We should see a lot more advertising like this

SEATTLE, Washington - I snapped a pic of this billboard (with dramatic sunset lighting) in Las Vegas last month, and was going to write about it but forgot:



Notice something unusual about this billboard? It's promoting the price of a medical procedure. Considering that about 16% of GDP goes to health care, we should be seeing stuff like this constantly.

Think about billboards (and other advertising) related to other large sectors - restaurants/food, hotels, consumer electronics, real estate, etc. - we are hammered relentlessly with the value proposition. Here's what you get, here's what it costs.

How many medical procedures do you even know the price of? All I could think of was laser eye surgery, because (at least at first, maybe it's different now) it hasn't been covered by health insurance. So they have to pitch it to you - here's what you get, here's what it costs. You've probably heard those radio commercials with the lifeless monotone of Tiger Woods telling you how great his laser eye surgery was.

The fundamental reason for this, of course, is that you don't pay directly for most of these things, your health insurance company does.

I was reminded of this sign when reading Reason's interview with Steve Forbes. Forbes mentions laser eye surgery, and he also provides the example of cosmetic surgery:

But we see from Lasik what happens when you get a real market. It costs a third less than it did 10 years ago. Cosmetic surgery hasn’t had inflation, like you have in the rest of health care, even though demand has increased sixfold in the last 15 years and even though there have been enormous technological innovations. Why? Because you pay for it.

Amazing, eh? If you have people paying for something out of their pocket, and with a competitive marketplace from which to buy it from, costs keep coming down and innovation continues briskly.

Think about automobiles: if you do the inflation-adjustment math, their cost today isn't much different than in prior decades, but today's cars are vastly superior machines to those of yesteryear.

So a fundamental problem with cost control in health care is that people don't pay directly for things; a third party pays, a third party you're usually tied to through your employer. The goal for health providers simply becomes satisfying a bureaucratic beast:

And you don’t get the kind of productivity you get everywhere else. We use phones and emails for everything now. Do you do consultation with your physician or nurse by phone or email? Rarely. Or hospitals giving warranties, like you have everywhere else, where if they don’t scope your knee right, you go back and don’t have to pay for it again. Why wouldn’t that be their dime? Because it’s not real competition. They know you’re not writing the checks, so therefore they don’t have to please you; they just have to make sure they get a bureaucratic insurance company to approve it.

(You know what I do see a lot of advertising for? Health insurance companies.)

Imagine if a third party (or even worse, the government) was responsible for buying your car and buying your gas? Or, for that matter, your food? It would be a debacle. Health insurance is tied up into every little medical transaction for one simple reason: Employer-provided health benefits were given beneficial tax treatment sixty or so years ago. This situation survives today. Employers will funnel money into anything that gets preferential tax treatment.

This situation needs to be eliminated. In my opinion, preferential tax treatment for health care should be eliminated. Both Forbes and Whole Foods CEO John Mackey (who caused endless hysteria in the granola-sphere with his health care op-ed) call for allowing individuals to receive health tax deductions similar to what employers get. (I suspect Forbes, at least, would also support simply eliminating the tax benefit altogether.)

So here's the simple health care recipe: (1) you eliminate preferential tax treatment for health care (2) employers, upon seeing this, stop offering health insurance. Every last penny they currently pay to health insurers goes right into your paycheck (3) You go out and buy insurance, which for most people would consist of a catastrophic plan, plus paying for more routine stuff out-of-pocket.

(Step 2 would be an effective tax increase; there should be a counterbalancing drop in income-tax rates to compensate).

Hope that's simple enough. Of course politicians are not going to pursue this, as it gives them less control, not more control.

And would Dr Athari be able to handle all the business?

p.s.: Read that whole Reason interview. Where the hell was that Steve Forbes in 1996 when he was running for office? It's amazing the things you can say when you don't have to cater to absurd interest groups and dance around "cultural" issues.

UPDATE: Right on cue, Arnold Kling points out a seven pundit commentary in the New York Times on "how to control health care costs". Some of it reads like parody - one of the pieces, with a straight face, is headlined "Be More Like Medicare".

Kling notes that his proposal has no chance of happening, and that the other six have no chance of actually reducing costs.

Only four of the seven pundits even bother to mention "patients", obviously thinking they can't possibly play a role in reducing the amount of money spent on health care. I feel like getting the email addresses of some of these characters and sending them my picture of Dr Athari's billboard.

On the Roman Polanski situation

You know what happens to nosy fellows?

SEATTLE, Washington - When the French government bails out on you, that usually means your goose is cooked - at least that's what Roman Polanski should be thinking right now.

Now, I have not exactly been calling for Polanski's head on a spear for the last fifteen years, so I've asked myself - should I have been doing just that?

If you asked me two weeks ago, "why did Roman Polanski flee the United States?", I would have said something to the effect that he kinda-sorta got down with a just-short-of-legal girl, and it came to light, and he left rather than deal with the static.

