Yeah, What HE Said: Limited Government

Quote shamelessly borrowed from the Cato Institute's blog today:

"Limited government is one of the greatest accomplishments of humanity.
It is imperfectly enjoyed by only a portion of the human race, and, where
it is enjoyed, its tenure is ever precarious. The experience of the last
century is surely witness to the insecurity of constitutional government
and to the need for courage in achieving it and vigilance in maintaining it."
- Tom G. Palmer, Cato Institute Fellow and Humanitarian

Taking Care of the Heroes

Football is valuable entertainment. Add up the value of the NFL teams: $30 billion according to Forbes to get one measure of just how valuable it is. A hundred bucks for every man, woman, and child in the US.

We love to play and watch it more when we can build (indirect) relationships with it by following our favorite teams, coaches, and players.

We love it more when we can build community with other fans around said relationships.

We love it more when it's exciting (meaning the competition is close and the outcome uncertain).

We love it more when it reminds us of humanity's higher nature. We can't stop talking about players who achieve super-human heroic feats, or coaches who execute strategies to snatch victory from the clutches of defeat.

We love it more when it makes us feel like winners.

We love it less when it is unjust.

We love it less when it is boring.

We love it less when it is inhumane.

We love it less when we lose connection to players or teams.

Sooooo.....

A good way to kill the sport would be to remove the best available (and best-known) players. Heroes: gone. Relationships: severed. Excitement: weak.

Another good way would be to have no rules or penalties. Justice: betrayed. Heroes: broken. Participation: discouraged. Humanity: degraded.

Yet another good way would be to have too many rules and penalties. Action: mundane. Risks: not taken. Super-humans: enfeebled. Results: predictable.

Helmet-to helmet, launching, spearing, intimidating, crushing hits are designed not to stop the opponent, but to intimidate him. Tru dat, but they also damage him, sometimes permanently. They prevent him from being his best.

For some they may be fun to watch or commit, but they are a net negative to the value of the sport and that's the best reason I can think of to stop them. Football is nothing without it's heroes. We have to let them show off ... but not at the expense of knocking other heroes out of the game. That's exactly what no-holds-barred hits do ... in more ways than one. They can injure, sure. They also can cause a receiver to muff a catch because they're too busy worrying about what semi truck is coming their way. The long-term effects (ALS, etc) might even cause some smart-and-athletic dudes to avoid college and pro ball altogether.

On top of that, menacing hits call attention to the embarrassing base nature of the hitters. These are not heroes. Their lack of humanity exposes that.

Joe Pa agrees:

"I've been saying for 15 years, we ought to get rid of the face mask," Paterno said this week. "I think, then, you go back to shoulder blocking, shoulder tackling, and you wouldn't have all those 'heroes' out there."

I'm not convinced that he's found the best solution, but his point is that these guys are just doing what they can get away with. Whether pain, fines, suspension, or legal proceedings provide the disincentive, the point is that these guys will figure it out. It's unacceptable to cream kickers and QBs (Favre aside). Players have somehow figured out how to avoid those hits. It should be unacceptable to demolish receivers, too. Egregious hits are not required. They are not unavoidable. They're not the result of confusing rules. They're not a necessary part of the psychological game. They're not the natural result of younger quarterbacks. That's all ridiculous. They are an embarrassing lack of discipline on the part of the aggressor, exploiting a loophole in the rules. The loophole should be closed and enforcement should be strict. Players will figure out how to comply ... or they're not the kind of players we want in the game.

Yeah, What HE Said: The Blasphemy of Expressing Opinions

“I mean, look, Bill, I’m not a bigot, but when I get on the plane, I got to tell you, if I see people who are in Muslim garb and I think, you know, they are identifying themselves first and foremost as Muslims, I get worried. I get nervous.”

ALARM! ALARM! BIGOT ALERT! PSYCHO ALERT! INSANE RADICAL CONSERVATIVE RIGHT-WINGER ALERT! CRUCIFY WHOEVER SAID THIS! SEVER ALL TIES TO AVOID GUILT BY ASSOCIATION! ABANDON SHIIIIIIP!

