Well put

I’ll give Santorum credit for finding a concise and accurate way to describe those who want everybody to go to college, like President Obama, “What a snob!”

Jeff Jacoby writes about Santorum’s dig on Obama here and how it elicited criticism from, well…snobs:

Ridiculous? Offensive? Hypocritical? Manifestly, all of the above,” wrote Eugene Robinson in the Washington Post. On The Daily Show, the inimitable Jon Stewart was beside himself: “Just to be clear,” he said, “you’re coming out against people educating their kids because it’s – fancy?” Vice President Joe Biden assured a radio interviewer that Santorum had managed to separate himself from “all of America on this.”

A note to Jon Stewart: Just to be clear, no, Santorum didn’t come out against anybody educating their kids. That’s a straw man fallacy.

Santorum came out against the idea that college be considered the only path worth pursuing and using government policy to reinforce that mythical idea.

And Santorum meant that it’s snobbish to ignore the good work done by millions of people in this country who don’t have college degrees, but still managed to contribute to society and achieve the American Dream.

I know plenty of such people. They are business owners, electricians, factory workers and railroad workers. They build roads, program computers and edit video. They work on garage doors, paint houses, build fences, clean windows, fix cars and tractors and run restaurants.

They also start companies like Microsoft, win Oscar awards and play professional sports.

Many of these folks do amazing things that they didn’t learn in a classroom.

For example, I’m amazed that a painter I use can finish painting a room quicker than it would for me to set up and start, and his product looks far better than anything I’ve tried to paint.

I was amazed by the movers I hired a few years ago to move the heavy stuff from my old house to my new house. They accomplished in 3 hours what would have taken me days. I would have strained my muscles, maybe injured myself and I’m sure I would have marked up my walls or damage my furniture.

The path to the American Dream isn’t about going to college.

It’s about adopting a set of behaviors that includes a strong work ethic, integrity, personal responsibility, ability to get along with others, productivity, willingness to learn, careful consideration of decisions and resourcefulness, among other things.

The folks I mentioned above, who didn’t go to college, would score well on these behaviors. Likewise, I know folks who did go to college, who are struggling to achieve the American Dream and would score low on these behaviors.

We’d be far better off if we encouraged and reinforced the behaviors that lead to the American Dream, rather than encouraging shortcuts to achieving a facade of the American Dream.

Cost Benefit Analyses Suck

Rick Santorum wrote in the Wall Street Journal this past weekend about his Economic Freedom Agenda.  Most of it sounds good.  This part bugged me though:

I’ll review all regulations, making sure they use sound science and cost benefit analysis.

One reason it bugs me is that Candidate Obama made a similar promise four years ago. The Obama/Biden campaign promised to go through the budget and “keep the stuff that works and stop the stuff that doesn’t.”

Sounds good, but it didn’t happen.  And there’s a good reason it didn’t happen.  That brings us to the second reason Santorum’s comment bugged me: It’s impossible.

Believing it is possible is a true marker of naiveté or willing deceit.

Cost benefit analyses sounds good to a lot of people. They teach you cost benefit analysis in college, after all, no?

But cost benefit analyses have a major weakness — they’re usually wrong.  They’re wrong for a couple of reasons.

First, cost benefit analyses can be made to say what you want them to say, so they are subject to the same political wills as if the cost benefit analysis didn’t exist. The cost benefit analysis serves one purpose: to fool those who don’t understand this about cost benefit analysis.

Publicly funded stadium, museum and public transit projects are notorious for such analysis.

Even when a cost benefit analysis is conducted with the best of intentions by supposedly competent folks, it is usually wrong. As I mentioned here, Richard Feynman said:

The first principle is that you must not fool yourself…and you are the easiest person to fool.

He said this because he specialized in finding where experimental physicists had fooled themselves while conducting their experiments.

Unfortunately, the only true cost benefit crucible is the real world — and even that can be misinterpreted, and often is.  Economists still debate whether FDR’s actions in the Great Depression helped or hurt.

The truth is that government programs face incentives different from the free market. There’s always plenty of reasons to keep a government program around, even when it clearly does not have desirable outcomes (e.g. minimum wage).

But, the main reason to keep a program in the free market is if its doing its job.  If its not doing the job, the market (or “us”) finds ways to use those resources better.

The restaurant where I had my first W2 job went out of business long ago. It was bulldozed and replaced with a convenience store that does brisk business and has for years.

Had it been a government program, the old restaurant would still be open, supported by your always forgiving tax dollars.  It wouldn’t have many customers, but that’s okay. Politicians will claim they are keeping folks employed. Voters can feel good about voting for them for that reason and the cooks in the restaurant feel great about getting paid to not work that hard.

Ask folks then if they’d like to keep the restaurant, they might be inclined to say yes, you know, to keep the workers employed.  Ask them if they eat at the restaurant, they would tell the truth. No.

Nobody would be able to see the true opportunity cost of all that. They would never have guessed that had the restaurant been allowed to go out of business, it would have been replaced by a convenience store that produces much more value for the community and more jobs. And higher paying jobs.

Ask folks in the community now if they’d like to put the restaurant back in place of the convenience store and most would laugh at you.