Archive for August, 2008


Health insurance, and why socialism is not the answer

Wednesday, August 27th, 2008

Politicians, esp Dems, rail about the health uninsured. Invariably, this is followed by a proposal by the speaker to “do something” in the form of health legislation that shackles insurance companies or “universal healthcare,” which, using the most extreme definition, bestows healthcare to all Americans and is administered by the government (like the VA, but for everyone).

The government’s bad enough at what is ought to be doing to be doing something it shouldn’t have any business doing whatsoever. Centralized planning is derided by economists for a very good reason, and centrally planned, government administered healthcare sounds awful. Think of the courtesy of the IRS and the efficiency of FEMA… doing triple bypass on you.

We need a national market for health insurance. We need more freedom to shop around, not the reduction in freedom that is innately the result of additional legislation. Currently, shopping across borders for health ins is disallowed, reducing market competitiveness and consumer freedom of choice.

It’s ironic that people who deride our current (flawed) system of healthcare propose a socialist one as the only alternative solution. It’s clear that our current system is flawed in part because of the fiat and often arbitrary requirements in the legislation. So we don’t need more government intervention, but less of it.

There are other reasons why healthcare is pricey, some that are fixable, others that are more complicated. But the legislation that restricts our freedoms and makes us serfs to the state bureaucracy are needlessly making health insurance unaffordable or, at best, cumbersome for far too many Americans.

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Dems and Big Labor

Wednesday, August 27th, 2008

Big Labor’s Comeback

But this claim [that unionization is good for the middle class] is suspect, given the record in autos, steel and the rest of unionized American manufacturing. The only sector of the U.S. auto industry that is prospering is the part not organized by the United Auto Workers. Likewise, Europe, with its high jobless rates and slow growth, argues against unionization as a way to lift middle-class incomes. To the extent a country like Germany has modestly reversed some of this, it has been the result of recent labor-law reforms and labor concessions.

I’m not a big fan of unions, so naturally, I’m not a big fan of the fact that, in my observation, national Democrats pander to union bosses. Unions are invariably against free trade, free choice (i.e., against new workers not joining the union), and economic competitiveness.

I’ve spent a good deal of time trying to determine if unions have any positive aspects. My thought is that, in the undeveloped or developing countries, unions can be a good thing. I do not believe that’s the case anywhere in the developed world (“rich countries”). If I’m wrong, please point me to an example or make an argument in the Comments section.

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“Russian” to conclusions

Tuesday, August 26th, 2008

A recent blog post by strategic thinker Thomas Barnett does a good job of summing up some people’s panic over Russia:

Nice piece by Flynt Leverett and Hillary Mann Leverett (married couple, formerly of NSC) that’s in line with my geostrategic thinking: Russia isn’t interested in upsetting our international liberal trade order, but it does want to be far more credentialized as a rising great power whose views and interests must be accommodated.

Again, some will call that a post-American world, and if, by that, you mean the end of the illusion that America alone can run the world, then stipulated.

But you have to remember the implied win for us: it’s our system within which Russia seeks to compete, in what I would call a very American way–just not one we currently recognize as okay because we gave up that sort of approach many, many decades ago.

If you see the world only in pol-mil terms, that pathway is scary. If you have a wider-angle lens, though, you view it with equanimity, understanding your long-term competitive advantages.

My thought is this: Russia was heavy-handed, and Georgia was stupid and provocative. Still, Barnett is right that, under Putin, Russia has largely become more “connected” to the rest of the world (i.e., globalized). That’s despite the negative press about (real) authoritarianism in that country.

Thomas Friedman also provides a good view point. Friedman also (wisely) blames US policy for continuing the “isolationist strategy” on Russia… even after the Soviet collapse! (Not that isolating countries really works very well, looking at N Korea, Cuba, and Iran.) Russia, for eg, was blocked from joining NATO (and continues to be blocked from participation).

Posted in Political | 2 Comments »

Cash for old cars – bad idea

Wednesday, August 13th, 2008

Freakonomics author Steven Levitt offers an excellent counter-argument to the “cash for clunkers” idea. First, here’s the idea:

Under the program, the government would buy back old cars at above market prices and scrap them. According to Blinder, this would accomplish a policy trifecta: 1) help the environment by getting the most polluting cars off the road; 2) stimulate the economy by getting money in the hands of people who will spend it and increase the demand for new cars; and 3) reduce income inequality by funneling the money to the poor.

So, the argument is 2-fold: environmental and “progressive” feel-good economics.

The counter-arg is compelling. In sum, the unintended consequences of such a program would be that people would likely drive older (and more polluting) cars longer than they otherwise would so as to be eligible for the money give-away. Further, some people might engage in the economically unproductive task of fixing up old cars merely to sell them to the government and have them trashed.

Levitt provides more reasoning, along with a comparison to a gun buy-back program (that wasn’t very effective).

But, at least it “feels good,” right?

Posted in Economic, Political | 2 Comments »

A world without the Hyperpower

Saturday, August 9th, 2008

On September 12, 2001, Jean-Marie Colombani, the editor of Le Monde, famously wrote, “Today we are all Americans.” Three years on, it seems that we are all anti-Americans. Hostility to the United States is deeper and broader than at any point in the last 50 years. The Western Europeans, it is often argued, oppose U.S. foreign policy because peace and prosperity have made them soft. But the United States faces almost identical levels of anti-Americanism in Turkey, India, and Pakistan, none of which are rich, postmodern, or pacifist. With the exception of Israel and Britain, no country today has a durable pro-American majority.

