Category: moral hazard

Don’t Trump the Gun

Trump, president, inauguration, democracy, election, protest

The 2016 presidential election will go down in history as a doozy. The Trump win was a surprise, even shocking many of his supporters. But the most obvious lesson we learned pertains to the modal Obama-Hillary voter.

Well, make that lessons. Plural.

Today’s most vocal Democrats don’t seem to understand democracy. The “deal” of our democratic republic, as I learned in Civics and “on the streets,” is that you do your best for your party, candidate, or policy, and accept the results … until the next election. Whiners, rioters and Hollywood actors (to place them in descending order of tolerability) would serve their cause better by remembering this.
It has become commonplace, now, to make sweeping judgments about one’s opponents based on little or no information. Or erroneous info. On no basis whatsoever, nearly every lefty YouTuber and street shouter I have seen yammers on about how anti-gay Trump is. Truth is? No president has ever entered the White House more pro-gay than Donald J. Trump.
Actual policy issues mean too little to too many. What does matter? Style. Obama has “good style.” Bush had “dumb style.” Trump has “evil style.” Substance? Results?

Blankout.

Tomorrow the President-elect becomes President. And Resident of 1600 Pennsylvania Avenue*. As skeptical as some of us may be (myself included), we owe it to ourselves, our neighbors, and the country — perhaps the world — to give the president a chance. At least, take a deep breath and let him make a mistake before pouncing.

Meanwhile, let’s also stop denigrating half the country — that is, those who voted for Trump. Consider their alternative.

This is Common Sense. I’m Paul Jacob.

* Part-time? Will he really spend a lot of time in Trump Tower?

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Tags democracy, election, inauguration, president, protest, Trump

Accountability folly free trade & free markets general freedom moral hazard

Oil’s Bad that Ends Bad

Mexico, oil, nationalize, socialism, neoliberalism

Sometimes socialism seems reasonable.

Emphasis on “seems.”

Take natural resource socialism. Ores and oil are “just there in the ground” and “belong to everybody.” So it “just makes sense” that “the people” should “own” the mining and drilling and refining industries, and run these operations to share the profits to help “everybody,” not just a few.

The Mexican government bought into this back in 1938, when it nationalized the U.S.- and Dutch-based oil companies. Today, the industry is under-capitalized, its equipment old and inefficient. Mexico itself is a mess. The government is corrupt and the people far poorer than would have been the case had they not bought into the nationalization mania.

The cause of the problems should not be in dispute. “By cutting off Mexican oil exploration from foreign investment and foreign know-how,” Ryan McMaken writes in an interesting analysis, “the Mexican state has only succeeding in making the Mexican oil industry less efficient, and less capable of taking advantage of the natural resources in Mexico.”

Which is why the government has been making tentative “liberalization” moves, de-monopolizing Pemex, the government’s oil outfit.

Unfortunately, though the damage done by bad government policy and monopolistic privilege is everywhere to see, many people (especially intellectuals) in Mexico blame “neo-liberalism” and non-existent “free markets” for rising prices and the specter of economic collapse.

Once bitten by the natural resource socialism bug, it’s apparently easy to dismiss evidence. Or the common-sense notion that government over-reach has made the mess they now struggle with.

This is Common Sense. I’m Paul Jacob.

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Tags Mexico, nationalize, neoliberalism, oil, socialism

Accountability crime and punishment education and schooling ideological culture moral hazard

The Damage Done

In his Washington Post op-ed, “The dangerous myth of the ‘missing black father,’” Mychal Denzel Smith argues that “responsible fatherhood only goes so far in a world plagued by institutionalized oppression.”

He asks:

If black children were raised in an environment that focused not on bemoaning their lack of fathers but on filling their lives with the nurturing love we all need to thrive, what difference would an absent father make? If they woke up in homes where electricity, running water and food were never scarce, went to schools with teachers and counselors who provided everything they needed to learn, then went home to caretakers of any gender who weren’t too exhausted to sit and talk and do homework with them, and no one ever said their lives were incomplete because they didn’t have a father, would they hold on to the pain of lack well into adulthood?”

Hmmm. The first question answers itself. If all children get everything they “need to thrive,” it is assumed they’ll thrive. The second question is impossible to know … at least until the creation of that perfect utopia with universal material abundance, a flawless education system and indefatigable single-parents.

Fatherlessness is not just a black problem. And let’s agree there are great single-parent (or no-parent) homes as well as terrible two-parent homes.

Still, fathers are nice. Oftentimes they help children thrive, in part by providing “electricity, running water and food” as well as “love” — both tough and nurturing. Proclaiming that fathers would not matter in a society where everything’s automatically supplied is … simple-minded.

Often called socialism.

Smith raises the issues of “racist drug laws, prosecutorial protection of police officers who kill, mass school closures … the poisoning of their water.” He’s right: having a father won’t magically solve those.

But it would solve the problem of not having a father.

This is Common Sense. I’m Paul Jacob.

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Original photo by Sunil Soundarapandian on Flickr

Tags black, children, father, race, racism

free trade & free markets general freedom meme moral hazard nannyism national politics & policies Popular too much government

Is Denmark Socialist?

Democratic Socialism, meme, problems, solve

First… some definitions:

Socialism advocates the public ownership (or control) of business and industry in service of a more equal distribution of wealth.

