Dead in the Water: The Federal Flood Insurance Fiasco

By almost any analysis, the National Flood Insurance Program (NFIP)—the recipient of a $9.7 billion bailout in the wake of Hurricane Sandy—doesn’t work. It is poorly conceived, it’s terribly mismanaged, and it encourages harmful behavior.

Of course, the same can be said for dozens of other federal efforts. What sets the NFIP apart is that, in looking to address what was at the time a clear market failure, Congress created a program that has so influenced the course of society these past four and a half decades that getting rid of it would be nearly impossible.

Before Congress set up the NFIP in 1968, only a handful of very small insurance companies wrote flood coverage as part of conventional homeowners’ policies. Although a demand for flood insurance clearly existed, nobody would sell it. This was a market failure as almost any economist would describe it. And it happened for several reasons.

Insurance works best when a large number of people who face similar but uncorrelated risks pool their risk together. But floods are heavily correlated. While they aren’t a serious concern in many parts of the country, they can be a constant menace in areas near river valleys or along coasts that face threats from tropical storms. In an era when small, local insurers that served one or two states provided most insurance, a single big flood could drive many of them out of business.

Not that the business of home insurance has ever been particularly lucrative. Over nearly any given 10-year period, the property and casualty insurance industry as a whole pays out in claims roughly as much as it takes in in premiums, and the home insurance business is one of the least attractive from an underwriting standpoint. Insurers earn their returns mostly by investing premium dollars in high quality, low-yield bonds. With very thin margins, in those years when the business is profitable at all, the main attraction to insurers of offering home insurance—required of everyone who has a mortgage—is the chance to cross-sell more lucrative products, like investments, life insurance, and automobile insurance. Indeed, no company of any size sells only homeowners’ insurance.

Most important, the data that insurers needed to make good underwriting decisions about flood risks didn’t really exist at the time Congress created NFIP. Before air conditioning and the near-elimination of malaria-carrying mosquitos made them pleasant places to live, wet areas were mostly the domain of poor “river rats” who couldn’t afford homeowners’ insurance. Because the flow of water continually changes the contours of flood-prone areas, mapping such areas remains inherently difficult and expensive and was nearly impossible given the technology of the time. And it follows that the paltry returns they expected to earn on flood insurance offered little incentive for insurers to invest in and improve these systems.

Government policy made things worse. Since the 1920s, nearly all states have passed laws to regulate how much insurers are allowed to charge. Although these laws have eased slightly since the 1960s—and vanished entirely in Illinois—they still make insurers very reluctant to take on new types of risks. They have a legitimate fear that state governments may not let them charge enough to cover their costs and, thus, face the no-win choice of either “nonrenewing” their customers or losing money.

Even worse, from the standpoint of any insurer contemplating entering the flood insurance business, Sen. Prescott Bush (father and grandfather of the Presidents Bush) succeeded in convincing his colleagues in Congress to pass a law creating a flood insurance program in 1956. While the program was never funded, its very existence in statute provided a powerful reminder that the federal government planned to nationalize flood insurance and thus was a disincentive for anyone who might otherwise have thought of investing in the market.

This combination of the nature of the flood risk, the insurance business, the limitations of technology, and the regulatory climate made it impossible to provide flood insurance in most of the country. Spurred on by the GI Bill, the new interstate highway system, and the FHA mortgage insurance created by the Housing Act of 1949, an exploding population began moving into brand new suburbs, many of them constructed in naturally flat flood-prone areas where building was easy.

Flood damages began to rise, and Hurricane Betsy in 1965, the first post-World War II storm to do more than $1 billion in damage, provided an additional potent incentive for the federal government to do something about flood insurance.

On paper, the flood insurance law passed by Congress in 1968 looked sensible: It required participating communities to take steps to avoid building in disaster-prone areas, left requirements loose enough that private companies could take on risk if they wanted to, assured that rates on all future construction would be “actuarially adequate,” and promised that the federal government would draw up the maps that the private sector needed in the first place. As an incentive for people to buy the insurance, it denied all federal aid to those who qualified for the program but didn’t buy in. Although its creators allowed it to borrow funds from the Treasury—a stop-gap measure, lest major floods had hit in its first few years—the program was intended to break even over time and, some thought, might eventually be sold off to the private sector.

Almost none of these good intentions proved justified. The requirement to purchase insurance or lose federal aid fell by the wayside as soon as hard-hit areas came crying to Congress. Government definitions of “actuarial adequacy” ended up leaving out most of the costs private companies would factor into their rates. While communities wishing to let their residents buy into the program did have to discourage the most obviously foolhardy building, poor mapping and the natural clout of local developers made these requirements a triviality. So much for a financially responsible program. “Temporary” subsidies became permanent. Congress periodically forgave the program’s debts and, following Hurricanes Katrina, Rita, and Wilma in 2005, authorized it to borrow $20 billion from the Treasury that it had no chance of ever paying back. On the eve of Hurricane Sandy, the NFIP still owed the Treasury more than $17 billion, with another chunk of debt taken out to pay claims from Hurricane Ike in 2008.

