Keynes Likes Totalitarians

Keynes Politely Explains How to Destroy Civilization
02/27/09 - Blog.Mises.org by Jeffrey Tucker

The late economist Lord John Maynard Keynes regarded his own theories as a best fit for totalitarian societies. It is so much easier to achieve full employment when you can tell everyone what to do and decide what they will be paid. Every member of an ant colony is employed, and seemingly happy.

Keynes impresses me with the long, jumpy, tedious construction of his sentences, to express the simplest and fuzziest thoughts. I find that saying something directly is easy. Saying nothing, or everything, with detailed qualifications and exceptions, in one sentence, is quite difficult. Why bother with paragraphs when long sentences are so much more impressive?

[edited] I'm sorry, but reading Keynes gives me the chills. I can easily imagine his dispassionate narrative about events in a Gulag, justifying every horror with a pseudo-scientific rationale made up on the spot.

Oh wait: he did do that. From the 1936 foreword to the German edition of The General Theory:

Nevertheless the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of production and distribution of a given output produced under conditions of free competition and a lance measure of laissez-faire.

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The General Theory of Employment, Interest and Money, Chap. 24
Dig into the thought of Lord Keynes at Marxists.org.

The Political Dictionary: "Keynesian Economics"
A satirical definition, unfortunately true.

Why Should I Believe You?

Brain Rinse
02/27/09 - ChcagoBoyz by John Jay

First impressions are usually the strongest ones. The acclaim or possible danger associated with a product or idea leads to thinking it is the best or worst, even when better ones appear or studies show safety.

Shannon Love comments that this is Social Reasoning, a result of our brains being specialized for cooperation and competition within groups. Groups started 2 million years ago. Individuality is only a thin thread starting 2 thousand years ago.

John Jay:

[edited] What I call “mental aftertaste” is that on many topics, there is no way for the layman to perform a test, such as directly comparing the washing efficacy of Dreft and Tide. No test is available that would once and for all change their perceptions. In most arenas, once the tone has been set by the first mover, it is extremely difficult to shake a perception.

Con-men, tricksters, marketers, and intelligence agents realize that once an idea gets into someone’s head, even if it is disproven to the rational brain, there is an emotional residue akin to an aftertaste that colors perceptions. Unless the new idea totally dominates the old one, the old one tends to stick. This is at the core of the marketing adage that "perception is reality".

Shannon Love:

[edited] People fall for all of these hoaxes because they use social reasoning instead of the evidence of each phenomena. Consider astrology, vaccine fears, suspect technology, alternative medicine, and suppressed miracles. The common factor is deep suspicion of other people or the need to believe one’s self to have unique knowledge.

People trained in the sciences are taught to ignore social reasoning. For the majority of people outside the sciences, even well educated people, social reasoning is their primary modality of thought. This is especially true in political and economic thought. The dominant idea in post-modernist thought holds that who advances an idea is the most powerful predictor of validity.

Thus, who a scientist is determines whether their ideas about global warming have any validity. Ditto for economists, politicians, and academics. Those in the tribe are trusted, those outside are automatically wrong.

The Hamas - Israel War

Mubarak is the Only One Who Got it Right
02/27/09 - AmericanThinker by Dan Gordon

President of Egypt, Hosni Mubarak:

[edited] Why did Hamas object to prolonging the cease fire? And why did they not heed our warnings that their positions constitute an open invitation for an Israeli assault? Was this planned and deliberate? For whose benefit?

The recent crisis is an attempt to exploit the Israeli aggression in order to impose a new reality on the Palestinian and Arab arena that will favor the agenda of Iran.

Dan Gordon:

[edited] The villages of the Gaza strip were crisscrossed with kidnapping and communication tunnels dug underneath the houses. Hamas militants could go unseen from house to house and carry out combat in a civilian environment, disappearing from one house, as it came under fire, to pop up in another.

They prepared this battlefield to launch rockets from civilian areas in order to draw in Israeli troops. They turned whole villages into booby trapped battlefields while the villagers were still in them. They hoped to kill two to three hundred Israeli soldiers and take prisoner as many as fifty.

They planned to maximize civilian casualties amongst their own people. Any action Israel took against Hamas fighters would become a war crime. Photos of innocent Palestinians killed in an Israeli onslaught would arouse public sympathy, to be translated into political pressure to effectuate a cease fire advantageous to Hamas. In that way, they could wear both the mantle of victimhood and victor.

You Will Pay, With the Rich

The 2% Illusion
02/26/09 - Online.WSJ.com OpinionJournal

Take everything they earn, and it still won't be enough.

[edited] If taxes took 100% of the taxable income of everyone earning over $500,000 in 2006, this would have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion, and only one-third of the $4 trillion Congress will spend in fiscal 2010.

Taking every taxable "dime" of those earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.

The bottom line is that Mr. Obama is selling the country on a 2% illusion. Unwinding the U.S. commitment in Iraq and allowing the Bush tax cuts to expire can't possibly pay for his agenda. Taxes on the not-so-rich will need to rise as well.

Mr. Obama's climate-change plans will hit all Americans with higher expenses. Selling cap-and-trade permits to emit greenhouse gases amounts to a steep new tax on most types of energy and so on all Americans.

Mr. Obama portrays his agenda as center-left pragmatism. But pragmatists don't ignore the data. The only way to pay for Mr. Obama's ambitions is to reach deeper into the pockets of the American middle class.

I Won't Do the Paying

Comment of the Week
02/25/09 - CafeHayek by Russel Roberts
Comment by Methinks

The problem with high income people is that they can make plans and act on them. They are better than most people at finding loopholes in government. In my opinion, if they have to, they will buy the government. That is what things were like in the 1960's.

[edited] I'm in the target group, the top 2% of taxpayers to do the paying for the trillion dollar spending. I won't do it.

I own my business and have the option to work as much or as little as I like. At some tax rate, the marginal dollar won't be worth earning. I'll fire some employees, scale down the business or retire altogether and stick my money in tax advantaged municipal bonds, and do all the traveling and relaxing I can't do now. The tax advantage of muni bonds will NEVER go away because municipalities will scream bloody murder.

If I'm not ready to retire and the tax rate gets too high, I may just immigrate to another country because it's very easy for me to get almost instant citizenship. I respond to incentives and I'm not incentivized by enslavement and neither is anyone I know.

The specialness of this country is the lack of totalitarian regime and individual liberty. Once that's gone, this country is no longer special. You can call me evil or "not doing my part" because I'm not willing to work myself into the grave for your family instead of mine, but the reality is that unless you plan to start a Gulag, you can't make me.

Why should I be expected to work and risk more than you to provide you with the lifestyle to which you have become accustomed?

Yes, it's sustainable to raise taxes on the most productive. However, it's not sustainable at a high standard of living. It's sustainable only at ever decreasing standards of living. France and Germany are good examples.

There's a difference between the natural altruism that occurs between family members and confiscation by the state. I feel great when I donate to charity. I feel really crappy when I write the check to the IRS. Maybe I should figure out how to receive one instead. Seems a lot less time consuming.

Politicians Like Thoreau

Thoreau Smacks Down Clinton
02/26/09 - Corner.NationalReview by Fred Schwarz
Via AdviceGoddess

Liberal politicans love the image of Thoreau, living by a quiet pond, loving nature. They forget that he was sitting there as a tax protest. Thoreau:

[edited] Yet this government never of itself furthered any enterprise, but by the alacrity with which it got out of its way. It does not keep the country free. It does not settle the West. It does not educate.

The character inherent in the American people has done all that has been accomplished; and it would have done somewhat more, if the government had not sometimes got in its way.

Trade and commerce, if they were not made of India-rubber, would never manage to bounce over the obstacles which legislators are continually putting in their way; and, if one were to judge these men wholly by the effects of their actions and not partly by their intentions, they would deserve to be classed and punished with those mischievous persons who put obstructions on the railroads.

Obama Challenges Us

Obama, Say Again?
02/25/09 - TheLipstickRepublican by Jamie

[edited] Then, Pres. Obama reached the part where he "challenged" every American to commit to at least one year of higher education, and I was brought up short. Who the bleeping bleep does he think he is, telling me I should seek more education?

It so happens that I want more education. But I want it for me, not to fulfill some "duty to my country." A politician from an earlier generation might have told me it was my duty to produce more children.

If this nation was founded on anything at all, it was founded on the right of individuals to chart the course of their lives.