Bernie Sanders and his version of “democratic socialism” places emphasis on redistribution and downplays the public ownership and control part of the system.

However… Bernie seems never to have met a government monopoly he didn’t love, or a free market enterprise he didn’t distrust or despise.

What are the problems (dangers) of socialism?

It idealizes envy.

It rationalizes theft.

It idealizes state power.

It penalizes accomplishment.

It rewards indolence.

It promotes obedience to the state.

It encourages dependence on the state by treating citizens as children.

It dismisses the protection of individual rights with a vague appeal to the “collective good” or “public good.”

It has repeatedly led to economic collapse, oppression, poverty and starvation. So how have Scandinavian democratic socialists managed to overcome these problems?

Quote from the current Prime Minister of Denmark:

“I know that some people in the US associate the Nordic model with some sort of socialism. Therefore I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy.”
—Speech, Harvard Institute of Politics

From “Scandinavian Unexceptionalism” (from the Institute of Economic Affairs):

Today the Nordic economies are again growing, following a return to broadly free-market policies that served them well before policies changed during the 1960s and 1970s.

The countries are changing in the face of serious long-term problems that have developed over the last 30 years.

Finland, Sweden and Denmark have…introduced far-reaching market reforms. These changes include greater openness to trade, clear reductions in the tax burden, private provision of welfare services, the introduction of personal retirement accounts and, in Denmark, even a shift towards a liberal labour market.

—Scandinavian Unexceptionalism (highly recommended!)

And the moral hazards?

The development of Scandinavian welfare states has led to a deterioration in social capital.

Nordic societies have for hundreds of years benefited from a strong Lutheran work ethic, a strong sense of individual responsibility and high levels of trust and civic participation.

In the early stages of their transition to “democratic socialism”, safety nets DID exist, but few used them. Over time, an increasing share of the population became dependent on government transfers. The welfare states moved from offering services to the broad public to transferring benefits to those who did not work.

The situation that exists in Nordic societies today is one in which ethics relating to work and responsibility are not strongly encouraged by the economic systems. Individuals with low skills and education have limited gains from working. This is particularly true of parents of large families, which gain extra support if on welfare.

It is true that welfare systems have reduced poverty. However, especially in the second generation, they have also created a form of social poverty of the same type that is apparent in the countries from which many of the admirers of the Scandinavian systems come. Detailed research clearly shows that welfare systems have formed a culture of dependency which is passed on from parents to children.

MUCH MORE HERE on the moral and economic capital that preceded the welfare state, and its gradual disintegration over time…

Do you believe that socialism is a good idea that has simply been corrupted by ruthless dictators? Consider the story of the Chinese Cultural Revolution… a mass movement of Chinese youth dedicated to eradicating capitalism and advancing socialism. Its bloody history tells us quite a lot about the logic of this flawed political philosophy… “Socialism’s Idealistic Youth”

Useful References

Scandinavian Unexceptionalism (Institute of Economic Affairs)
This paper is especially valuable because it was written by someone who actually favors a large welfare state. His willingness to concede the problems inherent in such a state are refreshingly honest… and useful for anyone interested in the issues.

What Can the United States Learn from the Nordic Model? (CATO Institute)

Myth: The Scandinavian countries are proof socialism works (Being Classically Liberal)

The Myth of the Scandinavian Model

Economic Freedom of the World: 2013 Annual Report

International government spending (Wikipedia)

Index of Economic Freedom (Heritage Foundation)

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Tags Democratic Socialism, democratic socialist, meme, Scandinavia

Common Sense general freedom ideological culture moral hazard too much government

A Tree Fell In a Forest

Calaveras Big Trees State Park is famous for its hollowed-at- the- trunk Pioneer Cabin Tree, a sequoia

It’s neither “iconic” nor “ironic.”

“Storm fells one of California’s iconic drive-through tunnel trees, carved 137 years ago,” Travis M. Anderson’s title informs us. Calaveras Big Trees State Park is famous for its hollowed-at-the-trunk Pioneer Cabin Tree, a sequoia you have seen in hundreds of photos.

It fell, almost certainly, because of a storm. The ground got wet, undermining the sturdiness of the tree’s root system. And the winds got fast, sending the tree crashing to the ground.

But that’s not the hole — er, whole story.

The obvious reason it fell down is that the “hollowed-out” tunnel amounted to a huge cut. It is almost as if loggers started the felling job nearly seven score ago, and it took all that time to fall.

That is not “ironic,” in case you were wondering. It’s to be expected. The real wonder is that it stayed up so long.

Which should remind us: more than one cause can contribute to a singular effect. We are always tempted to focus on only one factor when we argue about an event. But in society, as in trees and forests, multiple influences are always at work.

Life isn’t monocausal, to put it in professor-speak.

Anderson dubbed the tree “iconic.” Now, an icon is an image used to stand in for other things that look similar. That tree didn’t stand in or represent, did it, other trees in the forest? It stood in memory by standing out as different, distinct — one of a very few hallowed, hollowed California sequoias. The opposite of “iconic.”

Still, in using the tree’s toppling as an object lesson in complexity, the fallen timber might be iconic. It stands for a common sense view of how tragedies happen.

This is Common Sense. I’m Paul Jacob.

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