Polanski in fact had negotiated a guilty plea in 1978 on "unlawful sexual intercourse with a minor"; when you read that it kind of settles the issue of whether he had sex with her. So perhaps I have simply been Jedi mind-tricked whenever reading old accounts of why he left the country. Not even old accounts: the story linked above, written today, puts it thusly:

He is accused of having unlawful sex with 13-year-old Samantha Gailey in Los Angeles in 1978, before fleeing the country and spending the intervening period as a fugitive, mainly living in Paris.

That's a bit of a tinted view of the facts, and I suspect everything I've casually read about the circumstances of his flight had a similar ring.

The word "rape" had not entered my thinking, but if it had, I think I (like Whoopi) would have assumed it was a-few-weeks-short-of-legal rape, not "rape rape."

Once you read the details of the legal wranglings, and Gailey's testimony, it certainly puts Polanski in a rotten light. Sounds like "rape rape".

Now, I have also thought about taking a more libertarian perspective on this - specifically, the fact that Gailey has stated that she'd like the dogs called off. Crimes, even a person-on-person crime, are technically regarded as crimes against the state (Polanski v. California, as opposed to Polanski v. Gailey), so Gailey doesn't really have such power. Should she? It is a mainstream libertarian position that her wishes should override the wishes of the state?

Are we (through the government) sticking our nose where it doesn't belong? As Polanski himself said - "You're a very nosy fellow, kitty kat. Huh? You know what happens to nosy fellows?"

Turns out, it doesn't seem to be - I can only find evidence of the most hard-boiled anarchists (and a few Hollywood types) clamoring for a reduced role of the state. Mainstream libertarian opinion (if I may use the term) is much more sympathetic to the government than usual in this matter.

Where were these chicks when I was at Clemson?

Another Dagny wannabe

SEATTLE, Washington - I noticed in the October 2009 issue of Reason that one of their summer interns, Amanda Carey, is a student at Clemson. She is the editor of the miniscule "right-wing" student paper, the Tiger Town Observer. Very cute, as you can see. Per Reason she talks "a little natural rights, a little Atlas Shrugged" in a regular Friday get-together, followed by a trip to "Super Taco."

Where were these types when I was prowling Tiger Town? I knew one of the members of the Observer staff at the time and he never mentioned cuties (or any women at all, that I recall) at the paper. Otherwise, I'd have also been hanging out with them, talking natural rights.

And Super Taco must be new, because I was quite well versed on cheap eats when I was there and I don't recall it. Does the local Pizza Hut still have a $4 lunch buffet? For the sake of the current students, I hope not. Is Nick's still peddling cheap pitchers of Lowenbrau Dark? Is it a good thing or bad thing if they are?

All you need to know about the "housing crisis" in one press release from nine years ago

SEATTLE, Washington - Via Cafe Hayek, a press release from Wells Fargo in August 2000 (text not bolded in original):

A new home financing program, designed to spur homeownership among California’s educators, may receive an “A” from teachers throughout the state. The program, announced today by Wells Fargo Home Mortgage, Inc., the California Housing Loan Insurance Fund (CaHLIF) and Freddie Mac, allows teachers working within the state to purchase a home with a downpayment of just $500.
The program also offers teachers relaxed credit guidelines – making it easier to qualify for the program – and higher qualifying ratios, which allows homebuyers to qualify for more home. Wells Fargo Home Mortgage will be the exclusive provider of these loans; CaHLIF will provide downpayment assistance and mortgage insurance; and, Freddie Mac will purchase the loans.
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A starting salary for a California public school teacher is $29,000 a year, according to the California Teachers Association, while the average teacher’s salary is $44,000. Meanwhile, the median home price in California is $217,520.
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While California educators will only need $500 for a downpayment, the remaining downpayment will be funded by CaHLIF in the form of a 3 percent simple interest loan with payment deferred until the end of the loan term, or when the home is sold or refinanced.

As a commenter at CH noted, a $200K loan under these circumstances would be about $1,300/mo for someone making $44K a year. I make more than triple that and I consider my mortgage of under $1,600 to be approaching the upper range of what I consider acceptable relative to my income.

The "crisis" has repeatedly been spun in the media as crazy, gambling, out of control banks making bad decisions, but in this case all the bank (Wells Fargo) is doing is writing an ill-advised loan, scraping off a bit of vigorish, and dumping the turkey loan off on the only kind of entity that would want such a thing, a government mutant like Freddie Mac.

This particular example is doubly odious, doubly indicative of the danger of having a government entity tinkering in the housing market, because not only was Freddie gobbling up absurd loans, but in this case it was a special for teachers!. Why are teachers making $44K more deserving of cushy loans than anyone else making $44k? At least it was available to both public and private school teachers... cold comfort.

Sometimes foreclosure is a strategy, not a disaster

SEATTLE, Washington - Media treatments of foreclosures often have an air of treating the foreclosee as a noble victim, someone who's trying to do the right thing but has fallen victim to extraordinary circumstances. An example of this is a Seattle Times story from May on government help for these unfortunate victims:

Aurora Loan Services is set to foreclose on her home overlooking Seattle's Puget Sound on Friday. Despite numerous calls, e-mails and letters, she says she's only been able to have one phone conversation with a company representative.

