -193 | |
| Sep | 153594 | 366 | |
| Oct | 154017 | 423 | |
| Nov | 154198 | 181 |
The Unemployment Rate is the employment level divided by the labor force. If both employment and labor force are increasing at the same rate, in this case by about 300,000 per month, then the Unemployment Rate won't change.
There is more good news here. Our friends in the mainstream media will doubtless soon find it necessary to tell us the good news. In the past, in the early 1970s, early 1980s, and early 1990s, recessions and recoveries usually occurred during Republican administrations, so the MSM was delighted to put the worst face on the economic numbers. But now that a Democrat is suffering from bad economic numbers things must change. And the best way to do it is to show that the solid increase in job numbers is good news that is more important than the continuing bad news in the Unemployment Rate.
Thursday, November 3, 2011
Freeloading: What We Give for Free
The big problem for humans as social animals is the question of free ridership. For nothing destroys social cohesion like freeloaders.
We have seen how human societies deal with freeloading: through government force, through the notion of divine justice in religion, and through the free choice in economic relationships.
In fact though, society actually encourages the freeloading of people who aren't doing well. We have a variety of ways of talking about this: helping the less fortunate, feeding the hungry, reaching out to the poor. There is clearly a suspension of judgment. Never mind how the poor got to be poor, let's just help. Judgment, if any, is on those expected to help. It is considered a moral failing not to help. Judgement is not canceled; it is merely suspended. It reappears as soon as we start to differentiate between the deserving and the undeserving poor, as George Bernard Shaw did so cunningly in Pygmalion.
In the abstract, we all sit around and wonder why we all can't just get along. Noam Chomsky, famous leftist, told the Occupy Boston folks that they should "Occupy the Future." Said he:
Earth to Noam. When communities deal with crime without the police it is called vigilantism.
The whole idea is that government has a monopoly on force. If someone has broken the peace, by sexual assault or by theft, then the peace forces are the only chaps supposed to deal with it. It's called due process. Law enforcement without the government leads to lynching. And so on.
In other words, the newly created "cooperative communities" are already having to deal with the free-rider problem. And one of the ways of dealing with freeloading is with force. When force is needed you call in the government.
Years ago, a communications engineer told me that when a electronic communication works, that is a non-problem. The whole point of communications protocols is to deal with cases where communication has failed. The same is true of human society, or "cooperative communities." What do you do when things go wrong?
One way that things can go wrong is that someone commits a sexual assault on another person. WHen that happens you call in the police.
Another way that things can go wrong is when Democrat banker Jon Corzine bets the firm on Eurobond default and bankrupts the firm MF Global. What do you do then? Call in the government's bankruptcy court.
As soon as things start to go wrong, then the question of being free to do what you want and collaborate in communities any way you want comes into question.
Now it is obvious that the Occupy folks don't want to have government getting in the middle of their community affairs. That's natural. We capitalists don't like the government getting in the middle of our capitalist acts between consenting adults either.
But at some point, the freeloading has to stop. We give freely to others. Up to a point.
The point at which the freeloading has to stop is what we are all arguing about. It is called politics.
We have seen how human societies deal with freeloading: through government force, through the notion of divine justice in religion, and through the free choice in economic relationships.
In fact though, society actually encourages the freeloading of people who aren't doing well. We have a variety of ways of talking about this: helping the less fortunate, feeding the hungry, reaching out to the poor. There is clearly a suspension of judgment. Never mind how the poor got to be poor, let's just help. Judgment, if any, is on those expected to help. It is considered a moral failing not to help. Judgement is not canceled; it is merely suspended. It reappears as soon as we start to differentiate between the deserving and the undeserving poor, as George Bernard Shaw did so cunningly in Pygmalion.
In the abstract, we all sit around and wonder why we all can't just get along. Noam Chomsky, famous leftist, told the Occupy Boston folks that they should "Occupy the Future." Said he:
The Occupy outposts are trying to create cooperative communities that just might be the basis for the kinds of lasting organizations necessary to overcome the barriers ahead and the backlash that’s already coming.The thing is, Noam, that everyone is in favor of cooperative communities. That is what "human society" means. The problem comes in the next moment. For instance, your cooperative communities seem to be having a real problem with crime and pilfering. Not to mention sexual assault. According to reports the Occupy folks are investigating and dealing with these problems on their own without referring them to the police.
