30 January 2009

The Morbidly Obese Stimulus Bill

In case you didn't know, here's a breakdown of just some of the money being spent in this bill, courtesy of the Wall Street Journal:

- $1 Billion for Amtrak, the gov't railway system that hasn't turned a profit in over 40 years. Way to reward incompetence.

- $2 Billion for child-care subsidies

- $400 Million for global warming research, and another $2.4 billion for carbon capture demonstrations projects.

-$650 million for digital-TV conversion coupons. I thought this was about jobs, not sitting at home watching Wheel of Fortune.

- $252 Billion is for income-transfer payments. Aka - paying people for not working. That oughta get them pouring out of the woodwork looking for jobs.

This is just a few examples, and your blood should be boiling by now. For those of you who voted for Obama, please tell me how any of this will create jobs? He's up there selling this as the greatest job creating mechanism known to man, our only hope for the future, and it's filled with this junk.

If you think it's going to be all about the New Deal and creating work, think about this:

- $30 billion, or less than 5% of the total, is going to bridges and highway construction.

- Only $90 billion, or around 12 cents of every dollar, can even claim to be stimulating to the economy.

I could go on and on. Wasn't it Obama who told us that the days of pork-barrel spending and typical Washington politics were over? Are you people pleased with your selection? I'm not always a fan of either-or statements, but by virtue of the promises that are coming out of his own mouth, Obama is either a total liar or a complete fool who doesn't even know what's in the bill.

The Smithsonian Museum is going to get $150 million. Is the Smithsonian going to sprout new jobs for all of us? The central point is not whether you think any of these things are good, but whether they will accomplish the stated purpose of the bill - creating jobs.

They will not. There is no way that $30 billion for COBRA will create jobs. So, the question remains, if it's not about jobs, which it clearly isn't, then what is it about? We ought to be asking ourselves that question. Who benefits from all this?

I say it's nothing more than buying votes and trying to get as many people as possible on the gov't payroll. The democrats want all Americans sucking on the collective teat that they will then control. I hope that picture is disgusting. And yes, I'm furious, because I saw this coming. Please, remember this in 2010 when we vote for representatives. You are being sold a bill of crap and being told you should like it. If you enjoy that kind of treatment, then congratulations for getting exactly what you wanted.

Affirmative Action: Myth or Reality?

Ohhh...that title is sure to get a reaction. I know that the words used in this post are explosive, and my intention is not to insult or belittle. My purpose is to lift up and give momentum. So stay with me, please.

For purposes of brevity, I won't go into all the details or statistics (though I can provide them if you like) behind this little thesis, but there seems to be a large amount of evidence indicating the futility and even harmfulness of affirmative action programs. The studies I've read have taken place in countries all over the world, so this is not simply an American issue.

Let's start with the Civil Rights Act of 1964, regarded as the hallmark of AA and the beginning of a new dawn where we could begin the long, uphill battle toward equality in America. I submit to you that the language in this Act specifically sought to end any type judgements based on race. It's purpose was to stop putting people in categories and designing policies around these abstractions. Instead, those who wrote it wanted each person to be valued for what they were individually.

The problem is not whether or not we agree on my statement. It's the fact that we never even talk about that statement. AA is supposed to be accepted, as if it were something that always existed, or something that cannot be questioned. We never even discuss if it was intended by the people who set these wheels in motion.

AA policies usually start out as temporary measures structured to bring balance, to make amends for some wrongdoing in the past. By definition this is not possible, since we are not dealing with the flesh and blood individuals between whom the actions took place. We are dealing with abstract sections of society.

Boil it down to simplest terms. Can I, with any hope of actually succeeding, bring balance to my marriage by going back and recording every wrong or perceived wrong that my wife has committed against me, and then imposing some action to redress it? How would I ever make progress? Moreover, how would our relationship ever grow? You may sigh if you like, but AA is nothing more than that.

Let's say we're going to account for the inequality of whites as CEO's of companies, and we make a black man a CEO. Ok, but that's just one. If equality is the goal, then we need an exact number of every white CEO that ever was, and then we must have the same number of black CEO's. One won't do. But then, what if a man was half-black, or two-thirds black? Must we then find someone who is one-third black to make a whole one? It would never end.