"It's like this huge, concrete thick wall that you cannot get through," said Inman, 58, who is working as a human resources consultant, but making much less than she was before she was laid off by the City of Seattle.

Let's ignore for a second that we have a city employee who can afford a Puget Sound view property - the tone of the entire article is (1) foreclosees are victims and (2) President Obama is riding to their rescue.

I get an image in my head after reading stories like this, of a cruel bank sending four masked goons to haul the hapless residents from their properties, one goon on each limb, perhaps as a hungry child looks on with a tattered doll in her hands.

First of all - if you're a paycheck or three away from falling into a foreclosure that you don't want to fall into, you should have mortgage insurance. I get solicited for such insurance every month, and I've determined that I don't need it. The woman above (in a view property on a municipal salary where a pay cut has resulted in her not being able to make payments) has simply not been responsible. But I guess this is why the people have elected the politicians that they have elected - to dig them out of these holes.

But beyond that - getting foreclosed is often a strategy for a property owner, not a disaster to be averted at all costs. A friend of mine back east is doing it, and explained his plan to me in detail. He has an underwater condo with a paying renter. He's done the math on his income from the rent and his various costs (mortgage, taxes, condo fee, etc.) and has decided that the best move is to just stop paying everything, keep collecting the rent, and let the slow slow process of foreclosure grab the place when the time comes. He's 60+ years old and doesn't give a damn about his credit rating.

I've always sensed that situations like my friend's are more common than the media are letting on, and now I have some evidence to back me up: analysis of the causes of foreclosure show negative equity to be the leading cause of foreclosures in the second half of 2008, not the reasons more commonly cited in the media (e.g. evil banks offering "teaser" loan rates that roll into higher rates that the victimized borrower cannot afford). Negative equity does not in and of itself make you unable to afford payments, but it may make a thinking owner (like my friend) decide that walking away is the best option.

Of course, all the government "fixes" to the foreclosure "crisis" are either shooting at the wrong targets or aren't likely to lower foreclosure rates much even if they hit their targets (as the WSJ article above discusses in some detail).

codicil: When it comes to real estate, nobody has a more blinkered, myopic view than realtors. An Arizona realtor has dubbed people like my friend "sympathy foreclosees" (who is being sympathetic to whom, I'm still not sure) and declared that Something Must Be Done:

Everybody loses in a sympathy foreclosure, the lender loses money, the buyer damages their credit and usually they neighborhoods with many foreclosures are less attractive to buyers due to high crime in some of these abandoned homes. Something must be done....

Garbage report on "savings" from ditching car and using transit

SEATTLE, Washington - Economict Thomas Sowell made the oft-quoted observation that economics is not about solutions, it's about trade-offs. Keep this in mind as you read the America Public Transportation Associations's drivel on how much you can "save" every year by getting rid of your car and using public transit instead.

APTA pegged the "savings" at $8,600 per year across the top 20 transit-ridership cities, and $10,483 in Seattle.

Yes, it looks like riding transit will "save" you money - but what about the trade-offs? What are the costs? If you ditch your car, you're probably severely damaging your quality of life. People don't have cars for the joy of burning money - they have them because the benefits of the car equal or exceed the costs. A car gives you sweet, beautiful mobility, it immensely enhances your work possibilities, your recreational opportunities, your potential for community involvement, on and on. Unless you have tons of time to burn making circuitous trips on transit to do what you have to do, or you're just thrilled with everything within walking distance of your house, you're probably making your life worse.

We don't need the American Public Transit Association to tell us what car ownership costs, or for that matter if the costs are worth it - people have clearly voted with their choices. In fact, in recent polling about luxuries vs. necessities in life, the automobile checked in as a necessity with 88 percent of the respondents, blowing away items like landline phones, televisions, microwave ovens, you name it - even though car ownership was by far the priciest item in the poll.

Each of us can make our own decisions on these matters, without propaganda outfits like the American Public Transit Association telling us about the "savings". I'll keep my car, thanks. I don't have a microwave oven, even though I can afford to line my walls with the things if I want, because I've decided the benefits are too modest.

You can make a really shit life for yourself if you want to by eliminating all "costs" regardless of benefit. As a commenter on the seattlepi.com story on the APTA report noted:

Living in a tent would save about $42,000 per year. Giving up table wine would yeild $240 per year. Using old newsprint and forgoing commercial TP would save a whopping $48 per year. Movies? Nix your montly movie night habit with the wife and you would save nearly $1,200 annually. Coffee at Starbucks? Drinking tepid water each morning would net about $600 per year in savings. Want to save big? For go kids. The cute little buggers cost you more than $13K a year...throw in childcare so you can have a fulfilling career...another $8K minium. Everything in life is not always about saving money

which I reproduced here for its sentiment, in spite of the massive spelling, grammar, and usage errors.

Don't believe that a WA income tax will only tax the "rich"

SEATTLE, Washington - The politicians are scraping around for new revenue sources in Olympia, but at least for the moment they have shelved the idea of creating a state income tax on people earning above $250,000 per year.

