ARCHIVE - JUNE 2015
Issues, News & Views
Who will be the
EVALUATING POLITICAL PROMISES
2015/06/22 - The election to finally replace Barrack Obama is "only" 17 months away. More and more contestants are entering the field on both sides, making more and more promises. In today's complex world, how can voters possibly separate the bad ideas from the good ones?
The answer is, to think about it. Avoid your immediate reaction, and think about the idea. There are many dimensions to analyze a policy idea, here are four:
First, think about the incentives, and the behavior that will be incentivized. Who is being rewarded, and why? What have they done to deserve a reward? Who's getting the downside, and why?
Second, imagine that you are listening to a prognosis and treatment plan from a doctor - does the idea address the disease, or merely the symptom? Is it a cure or a painkiller?
Third, consider the long-term implications. Who pays for the policy? Do we print money, which will exacerbate future inflationary pressures; or do we borrow, which will only worsen our future fiscal imbalance as debt service costs increase; or, do we arbitrarily levy taxes, which will suppress future economic growth? What part of our future do we want to imperil?
And finally, is the policy good for America, or is it good for a special interest that a politician is trying to pander to? If it sounds like a cheap political pandering to get elected, it might be bad policy.
The point is that pretty well every policy idea, or, more accurately, "political promise", will sound great on the surface but probably comes with significant side effects.
Something else you can be fairly certain of - but you'll need to think it through - is that the less glitzy an idea sounds, the more effective and beneficial it will probably be.
Be aware of the "Law of Unintended Consequences". We live in a dynamic world where changes in public policy induce changes in societal activity. For example, when we reduce tax rates we incentivize economic activity, which increases the tax base and thus has the potential to increase tax revenues; and the opposite is also true, that increasing tax rates can actually reduce tax revenue, the seeming opposite of what might have been intended.
Compare political promises to parenting - when our children make mistakes in various forms, do we reward them? And when they do well, do we take corrective action? Yet that seems to be the bedrock of American public policy - we reward failure in the form of handouts, and penalize success in the form of taxes. Ask yourself whether you would raise your children the same way the government treats taxpayers!
Think about the adage, "If you give a man a fish, tomorrow you will feed him again; if you teach a man to fish, tomorrow he will feed himself". When a politician makes a promise, ask whether he is giving a man a fish, or teaching a man to fish. The right answer should be obvious.
Let's consider a couple of case studies:
First, consider the fish adage in the real world. Everyone wants to help the poor. The difference is that Democrats want to hand out fish, while Republicans want to start fishing schools. And they're both right to some extent. Right now our policy is almost completely the Democrat way, we hand out EBT cards (fka "food stamps") and Medicaid. In perpetuity.
In the process we teach people to make a life out of receiving fish, of collecting government hand-outs. That's what our policy incentivizes. But doesn't it make more sense to have life-time limits of say, perhaps, 5 years, for collecting Medicaid or SNAP benefits? And the collection of those benefits should be connected to participating in job training?
Providing nothing for the poor is unacceptable, but so is free stuff for life. A responsible sustainable policy puts people on a path to self-sufficiency, and, every bit as important, disincentivizes people from drifting onto a course of dependency in the first place. This is just common sense.
Next, consider Hillary Clinton, who has promised to deliver a student debt forgiveness plan next month. Naturally. Students are a coveted Democrat special interest, so you should expect pandering Democrats to offer a handout. Yes, student loan debt is an issue, but is it really the problem, or merely a symptom? If we forgave all the debt, would the problem be solved? No, because the real problem is the cost of higher education, and before too long we would have the same issue of massive student indebtedness all over again, and worse. A forgiveness plan solves nothing.
Worse still, universities would be incentivized by the expected Clinton plan to overcharge even more for education going forward, expecting that sooner or later students would force politicians to again take from the taxpayers and forgive their debt all over again. And they'll take a cheap shot at the banks for the mess because banks are an easy target.
So the plan we expect from Clinton would amount to a disastrous taxpayer-funded wealth transfer to college professors and administrators, with students just hostages caught in the crossfire, while Democrat allies make banks the scapegoats for lending to the students in the first place.
Yes, we must help the poor, but lifetime food stamp and Medicaid benefits don't solve the problem, they make it worse. Fifty years and trillions of dollars of LBJ's "War on Poverty" have made no difference.
Yes, we must find a solution to the ballooning student debt issue, and maybe she will surprise us, but we expect Clinton's plan will only provide addictive painkillers that will actually make the disease even worse. We expect a really bad policy idea to be promulgated by her - stay tuned!
Pay close attention to the politicians and their promises. And think about how their promises, if they became policy, would work their way through our economy and our society. You are likely to be disappointed at how counter-productive, how bad for America, most of their ideas are.
CHALLENGING RECENT COURT DECISIONS
2015/06/11 - Let’s ask some questions…
Would it be acceptable for a white restauranteur (who we’ll call "Conrad") to deny service to a black customer (let’s call him "Devon"), just because Devon is black? No doubt we would all agree that that would be very wrong.
Suppose for a moment their race was reversed - Conrad was black and Devon was white. Would it be then be okay for Conrad to withhold service from Devon, for no other reason than because Devon was white? Presumably we would all agree that that would be equally wrong.
