On December 14, 1819, Alabama became the 22nd state of these United States. On the same December date in 1918, Friedrich Karl von Hessen, a German prince elected by the Parliament of Finland to become King Väinö I, renounced the Finnish throne. In 1939, the Soviet Union was expelled from the League of Nations for invading Finland and starting the Winter War.
As I write this, the United States of America is $16,275,179,205,442 in debt. By the time you read this, we’ll have piled up millions more.
Much debt is of recent vintage. When George W. Bush became president in 2000, the national red ink totaled $5.7 trillion. In eight years, Dubya nearly doubled it to $10.6 trillion. Since his 2008 election, President Obama has far outpaced Bush, sinking us another $5.3 trillion in debt in just half Bush’s time.
And, by continuing to run yearly deficits of over $1 trillion, we’re digging the hole deeper at top speed.
For all the hysteria over draconian cuts, forced at the so-called fiscal cliff, those somewhat slippery savings would at best amount to about 10 percent of our yearly deficit, leaving us spending 9/10ths of a trillion dollars we don’t have.
In the “other cuts” department, the Obama Administration had been supporting paltry reductions to federal Medicaid spending of $17.6 billion over ten years (that’s less than $2 billion a year), but just flipped its position. Why? State governors are deciding if they can afford to take part in Obamacare’s massive Medicaid expansion to cover those earning up to 133 percent of the poverty line.
Not content to spend recklessly alone, the Feds picks up the entire tab of new Medicare recipients’ first three years. After that, Washington pays 90 percent and the states pay 10.
States are wondering how they’ll come up with that additional 10 percent — seven governors have already declined to join in the spending program. No one in Washington has given a second thought to paying the 90 percent.
They figure they can always raise taxes.
This is Common Sense. I’m Paul Jacob.
How do you get a body of professionals to go along with your program?
Pay them.
It’s an old idea: He who pays the piper calls the tune.
The pipers are economists. The paymaster is not you, but the Federal Reserve. There’s a suprising amount of agreement amongst even disagreeing economists that the Federal Reserve is, on the whole, “a good thing,” a necessary thing, even an institution whose existence and rationale must not be questioned.
Shocking, but less so when you apply what is called “Public Choice” analysis to economists themselves. Assume that economists are self-interested. Assume that they like to get paid. Opinions turn out to be somewhat elastic, even given some very hard facts. The results?
Don’t bite the hand that feeds you.
Nicely, a few economists bring this up, every now and then. Garett Jones on EconTalk did, reviving a letter monetary economist Milton Friedman wrote to researcher David M. Levy in the early 1990s. Friedman summarized the situation concisely, saying that the Fed
hires directly roughly half of all economists specializing in the field of money, and indirectly provides funds for a large fraction of the remainder. I have no doubt that is a major reason why the Federal Reserve, despite such a poor record of performance, has such a high public standing.
This also helps explain why there was a major shift away from laissez faire amongst economists. In the 20th century, the “worldly philosophers” developed a new labor market; they found that they could make a great deal of money working for government. And they don’t get paid for telling the government not to do what it wants to do, or to fire most economists.
This is Common Sense. I’m Paul Jacob.
Can you get in trouble with the law — or at least a government agency’s unlimited regulatory power — for peacefully telling the truth?
You can, despite the protections articulated in the First Amendment and the greater respect sometimes accorded to freedom of speech than to other constitutionally protected rights.
It is possible because when they assault speech, government officials claim to be opposed not to the right to speak freely but to something else. They say they’re combating lung cancer, the influence of money on politics, or the unequal distribution of information to investors.
This summer, Reed Hastings of Netflix committed the sin of boasting on Facebook that monthly viewing of Nexvids “exceeded one billion hours for the first time ever in June.” Sounds innocent enough.
Come December, though, and the Securities and Exchange Commission has threatened to bring civil charges against Netflix for allegedly violating “public disclosure rules.” SEC Regulation FD requires public companies to make “full and fair disclosure” of “material” information that is not already public.
The SEC still thinks that 244,000 Facebook subscribers don’t fully and fairly constitute the public, but the communication cannot by any reasonable, modern construal be a case of offering “insider information.” How much more “outside” from the back rooms of a corporation can you get than Facebook?
The absurdity, here, lies in the SEC’s rules and its interpretations of those rules — and in the blind, confused, bankrupt way bureaucracies, which don’t go bust as the companies they oversee can, enforce their rules.
That is why Bernie Madoff slipped through the SEC’s fingers for years, while Netflix finds itself in hot water for a Facebook posting.
