Saturday, July 6, 2013

Problems as Data

Problems that respond well to direct action have already been solved.

What's left is problems that respond perversely to direct action.

Enter big government motivated to solve them : the bigger the government, the more perverse the consequences.

But why should not the mere existence of a remaining problem be taken as information about its response to direct action?

That's the view of the right, mostly.

Sunday, February 17, 2013

Saving for Retirement

Future retirees will be supported with the goods and services of future workers.

If there are too many retirees for the number of workers in the future, it won't work for you no matter how you save for it, unless you save more than anybody else.

Everybody can't save more then anybody else, so it won't work nationally.

A focus on money obscures this essential truth. If it can't work, it won't work, no matter how you try to pay for it.

The only solution is raising the retirement age, so as to increase the number of future workers and reduce the number of future retirees, until the demographics balance again.

If you want to retire earlier, do it on your own dime to bridge the gap.

What makes this impossible? One thing is a health insurance requirement. Nobody will employ an old person if he must also take on their health care.

Will it occur to lawmakers that an exemption solves a problem?

Then will it occur to them that a more universal exemption solves even more problems?

Monday, January 28, 2013

Illegals Take American Jobs

Illegal workers can work for less than the regulated minimum wage and benefit level.

The value of their work then exceeds its cost, so they have a job.

Americans would take those jobs if they weren't forbidden to work for that wage until their experience and skills increase.

What would happen if the illegals were made legal? Those jobs would disappear.

Thursday, January 17, 2013


People disagree about what sufficient self-protection is.

They make their own choice.

That maximizes wealth, like every other disagreement settled voluntarily.

Your neighbor with an assault rifle is an asset to you, in addition. You might choose to let him protect you, and free-ride on his preferences.

Why not stinger missles? Because that makes no sense as self-protection. An assault rifle does.

The US is built on people themselves being worth trusting, with minimal disincentives applied. For instance that privately agreed to contracts will be enforced as agreed, in short rule of law, without the President reversing private agreements. Otherwise no agreement is possible, and gains from trade aren't possible.

It works out in economics, and it works out here too.

An entertainment choice on TV, namely grief porn, is an entertainment choice, and should not be promoted to a public policy choice. The personal risk statistics of mass killers are zero for a nation of 300 million, and have always been zero.

The message to send is that the government is ruled by the Constitution regardless of hysterics and hand-wringers and busybodies.

What is a very bad message to send is that the government is no longer ruled by the constitution.

That's the end of civil society.

Tuesday, January 15, 2013

"Can't Afford"

In the late 70s, there was a killing coffee frost in Brazil.

The price of coffee skyrocketed.

Yet you could buy all the coffee you wanted. The shelves were full, just shorter shelves.

People were buying less coffee, in just the right amount to meet the coffee available.

Obviously the poor could no longer afford coffee.

Suppose the government started a coffee aid program for the poor.

If you hand out free coffee, very fast you run out of coffee.

Suppose, instead, at the door of the supermarket, the poor are handed $10 for a pound of coffee.

Will the poor buy coffee?

No. They have a better use for $10 than coffee at $10 a pound. They prefer something else to coffee at $10.

That is the meaning of "can't afford." The price is such that they have a better use for the money, not that they don't have the money.

It's the same in health care. There's a better use for the money, at some price.

That's what holds the price down. Or, if you go the free health care route, that's what makes the price skyrocket.

Thursday, January 3, 2013

Investment Income

Corporate profits are taxed at a corporate rate of 35%.

Then the profits are distributed one of two ways.

1. As dividends to stockholders.

2. As reinvestment in the company, which eventually shows up as a capital gain when the shareholder sells the stock.

Taxing it again as income to the stockholder leads to a disastrously high total tax rate, so it's taxed at a "lower" rate than ordinary income.

This "lower" rate plus the corporate rate is still too high, but it's now being sold as a loophole.

It wasn't a loophole. There was a reason for it.

Wednesday, December 26, 2012

One Size Fits All

An increase in the standard of living from trading depends on disagreement about traded value.

Each side of each trade has to come out ahead, which can only happen if they disagree.

A one-size-fits-all program, on the other hand, leaves half the people ahead and half the people behind.

The people left behind aren't given the option to decline the trade.

The standard of living of the nation does not rise.

It's automatically worse than a free market, even if it's a good program.

A typically bad program is a disaster.

Socialism fails because it can't convert disagreement into a rise of the wealth of the nation, even benevolent and competent socialism, if that were a stable possibility.

Bureaucratic incentives always make bureaucratic benevolence unstable.