Now, you're welcome to think that the state should have an income tax (although it would probably drive people like me from the state). There are legitimate pros and cons. But you're a straight-up sucker if you think such a tax would continue to only be levied on the "rich" going forward.

Look at the history of the federal income tax for guidance on this. The first federal income tax created after the passage of the 16th Amendment in 1913 only applied to income above $3,000 (which if you do the math is almost $65,000 in 2008 dollars). The bottom rate was 1% (ONE Percent!), going up to 7% for income above $10,000,000 in 2008 dollars. Given the $3,000 threshold, less than two percent of American households paid any income tax at all at that time.

This tax was pitched as just grabbing a bit from the very very rich, those who could afford it, just as the proposed Washington income tax has been pitched.

Interestingly, when the 16th Amendment was being debated, there was talk of putting a 10% hard cap in the amendment. This was rejected, because it was considered absurd, a total howler, that the income tax rate could ever rise that high. (See here). In fact, by 1918 (under wartime conditions) the top rate had blown right through the inconceivable 10% barrier all the way to 77%.

State governments can't wage war as a justification for raising taxes, so they just institutionalize big spending increases and new programs in good times and then start cooking up ideas for ways to take more money to pay for these things when things sour. This phenomenon is discussed in detail in the excellent cover story from this month's Reason magazine.

Of course, every last penny of the government spending (in programs that sometimes did not even exist a few short years ago) is alleged to be indispensable, crucial to the functioning of a civilized society, kids will be starving in the gutters if anything is cut, etc etc.

News Flash! - some politicians made intelligent, prescient comments six months ago

SEATTLE, Washington - It's looking more and more likely that GM will fire for bankruptcy, in spite of the fact that they've gotten tens of billions of dollars in aid and have been essentially taken over by the allegedly brilliant inner circle of the Obama administration. I was beating the drum for bankruptcy back in November. In fact, it was so obvious back then that a bankruptcy filing with no taxpayer aid was the correct path, even some politicians knew it.

A couple senators mentioned in November that a government cash infusion to GM would just put off the inevitable. Jon Kyl (R-AZ) knew the truth:

Mr. Kyl, the Senate's second-ranking Republican, added, "Just giving them $25 billion doesn't change anything. It just puts off for six months or so the day of reckoning."

Those were tepid comments compared to Richard Shelby (R-AL):

"Companies fail every day and others take their place. I think this is a road we should not go down," said Mr. Shelby, the senior Republican on the Senate Banking, Housing and Urban Affairs Committee.

"They're not building the right products," he said. "They've got good workers, but I don't believe they've got good management. They don't innovate. They're a dinosaur in a sense."
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"It's not the General Motors we grew up with. It's a General Motors that is headed down this road to oblivion," said Mr. Shelby. "Should we intervene to slow it down, knowing it's going to happen? I say no, not for the American taxpayer."

Normally every word out of the mouths of politicians is nonsense, but note that the Times article is dated November 17, right after the election; you have a window of a couple weeks there where the politicians of the losing party will make sense, before the whole bullshit cycle revs up for the upcoming (i.e. two years in the future) election.

The end of intellectual isolation a.k.a. when I was your age...

SEATTLE, Washington - I've given a bit of thought here and there in the last few months to what my life would be like if I was just coming into adulthood today, instead of almost 20 years ago. One of the impetuses for this was a blog post from Neil Best last fall, where he mentioned that his employer asked if he had a business need for the pager that he was issued years ago. Not only did he not know the whereabouts of the pager, but he wondered if young adults reading his post even know what a pager is.

(I rolled with a pager in the mid-1990s).

The internet, of course, is the big deal of my lifetime. I first started accessing the internet in 1994 or so, via dialup, as a 22 year old. I recently chatted up some younger folks at the coffee shop, who have had full-blast internet access since they were 9 or 10 years old; they barely remember a world without it.

Of course the mid-1990s internet was a different place, with primitive web sites (go look at copies of your old favorites) and email lists ruling the day. Today we have blogging and RSS, and you can read from and interact with a large number of people from every nook and cranny of the human spectrum.

Intellectual isolation is a thing of the past. This was brought up recently in a post by Dr Joseph Salerno, discussing how students interested in out-of-the-mainstream Austrian economics no longer have to seek out the tiny number of graduate programs that have an Austrian concentration; they can apply to the best schools possible and still stay in the dialogue on Austrian thought:

When I went to lunch after the panel with four Rothbardian TES members I was not asked once to recommend an "Austrian" graduate program--much to my surprise and delight. Rather the discussion revolved around the pros and cons of the grad programs they themselves had researched and applied to. None of them fretted that he would be "intellectually isolated"--a ridiculous complaint in this age of the Internet , Facebook networking, Mises.org, etc.

This strikes a chord with me. Even as a young, moronic 1st year college student in 1990, I had a budding interest in economics. I took courses from econ professors in my first two semesters, and was then soured on the whole topic for years.

What happened? I ended up with two semesters of indoctrination from unreconstructed Marxist professors^* which, even as a young moron, was out of line with my budding intellectual inclinations. The Macro class textbook was a long paean to wise government planning and Keynesian ditch-digging written by Robert Heilbroner and James K. Galbraith. Heilbroner was a socialist for most of his adult life before throwing in the towel and declaring capitalism to be superior; I doubt Galbraith will ever throw in the towel.