A Revolutionary States the Essence of Law

Our favorite quotes: Thomas Jefferson
05/23/08 - Cornel.edu by "hear-hear"
From a comment by IronDioPriest

Thomas Jefferson. Letter to John B. Colvin, September 20, 1810, The Writings of Thomas Jefferson, ed. Paul L. Ford, vol. 9, p. 279 (1898).

A strict observance of the written laws is doubtless one of the high duties of a good citizen, but it is not the highest. The laws of necessity, of self-preservation, of saving our country when in danger, are of higher obligation.

To lose our country by a scrupulous adherence to written law, would be to lose the law itself, with life, liberty, property and all those who are enjoying them with us; thus absurdly sacrificing the end to the means.

Thomas Jefferson was a revolutionary. He chose to overturn the law he was born under in order to establish liberty under a new government.

There is no moral right in a democracy for some of the people to vote others into partial slavery, to vote to subsidize themselves by taxing others.

The purpose of government is to secure the liberty of all. The purpose is not to enable a majority to take the wealth, work, and liberty of a minority. A mob can do that quite well without the formality of a democratic vote.

Iran Might Stop Killing Brits

Iran Offered to Halt Attacks on UK Troops
02/21/09 - Telegraph.co.uk by Damien McElroy
Via Grand Bargain at NeptunusLex.

[edited] Sir John Sawers is the British ambassador to the United Nations.

The Iranians wanted to strike a deal. They would stop killing our forces in Iraq and stop undermining the political process there, in return for being allowed to continue their nuclear programme without hindrance and without economic sanctions.

Iran supplied arms, training, and strategic direction to Shia Muslim militias that were battling British forces for control of Basra. Iran supplied a deadly shaped-charge bomb that required precision engineering at Iranian military factories.

The Solution Is Simple

Proving Reagan wrong
02/23/09 - BobKrumm.com by Bob Krumm

"Why are they doing all this when they have to know that it isn’t going to work?” was the question my wife asked about the stimulus package.

I answered: “It’s not about fixing the economy; it’s about proving Reagan wrong.” It’s about proving that an enlightened government is superior to a country led by tens of millions of individual sovereign decision makers.

A comment by Joe Y
An insight into the simple view that many people have of the world. An explanation why hope and change is so attractive. An evaluation of President Obama's abilities.

[edited] The oddest thing about this election, was the continual leitmotif of Obama’s genius, from people that should have known better. People like Obama, of which I know and am related to far too many, are unable to seriously consider that there is any job (oil company CEO, football coach, running the local post office) that they cannot do as well or better than the person currently in the role, should they ever exert the effort to do so. It’s not a matter of faith, as faith requires a conscious effort; rather, it is a prejudice in the true sense of the word.

They believe that the government is better at running the country, because the solution to the problem, whatever the problem, is just so obvious. From their point of view, for example, the comprehensive national medical database in the Stimulus Package is obviously a good idea.

The person I was talking to said “Only idiots, paranoids, and Republicans - to repeat myself - want to stop this.” She then gave the several well-known and excellent reasons for the database, concluding with “Who could be against that?”

I replied that no one could, but what about the hundreds of thousands of medical personnel who have potential access to the database? What about the innumerable terrifying stunts that hackers, and not just American hackers, have been able to pull off in attacks on supposedly invulnerable networks? What about people not reporting medical conditions because they don’t want a record of them? What about erroneous data being mistakenly entered? What about erroneous data being deliberately entered? Of course, that was just a start.

To her credit, she got what I was saying, particularly when I applied it to our respective teenage children. A few minutes consideration revealed many problems which answer the question “It’s so obvious! What could go wrong?”.

These considerations were foreign to her, not because she was stupid (quite the opposite), but out of a prejudice that she and people like her can see the solution to any problem. That is why they attack people who disagree with them as stupid, morons, and idiots.

There is one major exception to this attitude, which is in the person's area of knowledge. Then, they are as smart and good as advertised, but rarely anywhere else.

This brings us to the President. Obama is clearly a very bright man, as anyone who becomes president has to be. But, there are a lot of smart guys around. He gives a marvelous television performance of an intellectual, but I would be grateful for a link to any genuine evidence of such.

Like most Ivy leaguers, he’s a smart operator and a dedicated hustler obsessed with accomplishment. Like almost all Harvard men and women, he lacks an aptitude for self-doubt and humility, which people usually, and a bit unfairly, mistake for Harvard arrogance. He is superb at his chosen field; but that field is not being President, it is becoming President.

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Dunning-Kruger effect: The hubris of the incompetent
10/31/09 - Neo-Neocon

Quip: I could do that better than you, if I wanted to.

Wikipedia [edited]: The Dunning–Kruger effect is a bias in thinking. People may make bad choices, and be incompetent to realize it.

The unskilled overrate their own ability as above average. The highly-skilled underrate their abilities, often below the self-rating of the unskilled.

Actual competence may weaken self-confidence, because competent individuals wrongly assume that others are also competent. The incompetent misjudges himself, whereas the highly competent misjudges others.

Incompetent individuals:

• Tend to overestimate their own level of skill, and do not recognize their true inadequacy.
• Fail to recognize genuine skill in others.
• Can come to recognize and acknowledge their previous lack of skill, if they can be trained to substantially improve their own skill level.

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Murray Gell-Mann Amnesia Effect
12/08/09 - Chicago Boyz - comment by Michael Kennedy
Quote by Michael Crighton at GoodReads

We give too much credit to people who speak with authority about subjects we don't know well.

[edited] You open the newspaper to an article on some subject you know well. In Murray’s case, physics. In mine, show business. You see the journalist has absolutely no understanding of either the facts or the issues. Often, the article actually presents the story backwards, reversing cause and effect. I call these “Wet Streets Cause Rain” stories. The paper is full of them.

In any case, you read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate about Palestine than the baloney you just read. You turn the page, and forget what you know.”

This is The Gell-Mann Amnesia Effect.

Where Did Barbers Go?

Of Plumbers And Barbers
02/23/09 - RiehlWorldView by Dan Riehl

Barbers were regulated out of existence.

[edited] In the 70's and 80's many states merged their Barber and Cosmetology Boards into one. A young man who could make a decent living as a Barber couldn't do a partly paid apprenticeship, taking just months to learn a career that could serve him for life. He had to pay to attend a Community College or private tech education program that could last two years, while making him learn a variety of skills he'd never employ. And he, or she was also taught to charge much more for the service.

Costs of a haircut more than doubled, and businesses saw their overhead costs rise dramatically. All because the government was just looking out for you, or perhaps they were paid off by the tech education and cosmetic industries. Maybe they found a clever way to extract more dollars from a male public that never actually needed them in the first place

The Department of GDP

The stimulus plan from the bottom up.
You can spend, or the government will do it for you.

(a large waiting room in a giant federal building)

Desk Clerk: Ticket 363. Is ticket 363 here?

Joe: I have number 363.

Desk Clerk: (without looking up) Go to office 26, through the gate, turn right, left down the corridor, on the right.

(Joe finds his way. The water fountain doesn't work.)

Official: (behind desk, seated, remains seated) Please close the door and have a seat.

Joe: (sits down)

Official: Do you know why you are here?

Joe: Something about GDP?

Official: As you can see from the sign on my desk, I am a case officer for the new Department of GDP Oversight and Improvement. The government, your government, measures it's success through GDP. Higher GDP is better. We want to talk to you about how you can do your part to increase GDP. Your government is absolutely committed to increasing GDP. It would be unpatriotic not to. Do you agree?

Joe: Uh, sure. I'm patriotic. May I ask, what is GDP?

Read more ...

Official: GDP is Gross Domestic Product. That is the market value of all goods and services produced in the U.S. It is the total of all the things that society can eat, drink, and work with. You can also think of it as the total income of the U.S. The government wants everyone to have more income.

Joe: I support that.

Official: Good. (flips through manila folder) Now, I see that you don't go to restaurants enough. Why is that?

Joe: My wife is a great cook. We eat at home most of the time. I even like cooking with her sometimes, and the kids help too.

Official: Yes, that comes up a lot. People are denying themselves the pleasures of fine dining. You can see how this decreases employment and GDP. From now on, you will dine out at least twice per week, with the kids please.

Joe: That is going to cost me a lot of money! I really don't see how ...

Official: (writes a note into the file) We all have to do our part to employ others, and restaurants are a huge employer of the less educated. You earn a good income, you should spend more. It is the patriotic thing to do.

Joe: But, I won't be able to save as much for my kid's college and my retirement.

Official: I know it seems that way, but a better economy in the future will pay you back. I'm no economist, but our department has done the analysis, I can assure you. You see, savings are a selfish, lazy way to use money. You should understand that many people don't have any savings. What good are your savings if the economy suffers?