With Congress expected to re-authorize the program every five years, many aspects of the NFIP grew worse over time. Even as Congress corrected obvious absurdities—such as subsidies for writing insurance on coastal barrier islands and other areas likely to wash away entirely—members added various benefits and even made the private insurance industry a beneficiary of the program. Under a “write your own” (WYO) program that pays them to adjust claims and service policies, private insurers get to keep about a third of the total premiums collected, but take on no real risk. While this program isn’t enormously lucrative for insurance company home offices—the tasks they’re asked to undertake are reasonably labor-intensive—it’s not a money loser either. Most large, well-known national property insurers participate in this WYO program, and not a single one was willing to step forward and offer to take on any risk when lobbyists and activists surveyed them about the topic last year.

Over the NFIP’s 45 years of existence, moreover, it has influenced the built environment to such an extent that full-scale privatization couldn’t happen, even if insurers were willing. For those whose mortgages were issued by federally chartered banks, or were purchased by Fannie Mae or Freddie Mac, policy requires the purchase of flood insurance if a property faces at least a 1 percent chance of flooding in a given year. Because NFIP rates have been kept artificially low for decades, millions of people now live in places that wouldn’t be inhabited at all absent the program’s subsidies.

Under Congress’s budget rules, eliminating the program outright would actually cost more money than keeping it operating. Once it finishes paying claims from Hurricane Sandy, the NFIP will owe nearly $30 billion to the Treasury. So long as those loans are outstanding, they don’t count toward the federal budget. Discontinuing the program, on the other hand, would leave taxpayers on the hook for that debt (and for scheduled mapping improvements) without any new premium dollars coming in the door.

The legally binding insurance contracts the program offers, likewise, make it impossible for Congress not to offer bailouts like the one that took place earlier this month. Had Congress not approved the funding, flood insurance policyholders would have gone to court and won judgments ordering the government to pay the claims anyway. Furthermore, the program, to the extent it will repay its debt at all, will never reach the point where it would look attractive to private suitors.

Everybody who has taken a close look at the NFIP realizes that the program is a mess. Once the symbolic votes to end the program had passed, both Democrats and Republicans came to basically the same conclusions that changes needed to happen. A set of reforms that became law last summer was written jointly by the moderate Republican Rep. Judy Biggert (R-Ill.) and far-left Maxine Waters (D-Calif.). That bill promises to improve maps, phase out some premium subsidies, and allow the program to transfer some of its risk to private reinsurers (insurers for insurance companies).

All of these changes make sense, and no sizable organized group stood against them, but they’re hardly the kinds of radical reforms that the program would need to put itself on firm fiscal footing for the long term. Even if all of the proposed changes work as promised, the program’s finances will remain such that any state regulator who looked over its books would forbid it from operating if it were a private company, on the basis that it can’t pay the claims it will reasonably expect to receive. At best, it will take an additional round of reforms—reforms that are unlikely to until the current program expires in September 2017—for the private sector to seriously begin assuming the liability. And that assumes Congress has the political will to ask coastal property owners to see their property insurance bills soar.

Better by far that the program had never been started. International examples show that private flood insurance can work. Germany and the United Kingdom, among other countries, write almost all flood insurance through private parties. While the business isn’t a major profit center for the insurance industry, it, at least, isn’t a taxpayer liability. And building is deterred in the most flood-prone areas.

More than anything else, the NFIP offers a stern warning to anybody who wants government to solve every problem. In the case of flood insurance, even the existence of a market failure didn’t mean the public sector necessarily had a better solution. For the foreseeable future, America is stuck with the NFIP.

SOURCE

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The New Swedish Model

Among policy nerds back in the day, “Swedish model” meant the brand of social democracy practiced in Sweden in the second half of the twentieth century. (Somebody would usually crack wise about Anita Ekberg whenever the phrase was uttered.) But for a very long time, whenever the problems of socialism were discussed, it was common to hear people say as a kind of shut-up argument: “Ah, but socialism works in Sweden; what about the Swedish model?”

Swedish social democracy created an extensive welfare state—including comprehensive health care, generous unemployment benefits, and marginal tax rates commonly in excess of 70 percent. But that followed years of relatively free-market policies in the early twentieth century, which generated impressive economic growth. Government intervention in Sweden didn’t really get going until the 1960s.

The Economist on “Northern Lights”

Interventionists in the United States could learn something from what’s going on now in Sweden (although I fear they won’t). According to a recent spread in The Economist magazine:

"Sweden has reduced public spending as a proportion of GDP from 67 percent in 1993 to 49% today. It could soon have a smaller state than Britain. It has also cut the top marginal tax rate by 27 percentage points since 1983, to 57%, and scrapped a mare’s nest of taxes on property, gifts, wealth and inheritance. This year it is cutting the corporate-tax rate from 26.3% to 22%."

Compare these rates with the U.S. tax rates, under the 2013 tax law, of 39.6 percent on incomes above $400,000 (filing single) and 35 percent on corporations.