OK, OK, probably ... maybe ... peut-être I'm over-reacting a bit. I mean, it WAS an opinion show, so ... maybe ... but eek - what will people think? That's it. Out he goes!

Apparently that's NPR's idea of a defensible argument for firing one of their most renowned, long-standing employees. That's exactly what they did to Juan Williams for his O'Reilly Factor quote ... or for something ambiguously "larger" as several have suggested.

And therein lies the rub. Juan Williams has long been a bridge across many political worlds. He worked for NPR (for many years) but was happy to participate in political discussions live, in print, on air, and on TV with just about anyone, on just about anything. He has always been willing to try and expand mutual understanding. Problem: Conservative nuts don't understand the real world? Juan's Solution: Go on Conservative shows and explain the opposing viewpoint in refreshingly clear, even-keeled, non-inflammatory terms.

Was his line culturally-insensitive? Yes. Did it reflect a true bias that he ... and many others have? Yes. Did he specifically preface it with the caveat that he's not bigoted? Yes. Did he mis-represent opinion as fact? No. He clearly stated a fact: he gets nervous. In doing so, did he betray his insensitive opinion? Yes.

Even journalists are allowed to have opinions ... even insensitive ones.

In his own words (on Good Morning America this week)

"This is one of the things in my life that's shocking. I grew up on the left. I grew up here in New York City and I've always thought the right wing was the ones who were inflexible and intolerant. Now, I'm coming to realize that the orthodoxy at NPR, as it's representing the left, is just unbelievable," he said. "And especially for me as a black man, to somehow, you know, say something that's out of the box. They find it very difficult... I think they were looking for a reason to get rid of me. They were uncomfortable with the idea that I was talking to the likes of Bill O'Reilly or Sean Hannity."

NPR's differentiating advantage is that they're like Juan: Clear, non-inflammatory, diverse, and comprehensive, if a bit left-leaning, in their reporting. When I want to get a (much) deeper understanding of an issue than I can get from the talking heads on TV ... and a (much) clearer understanding than I can get from the cacophony of the internet ... I turn to NPR.

And I want to hear Juan.

Yeah! What HE Said: Inspiring Government to Be All It Can

Government is the great fiction through which everybody endeavors to live at the expense of everybody else.
- Frederic Bastiat, French Economist (1801-1850)

A government big enough to give you everything you want, is strong enough to take everything you have.
- Thomas Jefferson, US President (1743-1826)

Image: Despair.com

Yeah, what HE Said: History Repeating Itself Edition

What one person receives without working for, another person must work for without receiving.

The government cannot give to anybody anything that the government does not first take from somebody else.

You cannot multiply wealth by dividing it."
- Dr. Adrian Rogers (1932-2005)

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.

If you destroy a free market, you create a black market.

We must beware of trying to build a society in which nobody counts for anything except for the politician or an official, a society where enterprise gains no reward and thrift no privileges.
- Sir Winston Churchill (1874-1965)

We ask you to be so good as to pass a law requiring the closing of ... all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses, to the detriment of the fair industries [of Candles, Tapers, Lanterns, sticks, Street Lamps, Snuffers, and Extinguishers, and from Producers of Tallow, Oil, Resin, Alcohol, and Generally of Everything Connected with Lighting].
(this from the excellent "Candlemaker's Petition")

Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.
- Frederic Bastiat, French Economist (1801-1850)

The "New" Creative Destruction

You cannot help the poor by destroying the rich.
You cannot strengthen the weak by weakening the strong.
You cannot bring about prosperity by discouraging thrift.
You cannot lift the wage earner up by pulling the wage payer down.
You cannot further the brotherhood of man by inciting class hatred.
You cannot build character and courage by taking away people's initiative and independence.
And you cannot help people permanently by doing for them, what they could and should do for themselves.