Joe: I am depending on my savings to ...

Official: No need to answer, that is what we in the department call a rhetorical question.

Joe: I thought my savings support businesses and home ownership.

Official: I don't mean this as an insult, but you are very ignorant about economics. The department has a giant computer to figure out the effects of spending, savings, and employment. And, we will have that figured out when we have entered all of the details, approximately 5 billion data points per month. This is in progress.

In the meantime, we have an estimate under the "one transaction" rule. We track things for one transaction. When you get your salary, that is GDP. When you pay a restaurant, that is GDP. When you put your money in the bank or invest in stock, we lose track. It's an estimate.

Joe: (confused)

Official: Now, under our Direct Employment program, we are assigning you a gardener and a family care worker. You will find them a wonderful help, freeing up a lot of your time for relaxation. You will be responsible for paying them. I see that you have plenty of income if you don't save anything. Savings are bad for the economy, so you won't miss them.

Joe: (restraining himself) That is not possible! I don't need a gardener or a home worker. I need to save for the future. I don't need all that leisure and don't want to pay for it.

Official: (writes a note into the file) I don't really understand. I myself love leisure. I have many plans for my pension. But, if you feel you have extra time, the department can arrange more work for you.

Under our Neighborhood Exchange program, you will mow one of your neighbor's lawns in Summer, and shovel his driveway and sidewalk in Winter. Another of your neighbors will do the same for you. You will all pay each other at the GFR (Government Fair Rate). This will produce a lot of measurable GDP that was hidden in the old way of doing things, and you won't have so much non-GDP leisure. This also generates valuable tax payments on the extra income.

Joe: (a bit upset) What if I don't cooperate?

Official: (writes a long note into the file) There is no need to be upset. I should have emphasized that this is a voluntary program, for now. You don't have to cooperate, but there may be unfortunate consequences for you and the economy if you don't. You certainly have the time until your next appointment to think about it. Find out what other non-cooperators have experienced. I certainly would not want to question your patriotism at this time.

Joe: (sits quietly)

Official: In any event, we must proceed with our task of raising GDP, so we have arranged to borrow money against your future tax payments, and your children can do their part too when they are older. Taxes will probably increase a bit. This costs more than the voluntary program we have talked about, but we are happy to add on the interest and processing costs. We'll tell you how to figure the increased taxes and pay them. There is no need to pay anything now.

Joe: What if I can't pay the increased tax?

Official: We will take that into account. First, we will get the taxes from the people with more money and savings than you have. We will only increase your taxes if we can't get the money from them. They are currently saving a lot of money that is bad for the economy, so there is a lot of money available for our programs.

In a short time, we will eliminate all of that lazy and selfish saving, and turn it into much increased employment for the good of us all. GDP will rise substantially, which is the important thing.

Joe: (doesn't know what to say)

Official: (closes folder, writes on a form, hands form to Joe) Here. Take this to the Appointments Manager at the front desk, and he or she will set up your next appointment. I really hope you can change your attitude and support this program. Without total and enthusiastic support, we are afraid that we won't meet our goals, and we would hate to blame you for that.

Leave the door open on your way out.
 

------------------
Why Spending Stimulus Plans Fail
The money isn't free. It is taken from the people who plan and invest in productive organizations. This destroys jobs and lowers income.

A Tested Stimulus Plan
The economic crisis is the result of a giant six year stimulus provided by housing loans.

Stimulus Does Not Cure a Recession
Jobs change when people change what they want to buy or can afford.

All articles about Stimulus.

Obama Challenges Us
Jamie at TheLipstickRepublican explains why the government should not be planning our lives.

Nurse Practitioners

Bilateral Queckenstedt's sign
02/20/09 - Throckmorton's Other Signs by Throckmorton

It seems that nurse practioners (NP's) are not a good replacement for doctors in an emergency room. But, they are "cost effective".

[edited] Nurse practicioners are nurses with 17 months of extra training. They replace an MD or DO who has 4 years of medical education plus 3-4 years of speciality emergency medical training.

ER cases that a doctor could treat and release can not be handled by NP's who either can't or don't know how. Worse, I am often called in for one problem and find that there is something totally different wrong with the patient. I wonder how many of the patients have been sent home with something badly wrong!

I asked a hospital administrator why the NPs are not discussing patients with their supervising MD's. He informed me that the supervising MD only reviews patient's charts. Further, the NPs can act independently.

Why don't they hire MD's? MD's cost too much because of their liability insurance. Nurse Practicioners are cheaper, with minimal insurance, because they are not held to the same standards! With EMTALA in the mix, I get called in for everything.

Elevator Lawsuit Safety

Elevator Logic
02/18/09 - Throckmorton's Other Signs by Throckmorton

I suppose the legal theory of "attractive nuisance" is used here. Escape doors are so attractive and dangerous that people must be protected against themselves. There could be a sign "Warning: Only professionals should attempt to escape from this elevator." I have wondered, if I am supposed to escape, where is the ladder?

[edited] The hospital has fancy ceilings in their elevators, and I wondered what I would do if I got stuck. The maintenance man explained that the escape door was behind the lighted panel in the ceiling. It was almost impossible to get to, and the escape doors are locked from the outside. Someone has to let you out.

There have been lawsuits when people stuck in elevators have hurt themselves climbing out or when the elevator starts moving. So, the escape hatches are locked from the outside. If you are trapped in the elevator in a fire? He said, "Hope someone can get you out before you burn!"

It is even code to have the escape hatches locked! I wonder if the glass in the fire alarm box that states "break glass in case of fire" is unbreakable to prevent lawsuits because of people cutting themselves!

Medicare Witch Hunt

Dear Mr President, Medicare Stinks
02/03/09 - Distractible.org by Dr. Rob

Medicare is controlling waste, fraud, and abuse by driving doctors out of Medicare. We can wonder who will be left to treat Medicare patients "for free".

[edited] I am a primary care physician. About 20% of my patients are covered by Medicare. I consider it an honor to be a doctor to the elderly. The complexity of a person’s medical problems goes up exponentially as they near the end of their life. I spend more time per patient for my Medicare population - which is OK if I can be paid for my extra time and effort.

If Medicare auditors find “problems” with our charting we will be told to send money back to CMS for our whole Medicare population. We are obligated to prove that we did not defraud Medicare to reclaim the money for the work we did. We will be presumed guilty unless we can prove that we are innocent.

They are looking for inconsistencies in the charting and the billing. These can be little things like:

• Failure to mention in the note the EKG we ordered, even if it is in the chart.
• The appearance of a “cookie-cutter template” in our notes. If all of our physical exams, review of systems, or impressions look similar, then it will be assumed we are trying to defraud Medicare.
• Forgetting to document a discussion about a diabetic eye exam.
• Certain ICD-9 codes will be accepted, but will “flag” that we are possibly trying to cheat Medicare. We need to be specific in our coding to avoid immediate suspicion.

We practice very good medicine and probably save money for the system, as a higher percentage of primary care in a community means lower cost. We use an EMR and are NCQA recognized for our diabetes care, and I think that our quality of care and documentation is in the top 10%. Yet we fear that your government employees are going to use us as scapegoats for the out-of-control costs of Medicare and put us out of business in the process.

We see what is being done to the hospitals by not accepting “No Pay” diagnoses (Never Events). That debacle is irrational and unfair, but the hospitals have no recourse.

That makes us extremely pessimistic about our odds when facing the hit-men from CMS. If a hospital with its lawyers and other resources can be hung out to dry, what chance does a primary care physician have?

We have never considered our acceptance of Medicare as something that actually makes business sense - we just like to care for the patients. But the increasing hostility we are seeing from the witch-hunters with their torches and angry mobs is making us really consider whether we can afford to stay on board.

Delayed Medical Tests

Emergency Primary Care (Not)
02/18/09 - DocsOnTheWeb by 911Doc

The Stark law (below) "stops" waste, fraud, and abuse by eliminating effective services. The government favors one-stop, no-other-choice shopping when the government provides medical services, but they require private doctors to fragment and delay their services.

[edited] Doctor's clinics are no longer allowed to provide on-site lab and Xray. The "Stark" law comes to mind. I witnessed a combination of poor primary care skills and the heavy hand of government.

An old man went in to his physician's office yesterday for a checkup. He 'wasn't feeling well' and the doc took him off one of his anti-hypertensive meds. Today he feels worse and WOW! the labs drawn at his checkup were resulted today and showed kidney failure and high potassium.

When the patient got to us in the emergency department, he was 'almost dead' with a pulse of 30. We brought him back from the precipice. I asked his primary doctor why the labs took so long to be resulted. He said, "We have to send out all labs".