My personality seems better suited to being an eccentric small-college professor than my current corporate drone status, and pursuing economics in college to the bitter end might have landed me in such a career. In 1990, I simply assumed that the nature of economics was what was presented to me in my early classes and texts; today, given sufficient interest, I would have balanced the stuff in class with supplementary learning more in line with my expectations and seen that I was not getting exposed to the whole soup and nuts in college.

I've had various chances to correct my trajectory in life (including nearly changing my major in graduate school in 1997), and fumbled the ball every time.

My interest in econ has been recently rejuvenated by reading best-of-breed blogs. There isn't a whole lot stopping me from just throwing it all away and going back to school to do a PhD today, except inertia, my belief that people's mathematical ability erodes over time, and my own trait of not being very adept at long-term, open-ended tasks.

Sound like whining? Yes, I'm whining. I ultimately have no one to blame but myself. My excuses are weak. But my When I Was Your Age lesson is: you can now cook up all sorts of excuses for how your life goes, but having a lack of information, or being exposed to an inadequate spectrum of information or opinions, is no longer an excuse.

* I want to note, these were two of the nicer guys you could possibly meet; in fact one helped me get into the class of the other when it was overbooked. This does not validate the bad economics.

Intelligence vs. Wisdom

SEATTLE, Washington - My current man-crush, Don Boudreaux (sorry, Daniel Craig, times are a-changing), recently made some interesting comments about intelligence, wisdom, and economics.

Dr Boudreax got on the topic as a result of a Newsweek article about Paul Krugman where Krugman notes that part of his original attraction to economics was that it seemed to reveal "the beauty of pushing a button to solve problems." Boudreax noted the hubris of proposing button-pushing "solutions" to address issues in complex market economies - what Hayek called "the fatal conceit".

In response to comments that Krugman is "no dunce" and that he probably has a appreciation of complex markets comparable to his own, Boudreax noted:

A believer in the existence of buttons to push is either overly impressed with his or her own intelligence or simply unaware of the true complexity of any market economy (or both).

It's true that Krugman is no dunce. I have absolutely no doubt that his I.Q. is significantly higher than my own -- and, more relevantly and much more impressively, that it is significantly higher than that of 95 percent of all other economists. But intelligence is not the same thing as wisdom. In fact, I suspect that, after I.Q. reaches a certain (above-average) level, I.Q. and wisdom are negatively correlated with each other. Cleverness becomes mistaken for insight. The two are not at all the same.

This ties back a bit to at least half of my old quip that the smartest and dumbest 25% of the population gravitate to leftist politics - the really smart ones think that they're not only smart enough to run their own life, but to run everyone else's life as well.

Note the end of this post by Judith Warner, where she says that we are now governed by "this book-writing president and his coterie of brilliant advisers." Well, now we're set - the guys in charge should feel free to fire the CEO of General Motors, shake up the board, funnel the production of the company into unwanted "green" technologies, pour billions of taxpayer dollars down the funnel, etc... after all, they're brilliant.*

Dennis Prager has touched on the topic of wisdom over the years - in particular how young people going to college are immersed in the ideology of the people who tend to populate college campuses (definitely of a certain political stripe, and intelligent - college professors are really smart, right?) and assume this is the Correct Way of Looking At The World, without realizing that there are other factors (e.g. wisdom) that come into play when shaping a world-view and values system.

Codicil: Hopefully this Dr Boudreaux is not the same as the one Tom Tolbert discussed on The Jim Rome Show.

* Warner did not endorse those specific policies, she was just swooning over the brainpower of the guys in charge now.

Zombie-company welfare machines

SEATTLE, Washington - Many people seem to be forgetting (or never got around to learning, or refuse to accept) the purpose of a business - it is to provide goods or services to consumers or other businesses. The fact that many businesses employ people is merely incidental - it is not the reason for the existence of any business.

But tell that to the bailout cheerleaders. It's not helping matters that everyone's personal savior was just elected President. One group of eagerly expectant beneficiaries of the Messianic Powers is the employees of Republic Windows and Doors, an Ohio manufacturer that's been in the news because the workers occupied the plant after the company ceased operations. The workers want accumulated pay and benefits that they say they've been stiffed on.

RW&D is selling the line that they closed quickly because Bank of America pulled their line of credit, making a Big Bad Bank the bogeyman:

The BofA said that the cancellation was routine business practice, caused by Republic's cash flow problem in the wake of declining sales in the nation's housing construction downturn.

"When a company faces such a dire situation, its lender is not empowered to direct the company's management how to manage its affairs and what obligations should be paid," declared the North Carolina-based BofA in a statement. "Such decisions belong to the management and owners of the company."

The BofA's antiseptic statement reflected the kind of cold-blooded market fundamentalism that has led a growing number of Americans to demand more government regulation of big business.

