Speaking of the bottom 50% looking within…

…Walter Williams does just that in his latest column, Dependency, Not Poverty.

A snippet:

No one can blame a person if he starts out in life poor, because how one starts out is not his fault. If he stays poor, he is to blame because it is his fault. Avoiding long-term poverty is not rocket science. First, graduate from high school. Second, get married before you have children, and stay married. Third, work at any kind of job, even one that starts out paying the minimum wage. And finally, avoid engaging in criminal behavior.

Since President Lyndon Johnson declared war on poverty, the nation has spent about $18 trillion at the federal, state and local levels of government on programs justified by the “need” to deal with some aspect of poverty. In a column of mine in 1995, I pointed out that at that time, the nation had spent $5.4 trillion on the War on Poverty, and with that princely sum, “you could purchase every U.S. factory, all manufacturing equipment, and every office building. With what’s left over, one could buy every airline, trucking company and our commercial maritime fleet. If you’re still in the shopping mood, you could also buy every television, radio and power company, plus every retail and wholesale store in the entire nation” (http://tinyurl.com/kmhy6es). Today’s total of $18 trillion spent on poverty means you could purchase everything produced in our country each year and then some.

There’s very little guts in the political arena to address the basic causes of poverty. To do so risks being labeled as racist, sexist, uncaring and insensitive. That means today’s dependency is likely to become permanent.

 

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Just a reminder

With Obamacare, here we again find ourselves with a government-made disaster on our hands. There’s much discussion about how ‘we’ fix it or change it, how to make it workable, how the GOP has no solutions…etc.

I hear very little discussion about why we even want these buffoons to touch this stuff.

It’s a good time to remind folks of some wise words from Walter Williams.

Personal choice

From Walter Williams column, You Don’t Have to Stay Poor:

No one can blame you if you start out in life poor, because how you start is not your fault. If you stay poor, you’re to blame because it is your fault.

This is Williams’ opener for his review of a new book from Dennis Kimbro, “The Wealth Choice: Success Secrets of Black Millionaires.”

We hear a lot in this country about the rich and poor. We hear how ‘something’ holds the poor back and gives advantages to the rich and how this ‘something’ disproportionately affects certain groups of people.

Solutions offered to solve this problem tend to be in the form of social safety nets and welfare.

But, I’ve often wondered why we just don’t ask the people who are successful in those disproportionate groups what they think contributed to their success. It looks like Kimbro did just that.

I have a suggestion for Kimbro. Next focus on middle class and upper middle class. We probably all won’t become millionaires, but it would be good to hear from some people who are doing okay. Is it that there just happened to be enough room in the upper ranks of income to let them get past that ‘something’ that tends to hold their group back, or is their success more a result of their own choices, values and habits?

Williams share some of those habits from Kimbro’s millionaires. Publishing billionaire, W. Clement Stone, said:

If you cannot save money, the seeds of greatness are not in you.

And generally:

Be passionate, and focus on unique strengths; develop clear, delineated goals. Then develop strong work ethic. Recognize the power of ideas, and never consider the possibility of failure. Be thrifty and frugal in nature.

Sounds like a good read.

Why not encourage people to adopt such habits and attitudes?

How about some critical thinking and a better understanding of economics?

It’s been 50 years since Martin Luther King Jr.’s I Have a Dream speech. According to some influential folks in my local paper there is still much to achieve.

Here are some of the things they graded poorly:

  • Education — Schools aren’t desegregated enough and bad in areas where blacks live.
  • Voting — Even though black voter turnout exceed white turnout in the 2008 and 2012 presidential elections (as reported by the article), the expert gives voting a “D” because the Supreme Court overturned a 1965 law requiring some states to seek Federal approval in changing voter laws.
  • Wages & jobs — The inflation-adjusted minimum wage is lower and black unemployment is higher than 1963, so that’s bad.
  • Poverty — The poverty rate among blacks dropped from 55 percent four years before 1963, but bounces around in the 20s. The expert gave this an “F”.

The solutions these folks proposed? More government action. I recommend these influential folks, and anybody who agrees with their solution, read the following:

1. Race and Economics: How Much Can Be Blamed on Discrimination? by Walter Williams.

2. Thomas Sowell’s Basic Economics, now in its 4th edition.

Ben Carson had some good things to say on the subject. I thought this one about education is especially poignant:

King was a huge advocate of education and would be horrified by the high dropout rates in many inner-city high schools. He, like many others, was vilified, beaten and jailed for trying to open the doors of education to everyone, regardless of their race.

If he were alive today, he would have to witness people turning their backs on those open doors and choosing to pursue lives of crime or dependency.

Walter Williams: Good Intentions

Walter Williams makes a good case that the war on poverty was making things worse in 1985. This was a PBS documentary now available to all of us through the wonders of the Internet and Youtube. I recommend watching all 28 minutes.

Part I:

 

Part II:

 

Part III:

 

Here’s Walter Williams home page to see more of his work. I recommend adding his weekly column to your normal reading rotation. You will learn a lot.