But in some sense the current dramatic policy changes in Sweden are just a continuation, after an interruption of several years, of a dis-interventionist trend that began in the 1990s. The “new” Swedish model is not really that new. Indeed, Sweden has climbed to 30th out of 144 countries in economic freedom according to FreetheWorld.com, compared to the United States, which has fallen to 18th, just ahead of Germany (31st) and far outpacing France (47th) and China (107th).

So What About the United States?

The federal deficit numbers in the United States, however, look worse compared to Sweden’s. Again, according to The Economist:

"Sweden has also donned the golden straitjacket of fiscal orthodoxy with its pledge to produce a fiscal surplus over the economic cycle. Its public debt fell from 70% of GDP in 1993 to 37% in 2010, and its budget moved from an 11% deficit to a surplus of 0.3% over the same period."

The current federal deficit—the annual excess of government spending over tax revenue—is around $1.1 trillion.

The accumulated debt of the United States federal government now exceeds $15 trillion, which is roughly equal to the current gross domestic product (GDP), the dollar value of all goods and services produced in the U.S. economy in 2012. That means that the federal debt as a percentage of GDP is now slightly more than 100% percent (compared to 37 percent in Sweden).

The United States does compare favorably to Sweden in federal spending as a percentage of GDP. For the United States, that’s about 39 percent, versus over 50 percent for Sweden. Including state and local spending boosts this figure somewhat over 40% percent of GDP for the United States, but that’s still significantly below Sweden's figure. Sweden, though, with one-thirtieth the population of the United States, has a per capita GDP of $57,091 to the United States’s $48,112.

If Sweden Can Do It, Can the United States?

Some fear that a debt-to-GDP ratio above 100 percent places the United States past the fiscal “point of no return”—that is, past the point where in modern times governments have been able to significantly reduce the percentage of debt to GDP. How did things get so bad?

Milton Friedman brilliantly characterized the main alternative politico-economic systems as follows:

1) spending my own money on myself (capitalist model)

2) spending my money on someone else (Christmas model)

3) spending someone else’s money on myself (rent-seeking model)

4) spending someone else’s money on someone else (socialism)

He went on to say that the problem with socialism is that eventually you run out of other people’s money.

But if Sweden, a country in which the welfare state has been so entrenched over so many decades, can make such dramatic, even radical, changes in its interventionist habits, why couldn’t the United States? A comparably dramatic reform here—perhaps “revolution” comes closer to describing what would be needed—is certainly possible, despite staggering institutional barriers, tenacious entrenched interests, and sheer economic ignorance.

The biggest obstacle, as I see it, is not having the strength of will to sustain the relentless intellectual and political battle needed to overcome all those other obstacles. And in all honesty, I find it hard to be very optimistic about that.

The Greek Model

Well into my sixth decade of life, one of the things I think I’ve learned is that radical change and the will to see it through are indeed possible—beyond any so-called point of no return—but only when it’s clearly a matter of life and death. There has to be a sense of urgency, even desperation, to the extent that you become willing to do whatever it takes to survive. But of course desperation is tricky; desperate people can easily make matters worse. It’s perhaps during crises, moments of widespread desperation, that a well-developed philosophy of freedom can have its finest moment by guiding desperate people toward real solutions.

So does the United States have to follow, say, hapless Greece—with its bloated welfare state, strangling regulation and taxation, and monetary profligacy—before our crony-capitalist system develops cracks wide enough for enough of us to see that embracing liberty and rejecting statism is our last, our best, and our only hope?

I’m afraid our economy will have to look much more like the Greeks’ before we’ll muster the will to follow the example of the Swedes.

SOURCE

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC,  AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena .  GUN WATCH is now mainly put together by Dean Weingarten.

List of backup or "mirror" sites here or  here -- for when blogspot is "down" or failing to  update.  Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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How Liberals Live

It's all about control.  Liberals can control the poor by patronizing them but the middle class are a bit pesky

The Democratic Party has two reliable groups of adherents: the rich and the poor.  Not all of the rich, of course. Not all of the poor, either.

But a large swath of wealthy people, especially those whose wealth was inherited rather than earned, wouldn’t dream of voting for a Republican. Ditto for a large number of poor people who have discovered how to sign up for various welfare programs and intend to remain on the dole for the rest of their lives.

What do these groups have in common? Nothing. They rarely meet. And if they did they wouldn't like each other.

You might be inclined to think that the political union of these two groups is an accident of modern electoral politics. But there may be something else involved. Both groups have little use for the middle class -- the poor envy them and the wealthy disdain them.

To test the idea the there might be some sort of weird sociology involved, I decided to look in on some communities where limousine liberals are firmly in control and have no fear of being ousted in the next election by middle class voters with middle class values.

Welcome to the People's Republic of Boulder, Colorado.  When you ask the residents what they like about Boulder, they are quick to respond. "You won't find any large billboards telling you where the nearest Target is," I was told. And, "Where you might find a McDonald's or a Taco Bell in some other city, in Boulder you are more likely to find Starbucks or Whole Foods."