Amazing. By most accounts we have a glut of housing in this country right now (brought on by one bad government policy after another, a topic for another time). There damn fucking well better be housing-related companies like RW&D scaling back or going out of business. BofA is doing the right thing, noting this trend and not supplying credit to ready-to-fail companies like RW&D.

But to the author of the story above, not throwing credit at failing companies is "cold-blooded market fundamentalism".

So, assuming BofA kept this failing company afloat even though there's not enough demand for their product - who would buy the product? Why, Barack Obama himself, more or less:

"The workers want Bank of America to keep the plant open and the workers employed," said UE President Carl Rosen. "There is always a demand for windows and doors. But with Barack Obama's stimulus proposal, there will be even greater demand for the products made by Republic's workers. It doesn't make sense to close this plant when the need is so obvious."

Amazing. The government should just keep artificially stimulating housing demand, because dammit, we have some people here making windows. We'd be better off paying these people to dig useless holes in the ground, as that would at least free up the raw materials of windows and doors to be put to better use.

Alternatively, we should just order every company in America to make windows and doors - after all, according to Mr Rosen there is "always a demand for windows and doors."

At least Barney Frank is shameless enough to openly and explicitly admit that companies should be turned into taxpayer-funded zombie-company welfare dispensers even if they don't provide a competitive product. As far as I can recall, Frank is the only politician I've ever praised by name (for his work on marijuana and online gambling), but even then I noted that I'd find his overall record and worldview distasteful if I looked into it. Frank appeared on 60 Minutes and cheerily discussed his zombie-company theories:

"No. We’re not propping up companies. That’s your mistake," [Frank] tells Stahl, who had asked him about taxpayer money going to prop up companies that had made bad decisions. "We’re propping up individuals. The world doesn't consist of companies. The world is people. The country is people."

When Stahl points out that Frank is then talking about welfare, he responds, "Yeah, I’m for welfare. You’re not? Are you for letting people starve?"

Some argued that bankruptcy was the way for Detroit to work out its troubles and reformulate their businesses. Frank is against that as well because it also hurts the individual. "There's only one thing you can do in bankruptcy: break your word, break your deals," says Frank. "It allows you to say to the small businesses who have been catering lunches for you...the workers, 'Sorry, we’re not paying you,'" he tells Stahl.

And lest someone think that I'm snugly insulated from the problems of the auto companies and thus can heartlessly advocate bankruptcy for the Big 3: I happen to work at a company that is very sensitive to the fortunes of the auto industry, a company that many analysts think will go bankrupt if the auto industry continues to struggle. I'm still 100% against any bailout. The auto industry does not exist to provide a job for me.

(links from Drudge Report and Reason Hit & Run)

Validation of an old political joke of mine

SEATTLE, Washington - At various times over the last decade or so, I've joked that for the portion of the population that consistently votes with one of the two major parties, the smartest 25% and the dumbest 25% vote Democrat, and the 50% in the middle vote Republican.

We have a small and highly flawed validation of this distribution at the Secular Right blog. The author took scores from a test and mapped the respondents into four categories (Secular Right, Secular Left, Religious Right, Religious Left). As it happened, the Secular Left came out the smartest and the Religious Left came out the dumbest.

It's a simple exercise and there are a gazillion flaws, including its use of a ten-question vocabulary test as a measure of IQ. Of course, it also assumes a simple bipolar ideological spectrum that most libertarians (and other people actually thinking for themselves) would dismiss as inadequate, but our whole national political dialogue makes this error.

Still, it was mildly interesting that the results matched my lighthearted observation.

Disgraceful General Motors propaganda video

SEATTLE, Washington - General Motors has released a video documenting why we should be writing our lawmakers and demanding that they fork over a $25 billion bailout (or as the video calls it, a "loan") to the auto industry.

There's a lot of hot air here, but the main bone in my throat is that most of the video assumes a complete "collapse" of the domestic auto industry - that it completely ceases operations. They did everything but show a picture of auto workers at a plant and then ghost out the workers, leaving an empty factory.

Have they never heard of bankruptcy? Do they think we've never heard of bankruptcy? You declare bankruptcy, which shields you from creditors for a time while you do what you have to do - sell yourself off for parts, restructure your debt, resize, whatever. Often, businesses keep operating during bankruptcy, and this would certainly happen in the case of the big automakers.

But that is insufficiently apocalyptic.

One of the first and most powerful criticisms during the original "bailout" debates for the financial sector was that it would cause many other industries to show up in Washington, hat in hand. Now everyone from Ford Motor Company to the mayor of Phoenix is showing up for some cash.

Involuntary Servitude We Can Believe In

SEATTLE, Washington - I think all the Obama voters are so busy patting themselves on the back for being so Cool and Hip and Progressive and Tolerant and Not-An-Evil-Republican that they're failing to notice the garbage appearing on the official President-elect web site.

After all, what better way to celebrate a black man becoming President than introducing a broad new suite of involuntary servitude programs?

President-Elect Obama will expand national service programs like AmeriCorps and Peace Corps and will create a new Classroom Corps to help teachers in underserved schools, as well as a new Health Corps, Clean Energy Corps, and Veterans Corps. Obama will call on citizens of all ages to serve America, by developing a plan to require 50 hours of community service in middle school and high school and 100 hours of community service in college every year.