- Ronald Reagan, 1992 Republican Convention, quoting William Boetcker

In the Words of Willie: "It's Been Rough and Rocky Travlin'..."

... but I'm finally standin' upright on the ground.
And after takin' sev'ral readings,
I'm surprised to find my mind's still fairly sound..."
- Willie Nelson, Me and Paul

Willie doesn't need a U of Chicago economics diploma hanging on the wall in his tour bus. He just knows good sense and how to not take things too seriously. I'm going to borrow his words above to explain what is essentially a very simple economics concept. Stay tuned.

As I bemoaned in a recent blog, talking heads everywhere are proclaiming the death of the free market, but NOT the death of capitalism and NOT a turn toward socialism (that would be politically unwise to say). In saying this crap, they show their lack of understanding of economics. A free market is a necessary prerequisite of the capitalism model because this is how prices are determined ... and prices are the uniform measure which ensures capital is allocated most efficiently ... and efficient capital allocation ensures that the most "value" is wrung from every bit of capital. This is capitalism' single goal.

• It's goal is NOT fairness (Thomas Friedman said it himself on Meet the Press this week: "Fairness is not on the table anymore ... we either have systemic risk or find a way out of this mess.")
• It's goal is NOT equality (actually, perfect equality and perfect capitalism are completely incompatible, as forced equality kills the incentive mechanism)
• It's goal is NOT stability (and that's where Willie's words come in. Free-market capitalism is great at achieving its goal, but it does not guarantee a smooth or direct path. This is not a failing of the model, it is a result of the imperfection of the human mind in making decisions)

Capitalism focuses on what it's good at (the economy) and leaves social topics to social constructs. Advocates of other models such as socialism and communism may be reluctant to admit as much, but the ultimate goal of these models, in pure form, is the same.

The only real difference between the models is simply who makes the decisions.

Socialism presumes that government officials are in the best position to make decisions for the common people, and that their goal must be equality. Our economy is so bogglingly complex that, for this model to work, government must be comprised of a cadre of elite, selflessly compassionate intelligentsia with perfect foresight and super-human decision-making abilities.

Until a doting, grandfatherly HAL 9000 emerges (and it's already 7 years late!), free-market capitalists believe that it takes the entire population of the economy to get decisions right. Leveraging 4 billion years of evolution (or 6 days of creation, which ever you prefer), capitalism makes use of each person's instinctive desire to maximize pleasure while minimizing pain. Each person is empowered to constantly make the decisions that are best for themselves based on the information at hand.

Each owner of capital (including the human capital of our own labor and intelligence) is empowered to constantly make decisions about the best use of that capital in order to maximize the NPV of future profits from it. This NPV is represented by the current price of the capital. If the owner "prices" his capital at $1,000, but a smart entrepreneur thinks of a better use and "prices" it at $1,200, then the owner should be ecstatic to sell it to the entrepreneur at any price above $1,000. Done a trillion times a day, such interaction maximizes the overall output and value of the entire economy. In short, decision-making is decentralized to the lowest possible level, not hoarded in Washington.

Progressive Lefties will immediately smell a rat here. This process does nothing to ensure that all the pie slices are equal. They're right. Capitalism simply grows the entire pie, and in doing so makes EVERY slice bigger. Bill Gates' decisions vastly grew his slice of the pie, both in absolute terms and in relation to everyone else's. He benefited unequally from his own success. That's the incentive mechanism of the economic model.

As a side-effect, the whole pie got bigger, and that has benefited even the poorest among us (see my recent blog on poverty for more on this) but social concepts like equality, fairness, stability, or poverty eradication should be handled via social constructs. Asking an economic model to address social goals creates an unnatural and unstable conflict of interest. To impose these goals on capitalism would require convincing every member of the economy to make decisions which do not maximize their own well-being. On the other hand, the concentration of power required by socialism, creates an much more practical way of imposing these goals on a populace without their consent.