This adds another pressure point to ER medicine. People know that their primary physician will not get answers that day. In this case it was almost a day late and a dollar short. Thanks Uncle Sam, you have prevented primary care physicians from committing fraud by over-ordering tests. Good job. Bunch of freaking putzes.

---------
Physician self-referral

The Stark law governs physician self-referral for Medicare and Medicaid patients.

Self Referral is a physician referring a patient to a medical facility in which he has a financial interest, be it ownership, investment, or a structured compensation arrangement.

Critics of self-referral allege an inherent conflict of interest, because the physician can benefit from the referral. They suggest that such arrangements may encourage over-utilization of services, in turn driving up health care costs. They believe that it would create a captive referral system, limiting competition by other providers.

Others say that some problems may exist, but are not widespread. Physicians are responding to a need which would otherwise not be met, particularly in a medically underserved area.

Most laws are not written with a delicate hand. Instead of auditing abuse, our government eliminates efficient services, including standard lab tests, for all of the patients and doctors who are not defrauding the system. Broad-brush laws have real consequences.

AGW Scientists Can't Predict

The Caine Mutiny Teaches Us about Global Warming Scientists
02/17/09 - PajamasMedia by Frank J. Tipler

Academic degrees mean nothing if you can't say what is going to happen. Watch out for global warming scientists who can't predict the details. And watch out for "economists" who fiddle some equation as a reason to take your money to improve your life.

[edited] Anthropogenic global warming (AGW) is justified via argument from authority: a consensus of "experts" holds that humans are responsible for the increase in the Earth's average temperature.

I was once a leader in forming a scientific consensus based on expert opinion. In the late 1970s, most cosmologists believed the universe could not accelerate, based on very weak experimental evidence. In the late 1990's, we discovered that dark energy is accelerating the universe. I now regard "scientific consensus" as a synonym for "wrong."

I am struck by the lack of accomplishments by the leaders of the AGW consensus. In fact, it is the leading opponents of AGW who have genuine scientific achievements in climatology. Reid Bryson was the "father of climatology," a leading AGW skeptic, and had the achievements of a genuine scientist.

A true scientist demonstrates his knowledge by making predictions which can be confirmed or refuted. What counter-intuitive predictions have the Global Warmers ever made? I invite you to look.

I could not find a single counter-intuitive prediction made by any major Global Warmer. But, I have found cases of them trying to cover up failed predictions.

No Sports Economic Multiplier

Evidence against the multiplier
02/17/09 - CafeHayek by Russell Roberts

[edited] Almost all academic economists agree about the impact of subsidies and spending on sports stadiums. Building a stadium "creates" jobs, but the best estimates of NET job creation are ZERO.

From the survey paper "Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?" (PDF), 09/2008 :

Sports subsidies are unwarranted, based on economic intuition, a survey of economists, and a review of the literature on the economic impact of professional sports. There may be some local economic benefits, but the empirical findings strongly reject sports subsidies due to a lack of economic benefits.

There is a large and growing peer-reviewed economics literature done by economists, as opposed to that of scholars in public policy, urban development, and planning departments. This research is almost unanimous that stadiums, arenas, sports franchises, and sport mega-events have no consistent, positive impact on jobs, income, or tax revenues for the associated communities.

Teleprompter President

In All Fairness
02/16/09 - American Spectator by The Prowler
Via RiehlWorldView.

It seems that Obama gets real-time advice on what to say, along with scripted settings to say it.

[edited] A former Obama communications advisor has been giving notes and suggestions to the White House team, and worked with them on the inauguration.

The press conference speech looked scripted beyond the scripted part. Every president uses some pre-arranged questions or journalists to be called on, but this press conference was pretty ham-handed.

The White House wants to install a small computer screen into the podium for press conferences and events in the White House. The screen would indicate whom to call on, seat placement for journalists, notes, and points to hit. It would make it easier for the communication guys to pass along information without being obvious.

Using a screen is nothing new for Obama. Almost everything he said in supposedly unscripted townhall campaign events was scripted, down to many of the questions and their answers. Teleprompter screens showed his opening remarks, and also statistics and information he could use to answer questions.

Stimulus and Terpentine

The Stimulus Bill Smells of Turpentine
02/16/09 - AmericanThinker by Paul Shlichta

[edited] A farmer had a sick horse and wanted to call in a veterinarian. His neighbor said "You don't need no vet. Just feed him turpentine: two spoonfuls a day."

The farmer tried it, and the horse got sicker. The neighbor said, "You're not giving him enough; double the dose." The farmer followed the advice, increasing the dose several times, until the horse finally died. The neighbor drove by while the farmer was burying it. The neighbor hissed, "You didn't give him enough," and drove away.

The turpentine ploy provides politicians with a win-win situation. If their project succeeds, it's because of their brilliant leadership. If it fails, it was inadequately funded and needs more money.

No Need For Earmarks

Phone calls are enough when your party controls Congress and the Presidency

From my post The Political Dictionary:

earmark   n.   From cattle ranching, where a mark on its ear would direct each cow to its buyer. It is the same for government spending.

Directing federal money to specific local projects in the US goes back to 1817, and further back to the Roman empire. Anyone for Bread and Circuses?

The Congress is supposed to appropriate money for the public good. It is illegal to hand out money in repayment for political support. Earmarks were and are a way to pay contributors and voting groups.

Eliminating earmarks was a major theme in the presidential election. I see earmarks as services delivered for political bribes contributions, and I am amazed that people accept the self-serving arguments made for them.

Congressmen argue that earmarks are their way of developing the most needed projects in their districts. They say their knowledge is better than a federal bureaucrat's. That is beside the point.

• The federal government is not authorized to collect taxes to distribute favors for congressmen. Developing particular projects is not the goal. The federal government should not develop any project that could be developed by a private company or by the individual state.
• The federal government is a burden undertaken to provide the most needed, public benefits that only a federal government could provide. It is supposed to operate on as little tax as possible, because taxes are collected by force from productive people.
• Earmarks increase demands to raise taxes, and earmarks promote corruption by giving congressmen the means to routinely pay off political and financial contributors.

Earmarks have always been with us, by that name or not. But, they were only tolerated as back-room deals. Current earmarks are published, but that does not make them right. They are appropriately seen as a public display of political corruption.

Read more ...

I think the modern increase in earmarks is an adaptation to mixed party government. A Republican majority in congress under Democratic President Bill Clinton wanted assurance that their spending would go to the correct narrow purposes (contributors), congressional districts, or states, and their Democratic colleagues wanted the same. A president has wide discretion on how to spend funds unless legislation specifically restricts him.

The political problem is to avoid any direct payment that says "here is your money". The solution is to allocate money for worthy causes and government agencies. The causes are implemented through the research and development of private companies, and government agencies give contracts to private companies. "Non-profit" companies have presidents and pay salaries, so they are just as useful as ordinary companies. Coincidentally, the preferred companies get the money.

"Green" research and new technologies are quite valuable in this process. An earmark may be for research into (say) "Self-Replenishing Hydroponics". Conveniently, there may be only one company in the country, located in the congressman's district, that is developing that process, so it gets the contract. A phone call can clear up any confusion.

New technologies are not directly comparable to current markets. This makes it harder to say that an earmark is wildly uneconomic, or that the developing company is wasteful. It is research into something new, and much failure is to be expected. It is much safer to deliver no product than to skim money and deliver a sub-standard product.

Legislators claim that earmarks don't increase spending because they merely direct already allocated money to particular purposes. This happens after discussions behind closed doors about how much to allocate in the first place.

Earmarks increased under Republican President Bush, and greatly increased after the Democrats gained control of Congress in 2007. They couldn't trust Bush to distribute money as they wished; they had to write specifics into the law.

Now, Democrats have the Presidency and majorities in the Congress and Senate. Specific earmarks are no longer needed, and Democrats have declared to a grateful public that there are none.

The Democratic announcement was decisive:

[edited] House Appropriations Committee Chairman David Obey (D-WI) is the chief author of the $800 billion stimulus bill. National Public Radio asked Obey about the lack of direction from Congress about how the money would be spent.

So what? This is an emergency. We've got to simply find a way to get this done as fast as possible and as well as possible, and that's what we're doing. We simply made a decision, which took about three seconds, not to have earmarks in the bill. With all due respect, that's the least important question facing us on putting together this package.

He said that Congress is not responsible if money is misspent, but rather, whoever spends the money poorly is responsible.

