ON WELFARE AND ECONOMICS

An American tragedy: "One out of 17 white homeowners owns a luxury home, but only one out of 33 minority homeowners has such a costly house". And one out of 33 million Bangladeshis has such a house.

Welfare destroys community: "Cohesion develops from the bottom-up. It emerges when families, workmates and neighbours come together to share common interests and to solve common problems. But people come together only when they have a reason to do so. The more the welfare state takes care of our needs, the less remains for us to do for ourselves. The result is that the bonds between us begin to fray... crime rates plummeted during the 1990s at precisely the same time as the government cut back on welfare spending and income inequality increased significantly". All of which is the opposite of Leftist orthodoxy.

Sowell on the "Big Lie of the Year": "It may be too early in this election year to determine which will be the biggest of the Big Lies in this political campaign. However, my feeling is that it may be 'the working poor.' While there are working people who are poor, most poor people are not working full time, not working very long, or not working at all... By focussing on those who work hard all their lives and still remain poor - no more than 3 percent of the population - and telling their personal stories endlessly, liberals can present the Big Lie with a human face. There is an even bigger lie behind all this. That lie is the implication that the purpose of all this hand-wringing is to help the poor. But the poor are just the bait in a political bait-and-switch game. ....The fraud becomes apparent the moment anyone suggests that there be means tests, so that the taxpayers' money will be spent only on the poor. Those who pose as the biggest champions of the poor are almost invariably the biggest opponents of means tests. They want bigger government and the poor are just a means to that end. "

The Left-leaning "Atlantic" to its credit highlighted the same economic mythology that Sowell refers to last year: "lack of money was more an effect of poor people's other, more-fundamental problems than a cause in its own right; and so handing out more cash would be of little help. Other research similarly pointed away from money and toward the importance of two-parent families, education, and work". And Peter Hitchens compares the welfare state to heroin addiction.

On business 'down sizing': The facts show it's mainly restructuring and "..about half of all downsizing firms end up with at least as many laborers within a few years' time... Manufacturing is fifteen percent of the U.S. labor force and thus only a small part of the downsizing story. Retailing and services have been upsizing considerably for many years."

There is an amusing article here about Lou Dobbs, the financial expert who knows nothing about economics -- or pretends not to in his hunger for popularity. The article suggests that he is actually quite a good investment guide -- if you do the opposite of what he recommends.

Should the whole US Senate be investigated for insider trading? "US senators' personal stock portfolios outperformed the market by an average of 12 per cent a year in the five years to 1998, according to a new study. "The results clearly support the notion that members of the Senate trade with a substantial informational advantage over ordinary investors," says the author of the report, Professor Alan Ziobrowski of the Robinson College of Business at Georgia State University."

Good news for Israel: "Mr. Netanyahu has tackled economic reform with the zeal and single-mindedness that has marked his career, drawing comparisons to New Zealand's Roger Douglas, the finance minister who liberated his own nation's economy in the 1980s. Mr. Netanyahu's emergency economic plan spared no holy cows: It included cuts in government expenditures, welfare entitlements and public-sector jobs. It also sought to lower taxes and jump-start a stalled privatization program"

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