Now, what if the black restauranteur Devon recognizes the white diner Conrad as a known, avowed racist? Should Devon be forced to serve Conrad a meal at "Devon’s Restaurant"? What if Conrad was wearing a shirt with a racially suggestive slogan? Or a blatantly racist slogan? Is there a point where Conrad could be refused service?
What if the people were the same but the roles were reversed, is there a point where the black diner Devon could be legitimately refused service at "Conrad’s Restaurant"? Is it the exact same point where Conrad could be refused service at Devon's Restaurant? Does "Equal Protection" really mean equal protection?
What if Conrad asked Devon’s Restaurant to cater his club’s annual barbecue? What if Conrad's club is one that Devon doesn’t particularly appreciate, such as perhaps a motorcycle club, or a gun club, or perhaps something much different and far worse, such as a KKK club? Is there any room for Devon to say "No"? Does he have any recourse at all? Or does Conrad, by simply asking Devon’s to cater the event, in effect dictate to Devon’s that they irrevocably must cater the event? Does the Constitution offer Devon any freedom of conscience?
And what about freedom to contract? Does not Devon’s - or any other business - have the right to decide what business transactions they will or will not engage in? Freedom to contract is a basic fundamental right, as much as freedom of conscience or freedom of speech. Freedom to contract is an intrinsic element of our economic freedoms that have contributed so greatly to our unparalleled prosperity.
Freedom to Contract must by definition also include Freedom to Not Contract. In one of its finer moments, the Supreme Court's 1905 Lochner v. New York decison upheld this freedom under the Fourteenth Amendment. Statists and Progressives have hated this decision and falsely and malevolently disparaged it ever since - for no logical reason, for no reason other than that it shreds their agenda: it places individual liberty far, far ahead of shackles of Güberment Diktat.
Unfortunately in 2012 the extreme left wing of the Supreme Court (Ginsburg, Sotomayor, Kagan, Breyer) - the Statists - ganged up with Chief Justice John Roberts and took it upon themselves to strike a blow against our fundamental economic freedoms when they decided that the Federal Government could force people to buy something, like health insurance, even if they did not need it, did not want it, and could not afford it. Yet another dismal Obamacare outcome.
We must uphold all of our fundamental freedoms including freedom of conscience, and freedom to contract.
Consider Pam Geller, a name that has been in the news recently for organizing several Mohammad art events. As you are probably aware, Muslims are generally offended by depictions of Mohammad - paintings, drawings, what have you. Suppose Geller asked “Mediterranean”, a hypothetical Halal (Muslim concept not unlike the Jewish concept of “Kosher”) food and beverage business owned by Ahmed, to cater one of her Mohammad art fairs? Should Ahmed be allowed to exercise his freedom of conscience, and freedom to contract, and tell her to get lost? Or should the government and the courts coerce him to support her event that he deems offensive?
Chalprem dislikes Pam Geller’s events. We do not believe in mocking anyone’s religion. We do not believe in insulting Christianity, Catholicism, Mormonism, Islam, or any other religion. A respectful conversation is always appreciated, pressing buttons is not. But we support Pam Geller’s right to hold her events even if we detest the event itself. And we support Ahmed’s freedom of expression to tell her quite forcefully what to do and/or where to go.
Now suppose Pam Geller just walked in off the street into Mediterranean, and asked for a hummus sandwich? Should they be allowed to kick her out because they recognize her as an outspoken critic of Islam? What if she asked for a BLT, perhaps unwittingly, or perhaps quite intentionally? Maybe she thought Mediterranean was a Greek/Orthodox diner, or maybe she knew it was a Turkish/Halal establishment and wanted to pick a fight. Should that even make a difference?
Christians always walk a fine line between expressing charity and kindness to people, while at the same time not condoning the lifestyles, decisions and actions of those same people when they contravene Biblical teaching. The Bible clearly takes a dim view of homosexual acts, so Christians seeking balance will always face a tension in dealing with gays – expressing acceptance of gays as individuals, but without condoning their gay lifestyle. This is respectful, reasonable freedom of conscience.
Now, suppose a lesbian we'll call Rachel walks into a business we'll call Melissa’s, a bakery owned by a Christian. Should Melissa's serve Rachel? The answer, of course, is yes - with a level of courtesy and respect indistinguishable from that directed toward any other customer. Yes, Melissa’s should serve Rachel; and yes, Mediterranean should serve Pam; and yes, Devon’s should serve Conrad. Courteously and respectfully.
But should the business owners be forced to support the individuals’ events and show implicit support for their views and causes? Should Melissa be forced to serve the gay wedding? Should Ahmed be forced to cater the art fair? Should Devon be forced to serve the barbecue? If there is such a thing as Equal Protection, or Freedom of Conscience, or Freedom to Contract, we would think the answer should be emphatically “No!” in all such cases.
Shame on those liberal Courts that have ignored common sense and the Constitution in the pursuit of their extremist left-wing agenda. And shame on those politicians who have not put conscience ahead of career, and have not stood up to defend our freedoms from the Thought Police progressives.
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