Here are some new-style earmarks in the bill:

[edited] A $246 million tax break for Hollywood movie producers, to deduct 50% of the production cost for movies and TV shows made in 2009.

$70 million for supercomputer activities related to climate research. This may be for the National Center for Environmental Prediction in Camp Springs, MD.

$250 million to repair NASA facilities damaged by Hurricane Ike and for maintenance projects at NASA facilities nationwide. This may be for the Johnson Space Center in Houston, TX.

Senators Barbara Mikulski of Maryland and Kay Bailey Hutchison of Texas are on the Appropriations Committee. Their names are not listed with the projects.

"Stimulus Earmarks" lists 32 large earmarks identified by Republicans. These all lack detail. The Democratic majority is now working with a free-spending Democratic President Obama. They don't have to bother with specifics, because Obama will spend these funds according to the backroom wishes of the congress.

Phone Pork
02/13/09 - RiehlWorldView

[edited] Sen. Tom Coburn (R-OK) cited "Phone Pork" as a new invention in his floor speech. Open ended earmarking might be a better term.

He said that everyone who works in DC knows precisely what will happen after the stimulus bill is passed, because the Democrats simply made the earmarks a type of general aid to the states and federal agencies.

He said politicians will promptly get on the phone to those agencies and tell them what projects they are to spend the money on, threatening to give them trouble on their next round of appropriations if they do not.

Legislators must have detailed lists describing the earmarks, federal agencies, amounts, targeted companies, and donors. Such information could not be trusted to memory. Just one of these lists would shake congress to its foundations.

The Abuse of Earmarks and Needed Reforms
March 2007 - Citizens Against Government Waste by Tom Finnigan

[edited] The mangled and secretive appropriations process gives congressional staffers an enormous amount of discretion. Some Senators have nearly 100 staff members who earn taxpayer-funded salaries up to $160,000. Staffers write most of the appropriations bills and operate behind the same veil of secrecy as Appropriations Committee members.

There are no public records about who requests an earmark. Lawmakers submit written earmark requests to the Appropriation Committees, but all congressional correspondence is exempt from the Freedom of Information Act. Appropriation Committees prohibit members from commenting about who requested specific provisions. It is difficult to establish a connection unless a member openly takes credit for a project.

See No Earmarks
03/05/09 - Online.WSJ Opinion

An earmark by another name smells just as sweet.

In theory and publicity, the $787 billion stimulus bill contains not a single earmark. That's true according to the new Democratic definition of earmark.

Before President Obama's inauguration, "earmarks" referred to the special appropriations that bypass the normal budget process to cater to special interests and protect the incumbents who inserted them. Now the politicians are much better at disguising their work and the projects are much larger.

Take the $2 billion originally devoted to "one or more near zero emissions power plant(s)." No recipient was named, but that parenthetical "s" is a wry touch, given that only the FutureGen project in Mattoon, Illinois meets the criteria.

This is a demonstration plant for carbon capture "clean coal" technology. It came out of Dick Cheney's 2001 energy task force. The idea is to trap carbon emissions, compress them into liquid, then inject it into the earth. Years of delay earned it the nickname "NeverGen". The Department of Energy ended the experiment last year after costs doubled to $1.8+ billion.

The Illinois Congressional delegation went to work, including Mr. Obama when he was a Senator, and Rahm Emanuel when he was in the House. Chicagoan Dick Durbin is the Senate's No. 2 Democrat and FutureGen's best political friend. He included $1 billion for the project in the final stimulus bill. That $1 billion is about one-eighteenth (5.6%) of all earmarks in 2008.

Consider the last-minute changes that added $8 billion in appropriations for high-speed rail projects in general. Republicans called this an earmark for a 311 mph magnetic-levitation train between Las Vegas, Nevada and Disneyland in California, a project favored by Majority Leader Harry Reid of Nevada.

Strictly speaking, this wasn't an earmark, because the $8 billion will be divvied up on a "competitive basis," with the L.A.-Vegas route eligible for some portion.

Everything is an earmark when nothing is an earmark. A "competitive basis" in Congress does not resemble competition elsewhere. We might expect that Mr Reid, one of the most powerful men in Washington, will lean on the Obama Administration to benefit his business friends. That's the operation of earmarks, even if they are called something else.

McCain fumes over 9,000 earmarks in omnibus budget
03/03/09 - ThinkProgress by Faiz Shakir

Earmarks have not disappeared from the current $410 billion ominbus (general) appropriations bill. There are many excuses. The best one may be paraphrased "We worked on this bill in the past. We will get around to eliminating earmarks in the next bill. We promise."

Does Obama Have a Double Standard on Earmarks?
02/26/09 - Time by Jay Newton-Small and Michael Scherer

[edited] It may seem like yet another example of Washington hypocrisy, but the Obama Administration insists there is no contradiction between its words and actions. The $410 billion budget in question was passed to keep the government running for the rest of fiscal 2009.

Congressional Democrats crafted much of the bill after Obama was elected. Yet, the White House argues that the pork-laden bill, increasing general spending by 8%, is part of the prior Administration's legacy.

No Effect On Unemployment

The Obama-Geithner Bear Market
02/13/09 - Forbes.com by Robert Lenzner

[edited] The spectacle of nasty political infighting between Democrats and Republicans must be disturbing to investors everywhere. They question whether the $787 billion stimulus plan is sufficiently robust or properly focused.

Robert Albertson is a principal at Sandler O'Neill and a former Goldman Sachs banker:

[edited] After 18 years of record spending, much of it on credit, consumers must and will save the next $1 to $2 trillion of income to reduce their debt. Only private businesses create job multiplication and true future spending power. That requires a savings and investment program, not a doomed spending program.

Spending programs ate up resources for six years during the 1930s Depression, with little or no effect on unemployment.

SEC Workers Explain Failure

Morriss on Madoff and the S.E.C.
02/14/09 - Cafe Hayek by Don Boudreaux

It seems that the employees at the Securities and Exchange Commission belong to the National Treasury Employees Union. I didn't know that there is a special union to represent the workers at the Treasury Department. Does every government department have its own union?

Colleen Kelley is president of that union. She has bravely come forward to reveal that employees of the Treasury Department have too little resources, training, and direction to be effective investigating financial crime. If only they had revealed this before the Bernie Madoff scandal, maybe government could have done something about it.

Government makes a poor regulator, purchaser, and evaluator because no one loses their jobs when they fail. They don't have to be afraid. It is OK to mishandle a few investigations involving $50 billion dollars lost.

On the other hand, they did a great job prosecuting Martha Stuart. They did not claim that she did anything fundamentally wrong. They claimed that she misled them about the perfectly legal actions she took. She thought that she might possibly have done something wrong, and lied to them about what her stock broker told her. Lying to a federal agent is a crime, even if there is no previous crime involved. This is a subtle point that got Ms. Stuart 5 months in jail.

Read more ...

Now we know why they prosecuted Ms. Stuart. It seems that the SEC is easily misled and thrown off the track. They must act swiftly to punish anyone who tries this, because it is so effective.

Andy Morriss of Market Correction writes:

[edited] Colleen Kelley defends the SEC’s “front line” employees against charges that they ignored the Madoff fraud, right under their noses, by declaring that it is all the Bush Administration’s fault. (“Don’t Blame the SEC’s Employees,” Letters, Feb. 13).

There will be no more Madoffs if we give those “front line” employees “adequate staff and resources,” “appropriate regulatory authority consistent with the growing complexity of financial instruments and trading techniques,” and “leaders committed to the missions of their agencies”!

This is not just nonsense but self-serving nonsense on more steroids than all of our home run champions combined. The Madoff fraud was one of the oldest games in town, a Ponzi scheme.

Dozens of fund managers rejected investing with Madoff because they undertook simple steps, such as talking to Madoff and observing his unwillingness to provide information on his strategy, and his suspicious use of a tiny accounting firm.

We need to stop pretending that government can protect investors from people like Mr. Madoff and tell investors to do some due diligence themselves.

So, who needs government, and who can afford to depend on government?

Obama Praises Lincoln

Obama's Lincoln
02/14/09 - PowerlineBlog by Scott Johnson

[edited] Obama gave remarks on Lincoln's bicentennial in the Capitol rotunda. Obama struck a humble note at the opening, confessing that he "cannot claim to know as much about his life and works as many of those who are also speaking today." This humility quickly transformed into a personal tribute expressing a "special gratitude to this singular figure who in so many ways made my own story possible."

The medieval scholastics characterized themselves as dwarves standing on the shoulders of giants; they could see more and farther, not through any virtue of their own, but rather "because they were carried high and raised up." Obama omits any such self-assessment in his tribute to Lincoln. One wonders, does Obama think Lincoln is great because he made Obama possible?