To make sure that things stay that way, Boulder has virtually destroyed any possibility of new housing that people who shop at Target and eat at McDonald's would find affordable. Through tight zoning restrictions, the city has virtually legislated new, middle class housing out of existence. The city has even purchased large tracts of land to make sure development doesn't occur.

As a result, the average price of a home in Boulder is $375,000, in contrast to an average price of $220,000 in Colorado Springs.

Boulder has its own global warming policy. In fact, it is one of the few cities in the country that is about to jettison a private electric utility company for a publicly owned one. The reason: the private electric company isn't "green" enough. This would be comical until you stop to realize that Boulder has a lot to atone for on the climate change front. Two thirds of all the people who work in Boulder must drive to work from outside the city because they cannot afford to live there.

That's 60,000 automobiles spewing carbon dioxide into the atmosphere every morning and every evening of every congested business day, thanks to Boulder's land use planning.

While Boulder forces its middle class workforce to live in neighboring communities, it is surprisingly generous to the poor. A multimillion dollar homeless shelter is so luxurious, it actually attracts vagabonds from other Colorado cities. As one local writer explains:

    "Boulder Shelter for the Homeless is a multimillion dollar facility of recent construction. It has a spacious day room, a TV room, washing machines ($1 per load) and dryers (free) available, showers, a few dozen small storage lockers, and a large kitchen/dining room… It has a 160 person occupancy limit, and the nightly "overflow" is accommodated by a network of local churches and a synagogue managed by Boulder Outreach for Homeless Overflow.

There is also an active program to provide subsidized housing to low-income families. One development on prime real estate with a mountain view is estimated to have a market value of $500,000 per unit. In other words, low-income families are living in housing units that are worth considerably more than the average home in Boulder! Unfortunately, poor families cannot sell their homes to the highest bidders, however. Were they able to, they would immediately become non-poor and the property would go to its highest valued use.

Maximizing the value of property, however, is not the goal of the citizens of Boulder. If you have a house built, say, before 1950, there's a good chance the Landmark's Board will designate it a historic preservation site and not allow you to modify it. For new houses and renovations, the city virtually dictates how big the house can be. It also tells you what kind of fireplace you can have and what you can or can't burn in it. If you want to tear down an existing structure, you can't just bulldoze it. You have to disassemble it and recycle all the pieces.

When the owners of a trailer park decided to use the property to build condominiums instead, the trailer owners appealed to the city leaders, who rezoned the property so that it could only be used as a trailer park.

Then, of course, there is the nanny state desire to tell everyone what to do with their personal lives. Smoking in Boulder is banned in almost all indoor facilities and also outside on the sidewalk.

SOURCE

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Economic growth centered in America's more conservative States

In the wake of the 2012 presidential election, some political commentators have written political obituaries of the "red" or conservative-leaning states, envisioning a brave new world dominated by fashionably blue bastions in the Northeast or California. But political fortunes are notoriously fickle, while economic trends tend to be more enduring.

These trends point to a U.S. economic future dominated by four growth corridors that are generally less dense, more affordable, and markedly more conservative and pro-business: the Great Plains, the Intermountain West, the Third Coast (spanning the Gulf states from Texas to Florida), and the Southeastern industrial belt.

Overall, these corridors account for 45% of the nation's land mass and 30% of its population. Between 2001 and 2011, job growth in the Great Plains, the Intermountain West and the Third Coast was between 7% and 8%—nearly 10 times the job growth rate for the rest of the country. Only the Southeastern industrial belt tracked close to the national average.

Historically, these regions were little more than resource colonies or low-wage labor sites for richer, more technically advanced areas. By promoting policies that encourage enterprise and spark economic growth, they're catching up.

Such policies have been pursued not only by Republicans but also by Democrats who don't share their national party's notion that business should serve as a cash cow to fund ever more expensive social-welfare, cultural or environmental programs. While California, Illinois, New York, Massachusetts and Minnesota have either enacted or pursued higher income taxes, many corridor states have no income taxes or are planning, like Kansas and Louisiana, to lower or even eliminate them.

The result is that corridor states took 11 of the top 15 spots in Chief Executive magazine's 2012 review of best state business climates. California, New York, Illinois and Massachusetts were at the bottom. The states of the old Confederacy boast 10 of the top 12 places for locating new plants, according to a recent 2012 study by Site Selection magazine.

Energy, manufacturing and agriculture are playing a major role in the corridor states' revival. The resurgence of fossil fuel–based energy, notably shale oil and natural gas, is especially important. Over the past decade, Texas alone has added 180,000 mostly high-paying energy-related jobs, Oklahoma another 40,000, and the Intermountain West well over 30,000. Energy-rich California, despite the nation's third-highest unemployment rate, has created a mere 20,000 such jobs. In New York, meanwhile, Gov. Andrew Cuomo is still delaying a decision on hydraulic fracturing.