Earth to Noam. When communities deal with crime without the police it is called vigilantism.
The whole idea is that government has a monopoly on force. If someone has broken the peace, by sexual assault or by theft, then the peace forces are the only chaps supposed to deal with it. It's called due process. Law enforcement without the government leads to lynching. And so on.
In other words, the newly created "cooperative communities" are already having to deal with the free-rider problem. And one of the ways of dealing with freeloading is with force. When force is needed you call in the government.
Years ago, a communications engineer told me that when a electronic communication works, that is a non-problem. The whole point of communications protocols is to deal with cases where communication has failed. The same is true of human society, or "cooperative communities." What do you do when things go wrong?
One way that things can go wrong is that someone commits a sexual assault on another person. WHen that happens you call in the police.
Another way that things can go wrong is when Democrat banker Jon Corzine bets the firm on Eurobond default and bankrupts the firm MF Global. What do you do then? Call in the government's bankruptcy court.
As soon as things start to go wrong, then the question of being free to do what you want and collaborate in communities any way you want comes into question.
Now it is obvious that the Occupy folks don't want to have government getting in the middle of their community affairs. That's natural. We capitalists don't like the government getting in the middle of our capitalist acts between consenting adults either.
But at some point, the freeloading has to stop. We give freely to others. Up to a point.
The point at which the freeloading has to stop is what we are all arguing about. It is called politics.
Wednesday, November 2, 2011
Freeloading, Welfare and the Rich
For any human society--for any social animal--the big issue is freeloading. The biggest threat to social solidarity is free-ridership.
At one level, we are all free riders. We all benefit from society way beyond our contribution. Even a chap like the late Steve Jobs could not bring forth his consumer-electronic trinkets without the rest of society. After all, what did he know about solid-state physics, computer processor design, software design, touch display technology? The brilliance of Steve Jobs was his ability to put things together: as in entrepreneur.
Despite the huge benefit each of us obtains from our membership in society, we humans are quick to accuse the other chap of freeloading. Lefties accuse the rich of "exploiting" the poor. Union members accuse the bosses of screwing the working man. Righties tell the poor to "get a job." And President Obama wants the rich to "pay their fair share."
Obviously, we all care deeply about free riding. The question is: what do we do about it? Here, as usual, we turn to Michael Novak and his Gaulian division of society into three parts: political, economic, and moral-cultural.
We can attack the free-rider problem politically, by using force. If we want to do that then we assign the politicians to do the job. Government is force, and politics is power. Politicians will gladly go after the rich and make them pay more taxes. But the problem with that is that the politicians will also listen to the would-be crony capitalist that comes bearing political contributions. And the politicians aren't all that smart. They will find, in a crisis, that all kinds of institutions are "too big to fail" and that in the present emergency they must free ride on the rest of society. You could also ask the politicians to tell the poor "to get a job." We did that back in the 1990s when President Clinton signed the welfare reform bill that reformed one of the 79 federal welfare programs. But many people disapprove. They call welfare reform "balancing the budget on the backs of the poor."
If you don't like force, there is an alternative. You can shame the freeloaders. According to Nicholas Wade in The Faith Instinct, this is what religion is all about. Policing freeloaders is a costly business, and you make people mad because nobody likes being bullied around and told to pay more taxes or get a job. So you discover that, in addition to the usual earthly policemen there is a divine police force that is willing to catch the freeloaders and make them pay. Even if the freeloader gets away with it throughout his earthly life, the gods will make him pay in the next life. It's a cunning system, but it requires a proper socialization in childhood to inculcate the idea of divine justice.
Another way to deal with free riding is to let the economic sector worry about it. The economic sector works like this. If you think that Joe over there is a free rider, you don't deal with him. You don't hire him. You don't work for him. You don't buy from him. There is a certain elegance in this approach. It doesn't require force. It doesn't require a government program. It doesn't even require public shaming. It's just a private thing. You say to yourself: "I don't like the cut of that fellow's jib." And that is that.
