My State of the Union Speech

Good Evening.

It’s good to see you all here.

We kept you relatively safe for another year. Regrettably, bad things happened. We’re not perfect. I wish we were.

But, let’s give a warm round of applause to the brave members of our military forces who kept the vast majority of us safe.

Now, go forth and enjoy your life, liberty and pursuit of happiness.

If I’m not doing something that you think I should, please consult with the Constitution and point me to where I’m empowered to do that.

See you next year.

Good Evening.

Dr. Carson’s Speech

I went to Grant Davies’ blog, What We Think and Why, and watched all of the nearly 28 minute Dr. Carson speech. I recommend watching it. I just had to re-post it here:

Here are some of his major themes:

1. Political correctness keeps us from saying what we really think and that keeps us from talking about important things.

2. But, we should be respectful with those who we disagree. That’s a major theme of this blog. Hostility just tends to entrench people in their beliefs.

3. Carson’s Mom taught him to use his brain to solve problems, which resulted in him thinking his way out of poverty by not accepting excuses for his poverty status, taking advantage of education, educating himself and thinking himself out of poverty.

4. He and his wife put their money and talents where their mouths are to help others to the same. They started the Carson Scholarship Fund.

5. Why is education so important? He encourages us to learn from ancient Rome, which died from within.

6. He mentions we have a fourth branch of government: Special Interests.

7. Everyone should pay some tax, we shouldn’t punish the guy who puts a billion dollars into the pot and with health care we should empower individuals.

8. He closes with a great story about the origination of our National Anthem and a very nice imagery of the bald eagle as the nation’s symbol.

An enterprising reporter ought to ask President Obama what he thought of Dr. Carson’s speech. However, I think I can predict the answer. My guess is he’d say he liked it and agreed with it, and then say that’s why Federal government needs to help do those things.

Good News

I know this isn’t original, but the thought occurred to me the other day that so much of our attention in on bad news, that it might help to call out some good news items.

I thought a good place to start doing that would be this blog.

Good news item 1:  Dr. Ben Carson. I think it’s good news that he can express his position — which opposes the President’s — in the President’s company. I also think it’s good news that he’s expressing his opinion.

Good news item 2:  I’ve become a fan of good design. I love seeing what a good designer can do on shows like Restaurant Impossible where the designer is given a shoestring budget to transform a space.

However, I’m an inept designer, so I think it’s good news that along with this space to write-in, WordPress also provides some beautifully designed blog themes. The theme I use is called Twenty Eleven and I’m very happy that to give my blog this professional, well-designed look all I had to do is click my mouse buttons a few times. I could have spent days on the blog design and it would have never looked this good.

God’s flat tax

Johns Hopkins neurosurgeon, Ben Carson, made a couple of interesting points at a White House prayer breakfast this week. Here’s one point about taxation (emphasis mine):

What we need to do is come up with something simple. And when I pick up my Bible, you know what I see? I see the fairest individual in the universe, God, and he’s given us a system. It’s called a tithe.

“We don’t necessarily have to do 10% but it’s the principle. He didn’t say if your crops fail, don’t give me any tithe or if you have a bumper crop, give me triple tithe. So there must be something inherently fair about proportionality. You make $10 billion, you put in a billion. You make $10 you put in one. Of course you’ve got to get rid of the loopholes. Some people say, ‘Well that’s not fair because it doesn’t hurt the guy who made $10 billion as much as the guy who made 10.’ Where does it say you’ve got to hurt the guy? He just put a billion dollars in the pot. We don’t need to hurt him. It’s that kind of thinking that has resulted in 602 banks in the Cayman Islands. That money needs to be back here building our infrastructure and creating jobs.”

Update: Grant Davies has posted the video of Carson’s speech on his blog, in case you are interested in watching it. Carson talks about much more than taxes. Thanks Grant!

And I highly recommend that you watch it. I’ll have more to post from it.

I’ll have a cost-benefit analysis, less the costs and heavy on the benefits, please

Daniel Henninger, in his Wall Street Journal opinion article, Obama’s Colossal Politics, correctly and succinctly identifies two causes of runaway government.

First, there’s the bad cost-benefit analysis, that overplays the benefits and doesn’t consider the costs:

 “If there’s just one life that can be saved,” Mr. Obama said Monday in Minnesota, using standard Washington risk-benefit analysis, “then we have an obligation to try it.”

Then there’s this:

When serious scientists try to solve a problem, they ask, What works? When Washington takes on a problem, it says, Why not?