This is Common Sense. I’m Paul Jacob.
Adults have expressed disappointment in the behavior of young people since civilization began. You can read complaints about “the kids these days” on cuneiform tablets.
That being said, I have some sympathy for U.S. Senator Joe Manchin (D-W.Va.)., who has asked MTV to cancel its latest “reality TV” extravaganza, Buckwild, slated to debut in January. This West Virginia-based show show emulates Jersey Shore, a low-level satire on low-life New Jersey twentysomethings that I know too much about . . . without ever having watched.
“As a U.S. Senator, I am repulsed at this business venture,” Manchin asserts. He seems especially troubled by the fact that “some Americans are making money off of the poor decisions of our youth. I cannot imagine that anyone who loves this country would feel proud about profiting off of” the presumably horrid show.
First, as Ed Krayewski notes on Reason’s Hit and Run, were the senator really to take pride in business, he could mind his own: “The Senate . . . hasn’t passed a budget in more than 1,200 days. And, unlike MTV, it’s their job.”
Second, this is “Reality TV” here, folks. Not much to see. The truth is that Americans, for reasons ranging from Schadenfreude to mirth, like watching people make fools of themselves. And the youngsters hired on to play the foul-mouthed, inebriated, uncultured, promiscuous ninnies of Buckwild will be well paid for their efforts, and, as Americans chortle at them, they’ll chuckle all the way to the bank.
Third, they perform a useful service. Most folks watching fools don’t want to become fools themselves. They laugh. And, in so doing, begin to grow up.
This is Common Sense. I’m Paul Jacob.
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F. Marion Crawford
The artist may doubt his own work, but he is bitterly disappointed if other people doubt it also.
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F. Marion Crawford
To expect defeat is nine-tenths of defeat itself.
Michigan’s state House and Senate passed Right-to-Work bills last week, because, as Governor Rick Snyder said, workers “should be able to decide whether to join a union or not.”
Which exact bill will wind up on the governor’s desk is anybody’s guess, but one could be signed into law by Snyder as early as tomorrow. Both would prevent unions from requiring workers to join as a condition of employment.
Predictably, Michigan Education Association President Steve Cook argues that legislators “want to force unions to . . . provide se+rvices, benefits and the protections to non-members who will not pay a penny for them. It defunds unions.”
That’s a rather one-sided way of looking at the issue. The cases of Michigan day care workers and home health care workers, both railroaded into union, tell a different tale.
Two years ago, the Mackinac Center for Public Policy challenged the bizarre unionization of 40,000 self-employed day care providers by the American Federation of State, County and Municipal Employees and the United Auto Workers, with dues skimmed “from the Michigan Department of Human Services subsidy payments made to some providers on behalf of qualifying low income parents.”
Then, there’s the $33 million SEIU has nabbed “from the elderly and disabled in Michigan . . . through a unionization scheme it orchestrated when Jennifer Granholm was governor.” Jarrett Skorup writes in Michigan Capitol Confidential that “tens of thousands of people are being forced to send money to the Service Employees International Union simply because they care for a friend or family member who receives a Medicaid stipend.”
After reviewing these two cases, the right-to-work is clearly part of an even bigger right: the right not to be ripped off.
This is Common Sense. I’m Paul Jacob.
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John Milton
Truth never comes into the world but like a bastard, to the ignominy of him that brought her birth.
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Townhall: Falling on Soft Times
We have entered a new era, and perhaps nothing expresses this better than the worry, by those who define themselves as “of the left,” that the poor are being “left behind” in the recent economic recoveries.
For some reasons, the cause for this is assumed to be “markets.” But what if the cause for this new social stratification were nothing other than government itself, as advocated and run by those who say they “most care”? What if they were responsible?
Go to the Townhall column, and come back here to consider a few more ideas. Here are some references:
- All quotations from Casey Mulligan are from his talk with Russ Roberts of EconTalk. Listen. It’s fascinating.
- The Mohs scale, mentioned early on, is a scale of mineral hardness. Glass, we were told in school, is 5.5 on the Mohs Scale; diamonds rate a 10.
- The importance of the Basel agreements in setting off and ramping up the monetary aspect of the current depression can also be found on EconTalk, this time a conversation with Steve Hanke.
- The crucial role played by the triple-A ratings system was identified by Lawrence J. White, and is briefly dealt with in David Henderson’s review of a book on the origins of the current crisis.
I urge my readers to look into Mulligan’s book, and the book cited immediately above. Tell me what you think.