Let us do a bit of reckless simplifying and tell a story of freeloading down the ages. In the hunter-gatherer age, the dominant response to freeloading was religion. It was appropriate because force was expensive and created blood feuds, and because communities were small enough that an individual couldn't really decide that another individual was a bad apple and refuse to deal with him.
In the agricultural age there was an increase in the use of force, because the political elite was rich enough to afford an army. But still, the idea of divine justice was very strong.
In our age we have reduced sharply the use of divine justice to curb freeloading. In response the political sector has stepped up its enforcement against freeloading. Unfortunately, as we saw above, there is a lot of disagreement about who the freeloaders are. It isn't me, it isn't thee; it's probably that guy behind the tree. The modern age has also seen a big increase in the regulation of freeloading by the economic sector. Arguments over freeloading create division in society. So modern man has expanded the economic approach to freeloading.
The loosening of social ties and the breakdown of the local extended family in the modern age means that you can choose who you will deal with. You can even refuse to deal with a family member, and it isn't the end of the world. Control of freeloading by refusal to deal works. People who try to cheat other people are likely to suffer a reduction in income, and therefore pay a penalty for their freeloading.
Many people have tried to revive the divine justice approach to freeloading, especially our environmental friends. They urge us to "save the planet" by recycling and by reducing our carbon footprints.
When you look at freeloading this way, one thing comes out very strongly. We have a wonderful solution to the freeloading problem in our market system economy, but nobody gives it any credit. Attack freeloading with government force, and you create division in society because everyone disagrees about who the real culprits are. Attack freeloading with religion, and you must face the problem that in recent centuries the belief in divine justice has declined. Even among believers there is more belief in a loving, forgiving God than a stern divine patriarch.
The obvious choice is to let the people be the judge of freeloading in their own lives. If they make a mistake, and refuse to deal with a guy who really does contribute to society they are only hurting themselves.
But that would be too easy, and not as much fun as a public humiliation of the evil doers.
At one level, we are all free riders. We all benefit from society way beyond our contribution. Even a chap like the late Steve Jobs could not bring forth his consumer-electronic trinkets without the rest of society. After all, what did he know about solid-state physics, computer processor design, software design, touch display technology? The brilliance of Steve Jobs was his ability to put things together: as in entrepreneur.
Despite the huge benefit each of us obtains from our membership in society, we humans are quick to accuse the other chap of freeloading. Lefties accuse the rich of "exploiting" the poor. Union members accuse the bosses of screwing the working man. Righties tell the poor to "get a job." And President Obama wants the rich to "pay their fair share."
Obviously, we all care deeply about free riding. The question is: what do we do about it? Here, as usual, we turn to Michael Novak and his Gaulian division of society into three parts: political, economic, and moral-cultural.
We can attack the free-rider problem politically, by using force. If we want to do that then we assign the politicians to do the job. Government is force, and politics is power. Politicians will gladly go after the rich and make them pay more taxes. But the problem with that is that the politicians will also listen to the would-be crony capitalist that comes bearing political contributions. And the politicians aren't all that smart. They will find, in a crisis, that all kinds of institutions are "too big to fail" and that in the present emergency they must free ride on the rest of society. You could also ask the politicians to tell the poor "to get a job." We did that back in the 1990s when President Clinton signed the welfare reform bill that reformed one of the 79 federal welfare programs. But many people disapprove. They call welfare reform "balancing the budget on the backs of the poor."
If you don't like force, there is an alternative. You can shame the freeloaders. According to Nicholas Wade in The Faith Instinct, this is what religion is all about. Policing freeloaders is a costly business, and you make people mad because nobody likes being bullied around and told to pay more taxes or get a job. So you discover that, in addition to the usual earthly policemen there is a divine police force that is willing to catch the freeloaders and make them pay. Even if the freeloader gets away with it throughout his earthly life, the gods will make him pay in the next life. It's a cunning system, but it requires a proper socialization in childhood to inculcate the idea of divine justice.
Another way to deal with free riding is to let the economic sector worry about it. The economic sector works like this. If you think that Joe over there is a free rider, you don't deal with him. You don't hire him. You don't work for him. You don't buy from him. There is a certain elegance in this approach. It doesn't require force. It doesn't require a government program. It doesn't even require public shaming. It's just a private thing. You say to yourself: "I don't like the cut of that fellow's jib." And that is that.
