Government begets more government

A new argument is emerging for a higher minimum wage. It goes something like this:

Low wage workers cost taxpayers a lot because many receive government assistance of one form or another. So, let’s increase the minimum wage so fewer will need government assistance.

Or maybe government assistance enables people to settle for low wage jobs and reduces incentives to improve their productivity in order to earn higher wages.


Warning of the Day

Be cautious of people who state that their goal is not to be evil, especially smart people who say that.

I’ve been amazed in the past how smart people can rationalize themselves into doing evil things for what they believe is the greater good.

Inconsistency of the Day

A thought occurred to me while I read this Wall Street Journal opinion piece that explains that taxes are high on American corporations. This is despite an earlier GOA report that showed a 12.6% effective tax rate.

It turns out there were two problems with that report. First, it had a small sample size. It was based on one year, 2010. That year saw heavy write-downs (i.e. tax deductions) from the financial crisis, so it was an anomaly. Second, it didn’t include taxes paid to foreign countries.

Another study, with a longer period or 2004 through 2010, showed the total tax rate exceeded 35%.

The thought that occurred to me was this: I wonder how those who tell us that ‘corporations are not people’ feel about corporate taxes. 

My guess is that they don’t want corporations to have a voice in the political arena, but they want to tax the heck out them, which I find inconsistent.

They should realize that corporations are made up of people. Shareholders and employees are people.

While I sort of agree that corporations in the political arena are usually out to use government’s power against us, I think the proper place to fix this is by reducing the power government has, rather than trying to keep the 16 year-old-girl away from the proverbial bad-boy.

I also think that the proper place to tax corporations is at the individual level. Taxing corporations just reduces the transparency of the taxes government is imposing on individuals.

Conflict of interest? No, can’t be.

I recommend reading, Does Government Dependence Influence Voting Behavior? by David Waciski.

I’m always skeptical of data and statistics, even those that confirm biases. But, I found this interesting.

First, Waciski starts with a great quote from Alexis de Tocqueville:

The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.

Later, he writes why looking at state level voting data to determine if voting is influenced by government aid can be misleading. Since there are lots of reasons why people vote, looking at too big of groups of people to answer the question, assumes that the noise caused by all the other reasons can be ignored. It can’t.

My favorite example of this aggregation phenomenon comes from academic research. Statistics always shows that individual-level data (like parent status or number of books in home) explains variations in individual student academic performance better than aggregated data like schools or school districts. No duh. Even in ‘good schools’, there are A students and F students, so just about any data that exists at an individual level will naturally have more individual level variations than any data that exists at a group level.

To picture this, imagine art with Legos. The smaller the Legos, the better the artist is at being able to reproduce the recognizable variations in their subject.

Finally, Waciski concludes from looking at precinct level data, instead of state level (smaller Legos), on voting and government aid:

On average, every one percent increase in the number of households receiving federal assistance resulted in a two percent increase in the vote received by President Obama.

I think “…resulted in…” is a bit strong here. He has found a relation between two sets of data, but that isn’t enough to establish cause. Though, it is enough to say that cause is a possible explanation for the relation.

And, I think it’s a probable explanation, because it is easy to identify the mechanism that might convey the cause: 

Unsurprisingly to those who understand human nature, the recipients of federal aid have a strong propensity to support the politicians who provide that aid.

In just about any other walk of life, most people aren’t surprised when other people act in their own self-interest. Yet, somehow, it couldn’t possibly be when it comes to voting?


The Affordable Care Act?

1. Why didn’t the government just use instead of trying to recreate it?

2. You can go to now and compare available plans for 2013 and 2014.

I did. I found out that for 2013 plans for my family start at $152 per month. That is comparable to the high deductible plan that I currently have. I also have 58 plans to choose from.

I also found that Obamacare-compliant plans for 2014 start at $515 per month and I have 25 plans to choose from.  And, yes, that is for a high deductible plan.

Say what?

Is the cost of my insurance about to increase by $4,300 a year because of the Affordable Care Act?

I encourage you to give this a try. Go to the working website, and get rate quotes for you for 2013 and 2014. You only need provide a zip code, ages of the plan participants and whether each has used tobacco. It takes about 30 seconds.

That’s nature: trial and error

Many seem surprised with the problematic launch of the Obamacare website and not only those with a political ax to grind. I’ve even heard Obamacare friendlies ask, How could government get this so wrong after hiring experts, spending so much money and having so much time to prepare?

I’m not surprised. It fits well with how I think the world works. Most things fail. Some things work. We don’t know beforehand which will fail and which will work.

I’m not surprised the Obamacare launch failed. Most new things do.

It doesn’t matter that it was government or not, since we live in a trial-and-error universe. Government and free markets are subject to failing more often than succeeding.

Few people see this trial-and-error process. We see success stories and forget the failures. We forget Starbucks wasn’t always big and had its fits and starts and still does. Apple, too. Every company did. And for every success story, there are numerous failed attempts of competitors that we forget about.

The one thing that is a little more rare about the Obamacare trial is that it is on such a grand scale. Again, that’s not unique to government. Plenty of companies have had big roll-outs of products or business plans they were certain would work, only to fail. JC Penney, anyone?

The error, though, that some don’t seem to learn from is that we should avoid doing new things on such grand scales because most things fail.

Start small, test it and grow it through the crucible of trial-and-error.

Selective Constitutional Ignorance

Why is it that some parts of the Constitution folks seem to be okay with either ignoring or interpreting as they see fit, but others they seem to accept even when they disagree with it?

For example, many interpret Article I, Section 8, which specifies the powers of Congress, as they see fit.

Many completely ignore Article V: Amendment and seem to be okay with effectively amending the Constitution through the Supreme Court, rather than with approval of state legislatures.

Yet, while many people don’t seem to like it, they accept the method for electing the President (electoral college), rather than ignoring it or interpreting it to their liking.

We also respect the specified methods for electing congressman and senators, the latter of which was changed by the very amendment process (in Article V) that we ignore.

I just find it odd how people pick and choose which parts of the Constitution are to be followed and which parts are malleable.

Netflix for eBooks?

Over three years ago, I wondered when the Netflix business model would be applied to ebooks. 

I thought it was a huge step forward when I could checkout ebooks to my Kindle apps from my library. That is, until I read the five books that I wanted to read in the limited checkout library.

Then I thought Amazon Prime might be the answer, until I became a Prime member and realized I would need to buy a Kindle device to check out the books. I almost did, until I started trying to find books I could check out. I haven’t found one.

Maybe Oyster Books will do it. But, judging from my first glance at the library, it has even fewer books available for electronic checkout than my local library.

My understanding is that the limited available titles for electronic borrowing is caused by publishers weary of losing revenue. Could be. Too bad someone hasn’t figured a way around that yet.

Is it just me?

…or is expecting fiscal responsibility now considered radical and extreme, while expecting government to spend like crazy the norm?

…or is expecting government to follow the Constitution considered too extreme, while expecting government to make it up as they go along the norm?