Cheap U.S. natural gas has some envisioning the Mississippi River between New Orleans and Baton Rouge as an "American Ruhr." Much of this growth, notes Eric Smith, associate director of the Tulane Energy Institute, will be financed by German and other European firms that are reeling from electricity costs now three times higher than in places like Louisiana.

Korean and Japanese firms are already swarming into South Carolina, Alabama and Tennessee. What the Boston Consulting Group calls a "reallocation of global manufacturing" is shifting production away from expensive East Asia and Europe and toward these lower-cost locales. The arrival of auto, steel and petrochemical plants—and, increasingly, the aerospace industry—reflects a critical shift for the Southeast, which historically depended on lower-wage industries such as textiles and furniture.

Since 2000, the Intermountain West's population has grown by 20%, the Third Coast's by 14%, the long-depopulating Great Plains by over 14%, and the Southeast by 13%. Population in the rest of the U.S. has grown barely 7%. Last year, the largest net recipients of domestic migrants were Texas and Florida, which between them gained 150,000. The biggest losers? New York, New Jersey, Illinois and California.

As a result, the corridors are home to most of America's fastest-growing big cities, including Charlotte, Raleigh, Atlanta, Houston, Dallas, Salt Lake City, Oklahoma City and Denver. Critically for the economic and political future, the growth corridor seems particularly appealing to young families with children.

Cities such as Raleigh, Charlotte, Austin, Dallas and Houston enjoy among the country's fastest growth rates in the under-15 population. That demographic is on the wane in New York, Los Angeles, Chicago and San Francisco. Immigrants, too, flock to once-unfamiliar places like Nashville, Charlotte and Oklahoma City. Houston and Dallas already have more new immigrants per capita than Boston, Philadelphia, Seattle and Chicago.

Coastal-city boosters suggest that what they lose in numbers they make up for in "quality" migration. "The Feet are moving south and west while the Brains are moving toward coastal cities," Derek Thompson wrote a few years ago in The Atlantic. Yet over the past decade, the number of people with bachelor's degrees grew by a remarkable 50% in Austin and Charlotte and by over 30% in Tampa, Houston, Dallas and Atlanta—a far greater percentage growth rate than in San Francisco, Los Angeles, Chicago or New York.

Raleigh, Austin, Denver and Salt Lake City have all become high-tech hubs. Charlotte is now the country's second-largest financial center. Houston isn't only the world's energy capital but also boasts the world's largest medical center and, along with Dallas, has become a major corporate and global transportation hub.

The corridors' growing success is a testament to the resiliency and adaptability of the American economy. It also challenges the established coastal states and cities to reconsider their current high-tax, high-regulation climates if they would like to join the growth party.

SOURCE

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ELSEWHERE

20 years ago today: Operation Showtime:  "On February 28, 1993, the Alcohol, Tobacco, and Firearms Bureau raided the home of the Branch Davidians, a religious sect just outside Waco, Texas. The agency, which has suffered bad press due to sexual harassment and racial discrimination scandals, made sure reporters were there to witness its planned heroics and dubbed the raid 'Operation Showtime.' The agents sought to apprehend sect leader David Koresh, whom they deemed a dangerous cult leader, but who, as an integrated member of the community, they could have easily arrested peacefully on his regular jog or during one of his frequent visits to the bar."

Waco: 20th Anniversary of the ATF attack on the Branch Davidians:  "Today is the 20th anniversary of the ATF’s attack on the Branch Davidians outside Waco, Texas. I thought Waco might be the most important public education lesson of the 1990s, but I don’t see the learning curve yet. Most Americans forgot or never undertstood Waco, paving the way for politicians to commit other grave abuses in the following years. Following are a few pieces I did on Waco back in ‘95, when some members of Congress briefly acted like they gave a damn about the carnage."

The coming default:  "I think it's more practical to address those who continue investing, through the purchase of government bonds, in the debts run up by Obama, Reid, Boehner et. al. and let them know that the likelihood of making their money back over the long haul passed 'slim'quite some time back and as of now is right at 'none.' Sooner or later -- probably much sooner than most people think -- that debt is going to be defaulted upon and repudiated. There is no 'if' involved, only an unspecified 'when.' Heck, it may even be this generation! Regardless of when the when is, one thing is certain: You don't want to be holding T-Bills when it arrives."

Lincoln’s inversion of the American union:  "By 1860, a choice lay open between either re-negotiating the compact between the states in order to form more perfect unions, as John Quincy Adams counseled should happen, or a powerful section would have to conquer the whole and reconstruct it into its own image, subordinating all else to its own interests. Everything in the older American tradition of the self-government of peoples points to the former path. Lincoln chose the latter path, and in doing so was in step with the nineteenth- and twentieth-century trend of industrial society to consolidationism."