Let us do a bit of reckless simplifying and tell a story of freeloading down the ages. In the hunter-gatherer age, the dominant response to freeloading was religion. It was appropriate because force was expensive and created blood feuds, and because communities were small enough that an individual couldn't really decide that another individual was a bad apple and refuse to deal with him.
In the agricultural age there was an increase in the use of force, because the political elite was rich enough to afford an army. But still, the idea of divine justice was very strong.
In our age we have reduced sharply the use of divine justice to curb freeloading. In response the political sector has stepped up its enforcement against freeloading. Unfortunately, as we saw above, there is a lot of disagreement about who the freeloaders are. It isn't me, it isn't thee; it's probably that guy behind the tree. The modern age has also seen a big increase in the regulation of freeloading by the economic sector. Arguments over freeloading create division in society. So modern man has expanded the economic approach to freeloading.
The loosening of social ties and the breakdown of the local extended family in the modern age means that you can choose who you will deal with. You can even refuse to deal with a family member, and it isn't the end of the world. Control of freeloading by refusal to deal works. People who try to cheat other people are likely to suffer a reduction in income, and therefore pay a penalty for their freeloading.
Many people have tried to revive the divine justice approach to freeloading, especially our environmental friends. They urge us to "save the planet" by recycling and by reducing our carbon footprints.
When you look at freeloading this way, one thing comes out very strongly. We have a wonderful solution to the freeloading problem in our market system economy, but nobody gives it any credit. Attack freeloading with government force, and you create division in society because everyone disagrees about who the real culprits are. Attack freeloading with religion, and you must face the problem that in recent centuries the belief in divine justice has declined. Even among believers there is more belief in a loving, forgiving God than a stern divine patriarch.
The obvious choice is to let the people be the judge of freeloading in their own lives. If they make a mistake, and refuse to deal with a guy who really does contribute to society they are only hurting themselves.
But that would be too easy, and not as much fun as a public humiliation of the evil doers.
Tuesday, November 1, 2011
A National Conversation about Debt
With the European project flushing down the toilet, I think it is time for a national conversation about debt.
This is hard, and you know why. It is hard because of a trait that our liberal friends share with Harvard men. You can always tell a liberal, but you can't tell her anything. Liberalism is a religious cult, rather like Harvard. It is a closed system, and is almost impervious to persuasion.
My point is this. I can understand having a debt crisis when the nation's existence is at stake, when we have to strip the nation of assets in order to feed its armies fighting against the Nazis or the Commies. But should we really be facing a debt meltdown over paying grannie's Medicare?
Everyone wants to make grannie's golden years a comfort to her. But what happens when grannie's Medicare/Medicaid takes 12 percent of GDP?
It seems to be a good idea to mortgage the whole nation if an earthquake had leveled San Francisco. That is what government is for, to rally us all after a crisis, and help pay for the trillion dollars needed to rebuild. But should we bankrupt the nation on multigenerational welfare?
The great advantage of keeping the national debt down to about 10 to 15 percent of GDP is that it means that the nation is ready to assume any extraordinary burden that comes along, whether it is a war to defend democracy or a natural disaster. When it is up at 100 percent like it is now, then the nation is not ready to assume extraordinary burdens. It already has enough burden shouldering today's debt.
Don't get me wrong. I think that pensions are a great idea. Health care is a wonder. But people value these things enough to do them without the government. Of course, after 70 years of Social Security and 40 years of Medicare many Americans can't imagine life without them. But we'd find a way if the government went broke. In fact, I'll bet my nickel that the aftermath of a government default would see wonders of invention: oldsters like me figuring out how to make a buck, physicians figuring out how to deliver health care to people that had to pay for health care with their own money.
And there is the societal aspect to consider. Most ordinary people derive their most satisfaction in meeting the routine challenges of life. In today's welfare state only the educated elite gets to meet challenges. Everyone else just sits around telling victim stories and waiting for the handout. No wonder we learn that, e.g., young people are curiously diffident these days. Nobody is challenging them.
