Sowell Agrees on Barney Frank

Thomas Sowell wrote two columns this week about Barney Frank, the politicians’ politician.

From the first:

Barney Frank is a master of rhetoric, who does not let the facts cramp his style.

Barney Frank was all over the media, pointing the finger of blame at everybody else. When financial analyst Maria Bartiromo asked Congressman Frank who was responsible for the financial crisis, he said, “right-wing Republicans.” It so happens that conservatives were the loudest critics who had warned for years against the policies that Barney Frank pushed, but why let facts get in the way?

Ms. Bartiromo did not just accept whatever Barney Frank said. She said: “With all due respect, congressman, I saw videotapes of you saying in the past: ‘Oh, let’s open up the lending. The housing market is fine.'” His reply? “No, you didn’t see any such tapes.”

“I did. I saw them on TV,” she said. But Barney Frank did not budge. He understood that a good offense is the best defense. He also understands that rewriting history this election year is his best bet for keeping his long political career alive.

Good for Maria for not backing down.  This if from the second Sowell column:

Politicians who say we need more regulation almost never mean regulation in the sense of impartially enforcing explicit rules, such as the accounting rules that Fannie Mae was violating to cover up its own risks. They mean regulation with arbitrary powers, such as those under the Community Reinvestment Act, which enable regulators to carry out the agendas that politicians give them.

In other words, they pull the wool over our eyes by making us believe that their power grabs are for our own good. This paragraph reminded me of Arnold Klilng’s first question on this blog post.

if the problem was that we deregulated too much over the past 20 years, then why doesn’t the bill [financial regulation] simply reset regulations to what they were 20 years ago? or 30 years ago?


McDonald’s Provides a Good Business Education

Paul Facella writes in his book, Everything I Know About Business I Learned At McDonald’s (p. 85):

As Bill Cosby said in his commencement address to Cheyney University’s Class of 2007, workers at McDonald’s pick up many skills.  “If I’m flipping burgers,” Cosby noted, “I’m not flipping burger for the rest of my life.  I’m learning to become a manager.  And I’m not the manager forever because I’m learning to become the regional manager.”  Cosby accurately depicted opportunities at McDonald’s–for those, it should be stressed, who adhere to McDonald’s rigorous standards.

That passage brought back more than a few discussions I’ve had over the years about “burger flipping jobs.”  Usually, the reference was made by discussion partners as if they were dead-end, low pay hopeless jobs.

One of the best managers I’ve had the opportunity to work for is a former McDonald’s burger flipper.

The author, Paul Facella, started working with McDonald’s at 16 and rose to become a regional vice-president for the company and judging from his writings, he enjoyed it and found it greatly fulfilling.

Just a few pages earlier (p. 77), Facella wrote about the pride of burger flipping:

I worked my way to grill person, the key position, after many months and had a pretty good knack for speed and dexterity, always striving to perform up to the standards expected of me.  Coworkers and I raced to see who was the fastest at flipping burgers and putting patties on the grill.  I could usually hold my own.  But the more important contests were sales.  We strove to break any record…hourly, daily, or weekly.  There was a bonus if you worked during that time period.  And we broke records. Our store became one of the top sales restaurants in the area, and we got quite good at keeping the lines down and increasing sales.   It was also important in the status of your crew if you worked the record hour on your station. We fought to be there when the big crowds gathered for a chance to break the record on our shift.


It sounds like a burger flippers learned to see the big picture.  They knew their efforts contributed to keeping lines moving quickly, which helped keep customers satisfied and their store break sales records.   As Cosby said, they’re learning to be the manager.  And they took pride in their work.  Imagine that.

Responsibility to the Poor

Here’s a nice video of Milton Friedman explaining where the true responsibility lies.  Not the government.  People.

The student asserts that it might be the responsibility of the government to help out the poor.  Right about 50 seconds in Friedman responds:

First of all, the government doesn’t have any responsibility.  People have responsibility.  This building doesn’t have responsibility.  You and I have responsibility.  People have responsibility.

Make no mistake about it.

Impressive Podcast

The guest on this week’s EconTalk podcast is Richard Epstein of New York University and Stanford’s Hoover Institution and he discusses regulation.

