Coercion

Here’s a good example of it:  State to mom: Stop baby-sitting neighbors’ kids

Some neighbors have a voluntary arrangement between neighbors where everyone involved comes out ahead.  One mom lets several neighbor kids in her home before the school bus arrives.  The state of Michigan says she’s violating the law and needs to stop it.

At least if you read a little further, it sounds like some common sense is prevailing in the upper echelons the state government.

A Few Good Columns

The first from John Stossel.  In it, he links to and quotes from a blog post from Mario Rizzo.  One interesting quote regarding the stimulus package:

At the outset of the Obama Administration, as Greg Mankiw reminds us, their economists laid out a series of predictions about where the unemployment rate would be with the stimulus package and without it. Currently, the economy is doing worse than their predictions of unemployment without the stimulus and, of course, much worse than the predictions with stimulus.

The stimulus apologists are ignoring the original prediction based on a model. By that prediction the stimulus is doing harm.

History shows us that several financial crises in the U.S. healed on their own rather quickly prior compared to financial crises after the 1930s, when it became en vogue for government to try and right the ship.

Another good column from Walter Williams, Is Disagreement with Obama Racism?

Race is no longer the problem that it once was. That doesn’t mean there are not white and black bigots and that every vestige of racial discrimination has been eliminated. What little racial discrimination remains is nowhere near the insurmountable barrier it once was. For the most part, white bigots are no longer respected among whites and I look forward to the day when black bigots are no longer respected among blacks.

When one says that race is no longer the problem it once was, it is not the same as saying that there are not major problems that confront a large segment of the black population. Grossly fraudulent education is a major problem but it has nothing to do with racial discrimination as evidenced by the fact that the worse education received is in the very cities where blacks dominate the political structure. Crime is a major problem but it has nothing to do with racial discrimination, particularly in light of the fact that blacks commit most of the violent crime in America and well over 90 percent of their victims are black. The fact of a 70 percent illegitimacy rate and only 35 percent of black children raised in two-parent homes is a major problem but it has nothing to do with racial discrimination.

Americans should disavow and not fall prey to the racial rope-a-dope being played on us by the nation’s race hustlers.

Really?

Russ Roberts at Cafe Hayek posted a link to this story in yesterday’s Wall Street Journal.

The Obama administration is close to committing as much as $35 billion to help beleaguered state and local housing agencies continue to provide mortgages to low- and moderate-income families, according to administration officials.The move would further cement the government’s role in propping up the housing market even as some lawmakers push to curb spending at a time of rising debt.

If this doesn’t cause you to stop and ponder the New Era of Responsibility, you may want to check your pulse.  This one disturbs me on several levels.

  1. This isn’t responsible.
  2. This sounds very much like the root cause of the stuff that got us into the previous mess – making home loans available to people who can’t afford them.
  3. This is a blatant and perfect example of how political pressures limit government’s ability to do stuff that sound politically popular on the surface, but have bad results.
  4. It perpetuates the idea that home ownership is right for everyone, rather than it being right mainly for the people who actually exhibit the responsible behaviors that usually qualifies one to own a home.

Thomas Sowell’s Brainy Bunch

Here’s a good read today from Thomas Sowell.  Some key words:

There is usually only a limited amount of damage that can be done by dull or stupid people. For creating a truly monumental disaster, you need people with high IQs.

Such people have been told all their lives how brilliant they are, until finally they feel forced to admit it, with all due modesty. But they not only tend to over-estimate their own brilliance, more fundamentally they tend to over-estimate how important brilliance itself is when dealing with real world problems.

Many crucial things in life are learned from experience, rather than from clever thoughts or clever words. Indeed, a gift for the clever phrasing so much admired by the media can be a fatal talent, especially for someone chosen to lead a government.

Smarts creates a dangerous veneer of legitimacy for many.  I prefer experience, as does Sowell, but I’m also skeptical of that.  I prefer results, but take those with grain of salt.

Back in 2005, Paul Johnson wrote a column in Forbes called Five Marks of a Great Leader.  He had some things to say about smart people too.  Two of the five marks were judgment and sense of priority.

What makes a person judge wisely? It is not intelligence, as such. Clever people with enormously high IQs often show scarifyingly bad judgment. Nor is it education. When I need advice, I rarely turn to someone with first-class honors from a top university. I turn to someone who has knocked about the world and cheerfully survived “the slings and arrows of outrageous fortune.” One man to whom I turned for his judgment was Ronald Reagan. Though not a scholar by any gauge, he almost invariably judged correctly on the few big issues that really matter.

Being able to judge well is often linked to an ability to mix with and learn from other people–not so much from experts but from common people, those who lack the arrogance of power or the desire to show off their intelligence but who nevertheless think deeply about life’s trials. A person of judgment develops the habit of asking questions of such wise people and listening to their replies.

In running a country or a vast business, one is faced with countless problems, huge and insignificant, and has to make decisions about all of them. Clever leaders (I’m thinking of Jacques Chirac) often have a habit of pouncing on minor issues and pushing them at all costs, even to the detriment of their real interests. Sorting out the truly big from the small takes an innate horse sense that’s not given to most human beings. It has little to do with intelligence, but it is nearly always the hallmark of a great leader.

Milton and Rose Friedman on Adam Smith's Key Insight

From the Introduction of Free to Choose:

One set of ideas was embodied in The Wealth of Nations, the masterpiece that established the Scotsman Adam Smith as the father of modern economics.  It analyzed the way in which a market system could combine the freedom of individuals to pursue their own objectives with the extensive cooperation and collaboration needed in the economic field to produce our food, our clothing, our housing.  Adam Smith’s key insight was that both parties to an exchange can benefit and that, so long as cooperation is strictly voluntary, no exchange will take place unless both parties do benefit.  No external force, no coercion, no violation of freedom is necessary to produce cooperation among individuals all of whom can benefit.

And from  Chapter 1:

The key insight of Adam Smith’s Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it.  Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.

Lub Dub

“It’s the heartbeat of the world.  What seemed like a good idea five or ten years ago, isn’t a good idea now and it must be reversed.”

That’s how a colleague described the “Lub Dub Cycle” to me several years ago.  He credits one of his former bosses for educating him on the cycle.   Since then, I’ve seen it as a driving force in many things – business, politics, public opinion, sports trends, financing economic growth, subprime mortgage lending, elections, philosophy – just to name a few.

I was most recently reminded of it this past weekend when my wife and I visited with a friend on our hometown’s city centre, or The Square, as locals call it.  The city recently undid a works project taken on about 30 years ago around the town’s courthouse to make The Square modern and help employment.  Now, after undoing that work, the area around the courthouse looks the same as it did 50 years ago.

While our society tends to move forward providing us with high quality of life compared with our ancestors, much of our motion is governed by the Lub Dub Cycle.  I’m not sure Lub Dub is avoidable.  I don’t believe we’ll ever know what things will move us forward and what things will not until we try.  But, when undergoing a project it might be worth considering the Lub Dub.

You Aren't Entitled to Anything

Several weeks ago, my pal Raoul Lufberry sent me this story from the Wall Street Journal, Why Your Coach Votes Republican.

Lou Holtz sums up the parallels between football and conservative principles:

You aren’t entitled to anything. You don’t inherit anything. You get what you earn—your position on the team. You’re treated like everybody else. You’re held accountable for your actions. You understand that your decisions affect other people on that team…There’s winners, there’s losers, and there’s competitiveness.