A joke about some men on first dates.

Bruce had talked for ten minutes about his life, hobbies, and plans to move up at work.
Then, he paused and said: "Well, enough about me."
Sheila's eyes lit up in the hope that they could start a nice conversation.
He continued, "So, what you think about my plans?"

++++++++
Seduction and Politics
A politician on a first date.

They're Throwing a Party

Regarding the "stimulus" legislation, I need a cartoon to go with this caption:

Well, things can't be that bad. They're throwing a party.

Charming the Barbarians

President Obama Believes He Can Charm the Barbarians
02/11/09 - PajamasMedia by Phyllis Chesler

[edited] But what word other than “barbaric” describes the systematic incitement to violence that takes place in mosques and on television and which has led to mob rampages and episodes of “wilding”. Muslim girls and women are group-groped, gang raped, kidnapped into sexual slavery, set on fire, buried alive, and blinded by acid. This, for daring to go to school, work as a newscaster, a hairdresser, or for a foreign company, refuse to wear a shroud, or choose to marry someone of their own choice.

Beginning with President Obama, and including the American and western media, we had better start connecting the dots. We are not only facing “barbarians,” but we are facing barbarians who brilliantly and viciously employ non-conventional, asymmetrical, non-proportionate, and terrorist means of warfare–which unbelievably, our own media finds thrilling and romantic.

The western liberal media is terrified to further offend the rampaging Muslims whose religion is, presumably, one of peace. But not telling the truth and keeping one’s head deep in the sand does not abolish the barbarism. It only makes it more difficult for us to name it and to defend ourselves against it. For example, despite all the liberal media cautiousness, in 2009, a Polish engineer Piotr Stanczak was kidnapped, then beheaded on video in Pakistan, near the border with Afghanistan.

The “barbarism” is hardly confined to Muslim countries. In Scotland there is an alarming pattern of Muslim or “Asian” murderous attacks upon young white boys.

Trusted Public Bicycles

The Great Parisian Bike Experiment
02/13/09 - CafeHayek by Russell Roberts

From the BBC two summers ago

[edited] The local authority in Paris has deposited 20,000 heavy-duty bicycles in 750 racks around the city. Users swipe an ordinary travel card and pedal off wherever they want to go.

There was no deposit involved with the bikes, just an inexpensive user fee. The outcome isn't pretty (via Jeff Bliss).

[edited] Over half the original 15,000 specially made bicycles are presumed stolen. They have been used 42 million times since their introduction but vandalism and theft are taking their toll.

The company JCDecaux says it can not afford to operate the city-wide network. Nearly all of the original bicycles have been replaced at a cost of 400 euros ($519, £351) each.

-----
Trusted Bicycles 2
10/31/09 - Don Surber

New York Times [edited]: 80% of the initial 20,600 bicycles are stolen or damaged. The program has hired several hundred people to fix them. This has dented the Paris budget and the self image of its residents.

Many of the specially designed $3,500 bikes are showing up on black markets in Eastern Europe and northern Africa. Many are being spirited away for urban joy rides, then ditched by roadsides with bent wheels and stripped tires. Many are vandalized without reason.

The company JCDecaux invested about $140 million to set up the system and pays a yearly fee of about $5.5 million to Paris, which also gets rental fees for the bikes. In return, JCDecaux may put up 1,628 billboards that it can rent.

Don Surber: There is a possibility that the company is making enough money from the billboards to offset the losses on the bikes.

That would make the city of Paris idealistic, and the JCDecaux company realistic.

How many utopian government programs have the same outline? Companies propose plans to achieve part of a glorious future. A "trusting" government grants money and privileges to those companies. The plan falls apart, but somehow the company and the politicians make money. Only the taxpaying public loses.

Audacity to Do Nothing

The Audacity of Doing Nothing
02/11/09 - Blogs.Law.Harvard.edu by Philip Greenspun
(via Peter G. Klein)

Our prosperous society is built on predictible law and consequences. This is already a shining accomplishment in an uncertain world. It does no good to, in effect, suspend the law and take extraordinary actions because some people made bad bets, lost money, and have political influence. Changing the rules and using naked government power makes things much worse. It removes predictability and rewards the people who took outrageous risks.

See also Rewarding Bank Management for Failure

[edited] The "real money" investors didn't want to invest alongside the government. If the bank loses money, they fear the government will take 100% of the value left in the bank and leave private investors with nothing, including recent ones. This happened to recent investors in Fannie Mae.

The "real money" investors didn't want judges to modify contracts, as when bankruptcy judges reset mortgage payments at a lower level and reduce the principal owed. A central tenet of the U.S. Constitution is that people are free to make contracts.

A foreclosure is greatly preferable to these folks than a modification. In a foreclosure, the most senior investors get what they expected, their money back. The holders of the most junior tranches [last to be paid], which carried a higher return and were known to be high risk, would get nothing. This is also what they expected. If mortgages are modified by government action, it is unclear how the obligations among the various private parties should be adjusted.

One money manager scoffed at the idea that the markets had failed. "The markets are working fine, but they're giving people answers that they don't like, so people cry market failure." Stocks and bonds low? That's because investors are afraid of a prolonged depression and continued government interference.

A house in a jobless region of Michigan is worth almost nothing. A place with 50% of its former jobs only needs 50% of its houses.

The government is a lot bigger and more powerful now than in prior recessions. Rich companies and people can put some of their wealth into lobbying. They demand that the government prevent them from getting wiped out or at least slow the process.

Non-Union Businesses Grow Faster

What Happened to American Unions?
02/12/09 - Econlog.Econlib.org by Bryan Caplan From Brink Lindsey's "Nostalgianomics":

[edited] Henry Farber of Princeton and sociologist Bruce Western of Harvard report that the main cause of declining union membership as a fraction of all workers, has been the slower growth of unionized workplaces compared to nonunionized.

Between 1973 and 1998, employment at
- nonunion companies grew at 2.8% a year
- unionized companies declined at 2.9% a year

Keeping up unions membership would have required organizing new workers at the rates of the early-1950s. But, organizing rates have declined steadily since then. Percent union membership has declined steadily since the 1970's.

Survive Obama Care

How to Survive "Obama Care"
02/11/09 - MDOD by 911DOC
A doctor in emergency medicine gives some advice about healthcare as specified by Obama and the "stimulus" bill.

[edited] Buried in the "stimulus" package is a bit on health care. It's not making the news in the way it should. It is the equivalent of a bomb threat to American Medicine.

Rationed care is on the way, and the folks who do the rationing will be government 'lifers' who can not be fired and just don't care. So here you go, get to work on these things quickly before the powers that be start watching you closely.

1. Obtain a second social security number and identification card that makes you ten years younger. Keep it well hidden and once you crack 70 years old, or whatever the new cut-off for 'extraordinary care' will be, you will not be kicked to the curb to die quietly at home.

The $500 you spend for this now may save your life later. And if you doubt that this will happen, I have a family member who left the UK twenty years ago because they would not do bypass surgery on her based on her age. She got it here.

(Read 2-5 at the link)

I can not conceive of the rationale for pushing this type of plan. It has been tried and has failed in the UK and, as we have detailed on this site, Canada has good primary care, but for those who do not get their brain cancer or breast cancer at a convenient time Canadians may wait until they die for their free care. They come here. That will stop.

Failure of the New Deal

Imitating Failure
02/08/09 - AmericanThinker by Nicholas J. Kaster

[edited]
Burton Folsom Jr. writes that the New Deal didn't work. He is a professor of history at Hillsdale College, and has published New Deal or Raw Deal? (Threshold Editions, 2008).

Folsom says the New Deal combined bad economic policy and a more corrupt central government.

Obama's so-called stimulus bill, a "new" New Deal full of massive spending, is based upon the conventional wisdom of the New Deal.It will ensure that today's bad economy stays with us for many years.

Henry Morgenthau was Secretary of the Treasury and a confidante of Roosevelt. He testified May 1939:

We have tried spending money. We are spending more than we have ever spent before and it does not work. We have never made good on our promises. I say after eight years of this Administration we have just as much unemployment as when we started and an enormous debt to boot!

Unemployment was 20+ percent in April 1939. This was nearly a decade after the 1929 crash and more than 6 years after FDR's inauguration.

During that time, FDR tried everything to end the crisis: cartelizing industry (the NRA), subsizing farmers (the AAA), creating make-work projects (the WPA), promoting organized labor (the Wagner Act), and finally, launching the modern welfare state (social security, minimum wage laws, the AFDC). It was all funded by a combination of increased debt, excise taxes, and high progressive income taxation.