I highly recommend listening to the whole podcast.  Epstein does an excellent job of discussing the intricacies and problems with things like the health care legislation, the financial reform and the FDA.

With about 16 minutes in the podcast, Epstein launches a criticism of Keynesian economics that I haven’t heard before.  In case you don’t know, Keynesian economics underpins government expansionary efforts like stimulus spending.


It [Keynesian economics] never tells you where it is that you’re supposed to quit. Take something like unemployment benefits. If 52 weeks are better than 26 weeks and 99 weeks are better than 52 weeks, are we going to say 200 weeks are better than 99 weeks?

If I were an enterprising reporter, I might be inclined to start asking politicians when will we know to pull government out?  When will we know that we should move unemployment back to 26 weeks?  When will we know that we don’t “need” stimulus spending?  When will we know when the health care bill is making things better?

Of course, the easy answer would be, we will know it when we see it.  When the economy is back in shape.

Next question: So, if the economy gets back in shape, say when unemployment reduces to 6%, can we count on you to sponsor legislation to shorten the duration of unemployment benefits?

Milton Friedman – Open Mind

Here’s an excellent, and topical, interview with Milton Friedman.

Around the 7 minute mark, Friedman says:

I have often in talking to audiences, especially liberal audiences, offered them a challenge.  I challenge you to name me a single social measure which has accomplished its intended objectives rather than opposite, which has not done more harm than good.

Around the 22 minute mark, the host Richard Heffner says,  “…you just said that mankind is selfish and greedy and that has always been the battle cry of those who said, ‘therefore, we must impose controls upon them.'”

Friedman: Therefore, we have to put power in the hands of other greedy and selfish men.

Heffner: That’s the philosophic basis of the argument that the government must step in.

Freidman: It’s a false argument.  It assumes somehow that government is a way in which you put unselfish and ungreedy men in charge of selfish and greedy men.  Government is an institution whereby the people who have the greatest drive to get power over the fellow man get in a position of controlling them.  Look at the record of government.

That’s what government supporters never seem to recognize.  That was one of the points of this post, Anyone Mad At The Government? People in government are no different than the CEOs of the corporations that everybody gets so mad at (while voluntarily buying and benefiting from the products their companies produce).

We demonize CEOs and want to fire them when they screw up – which I have no problem with – but we also want to give government more power when it screws up.  That make no sense to me.  Some might say, “but you can always elect a different person in government.”  Which takes me back to Friedman’s last comment, “Look at the record of government.

Concentrated Power

Sunday 219 people, less than half the total in my high school graduating class, decided what’s best for the rest of us.

The Founders wrote a document to prevent the concentration of power.  I don’t believe 219 people deciding the health care fate of 300 million was their intent.

Power has concentrated in this country into the hands of people who do not understand the purpose of the Constitution — including those duly elected representatives who have sworn oaths to uphold it.

Perhaps the Founders should have added an oath for voters.  To earn the right to vote in Federal elections, one must swear an oath to vote for candidates that will indeed uphold the Constitution.  That way they might take it upon themselves to understand the Constitution before swearing the oath and when they don’t vote accordingly the rest of us can hold them accountable for violating their oath.

Why Do I Need Land Line?

In this tough economy, as each of us Backseat CEO’s comb our income statements to rid it of unnecessary expenses to push to our bottom lines, I find myself pondering why I have a land-based phone line and cell phones.

A co-worker made an excellent point, if true:  911.  A 911 operator knows where you’re calling quicker from on a land line, but not necessarily with a cell phone.  In an emergency situation where a  few seconds can make a difference, that’s a valuable benefit.

Also, along the same lines, I only have one cell phone.  I may not always have that near me, whereas my land line phones are always in the same spot scattered throughout my home.

I think my co-worker saved a land line cancellation for now.  However, I will review my next bill to see if I’m paying for extras I don’t need.

That’s part of the basic financial responsibility of a manager: to periodically review the expenses within their control to ensure that the company or household is getting the value for the money.

My recommendation is to do this on a cycle that makes sense for the expense.  For monthly expenses, like a phone bill, a manager may want to review that annually to see if the benefit is worth the cost and to see if there are better alternatives that can be more cost effective.