Month: December 2005

A Little Putdown of Politically Correct Shopping

UPDATED BELOW

The current anti-Wal-Mart propoganda drive by unions and various “liberal” groups reminds me of my decision a few months ago to keep my Sam’s Club membership and drop my Costco membership. A few trips to Costco were enough to convince me that Sam’s Club suits my needs, and at better prices. Why pay two annual membership fees when one will do?

Why shouldn’t I shop at Sam’s Club? It’s a slave-free zone. I haven’t seen good squads dragging unwilling people in from the streets to work at Sam’s Club. I haven’t seen any Sam’s Club employees caged in their work areas. But maybe Sam’s Club is hiding all of that from public view. Perhaps there are secret prisions in Arkansas where they send Sam’s Club employees who try to resign for higher wages and benefits elsewhere. Yep. And labor union leaders are paid the same wages as the workers they represent.

P.S. On a related note, I have a word of advice for people who work in “one company towns” (e.g., regions centered around auto manufacturing). That word of advice is this: Leave. I should qualify that: You should have saved some money, figured out where you’d be better off, and gone there. You could see the handwriting on the wall; it’s been there for decades.

But whatever you do, don’t blame me for your woes. It’s not my fault that you live where you live. Blame your parents and blame yourself. Don’t take it out on me by demanding some kind of government bailout when your company goes belly up because you unionized it. If most consumers don’t want to buy what you make, why should they have to subsidize your remaining customers’ purchases of your inferior products? Why should I pay you to stay on the job if your State and local governments have enacted so many taxes and regulations that new companies don’t want to move into your “town” and hire you?

As I said: Leave. Your ancestors probably crossed the Atlantic to get here. You don’t have to go that far, and you can do it in a style to which your ancestors were not accustomed.

UPDATE (RE WAL-MART): Cafe Hayek points to a scholarly paper about the economic benefits of Wal-Mart and the like. Here’s the abstract (emphasis added):

Consumers often benefit from increased competition in differentiated product settings. In this paper we consider consumer benefits from increased competition in a differentiated product setting: the spread of non-traditional retail outlets. In this paper we estimate consumer benefits from supercenter entry and expansion into markets for food. We estimate a discrete choice model for household shopping choice of supercenters and traditional outlets for food. We have panel data for households so we can follow their shopping patterns over time and allow for a fixed effect in their shopping behavior. We find the benefits to be substantial, both in terms of food expenditure and in terms of overall consumer expenditure. Low income households benefit the most.

Labor unions don’t care about low-income households. They care about jacking up the wages and benefits of their members at the expense of low-income households.

Professor Buchanan Makes a Slight Mistake

Nobel laureate James M. Buchanan, writing in the inaugural edition of Cato Unbound, observes in passing that

[p]olitical leaders, both legislative and executive, with public support, act as if it is possible to spend without taxing, indeed as if the fisc offers the political equivalent of perpetual motion. This observed fiscal profligacy stems from diverse sources: institutional history, Keynesian follies, supply-side exaggerations, and, finally, the very logic of collective action, which fosters the personalized illusion of something for nothing, especially amid the natural constituency pressures of representative democracy.

Everything about that paragraph is correct but for the implication that it is not possible to spend without taxing. It is possible for the federal government to spend without taxing; it can simply borrow (or it can print money, which would amount to the same thing). Taxation and borrowing have similar results from the government’s standpoint; that is, both allow the government to commandeer resources and put them to work on things deemed “important” to government officials and their constituencies. But taxation and borrowing do differ in their effects on the public.

1. Through taxation, government confiscates taxpayers’ claims against current output and converts those claims to government programs that (for the most part) either increase the incomes of certain persons (e.g., most welfare recipients and many government employees who otherwise would fare less well in the private sector) or create “psychic income” for the proponents of those programs (even as those programs erode economic performance).

2. Borrowing doesn’t change the effects of government spending, but it does fund government spending in an importantly different way. That is, lenders (unlike taxpayers) voluntarily relinquish their claims on current output, in return for larger claims on future output (i.e., principal plus interest). And those claims on future output can be redeemed by additional borrowing in the future. (As I have argued here, there is no obvious limit on the amount the amount of debt the government can accumulate. I assume, of course, that the government’s appetite for spending would not become voracious enough to bring the economy to its knees.)