Most historians tend to overwhelmingly support the New Deal. Folsom says:

Historians sympathize with FDR's "progressivism" and judge him on his good intentions rather than on the results. In the progressive view, intentions and sincerity are among the noblest virtues a president can possess.

If we probe deeply into Roosevelt's popularity, we almost always discover the presence of patronage -- creating and manipulating federal jobs to strengthen his political support.

Political Truth in Labeling

These are the only Republican senators supporting the stimulus bill. I am making a list and checking it twice.

Sen. Susan Collins - R. Maine   202-224-2523
      Contact Form

Sen. Olympia Snowe - R. Maine   202-224-5344
      Contact Form

Sen. Arlen Specter - R. Pennsylvania   202-224-4254
      Contact Form

They are not from my state of Massachusets; I can't vote for or against them.

I have allocated two $10 bills for each of them. When they come up for election, I will be giving $10 to their primary opponents, and if necessary, $10 to their Democratic opponents.

If they are going to waste our resources, raise my taxes, and decrease my liberty, by voting for a bill they haven't read, then I would rather have Democrats in their place, so that the responsibily for the coming difficulties is laid squarely on the philosophies that have caused them.

It is too difficult keeping philosophies straight when the Republican and Democrat labels are confused. This is my contribution to truth in labeling.

----------
Climate bill clears House in close vote
06/26/09 - Washington Examiner by Lachlan Markay (via Riehl Worldview)

These Republican congressmen just voted for Cap and Trade legislation, a 1500 page bill that only a few in the Democratic leadership had read, and certainly none of these Republicans in name only. This bill taxes energy, the largest tax increase in US history.

Mary Bono Mack (CA)   202-225-5330
Mike Castle    (DE)   202-225-4165
Steven Kirk    (IL)   202-225-4835
Leonard Lance  (NJ)   202-225-5361
Frank LoBiondo (NJ)   202-225-6572
John McHugh    (NY)   202-225-4611
David Reichert (WA)   202-225-7761
Chris Smith    (NJ)   202-225-3765

Friedman On Greed

Milton Friedman On Greed
02/0/09 - PowerLineBlog by John Hinderaker

The late economist Milton Friedman in a video snippet. He responds to a talk show question: how can you support Capitalism, which is based on personal greed, when there is so much poverty in the world?

[edited excerpt]
Donahue: When you see around the globe the mal-distribution of wealth, the desperate plight of millions of people in undeveloped countries ... when you see the greed and the concentration of power, do you ever have a moment of doubt about capitalism and whether greed is a good idea?

Friedman: The world runs on individuals pursuing their separate interests. The great achievements of civilization have not come from government bureaus. Einstein didn't construct his theory under order from a bureaucrat. Henry Ford didn't revolutionize the auto industry that way.

The only cases in which the masses have escaped from the kind of grinding poverty you're talking about, the only cases in recorded history, are where they have had capitalism and largely free trade.

If you want to know where the masses are worst off, it's exactly in the kinds of societies that depart from that. The record of history is absolutely crystal clear: that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.

Obama's Feet of Clay

The Fierce Urgency of Pork
02/06/09 - WashingtonPost by Charles Krauthammer (via JustOneMinute)
An excerpt, not a summary.

[edited] Yet more damaging to Obama's image than all the hypocrisies in the appointment process is his signature bill: the stimulus package. He inexplicably delegated the writing to Nancy Pelosi and the barons of the House. The product, which inevitably carries Obama's name, was not just bad, not just flawed, but a legislative abomination.

The Age of Obama began with perhaps the greatest frenzy of old-politics influence peddling ever seen in Washington. By the time the stimulus bill reached the Senate, pharmaceutical and high-tech companies were lobbying furiously for a new plan to repatriate overseas profits for tax savings. California wine growers and Florida citrus producers were fighting to change "planted" to "ready to market" for a new "bonus depreciation" incentive.

After Obama's miraculous 2008 presidential campaign, it was clear that at some point the magical mystery tour would have to end. The hallucinatory Obama would give way to the mere mortal. The promised great ethical transformations would be seen as the usual fairy tale that this president told better than anyone.

I thought the awakening would take six months. It took two and a half weeks.

Spending Did Not Help Japan

What can we learn from Japan?
02/06/09 - CafeHayek by Russell Roberts

[edited] Most Japanese economists take a bleaker view of their nation’s track record, saying that Japan spent more than enough money, but wasted too much of it on roads to nowhere and other unneeded projects.

Dr. Ihori surveyed public works in the 1990s. The spending created almost no additional economic growth. Instead of spreading beneficial ripple effects across the economy, the spending led to declines in business investment by driving out private investors.

Critics said decisions on how to spend the money were made behind closed doors by bureaucrats, politicians and the construction industry, and often reflected political rather than economic considerations.

The Japanese Didn't Try Hard Enough?
02/07/09 - Blog.Mises.Org by Tim Swanson

[edited] This NY Times story discusses the Japanese government spending packages during the 1990's.

The story notes that most Japanese consider all of the plans to be resolute failures. Yet, a number of Western economists believe that Japanese taxpayers simply did not spend enough!

How much was not enough? Japan spent $6.3 trillion on construction-related public investment between 1991 and September 2008. [That is $6,300 billion.]

Read the "Stimulus Package Unveiled" from the WSJ and "Japan" by Benjamin Powell.

Will You Bet On Your Opinion?

Will $100 Shut People Up?
02/06/09 - Crime & Federalism by Mike

[edited] When people state a stupid opinion or false fact, I no longer argue. I say, "OK - I'll bet you $100 that you are wrong."

People never take the bet. What's up with that? It's amazing how something as small as $100 can test a person's convictions. Amazingly, if you will not put $100 on the line, why should I believe you? People want me to change my mind based on their assertions; yet their assertions aren't even worth $100 to them!

How about people who demand that the government provide a stimulus to the economy. Perhaps Paul Krugman will say, "I'll wager $10,000 with any of my critics that if x-stimulus occurs, y-economic effect will follow."

Why aren't these economists making huge bets? They are rather confident in their opinions. They should go win that money! If they are embarrassed by greed, they can set up a charity as the beneficiary of the wager.

If someone wants to spend billions or trillions of taxpayer dollars, but won't offer up a few thousand of their own, then what should we think of him?

We Don't Have Free Markets

Regulation of Financial Markets
02/05/09 - Cafehayek.com by Russell Roberts

If we had an "unregulated free market":

• The banks that made stupid investment decisions would have gone bankrupt and be under new management.
• The investment rating agencies that rated subprime loans as "AAA" would be disgraced, bankrupt and out of business -- no one on earth would deal with them any longer
• No one could force bankers to make risky loans, as is currently done by the Community Reinvestment Act, lawsuits from ACORN, and the Justice Department.
• No central bank would be in charge of the entire money supply.
• - to make credit available at too-low interest rates.
• - to create a permanent inflation that made housing jump in "value".
• - to encourage risk by being a lender of last resort.
• - to condone and support an over-leveraged banking system, where reserves are only 4% of loans outstanding, inviting constant instability.
• No Fannie Mae, Freddie Mac, or FHA could direct trillions of dollars into unaffordable housing construction.
• The government could not borrow $1 trillion for handouts to political interest groups.
• The few elements of remaining capitalism would not struggle under thousands of pages of rules and regulations, and dozens of government agencies.
• The little guy would not have to contribute his funds to a government that saves the incompetent and the dishonest from the consequences of their own actions.

We don't have an unregulated free market; we have an out-of-control government intent on looting us blind.

Leftist Arguments: A or B

Leftist Dual Models
02/05/09 - ChicagoBoyz by Shannon Love [edited, restated]

The Left has different arguments for different purposes.

Tobacco Taxes:

A: It is right to tax tobacco companies.

Tobacco use is the fault of evil tobacco companies, and smokers are their hapless victims. (1) Tobacco is highly physically addictive. People are largely powerless to stop smoking. (2) Marketing makes smoking so desirable that it subverts the choice not to smoke.

So, the companies are rightly paying billions (to state governments, not smokers) in compensation and are forced to stop brainwashing people with advertisements.

B: It is right to tax smokers.

Individuals freely choose to do something destructive to themselves and others. They can stop anytime they wish. Taxing them helps the smoker by inducing him to quit, and it compensates society for the harm that smokers choose to inflict on the community.

Social Security (SS) and Payroll Taxes:

A: Government payments to the retired are proper repayment of what was contributed.