NY: Bloomberg booed at annual St. Patrick’s Parade in storm-ravaged Rockaways:  "Mayor Bloomberg was booed yesterday as he walked in the annual St. Patrick’s Parade in the hurricane-ravaged Rockaways. The jeers grew so loud toward the end of the Queens parade that mayoral candidate and City Council Speaker Christine Quinn appeared to break away from the mayor to march separately. ... The mayor wasn’t the only politician crossed by paradegoers. Revelers heckled Democratic Sen. Chuck Schumer after he cheered through a bullhorn, 'Let’s hear it for the Rockaways.' 'Send money, pal. Send money!' one heckler yelled back. 'Talk is cheap!'"

CA: Smart kid designs compact nuclear reactor:  "Eighteen-year-old Taylor Wilson has designed a compact nuclear reactor that could one day burn waste from old atomic weapons to power anything from homes and factories to space colonies. The American teen, who gained fame four years ago after designing a fusion reactor he planned to build in the garage of his family’s home, shared his latest endeavor at a TED Conference in southern California on Thursday. 'It’s about bringing something old, fission, into the 21st Century,' Wilson said. 'I think this has huge potential to change the world.' He has designed a small reactor capable of generating 50-100 megawatts of electricity, enough to power as many as 100,000 homes."

Switzerland: Voters approve limits on “fat cat” executive pay:  "Swiss voters approved some of the world’s toughest limits on executives’ pay in a referendum, a move critics say could make Switzerland less attractive to multinational corporations. ... The proposal gives shareholders an annual ballot on managers’ pay. It eliminates sign-on bonuses, as well as severance packages and extra incentives for completing merger transactions. The initiative also includes rules punishing executives who violate the terms with as long as three years in jail."

From Hollywood to Kansas, drones flying under the radar:  "They hover over Hollywood film sets and professional sports events. They track wildfires in Colorado, survey Kansas farm crops and vineyards in California. They inspect miles of industrial pipeline and monitor wildlife, river temperatures and volcanic activity. They also locate marijuana fields, reconstruct crime scenes and spot illegal immigrants breaching U.S. borders. Tens of thousands of domestic drones are zipping through U.S. skies, often flouting tight federal restrictions on drone use that require even the police and the military to get special permits."

There is a  new  lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC,  AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena .  GUN WATCH is now mainly put together by Dean Weingarten.

List of backup or "mirror" sites here or  here -- for when blogspot is "down" or failing to  update.  Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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Pictures, pictures, pictures!

Every now and again I find a picture, graphic or toon that amuses me in some way and I put it up on this blog or on one of my other blogs.  I have just put together what I see as the "best" of my pictures for the period of July to December last year.  You can access it here or here

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False Prophets and the End of the World

 Krista Kafer

Remember back in 2011 when radio broadcaster and end-of-the-world prognosticator Harold Camping predicted the world’s end on October 21 yet the day passed with nary a sign of Armageddon?

Last year, the ancient Mayans and a few North American self-proclaimed prophets like Warren Jeffs had various dates in December pegged for the end. Imagine the surprise of their true believers when the sun came up the next day. Did they feel relief? Disappointment? Skepticism (somewhat overdue) toward their leaders? Some no doubt have left the cult while others wait in trepidation for their prophet to predict a new date of apocalypse.

More recently, what did those who believed in the sequestration end-of-the-world feel when they woke up this morning and everything was as they left it last night? Air traffic controllers are still directing flights and no planes have fallen from the sky. Medical research is still going on. Teachers are on their way to work as are health inspectors. National parks are open. Children are getting vaccinated. Government satellites continue to orbit the earth. The day will go on as every other day before it. No need to stay in the bunker.

As for the true believers, are they experiencing relief that the $85 billion cut—a mere 2.3 percent from this year’s $3.6 trillion budget—has not thrown the country into crisis? Or disappointment that the great federal government is not so indispensable that its growth rate cannot be trimmed a little without dire consequences? Will they feel skepticism (somewhat overdue) toward the self-interested politicians who use scare tactics to get what they want and the press that hypes fears for ratings? Some no doubt are now tuning out the fear mongering while others wait for the politicians to cry Armageddon once again.

During the past couple of “crises,” politicians’ fear mongering has successfully prevented any spending cuts while justifying tax hikes. It’s been “A tournament, tournament, a tournament of lies” to quote R.E.M.’s manic song It's the End of the World as We Know It (And I Feel Fine). Tales of fiscal cliffs and government shut-downs have distracted from the real problems ahead like the $16 trillion in national debt, Social Security and Medicare’s fragile financial footing, and yearly trillion plus dollar deficits.

While sequestration may not be the best way to cut an irresponsible $3.6 trillion budget, it has become the only way that politicians will do what is right. Only the House of Representatives has had the courage to cut spending, but it cannot act alone. Incredibly, Senate Democrats and the White House tried to pass a bill yesterday that would have increased spending and raised taxes. Didn’t Congress just raise taxes? Without sequestration, the status quo remains unchallenged and that is a truly scary situation.