Good editorial by Fareed Zakaria. Indeed, anti-Americanism is disturbingly high due in no small part to the arrogance and bad behavior of the Bush administration. But would the world be better off without the Hyperpower?

[...] Someone has to be concerned about terrorism and nuclear and biological proliferation. Other countries might bristle at certain U.S. policies, but would someone else really be willing to bully, threaten, cajole, and bribe countries such as Libya to renounce terror and dismantle their WMD programs? On terror, trade, AIDs, nuclear proliferation, U.N. reform, and foreign aid, U.S. leadership is indispensable.

The temptation to go its own way will be greatest for Europe, the only other player with the resources and tradition to play a global role. But if Europe defines its role as being different from the United States–kinder, gentler, whatever–will that really produce a more stable world? U.S. and European goals on most issues are quite similar. Both want a peaceful world free from terror, with open trade, growing freedom, and civilized codes of conduct. A Europe that charts its own course just to mark its differences from the United States threatens to fracture global efforts–whether on trade, proliferation, or the Middle East. Europe is too disunited to achieve its goals without the United States; it can only ensure that America’s plans don’t succeed. The result will be a world that muddles along, with the constant danger that unattended problems will flare up disastrously. Instead of win-win, it will be lose-lose–for Europe, for the United States, and for the world.

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“Bin Laden ‘Che Guevara of al Qaida’”

Saturday, August 9th, 2008

Bin Laden ‘Che Guevara of al Qaida’

My first thought when I read this is, “Gosh, it’s only a matter of time before hippie liberals are wearing bin Laden T-shirts and ivory tower professors are supporting the 9/11 mastermind.” Unfortunately, I’m not resorting to hyperbole. How will the illiberal Left view bin Laden in 10 years, or 20 years from now? With the same sympathy and solidarity that it bestows upon Ernesto Guevara, Fidel Castro, and Hugo Chavez?

Posted in Education, Political, Social | Comments Off

Unfair-trade coffee

Thursday, August 7th, 2008

Interesting perspective I hadn’t considered on “fair-trade coffee”:

In [promoting fair-trade coffee], [Starbucks, Wal-Mart, et al.] artificially lure [coffee farmers in developing nations] away from perusing better-paying jobs that would enrich the diversity of a developing country’s economy. A caffeinated price means more growers, more land destruction, more dependency on a single cash crop. It’s a subsidy that undercuts the very sustainability fair traders want to promote.

Further down:

The belief that any group with power – government officials, economic experts, or social activists – can establish a price that’s “fairer” or “more just” than the actual market price is a fallacy that bedeviled communism for decades and it’s bedeviling the fair-trade movement today.

Seems the “fair price” is what the market will bear, not artificial price floors.

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Obama president – end of victimology attitude?

Wednesday, August 6th, 2008

Check it out.

I have misgivings about Obama (esp his socialist predilections). But if he’s elected, a very good side effect is that opportunistic blowhards like Jesse Jackson will have greater difficulty using the race card. Further, the absurd inability to discuss “race” (a non-scientific classification if I’ve ever seen one) in a non-pandering way might actually be lifted, for everyone’s gain (except Jesse Jackson’s, of course).

If Obama becomes president that would bring us that much closer to the possibility of a color-blind society, where merit wins the day over skin color or other superficialities, and where opportunistic extortionists like Jackson have a smaller and smaller audience of people who actually take him seriously.

Posted in Political, Social | 1 Comment »

Alternative (energy) reality

Tuesday, August 5th, 2008

A reality check on environmental do-goodism:

Problems like these are the reality of “alternative” energy, and they explain why every “energy independence” plan has faltered since the 1970s. But just because Mr. Obama’s plan is wildly unrealistic doesn’t mean that a program of vast new taxes, subsidies and mandates wouldn’t be destructive. The U.S. has a great deal invested in fossil fuels not because of a political conspiracy or because anyone worships carbon but because other sources of energy are, right now, inferior.

Consumption isn’t rising because of wastefulness. The U.S. produces more than twice as much GDP today per unit of energy as it did in the 1950s, yet energy use has risen threefold. That’s because energy use is tethered to growth, and the economy continues to innovate and expand. Mr. Obama seems to have other ideas.

Related to this subject, the MarginalRevolution blog site linked to some blog I’ve never heard of. Anyway, some points regarding energy (that seem reasonable):

(a) energy is not scarce; the historically most efficient sources (oil, coal, etc.) are;

(b) a well-functioning price system will shift energy consumption to (cleaner) alternative energy sources as prices for historical extracted sources of energy rise;

(c) the initial high price of alternative energy will temporarily slow growth, but competition and technological progress will eventually push prices below the historical trend and even asymptotically approach zero, increasing average rates of growth;

(d) environmental quality is a global public good, but;

(e) this is most likely to be secured as a consequence of growth — as a consequence of the technological innovation that both creates and is created by growth — together with the rising scarcity and prices of the most environmentally degrading energy sources.

So,

(f) there are no meaningful limits to growth from either the scarcity of energy, or from negative environmental externalities from economic production, since in the medium run, those externalities are positive.

Realizing that energy is a heavily regulated industry, I concede that some involvement by the government is necessary. That involvement shouldn’t be micro-managing in nature, but instead allow the private sector to do what it is already doing: producing more efficient engines, light bulbs, and alternate energy sources. That’s already happening (whether most people or politicians know about it or not). But our political leadership (not just Democrats) have a burning desire to stifle this process… with disastrous consequences.

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