Is that really what we want? If not, we need to put our politicians back in line.

At the Risk of Stating the Obvious: Too Much is ... Well ... Too Much

I'm declaring an end to my blog-strike protest, but I'm certainly not getting over it's original cause. The floodgates are open. Bad, inefficient, uncompetitive, loss-making businesses are being propped up rather than forced to release their capital and get out of the way for someone who can actually make money with it. Return on capital is so '80's. Terribly capital inefficient projects are being brought out of governmental garbage heaps by heavy Keynesian hands. People who paid too much and made too little for their McMansion and Merc are going to be "rescued" from themselves (no matter who becomes president).

Anyone who is currently faced with a "cut your losses" prospect is highly incentivised to wait a while, maybe even make their situation a little more dire, and then scream for a rescue. As Ayn Rand feared, the notion of "from each according to ability, to each according to need" is fast becoming a reality.

Governments globally are assuming the role of [incompetent] banks by assuming bad debt and making foolish loans. Counterparty, market, and credit default risks are being glibly transferred to sovereign risks.

It's always tempting to throw good money after bad. Temptation has finally won. If I were a religious man, that statement might give me cause for concern.

As an economics man, it gives me horror. Without solving the root of the current crisis, we've sewn the seeds of the next.

It will be a doozy. With each crisis, our helpful nanny-leaders grow more sure that we, the lowly citizens cannot be trusted with ourselves but must be kept on tight choke collars. More regulations. More taxes. More reallocation of the money we earn. It's for our own good, they keep telling us as they encroach ever further into our ability to progress (personally and as a society). Times are different, they say. This is unprecedented, they say.

They are not, and this is not. We've had many a crisis before, and unfortunately with mixed outcomes. The stronger the pain, the more severe the whiplash response ... and the more unpredictable.

I'll return to my mantra (and notice I am unable to channel Keynes). No one can live beyond their means for long. Temporary rescues just forestall the fall.

Shout out to the Individual

I'll admit it: I was in love before I ever met Ayn. It's in the genes.

I'm enjoying a slow re-read of Atlas Shrugged at the moment. It has an apropos message considering the current state of political affairs. Apocalyptophiles among us would argue that in this election year, we're at the inflection point between the individual and the collective. Me? I take a slightly softer line. We're at an inflection point. There have and will be many.

Some people wish they were members of the Fight Club or the '27 Yankees. Me, I wish I was in the Class of '43 aka the Collective. The human animal is driven by self-interest. Period. Or as the Objectivists say it (via Wikipedia):

A society is, by Objectivist standards, moral to the extent that individuals are free to pursue their goals ... mutual consent being the defining characteristic of a free society.

To take it one step further: A maximally happy society would be one in which each member maximizes his own happiness (as long as his actions don't decrease others' happiness).

To restate that in economic terms: The only way to successfully maximize society's gross utility is for each member to maximize his own.

Sounds pretty evil and selfish, right? Uh, Right. I'm as bemused and perplexed as Ayn and Alan when people disagree with this obvious truism. In fact, I secretly believe that everyone agrees with it, but just doesn't like the logical consequence to society. We fear that a society of selfish people would be one where the strong take advantage of the weak. They fear that man's basest animal nature would lead to a least-common-denominator unravelling of society. They counter that in today's enlightened, progressive, cutting-edge society, we all must be persuaded to take from ourselves a bit and hand to the lesser among us. Equality is their driving aim.

To them, I'd like to offer my own consolation: self-interest is not mutually exclusive with the collective good. Much of the First World has gotten so wealthy that people have begun to feel they don't need their community. Frankly, they don't know what they're missing. I know from personal experience that people can improve their own happiness by helping others.

My argument doesn't just rest on feel-good charity. The central paradox of human motivation is that the most selfish thing we can do is to gain a sense of place in their community: a sense of being needed and valuable gives one a deeply satisfying sense of individual security.

Perhaps I should call this the theory of reverse enlightened self-interest.