If the phrase "whole one" is offensive to you, then think about the very idea of making human beings into categories and numbers to be equalized. Acting as if the highest achievement a group can make is some sort of mathematical parity with another group based upon a wholly subjective, external judgement system is ultimately degrading.

And if fairness is the goal, how do we judge that? Should a wealthy black man get admitted to college over the son of a poor, white farmer? Would that be equality? It's not fair to society to lower entrance exams on police academies simply to add numbers of females. That only makes us all less safe, including the female officer. The arrogance and elitism inherent in the assumption of being worthy to make these kinds of judgements is sickening. Besides, investing the power to "equalize" society in a select group automatically bestows upon them a level of power that makes a mockery of the orginal ideal.

A brilliant man once told me that in life, you can only turn on light. Walk into a dark room, and there is no switch to turn off darkness. Light is the only way to dispel the shadows. In other words, unselfishness itself is not a virtue. That is only the absence of greed, in theory anyway. Charity is the virtue being sought, so that it is giving to another person and meeting their needs, not merely abstaining from want that is the action. Clear as mud?

The studies show that AA programs never reach their goal, they can't. But they make great speeches for politicians acting as the pied piper.

Price Controls

During the summer of '08, back when gas prices were peaking and Exxon was making evil profits (the same profits that have somehow kept them out of the Bailout Boondoggle, interestingly enough) I heard my boss remark that we needed to go back to the 1970's and institute price controls again. It simply wasn't fair, he said, that they should charge that much for gasoline. Let's examine price controls and how they work, and what the evidence is.

Price controls are attractive at first glance. Ceilings are instituted to help some portion of the population that is seen as victims, who struggle to meet rising prices of a given product. Floors are put in place to make sure that a group of producers (farmers, for example) get a "fair" price for their goods.

Economists are generally opposed to price controls, because they distort the allocation of resources. Placing a ceiling on wheat, for example, below where the market price currently stands, will cause a shortage. At the lower price, producers will not make as much wheat, but demand will increase because wheat got cheaper. The result is a shortage in the market. Remember the gas lines in the 1970's? That was a shortage. Other effects can be even more damaging.

Take the line itself. Gas was served on a first come, first serve basis. Economically, the true cost of gas now included the gas itself and the time spent waiting. I'll wager that if price controls were not present and there were no lines, the true cost would have been lower. The cost will reach equilibrium, and it can't be arbitrarily controlled.

Quality deterioration is a frequent effect. If a landlord is forced to rent units below the market price, he will not idly accept the redution in profit. He will cut costs. Maintenance on the building will go down. During WWII in the U.S., due to price controls, more fat was included in hamburger meat, candy bars got smaller, and so on. The market will react, and it is arrogant to think the gov't can "control" it. Because price controls distort the market, other mechanisms like these will form.

But this was supposed to help the public, right? Take another example. Let's say a clothing manufacturer has a low-priced product with a small profit margin, and a high-priced product with a high profit margin. If the gov't sets up a price ceiling and creates a shortage, the clothing maker is likely to discontinue to low-profit line. The public now only has the choice of the higher priced clothes. This also happened during WWII, and the gov't then tried to force the manufacturers to keep making the cheaper clothing even though gov't policies clearly made it a bad business decision.

Let's step back even further. I'll take an idea from economist Thomas Sowell. Beach front housing is attractive, and expensive. Demand exceeds supply, and the price reflects that. It is therefore "unfair", because beachfront property goes disproportionally to those who can afford it. Let's say the gov't sets all beach front property at $100 per acre. Not one extra foot of sandy beach has been created. There is no more supply of the commodity. The allocation used to be controlled by prices, but now something else must control it. There is not enough space for every person who desires the ocean to live on the beach, so the gov't must decide who gets what space, since they assumed the role of controlling it.

Is this more fair? There will still be a limited number of people who can enjoy the beach, but now it is decided by a select group of people, with absolutely no bias, no tendency for corruption, and infinite knowledge on the matter they now pretend to control. Would you prefer this to letting millions of individual decisions, based upon each person's preferences, judgement, knowledge allocate the resource? Which gives more power to a few, and which to the many? Which allows for more freedom?

When I used to sell Volkswagens, we had a diesel model of the Jetta. It got 45 mpg. During the gas crunch of 2005, demand skyrocketed. We couldn't keep them in stock. We started raising prices, and the public threw a fit. The MSRP was supposed to be a magic ceiling! Why, how could we sleep at night after "gouging" people? Gouging is a term used by people when supply and demand do not go in their favor.