Found at Little Green Footballs

UPDATE 11/9 10pm: LGF is chronicling the backpedaling on the requirement of involuntary servitude. Hopefully, while they're at it, they delete all the other nonsense on change.gov.

Kentucky trying to say domain names are "illegal gambling devices"

SEATTLE, Washington - Whenever politicians talk about "protecting the children", you know they're pondering stuff that has nothing to do with protecting children. The absurdities pile up particularly high on the issue of online gambling.

Last year I mentioned proposals in Massachusetts. Now Kentucky is getting into the act - governor Steve Beshear is trying to the domain names of 141 internet gambling sites classified as "illegal gambling devices" that can be seized under state law. Surprise surprise, Beshear has also been pushing for a state constitutional amendment to allow meatspace casinos. Hurry, Steve, hide behind a child:

"No one has been willing to step up and do anything about illegal Internet gambling until now," Beshear said in the statement. "We must protect our people, especially our children, from this illegal and unregulated activity while also protecting our legal and regulated forms of gaming in Kentucky."

The technical absurdities pile up on this issue. Internet domain names are just mappings to a unique 32-bit numerical IP address, which people are free to use instead of the domain name - is Kentucky ready to start confiscating 32-bit numbers? Is the number 1481743248 an illegal gambling device, Mr Beshear?

The tech dork response to this may be "just use a proxy", but proxies and anonymizers often have performance lags that might be prohibitive for something like online gambling.

And of course, state governments are like football coaches, if they see one guy doing something that works they all copy it:

Jeremiah Johnston, president of the Washington D.C.-based Internet Commerce Association, said he thought the ruling could have far-reaching ramifications on Internet commerce.

"With this decision, it's essentially throwing a wild card into the mix," Johnston said. "I definitely fear copycat actions from other states."

Found via Digg (where it had a headline so misleading, I'm not linking to it)

On the stock market and the as-of-now failed "bailout"

NEW YORK, New York - Congress has voted down the "bailout" package and adjourned until Thursday - hopefully a Citizen's Brigade forms to block the doors and not let them back in.

I don't have the time to comment in detail, but I will say this:

I'm a big believer in the stock market in this fundamental sense - that it is essentially a system of communication; the rising and falling of stocks is a referendum on the health of companies and industries, a distributed and decentralized means of determining the best possible allocation of capital.

One might look at the failure of the "bailout" plan and see the reaction of the market and assume that the failure of the plan was a bad thing, because the market is tanking on the news. Already, I watched a closed-caption newscast of an "expert" for twenty seconds in my hotel lobby and saw "the House blew it" scroll across the screen.

The problem with looking at it this way is that not all aspects of our macro situation are represented by a stock on the Dow Jones Industrial Average. For instance, there's no stock on the market that represents a market judgment on the economic health of and relative burden upon the American taxpayer. Were there such a stock, it would be way up today.

There's no stock that represents a market evaluation of our liberty, of our commitment (paltry though it is) of our government not to interfere in the basic process of letting the market reward successful risks, and punish failed risks. Were there such a stock, it would be way up today.

(If we did have a choice of governments, evaluated by a stock-market-style process, bad governance would come screeching to a halt, but that's another discussion for another time.)

It's good, I guess, that 134 Republicans briefly regained the foggiest notion of the true intellectual foundation of their alleged governing ideology. But don't worry - they'll trade it away at the next dangling of a carrot, probably later this week.

Learning not much about the Future of Copyright

SEATTLE, Washington - Perhaps I've marinated myself so thoroughly in the issue of digital-age copyright that I can't learn much more from short essays, but the Cato Unbound series on this issue didn't enlighten me too much.

The lead essay is by anti-copyright activist Rasmus Fleischer ("just give up, copyright cabal, you can't win and you're just becoming a pain in the ass") with reaction essays by Cato scholar Timothy Lee (who proposes a middle ground that doesn't really accomplish much), law professor Tom W. Bell (who doesn't do much besides mention a book he wrote), and law professor Doug Lichtman ("we need copyright, we will pass whatever laws we have to to enforce strong copyright, and you will like it.").

Perhaps they could interest the less marinated.

John Stuart Mill on one-man-one-vote

SEATTLE, Washington - If we can't get rid of democracy in favor of a better way of each of us getting the government we want, at least we can look at addressing some of the flaws of democracy. I mentioned in this book review that I find the one-man-one-vote principle to be flawed in that it gives my vote the same weight as that of a less competent or deserving person.

I've thought briefly about different ways to weigh votes (e.g. proportional to taxes paid). Turns out, none other than John Stuart Mill was on the case way back in the 1850s. His essay Thoughts on Parliamentary Reform 1859 proposed a weighted voting scheme.

The first half or so of the essay is a discussion of districting schemes in Britain in the 1850s, dry even by my standards (and I enjoy reading learned 19th century English). He then steers the discussion to his thoughts about what would be "the ideal conception of a perfect representative government, however distant, not to say doubtful, may be the hope of actually obtaining it."