Thanks to Wally & Mike for — as usual — a good and productive discussion in the comments.

Profits and Ballot Boxes

In the comments of this post, commenter Wally and I discuss the business feedback of profit and government feedback of votes.

W. E. Heasley, of The Last Embassy blog, recently posted an excellent short video from Learn Liberty that helps explain why voting isn’t a very effective feedback mechanism:

 

Most of us make purchasing and voting decisions. Sometimes they are a little of both, like when you vote with your family on what’s for dinner.

The following are links to and excerpts from previous posts I’ve made quoting economists Thomas Sowell and Walter Williams, who do an excellent job of explaining why purchase decisions are a more effective feedback mechanism than voting.

1. From this post in 2010, I quoted from Thomas Sowell’s book, Intellectuals and Society.  He explains the difference in these feedbacks well:

The fundamental difference between decision-makers in the market and decision-makers in government is that the former are subject to continuous and consequential feedback which can force them to adjust to what others prefer and are willing to pay for, while those who make decisions in the political arena face no such inescapable feedback to force them to adjust to the reality of other people’s desires and preferences.

A business with red ink on the bottom line knows that this cannot continue indefinitely, and that they have no choice but to change whatever they are doing that produces that red ink, for which there is little tolerance even in the short run, and which will be fatal to the whole enterprise in the long run.  In short, financial losses are not merely informational feedback but consequential feedback which cannot be ignored, dismissed or spun rhetorically through verbal virtuosity.

In the political arena, however, only the most immediate and most attention-getting disasters — so obvious and unmistakable to the voting public that there is no problem of “connecting the dots” — are comparably consequential for the political decision-makers.  But laws and policies whose consequences take time to unfold are by no means as consequential for those who created those laws and policies, especially if the consequences emerge after the next election.  Moreover, there are few things in politics as unmistakable in its implications as red ink on the bottom line is in business.  In politics, no matter how disastrous a policy may turn out to be, if the causes of the disaster are not understood by the voting public, those officials responsible for the disaster may escape accountability, and of course, they have every incentive to deny having made mistakes, since admitting mistakes can jeopardize a whole career.

2. In three paragraphs that I quoted from Thomas Sowell’s book, Applied Economics, he explains the differences in our buying and voting decisions. Here are those three paragraphs:

Politics and the markets are both ways of getting people to respond to other people’s desires.  Consumers deciding which goods to spend their money on have often been analogized to voters deciding which candidates to elect to public office.  However the two processes are profoundly different.  Not only do individuals invest very different amounts of time and thought in making economic vs. political decisions, those are inherently different in themselves.  Voters decide whether to vote for one candidate or another but they decide how much of what kinds of food, clothing, shelter, etc. to purchase.  In short, political decisions tend to be categorical, while economic decisions tend to be incremental.

Incremental decisions can be more fine-tuned than deciding which candidate’s whole package of principles and practices comes closest to meeting your own desires.  Incremental decision-making also means that not every increment of even very desirable things is likewise necessarily desirable, given that there are other things that the money could be spent on after having acquired a given amount of a particular good or service. For example, although it might be worthwhile spending considerable money to live in a nice home, buying a second home in the country may or may not be worth spending money that could be used for sending a child to college or for recreational travel overseas.  One consequence of incremental decision-making is that increments of many desirable things remain unpurchased because they are almost–but not quite–worth the sacrifices required to get them.

From a political standpoint, this means that there are always numerous desirable things that government officials can offer to provide to voters who want them–either free of charge or at reduced, government-subsidized prices–even when the voters do not want these increments enough to sacrifice their own money to pay for them.  The real winners in this process are politicians whose apparent generosity and compassion gain them political support.

3. In his classic column, Conflict or Cooperation, which I linked to in this post, Walter Williams explains how to pit beer drinkers against wine drinkers. Here’s a taste:

Different Americans have different and often intense preferences for all kinds of goods and services. Some of us have strong preferences for beer and distaste for wine while others have the opposite preference — strong preferences for wine and distaste for beer. Some of us hate three-piece suits and love blue jeans while others love three-piece suits and hate blue jeans. When’s the last time you heard of beer drinkers in conflict with wine drinkers, or three-piece suit lovers in conflict with lovers of blue jeans? It seldom if ever happens because beer and blue jean lovers get what they want. Wine and three-piece suit lovers get what they want and they all can live in peace with one another.

It would be easy to create conflict among these people. Instead of free choice and private decision-making, clothing and beverage decisions could be made in the political arena. In other words, have a democratic majority-rule process to decide what drinks and clothing that would be allowed. Then we would see wine lovers organized against beer lovers, and blue jean lovers organized against three-piece suit lovers. Conflict would emerge solely because the decision was made in the political arena. Why? The prime feature of political decision-making is that it’s a zero-sum game. One person’s gain is of necessity another person’s loss. That is if wine lovers won, beer lovers lose.

The differences in political and private decisions has spawned a branch of economics study called public choice economics. Here’s more.