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meme moral hazard too much government

How to Know

Many people don’t seem to realize that a prohibition (banning something) is AUTHORITARIAN BY DEFINITION. Whether it’s drugs, guns, alcohol, offensive language, dangerous ideas, texting while walking(!), plastic straws(!)… authoritarians are perfectly happy to use government violence to force the rest of us behave as they wish. Because they think they know what’s right for everybody else. They are the authorities. They are the keepers of the truth. For the rest of us, the message is clear: obey or be punished.

The spectacle of people screaming about Trump’s “authoritarianism” while simultaneously demanding more regulations, more bans, more restrictions… would be funny if it weren’t so dangerous.


A “rule of law” is based on general principles, and makes room for — or, better yet, is based upon — the protection of individual rights.

It used to be common to say, “a rule of law, not of men”; it was even as common in political oratory as was spouted out over drinks at the Rotary. But as the modern Regulatory State has grown in scope and power, most folks seem to have lost track of the notion. It is now not even a cliché. Few even of our most educated folks can explain this idea. Vast swaths of the mis-​educated public appear not to “get” the idea of limiting government to the enforcement of a few general principles; instead, they cry for more “regulations” (along with additional spending and maybe even a whole new division of the executive government) every time a crisis, tragedy or atrocity occurs.

So we are left with a political culture in which the words of Tacitus seem to a majority as implausible at best, evil at worst: “The more the laws, the more corrupt the State.” Contrary to today’s trendy prejudice, we do not need “more laws” — edicts legislated by representatives, or regulations concocted by bureaucracies — we need Law.

As in, “a rule of Law.”

regulations, rule of law, control, freedom

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Accountability crime and punishment folly free trade & free markets insider corruption media and media people moral hazard national politics & policies porkbarrel politics property rights responsibility too much government

Déjà vu All Over Again

One of the stand-​bys of the post-​2008 mortgage finance bust, at least from left-​of-​center policy mavens, has been to ask: why has no banker gone to prison? They played a game of fraud and got rich. What a protected class — Cronyism! Plutocracy! Capitalism!

The why is much easier to understand if you read up on Round Two of the aughts’ boom-​bust scenario, as in Prashant Gopal’s coverage in Bloomberg, “Getting Rich on Government-​Backed Mortgages.” Gopal spotlights a non-​bank mortgage broker, Angelo Christian, who is making a killing selling houses to people with horrible credit, just as happened before 2008.

“Christian can do this kind of deal because he is, in effect, making the loan on behalf of the federal government through its most important affordable housing program,” Gopal writes. “It’s a sweet deal: He gets his nearly risk-​free commission. [His client] puts no money down. If things go south, the government ultimately bears the risk.”

So, should he go to jail?

Not really. He’s merely doing Congress’s bidding. 

Gopal notes that it is not banks that dominate this round. They are under too much scrutiny. But non-​banking loan intermediaries like Mr. Christian are swarming like flies on a cow’s behind.

There’s a problem in Gopal’s account though. “No one is saying the system is close to another collapse.” 

Well, plenty of people are saying that.

The Cassandras are just not being heeded.

Of course, they don’t know when the bust will happen.

They just know it will.

This is Common Sense. I’m Paul Jacob.

 


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Photo by Images Money on Flickr.

 

Categories
Accountability education and schooling folly responsibility

Only Make Believe

Problems can be solved. But for those lacking the merest clue how to solve a given problem … alternatives exist. 

Books can be cooked to pretend the problem no longer exists. And perhaps to fool others.

A series of articles in the Washington Post highlights the effort to reduce the rate by which city schools suspend students for misbehavior. The good news? “D.C. Public Schools has reported a dramatic decline in suspensions at a time when school systems around the country have been under pressure to take a less punitive approach to discipline.” 

Results? A whopping 40-​percent decline.

The bad news? 

A Post investigation found that “at least seven of the city’s 18 high schools have kicked students out of school for misbehaving without calling it a suspension and in some cases even marked them present.” In those schools, “most suspensions were not reported.”*

The Post further uncovered documentation showing that “DCPS officials knew students were being sent home without documentation at least as early as 2010.”

It brings to mind the recent scandal in Prince George’s County (Maryland) Public Schools, where a dramatic announcement that the county increased its student graduation rate faster than any other county … was followed by an investigation into grade tampering by school administration officials, which numerous teachers have alleged.

It is also reminscent of the systematic cheating on standardized tests in Atlanta — and across the nation.

Hiding the truth, cheating on tests, lying about results … not the actions of a system teaching kids a love of truth.

This is Common Sense. I’m Paul Jacob.

 

* Seven schools’ emails show that students spent a total of 406 days in suspension in January 2016. Officially recorded? Only 15 percent.


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Illustration based on a photo by Tod Baker