When most people hear you question the one-man-one-vote scheme, they automatically assume that you want to deny the vote to some people. Mill makes it clear that this is not where he stands, and enumerates several reasons why all governed people should have a vote:

First, then, in every system of representation which can be conceived as perfect, every adult human being, it appears to me, would have the means of exercising, through the electoral suffrage, a portion of influence on the management of public affairs...

It is important that every one of the governed should have a voice in the government, because it can hardly be expected that those who have no voice will not be unjustly postponed to those who have. It is still more important as one of the means of national education. A person who is excluded from all participation in political business is not a citizen. He has not the feelings of a citizen. To take an active interest in politics is, in modern times, the first thing which elevates the mind to large interests and contemplations; the first step out of the narrow bounds of individual and family selfishness, the first opening in the contracted round of daily occupations...

Whoever is capable of feeling any common interest with his kind, or with his country, or with his city, is interested in politics; and to be interested in them, and not wish for a voice in them, is an impossibility. The possession and the exercise of political, and among others of electoral, rights, is one of the chief instruments both of moral and of intellectual training for the popular mind; and all governments must be regarded as extremely imperfect, until every one who is required to obey the laws, has a voice, or the prospect of a voice, in their enactment and administration.

He then starts to question whether everyone's vote should count equally. He goes after the notion (repeated over and over at election time, or voter registration time) that your vote primarily gives you a say in your government. What it really does, in practice, is give you a say in everyone else's government:

But ought every one to have an equal voice? This is a totally different proposition; and in my judgment as palpably false, as the other is true and important... [Supporters of one-man-one-vote] say that every one has an equal interest in being well governed, and that every one, therefore, has an equal claim to control over his own government. I might agree to this, if control over his own government were really the thing in question; but what I am asked to assent to is, that every individual has an equal claim to control over the government of other people. The power which the suffrage gives is not over himself alone; it is power over others also: whatever control the voter is enabled to exercise over his own concerns, he exercises the same degree of it over those of every one else.

Given the power that your vote has over others, Mill forwards the idea (which would not make him popular today) that all people are not equally qualified to exercise such power:

If it is asserted that all persons ought to be equal in every description of right recognised by society, I answer, not until all are equal in worth as human beings. It is the fact, that one person is not as good as another; and it is reversing all the rules of rational conduct, to attempt to raise a political fabric on a supposition which is at variance with fact. Putting aside for the present the consideration of moral worth, of which, though more important even than intellectual, it is not so easy to find an available test; a person who cannot read, is not as good, for the purpose of human life, as one who can. A person who can read, but cannot write or calculate, is not as good as a person who can do both... A person who has not, either by reading or conversation, made himself acquainted with the wisest thoughts of the wisest men, and with the great examples of a beneficent and virtuous life, is not so good as one who is familiar with these. A person who has even filled himself with this various knowledge, but has not digested it—who could give no clear and coherent account of it, and has never exercised his own mind, or derived an original thought from his own observation, experience, or reasoning, is not so good, for any human purpose, as one who has. There is no one who, in any matter which concerns himself, would not rather have his affairs managed by a person of greater knowledge and intelligence, than by one of less. There is no one who, if he was obliged to confide his interest jointly to both, would not desire to give a more potential voice to the more educated and more cultivated of the two.

Mill then outlines a sample vote weighting scheme, assigning relative value to farmers, skilled and unskilled laborers, surgeons, members of "learned societies", etc. Mill seems to draw a direct correlation between education and competence as a voter, which is one possible scheme of many, and not really one that I agree with.

Interestingly, Mill's fall-back position (what to do in the absence of the stated ideal system) is to implement a rigorous minimal educational qualification for voting. If you can't make the vote of the smart guys count more than the vote of the dumb guys then yes, we do need to stop the dummies from voting.

found at EconLog

The sporting life of Sarah Palin

SEATTLE, Washington - Not only is Sarah Palin a better basketball player than Barack Obama, but she's also handy with a rifle.

Note to Joe Biden: wear a suit of an un-naturely color, like blue, to the Vice-Presidential debate (or better yet, an orange safety vest) so Palin does not mistake you for wildlife.

IKEA - transforming more than just Renton

NEW YORK, New York - It was only a few short months ago that I blasted Red Hook, Brooklyn as being an isolated, dumpy neighborhood. Now, not only is it getting some West Coast coffee roasting love from Stumptown, but I can't talk to anyone at the office for five minutes without them mentioning the new Ikea in Red Hook.

It's not just that people want to buy Ikea stuff, but that Ikea has instantly made Red Hook un-isolated with a good, old-fashioned, almost libertarian private suite of transportation options:

Transportation options include free shuttles every 15 minutes from three Brooklyn subway stations — the Smith and Ninth stop on the F and G line, the Fourth and Ninth stop on the R, and Borough Hall — between 10 a.m. and 10 p.m. daily... and a free water taxi from Pier 11 in Lower Manhattan, running every 40 minutes daily from 10 a.m. to 8:20 p.m.

It's good to see private transportation options like this (and, as another example, the private bus service Google operates for employees in the Bay Area) popping up.