If gas were $.10 per gallon, and they bargained for a discount on a Jetta, that wouldn't be gouging the dealer, would it? On the contrary, they think that since supply far outpaces demand, that the price should drop. It works the same way in reverse.

The problem lies in a misunderstanding of prices. They are not a final reality, they merely convey what lies beneath. Knowing how prices work is crucial to understanding the rest of economics.

Watermelon Communism

My Aunt Jeri sent out an interesting email today about Vaclav Klaus, president of the Czech Republic. He lived through the communist days and is an outspoken proponent of free economic systems. He views the "green" movement as largely a clever disguise for collectivism, efforts to curtail freedom and put more power in the hands of a few. An interesting thought, and one that deserves discussion.

My wife and I just spent a few months living in the People's Republic of California. They were actually considering a law that would let the state have control over your thermostat. So, if they thought you were running the A/C too high in the summertime, and this would cause "excessive" damage to the environment via power consumption, rate of turnover on the unit, and so on, they could turn it down for you. For you. You, a commoner, are too stupid to decide these things yourself.

Almost every strategy by environmentalists to save the earth involves large portions of our decision making capability being handed over to them. Leave aside the idea that global warming and it's cousins are based on junk science and hysteria, and just contemplate the arrogance of a group of self-appointed earth guardians telling the rest of us how to live. Follow the trail, it always ends up with more power and money in the hands of these folks.

Al Gore champions the idea of purchasing "carbon credits." This does nothing to change the size of his house, he doesn't change his habits or consumption by purchasing them, and there is no more surface area on the earth after his purchase than before. But money does flow in a certain direction as a result. The UN and other groups want to fine countries for pollution, and while the idea of punishment as a disincentive for a given act has validity, the tastes like a con to me. Especially when one considers the whole idea of global warming.

Even with little things like fluourescent light bulbs, it's all about appearing to care for the environment than really doing any good. I used to work in environmental recycling and disposal. These new bulbs have mercury powder in them, they ARE NOT good for the environment. If one breaks, you better get some breathing apparatus on before sweeping. If you suffer a cut from the glass, call 911 immediately. The powder getting into your bloodstream is potentially very lethal.

Plus, what do we do with lightbulbs when they burn out? They end up in the trash, and then go to landfills. Do you want mercury seeping into groundwater for the next 100 years? And trust me, it's not cheap to properly dispose of these things. My clients spent a lot of money doing it, because they had to. This type of short-sighted rush to save the planet stuff needs to stop.

But it won't, not as long as the snake oil salesmen behind this continue to profit from it. There was some global warming conference on a pacific island a while back. All the attendees had to fly jets to get there, pumping out obscene amounts of carbon all the way there and back. Gasp! The absurdity of this is astounding.

This is all about control. The more they can control your life and decision making processes, the better for them. Freedom and individual liberty are the most stubborn obstacles to those who envision themselves as rulers of the human race. Make no mistake, they will ride any vehicle to get there. Just look at the pressure exerted on anyone who tries to stand in their way.

29 January 2009

Opening Rant

Well, I've been thinking about starting a blog for a long time, and I'm finally so bored at work that it actually happened. A conspicuous title, I know. The central impetus for this project is that my dear wife, Scotti, for all her patience and good will, can only listen to me talk about politics and history for a limited amount of time.

My hope is that this forum of thoughts will stimulate more thoughts in each of you. And vice versa. I'm sure every blog says that, and though I mean it, the flip side is that this one is mine. So, we will talk about what's on my mind. At least, I will talk about what's on my mind and perhaps some other folks will stop in and add some comments to make things more interesting.

I read some survey the other day where 26% of High School seniors thought Abraham Lincoln was the first U.S. President. And I've heard about the clips Jay Leno plays on his show, where they take a camera and ask people on the street simple questions on civics or geography, stuff we should all know, such as naming a state through which the Mississippi flows. The answers are hilarious and frightening.

My first question is, "If these folks, who we can assume are old enough to vote, are lacking in this kind of basic framework of understanding regarding the world around them, how can they have a prayer of actually questioning a line that the media or politicians feed them?"

Let's get to work.