In the end, however, sequestration is insufficient to adequately reduce the deficit. Because it is only a cut in the growth of spending, the government will still spend more taxpayer money next year than it did this year. More cuts in discretionary spending are long overdue and there are countless examples of duplicative and ineffective federal programs and endless corporate and farm subsidies from which lawmakers can choose. Half of the budget, however, is devoted to mandatory spending—Medicare, Social Security, Medicaid, and interest on the debt—all of which is exempt from the sequester. It is clear that lawmakers must summon the will to reform these programs in order to balance the budget now and for the long term. In 2020,interest on the federal debt will rise to $1 trillion a year. Over the next decade the Social Security disability fund and Medicare hospital insurance run out of reserves. In another ten years, Social Security will run dry. The sequester does nothing to stave off these daunting budget crises.

The sequester does, however, prove that government spending can be cut without triggering the end of the world. It shows the crisis mongering on the Left for what it is—a con designed to milk the public for more money.

SOURCE

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Leftist obfuscation and deception

Emmett Tyrrell
 
I have long contended that public policy issues are as complicated as they appear because the giants of Capitol Hill like it that way, particularly the giants of the left. Bills can be written more simply. Decisions can be phrased with a certain lucidity. Yet, if they were, the electorate would mull them over and, after a cup of coffee, make a decision on them. As things stand today, with talk of budget imbalance and of esoteric matters such as "sequestration," voters scratch their heads, blink their eyes and walk away. Who gives a hoot? It is time for my morning nap, perhaps, two naps.

This is another anti-democratic way that Washington politicians have bootlegged our legislative process. Make policy so confusing to normal people that they will take little or no interest in it. It is all a game reserved exclusively for the political class. Al Gore in his new book, prosaically titled "The Future: Six Drivers of Global Change," bangs on about the power of lobbyists and giant corporations in shaping legislation -- do you know anyone who sits on more corporate boards than Gore? Has he considered the unwieldy nature of the legislation in the first place? Debt piled atop debt that even Warren Buffett cannot conceptualize. Sequestration, indeed -- why not segregation or constipation? It is a geek to me.

Then there is another of Washington's ways, lying. Or merely indulging in double talk until it reaches the point of lying or at least of deceiving. Both Republicans and Democrats do that all the time, though the number one Democrat is showing himself to be a master in the art. Now, however, he is going over the top. I believe, in his current row over sequestration, he has misstated the truth so shamelessly that he is in danger of destroying the one thing he as a politician needs the most, credibility. Once that is gone, he will have critics and even friends raising doubts about what he says on matters vast and puny.

The White House and the president have claimed that the Republicans have raised the present hullabaloo over sequestration. It was their idea, according to the White House and the president. That struck me as odd because, according to my recollection in the summer of 2011, the White House devised the idea of sequestration to ease both Republicans and Democrats into a deal enabling them to raise the debt ceiling -- remember the debt ceiling? Furthermore, if memory serves, included in the 2011 deal was a provision to bar any further tax increases. The president himself endorsed the idea. Actually, in his third debate with Mitt Romney he specifically said, "The sequester is not something I proposed." No, "It is something that the Congress proposed."

Now he is continuing to misstate the truth, but in so doing he casts doubt on Bob Woodward's latest book, and that has aroused Woodward. Says Woodward, "My extensive reporting for my book, "The Price of Politics," shows the automatic spending cuts [sequestration] were initiated by the White House and were the brainchild of [Jack] Lew [at the time White House chief of staff and now Obama's nominee for secretary of the treasury] and White House congressional relations chief Rob Nabors ... " And more: "Obama personally approved of the plan for Lew and Nabors to propose the sequester to Senate Majority Leader Harry Reid. They did so at 2:30 p.m. July 27, 2011, according to interviews with two senior White House aides who were directly involved."

President Obama, you are being watched. I would not resort to such tricks typical of a community organizer but not so easily resorted to by a president. Too many people are watching. Bill Clinton could advise you on this. It is not wise to play cute with the historic record.

President Obama has a problem on Capitol Hill. He is not trusted. The Republicans do not trust him and Democrats are wary. My guess is that this administration is going to find the years ahead painful.

SOURCE

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Study Says Free Lunches Expensive, Lack Nutrition‏

A controversial government study today revealed an astounding conclusion: free lunches are expensive and lack nutrition. All copies of the study have since disappeared and the members of the blue-ribbon panel which produced it have not been seen since it was released.

President Obama condemned the results, alleging that the panelists were "receiving bread under the table from the restaurant industry."

"It's nonsense," said the president. "Michelle and I get free lunches all the time and they don't cost us a thing. As far as not being nutritious, well, can anyone believe that after seeing the size of my wife's..." The president was interrupted by a loud noise off stage before completing his thought.

Other critics were less tactful than our unifying president.

"Their conclusion is ridiculous!" claimed Mora Forrus, president of Free Stuff Distribution Employees Union, a nationwide labor organization, which represents workers who help distribute free lunches.

"Just think about it: 'free' means it don't cost anything, so it's free! And 'lunch' is food, which means it's nourishing. Put them together and you get a nourishing free lunch! It's not rocket science!"