Why not? We must look like we’re trying.

Constitutionless

I heard about Constitutional law professor Louis Michael Seidman’s radical-sounding argument to ignore the Constitution though the general media. I thought he was a flake.

I must admit, when I began listening to this week’s EconTalk podcast and found out that he was the guest, I nearly turned it off.

I’m glad I was lazy enough to keep it rolling. I discovered that the impression I got of Seidman through the general media was wrong (surprise, surprise).

I also discovered that his conversation was remarkably similar to part of the discussion we had in the comments of my previous post Profits and Ballot Boxes.

And, I found I agreed with Seidman on quite a lot.

For example, Seidman doesn’t believe that the unconstitutionality of a government action is a valid argument against taking that action. He thinks we should discuss the merits of the policy and decide from there. I agree. I think the founders agreed, too, as evidenced by their inclusion of Article V: Amendment. 

I would add that this applies to government action that is constitutional. Just because an action is constitutional doesn’t make it right.

Of course, there are a certain group of people who should care about the constitutionality of a government action. They’re called judges.

However, I did disagree with Seidman on some things.

Seidman made a point similar to Wally in the comments (just before the 55 minute mark): the founders are not all-knowing so and it’s arrogant to assume they could think things through for generations hundreds of year after they wrote the Constitution.

I was surprised that Seidman — an advocate for discussing merits of issues — made this point. It doesn’t matter if the founders were limited in knowledge or lived hundreds of years ago. What matters is whether the Constitution (or a specific part of it) has merit. So,it seems reasonable to consider in the discussion of merits of government action why the founders were for or against those actions, rather than dismissing their positions outright. We might learn something. To commit my own fallacy, how many of us have written Constitutions that, by and large, have kept a country growing and improving for well over 200 years?

I do recommend listening to the podcast.

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.

 

State your case

In response to this post about rent-seeking, Z A employs a few rant tactics that I think are common barriers to productive discussions. He (assuming Z A is a he) starts with a straw man fallacy.

Economics being the dismal science that it is, I still do not ascribe to the notion that all points are valid and that any moron on the street that tries to form a thought or opinion about the macro-economy has a valid or sound point.

No one, but Z A, has made this argument.

However, if ‘any moron on the street’ expresses an unsound thought or opinion about the macro-economy (or anything), I think it is more productive and compelling to explain why their point is unsound rather than discounting it because of who they are.

As my Mom would say, if you can’t say anything nice, it’s best not to say anything at all. That’s a good rule. I’ll modify to promote productive discussion. If you can’t or are unwilling to show why a point is unsound, don’t say anything at all.

Z A then moved on to explain why he values credentials:

Knowing what someones credentials are in most any case does help in knowing how much they have actually studied that subject.

However, it does determine whether their reasoning is sound or not.

I’ve been in my share of discussions that degraded to a battle of finding credentialed folks who agree with your position, then onto the crediting and discrediting of those credentials. That’s simply not productive.

I agree with what commenter, Grant Davies wrote in response to Z A:

I have always found it more important to weigh the value and the validity of what is presented…

An argument from authority or appeal to authority is a common fallacy (something where the conclusion does not necessarily follow from the premises).

The key form of this fallacy is assuming something is right because an expert says so, but the expert isn’t really an expert in that field.

A second form of this fallacy is assuming something is right because an expert says so, but the topic is something where there is not a great deal of consensus. This is where you get into the ‘battle of experts’ on issues that have experts on all sides.

I believe there is a third form of this fallacy, as well. Experts can be wrong. Experts, after all, are people, so they are subject to the same biases, preferences, simplifications and groupthink as the rest of us.

Experts may well be right about something. I don’t discount what they say just because they are experts. However, I have enough experience with experts being wrong that I have learned that skepticism is useful.

If something is true, I want to know why it’s true, not who believes it’s true or what credentials they have. What’s wrong with that?

Later, Z A wrote:

I could write for hours about the incorrect assumptions and arguments on here but what good would it do if the people I am writing to do not have clue one about real economic theory and thought or the history of those things?

Z A chose to write nine similar paragraphs on my blog about this subject. How did it advance the discussion on the topic?

Why not simply choose just one of these incorrect assumptions, state his case on why he thinks it’s incorrect and perhaps teach us a few things. Or, perhaps, maybe someone would respond to his points and he could learn something. My guess is that the latter is what Z A fears the most.