3. When the government borrows from foreigners instead of Americans, those foreigners willingly assume the real “burden” of the debt; that is, they relinquish some of their claims on the current output of the U.S. economy. Foreigners can transfer their “burden” to Americans only as Americans are willing to buy government debt from foreigners. To the extent that government spending provides any benefits for Americans, foreigners are doing Americans a big favor by lending money to the government. Why? Because they are subsidizing the output of government services that are, in the main, “enjoyed” by Americans.

The O’Reilly Factoid

This (via Don Boudreaux) only reaffirms my contempt for Bill O’Reilly.

Torture and Morality

REVISED, 12/05/05
ADDENDUM, 12/06/05

Torture terrorists if that’s the most effective way of finding out what they’re up to? Why not? Will they refrain from terror if we refrain from torture? Hah!

Is this a war or a tea party, with Alger Hiss as host? Does torturing terrorists (if that’s what it takes to catch the bad guys) make America any less wonderful? Does exceeding the speed limit (if that’s what it takes to make it to the hip-hop party on time) make America any less wonderful? You figure it out.

Torture — or “aggressive interrogation,” if you prefer — can be quarantined. It isn’t contagious; you can’t catch it unless you’re a foreigner who’s caught in the wrong place doing the wrong thing (trying to kill Americans). It’s not exactly like being a babe in the womb.

Anyone who thinks of John McCain as a moral authority on torture because he endured the pain of torture must also think of John McCain as a moral authority on freedom of speech because he has endured the “pain” of political opposition. Experience does not always breed wisdom. John McCain is right about one thing: the war in Iraq. Which means that he is right far less often than a stopped clock, which is right twice a day.

John McCain is all about John McCain. Most Democrats are all about anything that’s anti-Bush and anti-war. If you wish to calibrate your moral compass, do not point it in the direction of John McCain or a Democrat member of Congress (Joe Lieberman excepted).

Torture a terrorist? How could a liberal condone such a thing? A liberal has more important things to condone — murderers and the torture of innocent unborn children, for example.

Tom Smith has much more.

ADDENDUM: So does Blanton at RedState.org:

John McCain is a fool. He is also a charlatan. He is convinced that the world would be better off if everyone agreed with him and has set about to make it so. When McCain was accurately criticized by third party interest groups, he set about restricting the first amendment. Now, because he was a prisoner of war who was tortured, he has decided to take moral high ground on how the United States treats enemy terrorists, though the United States does not torture terrorists. Nonetheless, McCain has chosen to believe terrorists in captivity and reporters bent on destroying the war effort than the military personnel who are keeping us safe.

John McCain is attempting to add to the appropriations process a provision that would prohibit the United States from doing to captured terrorists those things we are prohibited from doing to American citizens under the 5th, 8th, or 14th amendments to the United States Constitution. We will, in effect, be giving constitutional protections to enemy terrorists who, when given the opportunity, slowly saw off the heads (graphic violence) of captured Americans.

All’s Fair in Love and Cycling

Tom Smith of The Right Coast — a bicyclist himself — suggests the following antidote for drivers who like to “swoosh” close to cyclists:

If every one in 10 cyclists or so was packing, maybe another little part of the brain-like organ in the driver would think, “Uhnn. He has a gun. Mebbee I shouldn’t sceer him.”

I’ll go along with that, if Smith will go concede the right of motorists to shoot those cyclists who (a) cross intersections against the light, (b) insist on traveling in the traffic lane when there’s a clear shoulder or parking lane available, and (c) insist on riding two (or more) abreast in a bicycle lane, thus intruding on the traffic lane.

While I’m on the subject: Walkers on hike-bike trails (usually clearly marked to indicate that pedestrians take precedence) should be able to shoot cyclists who insist on making known their disdain for walkers by veering close to them in passing.

Let he who is without blame fire the first bullet.

Ten Commandments of Economics

MAKE THAT 12 COMMANDMENTS . . . UPDATED 12/03/05

1. Self-interest drives us to do good things for others while striving to do well for ourselves.

2. Profit is good because it drives people to invent, innovate, and invest in new and better products and services.

3. Incentives matter: Just as self-interest and profit drive progress, taxes and welfare stifle it.

4. Only slaves and dupes can be exploited. (Wal-Mart employees are not exploited because they are not forced to work at Wal-Mart; anti-Wal-Mart activists are exploited because they’re dupes of the anti-business Left.)

5. There’s no free lunch, all costs must be covered by prices or taxes.

6. The appearance of a free lunch (e.g., government’s assumption of risk for retirement savings, company-subsidized health insurance) leads individuals to make bad decisions (e.g., not saving enough for old age, overspending on health care).