SS represents a solid “investment” for workers. The compulsory payments are “contributions”, the same term used for private pension payments. Workers will reliably receive a higher rate of return than they can with private plans, because the government guarantees payouts. A worker will get back every dime he puts into Social Security plus interest. SS payouts are fair because they depend on how much a person contributes over his working life. SS is simply a compulsory government pension system whose benefits go to contributors.

B: Workers should get tax refunds based on their SS taxes.

SS is a regressive "tax" system that forces workers to carry the burden of supporting the elderly and disabled while getting nothing in return. The worker’s contribution to SS should be considered part of the general taxes he pays. These are not “contributions”, they are regressive taxes.

The analysis:

The only constant in these dual-model arguments is in who benefits. For tobacco, leftists get money to pay for votes and to increase the public’s dependency on government.

The SS arguments demand lower contributions and greater payouts, using contradictory statements.

Leftists choose which model to advance at any given time depending on how it benefits them, the politicians, and the particular political groups they identify with.

A Tested Stimulus Plan

Here is my idea for a stimulus plan. It will inject $trillions into the economy, employing people again in the hardest hit industries, such as restaurants, entertainment, travel, construction, and finance. This is an idea that has been implemented and tested in the past. It will work, unlike the speculative "trickle-down" stimulus bill now under consideration. It would place vital cash into the hands of consumers.

The government should guarantee any borrowing against houses, autos, and even future earnings, with low credit requirements for granting the loans. This would apply to both new and existing housing and autos, and the estimated future earnings of hopeful couples and serious singles. Building new houses would employ construction workers and materials suppliers. The borrowings against existing houses, autos, and earnings would be spent immediately for consumer goods and services.

Stop shouting. Keep it down out there. Yes, I know that this was the basis for what nasty people call the "housing bubble". The housing bubble was great! It worked well up until just recently. It was a period of prosperity and rising employment.

Read more ...

Our only problem is that the housing bubble was killed by having to pay back the loans. A few too many houses and pfft! the price of houses sank. We don't have to make that mistake again.

So, I will modify my suggestion just a little. We won't rely on personal credit. We will have the government borrow the money. The government will loan the money to the people as "tax rebates", to companies as "bailout" and "stimulus" loans, and to companies that will build new technologies that are "government guaranteed" to pay off within 5 years or so. It is not "trickle-down" when the technology is new, only when it is old. Government investments usually work out great and earn lots of money, I think. I should find some examples.

This time, the government will be doing the borrowing, so they can pay it back. They can get the money from the rich, who have so much that they won't miss it. If that doesn't work so well, I have heard that they can print up the money, so they don't have to pay it back.

Another thing is the multiplier on government spending. Obama says that this multiplier is 1.5. He says that $150 in goods and services is created whenever the government spends $100. Yes, it is a little hard to believe, that when the government buys 2 widescreen TV's, the government gets 2 TV's and someone else gets one for free. I like that deal. I'm a believer. I just think it is great that this works. I am waiting for the explanation to appear on BarackObama.com.

Let's do all of this quickly before those nasty people can shout "bubble" at us again. On to Victory!

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OK, I don't believe.

We have just emerged from a 5 year experiment in giant stimulus. The housing bubble WAS a stimulus bubble. The government borrowed through Fannie Mae and Freddie Mac to loan to people to buy houses (construction, consumer goods, appliances) and to re-finance housing to buy everything.

The $2 trillion in sub-prime financing in the last five years delivered dollars to the people who spent it immediately on all types of stuff. That was a $2 trillion stimulus.

We are living now in the "post stimulus" economy produced by that giant stimulus. How do we like it?

That was the result when people promised to pay it back. What will happen now when the money is being handed out, with no hope of repayment? We have only the prospect of higher taxes on productive people, or high inflation, and probably both. Tax the rich, tax the middle class, and tax the poor.

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Let's Counterfeit Our Way to Wealth
The Deadweight Loss of Taxes
Why Spending Stimulus Plans Fail
Posts on Stimulus

Democratic Trickle-Down Economics

Democrats Try Trickle-Down Economics
Growing government won't stimulate the real economy.
02/05/09 - Online.WSJ.com by Carl Rove

[edited] As a presidential candidate, Barack Obama attacked "trickle down economics" as "bankrupt" and an "old, discredited" philosophy that "didn't work." He was wrong. Even worse, he and congressional Democrats are embracing a Democratic version of trickle-down economics that won't work.

The House-passed "stimulus" bill, H.R. 1, is deeply flawed, assuming that spending $1 trillion to grow government will trickle down to help people who lost jobs. The Democrats' spending is horribly mismatched with industries that have suffered job loss.

Democrats want to spend $88 billion to increase the federal share of Medicaid. What American will be hired by a small business, factory, retail shop, hotel, restaurant or service company because of this spending? The answer is very few.

In H.R. 1, there's $41 billion set aside for school districts, $1.5 billion for university research grants, $2 billion for Energy Department labs, and $3 billion for the National Science Foundation. Yet education is one of the few sectors that added jobs last year.

There's also $4 billion for health programs like obesity control and smoking cessation, $2 billion for the National Institutes of Health, $462 million for the Centers for Disease Control, and $900 million for pandemic flu preparations. Health care also added jobs last year.

White House adviser Larry Summers argued that any stimulus must be "targeted, timely and temporary." This bill does the opposite. Mr. Obama pledged to "scour our federal budget, line by line, and make meaningful cuts." His cuts are unspecific and fanciful, while Congress's spending will be real and record-setting.

Discretionary domestic spending will have nearly doubled by the time Mr. Obama stops dithering and starts scouring.

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Worst Talking Point Ever Mike: We were supposed to create jobs. Instead, we've enriched the bankers.
Ike: Well, let's be proud of that.
11/06/09 - The Atlantic by Megan McArdle

McArdle: If this is the best the Democrats can come up with, they are in deep, deep trouble.

From Politico: Members fear their jobs are next.

House Minority Leader John Boehner (R-Ohio): Speaker Pelosi is trying to force her members to vote for a bill that the American people have soundly rejected.

Democrats counter that their agenda has kick-started a recovery on Wall Street, even if it hasn't trickled down to the job market yet, and that Republicans are putting at risk what Democrats have begun.

Rewarding Bank Management for Failure

Obama Caps Executive Pay Tied To Bailout Money
02/03/09 - HuffingtonPost via AP by Jim Kuhnhenn
President Obama, emphasis added:

[edited] We need a strong financial system to keep credit flowing to businesses and families. My administration will do what it takes to restore our financial system; our recovery depends on it.

We've got to restore trust. We've got to make certain that taxpayer funds are not subsidizing excessive compensation packages on Wall Street.

We all need to take responsibility. And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses.

That's the height of irresponsibility. That's shameful. And that's exactly the kind of disregard for the costs and consequences of their actions that brought about this crisis: a culture of narrow self-interest and short-term gain at the expense of everything else.

Read more ...

This is America. We don't disparage wealth. We believe that success should be rewarded. But what gets people rightfully upset, are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers.

As part of the reforms we are announcing today, top executives at firms receiving extraordinary help from U.S. taxpayers will have their compensation capped at $500,000 - a fraction of the salaries that have been reported recently. And if these executives receive any additional compensation, it will come in the form of stock that can't be paid up until taxpayers are paid back for their assistance.

I will restate Obama's analysis. Top executives at these companies led the companies into big trouble. They showed a disregard for the costs and consequences of their actions. They created a culture of narrow self-interest and short-term gain at the expense of everyone else. They paid themselves lavish bonuses as they drove their companies into the ground. They showed the height of shameful irresponsibility. We must act to restore trust in a strong financial system.

So, what does Obama do? He puts $300 billion into the custody of these same executives. Bush did it and Obama supported it. He wants to give them hundreds of billions more. Does this in any way restore trust? He says to these shameful and reckless executives "keep running the company, and here is more money". But, we are going to pay you less, only $500,000 per year plus stock options. (The options will only be paid after you pay the government back.)

Even this will apply only if those companies get more money, not the money given in the past, and only if they are given "extraordinary help" in the future, not just the usual bailout help.

This does not make sense to me. Why is he supporting the same managements that caused the problems?

Actually, government housing programs and policy created our problems. Bank executives joined into these programs, got burned, and burned us. But, government was the prime source of the bad policy and the temptation. (See We Guarantee It.)

If Obama believes his own words, he is irresponsible to invest public funds with these crooks. They should be thrown out along with their irresponsible subordinates, not just given a lower salary.

If Obama believes that the government is responsible, then it isn't so bad to support the managements and companies who were tempted into bad housing investments, along with government policy. Maybe the government feels guilty.