Of course, there is a bigger problem with the welfare state than just debt. It is the demographic problem, that welfare state people don't get married and don't have children, as in Germany and Italy, and Spain. Here in America conservatives have about 50 percent more children than liberals. That is an existential disaster that, so far, is not suitable for polite conversation and a national conversation.
So when we look at the national government budget for 2011, courtesy of usgovernmentspending,com:
You have to ask: Wouldn't most of this stuff be done better if the American people did it themselves? We wouldn't do it alone, of course, but in revived voluntary collective associations, first reported by Tocqueville to the world in the 1830s.
And in that national conversation about this, let us ask a difficult question, appropriate for national conversations. Is America ready to discuss the fact that it's all welfare, all $3.6 trillion of Social Security, Medicare, Medicaid and Temporary Assistance to Needy Families and on and on?
Imagine an America in which all these functions were being done in a vigorous, can-do American spirit. Bureaucrats need not apply.
This is hard, and you know why. It is hard because of a trait that our liberal friends share with Harvard men. You can always tell a liberal, but you can't tell her anything. Liberalism is a religious cult, rather like Harvard. It is a closed system, and is almost impervious to persuasion.
My point is this. I can understand having a debt crisis when the nation's existence is at stake, when we have to strip the nation of assets in order to feed its armies fighting against the Nazis or the Commies. But should we really be facing a debt meltdown over paying grannie's Medicare?
Everyone wants to make grannie's golden years a comfort to her. But what happens when grannie's Medicare/Medicaid takes 12 percent of GDP?
It seems to be a good idea to mortgage the whole nation if an earthquake had leveled San Francisco. That is what government is for, to rally us all after a crisis, and help pay for the trillion dollars needed to rebuild. But should we bankrupt the nation on multigenerational welfare?
The great advantage of keeping the national debt down to about 10 to 15 percent of GDP is that it means that the nation is ready to assume any extraordinary burden that comes along, whether it is a war to defend democracy or a natural disaster. When it is up at 100 percent like it is now, then the nation is not ready to assume extraordinary burdens. It already has enough burden shouldering today's debt.
Don't get me wrong. I think that pensions are a great idea. Health care is a wonder. But people value these things enough to do them without the government. Of course, after 70 years of Social Security and 40 years of Medicare many Americans can't imagine life without them. But we'd find a way if the government went broke. In fact, I'll bet my nickel that the aftermath of a government default would see wonders of invention: oldsters like me figuring out how to make a buck, physicians figuring out how to deliver health care to people that had to pay for health care with their own money.
And there is the societal aspect to consider. Most ordinary people derive their most satisfaction in meeting the routine challenges of life. In today's welfare state only the educated elite gets to meet challenges. Everyone else just sits around telling victim stories and waiting for the handout. No wonder we learn that, e.g., young people are curiously diffident these days. Nobody is challenging them.
Of course, there is a bigger problem with the welfare state than just debt. It is the demographic problem, that welfare state people don't get married and don't have children, as in Germany and Italy, and Spain. Here in America conservatives have about 50 percent more children than liberals. That is an existential disaster that, so far, is not suitable for polite conversation and a national conversation.
So when we look at the national government budget for 2011, courtesy of usgovernmentspending,com:
| Government Pensions | $1.0 trillion |
| Government Health Care | $1.1 trillion |
| Government Education | $0.9 trillion |
| National Defense | $0.9 trillion |
| Government Welfare | $0.6 trillion |
| All Other Spending | $1.6 trillion |
| Total Government Spending | $6.0 trillion |
You have to ask: Wouldn't most of this stuff be done better if the American people did it themselves? We wouldn't do it alone, of course, but in revived voluntary collective associations, first reported by Tocqueville to the world in the 1830s.
And in that national conversation about this, let us ask a difficult question, appropriate for national conversations. Is America ready to discuss the fact that it's all welfare, all $3.6 trillion of Social Security, Medicare, Medicaid and Temporary Assistance to Needy Families and on and on?
Imagine an America in which all these functions were being done in a vigorous, can-do American spirit. Bureaucrats need not apply.
Subscribe to:
Posts (Atom)