7. Paternalism is for children; when adults aren’t allowed to make economic decisions for themselves they don’t learn from mistakes and can’t pass that learning on to their children.

8. All costs matter; one cannot make good economic decisions by focusing on one type of cost, such as the cost of energy.

9. There best way to deal with pollution and the “depletion” of natural resources is to assign property rights in resources now held in common. The owners of a resource have a vested interest (a) in caring for it so that it remains profitable, and (b) in raising its price as it becomes harder to obtain, thus encouraging the development of alternatives.

10. Discrimination is inevitable in a free society; to choose is to discriminate. In free and competitive markets — unfettered by Jim Crow, affirmative action, or other intrusions by the state — discrimination is most likely to be based on the value of one’s contributions.

11. Voluntary exchange is a win-win game for workers, consumers, and businesses. When exchange is constrained by regulation, someone loses, namely, the worker (fewer jobs and lower wages) and the consumer (higher prices and less freedom of choice).

12. Absent force or fraud, we earn what we deserve, and we deserve what we earn.

A One-Issue Blogger

Mark Shea (via Steve Dillard at Southern Appeal) notices that the

key to everything [Andrew] Sullivan writes is the defense of his sex life. His attacks on Bush suddenly began after Bush said no to gay marriage. And, of course, his increasingly shrill loathing of Benedict springs from the same source.

I noted the same phenomenon on September 9, 2004, in the heat of the Bush-Kerry race:

Andrew Sullivan, renowned homosexual blogger, who was once a staunch supporter of Bush and the war in Iraq has turned his back on his old loves. Sullivan now openly embraces Kerry (no pun intended), puts down Bush at every opportunity, and second-guesses the war in Iraq.

Like many other bloggers, I long sensed that Sullivan eventually would change his colors because he has been monomaniacal about the recognition of homosexual marriage. He kept harping on it in post after post, day after day, week after week. It got so boring that I took Sullivan’s blog off my blogroll and quit reading it.

Now, Kerry isn’t much better than Bush on gay marriage — from Sullivan’s perspective — but Kerry doesn’t make a big issue of opposing it the way Bush does. Maybe that’s because Kerry doesn’t know where he stands on gay marriage. Why should he? He doesn’t seem to know where he stands on anything. No, I take that back: Kerry believes in serial monogamy with rich women; the evidence is irrefutable.

But I digress. Back to Andrew Sullivan. He seems to have put his sexual orientation above all else. He’s really a one-issue voter. Sure, he has rationalized his change of mind, but his change of mind can be traced, I think, to his preoccupation with gay marriage as a political litmus test.

Plus ça change, plus c’est la même chose.

A Simple Fallacy

Economic historian Robert Fogel, in an interview with Nick Schultz at Tech Central Station, makes some passing observations about private saving as an alternative to Social Security:

Nick Schulz: In the book [The Escape From Hunger and Premature Death: 1700 to 2100] you see a growing demand for leisure and retirement, and education and health care. Now, in current debates, especially in Washington, that sounds like more Social Security. . . . How do you see that?

Robert Fogel: . . . .

We’re probably going to shift gradually, despite the opposition to it, to private accounts, which exist in some countries, which require everyone who enters the labor force to put aside 30 percent of their income into a fund to cover retirement, health care, and education. In some countries, they permit you to borrow against that fund to buy houses.

And, it’s approaching what American academics have. You cannot teach in American universities without having TIAA-CREF. In American universities, you’re required to put aside between 12-and-a-half and 17 percent (it varies from university to university) into this fund so that when you retire you don’t end up with a tin cup sitting on the administration building saying, “I was a good teacher once, please help me.”

So, that’s a forced retirement system. It has the advantage over Social Security that the government can’t take it away. . . .

Nick Schulz: And you see that as a potential model for Social Security or public pension programs?

Robert Fogel: Right. Now, there is an argument which says it’s not as secure as the guaranteed government program. Well, ultimately, what the government can pay depends on how the economy performs. . . .

Fogel’s last comment is good as far as it goes, but it doesn’t go far enough. Every dime the government takes from a worker and gives to a retiree is a dime that cannot be invested in economic growth. So, it’s true that the “guarantee” of Social Security is only as strong as the economy. But that’s only half the story. It’s true also that Social Security weakens the economy by diverting resources from investment to consumption. The “guarantee” that liberals and leftists like to tout when they defend Social Security is therefore the opposite of a guarantee. Forced participation in Social Security is an insidious form of rot that actually undermines economic security by undermining the economy.