"This is right wing propaganda designed to deprive people of their free lunches!" said Forrus, whose union is threatening to strike unless their demands for a wage increase are met. "Distributing free lunches is a tough job - you can't expect us to work for NOTHING!"

"I have never read anything so heartless and insensitive in my life" stated Willie Cheatem, spokesperson for the Lunch Manufacturers Association, a food processing and repast fabricators trade group.

More Here

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A thug union

 What would you say if a group of employees working the Alzheimer’s ward in a health care facility deliberately switched the name tags on patient’s doors making patient identification difficult and removed dietary instructions from the patient’s room, putting patients at risk?

Would it matter that these actions were deliberately taken as part of a labor dispute?

That is exactly what happened at HealthBridge, where SEIU members engaged in a deliberate campaign of sabotage against the company, targeting patient’s health in a “work action.”

HealthBridge for their part, refused to let the offending SEIU local that sanctioned the attack on their patient’s safety, back to work.

Pretty clear cut situation, and truth be told, each of the offenders should have been hauled off to jail for reckless endangerment.

But that isn’t what happens in Obama’s America 2013.

In Obama’s America, his National Labor Relations Board (NLRB) appointees ruled that HealthBridge had to take back the nearly 700 striking “workers.”

HealthBridge is now asking the Supreme Court to take up the case, with a request they have submitted to Justice Antonin Scalia.

But Obama’s NLRB rulings of the past 16 months are in trouble for a different reason.  The U.S. District Court of Appeals in the Noel Canning versus NLRB decision threw the NLRB’s ability to make decisions into question as they found that Obama had illegally bypassed the Senate confirmation process in putting three members on the Board in Jan. 2012.

This seemingly benign decision has massive ramifications for the NLRB and all of its rulings over the past year and a half due to a separate Supreme Court case known as New Process Steel.  In New Process Steel, the Supreme Court ruled that the NLRB needed to have a quorum of at least three out of five members in order to make any decisions or rulings.

If the Canning decision is upheld by the Supreme Court, then all of the NLRB decisions for the past year and a half will become null and void.

This is certainly good news for the patients at HealthBridge, who deserve quality care, rather than being endangered by union shenanigans.

SOURCE

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Detroit faces the music

 Michigan’s Rick Snyder has appointed an emergency city manager to do for Detroit what Obama, Biden, the UAW, GM, Chrysler, the city’s council and mayor have not been able to even with a $80 billion bailout of the automotive industry.

“Snyder’s decision comes after a state review team report concluded last week that Detroit is in a financial emergency that it cannot fix on its own,” reports the Detroit Free Press. “The report detailed $14 billion in long-term bond debt and retiree pension and health benefits the city owes in addition to a $327-million accumulated deficit Detroit has been unable to tame. That figure could inflate by $100 million by July.”

The city has been powerless to stop plunging tax revenues. According to the Detroit News almost half of the city’s homeowners have not been able to pay property taxes:

“The News reviewed more than 200,000 pages of tax documents and found that 47 percent of the city's taxable parcels are delinquent on their 2011 bills. Some $246.5 million in taxes and fees went uncollected, about half of which was due Detroit and the rest to other entities, including Wayne County, Detroit Public Schools and the library.”

The article notes that delinquency is so bad that in one stretch of 77 blocks only one owner had paid their taxes.

And it’s not just that residents can’t pay. It’s that many of the taxpayers say they won’t pay taxes for services they aren’t getting.

More from the Detroit News:  "Why pay taxes?" asked Fred Phillips, who owes more than $2,600 on his home on an east-side block where five owners paid 2011 taxes. "Why should I send them taxes when they aren't supplying services? It is sickening. … Every time I see the tax bill come, I think about the times we called and nobody came."

But at least the average American can take satisfaction that we have a thriving automotive industry, leading an American comeback in manufacturing.  Right?

Nope.  CNBC reported this week that the average Americans family can no longer afford to buy new cars.

According to a report by Intrest.com, there is only one major city where the average household income is sufficient to buy a new car.

Bingo!  You guessed it: Washington, DC.

“According to the 2013 Car Affordability Study by Interest.com,” says CNBC via Yahoo Finance, “only in Washington could the typical household swing the payments, the median income there running $86,680 a year. At the other extreme, Tampa, Fla., was at the bottom of the 25 large cities included in the study, with a median household income of $43,832.”

Only the countries of Lichtenstein and Qatar enjoy higher per capita income than DC’s median income of $86,680 a year.

Thank goodness. All this time, I thought that the runaway federal spending was just fueling a sense of entitlement, privilege and contempt for us commoners amongst the people who run our government.  

More HERE

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC,  AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena .  GUN WATCH is now mainly put together by Dean Weingarten.

List of backup or "mirror" sites here or  here -- for when blogspot is "down" or failing to  update.  Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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People who are less reflective are more religious?

I would have thought that religious people reflect on things all the time but Hey Ho, Nonny O

Following is the "Cognitive Reflection Test", a set of riddles.  Maybe you might like to try answering the questions yourself.

 * A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost?

 * If it takes five machines five minutes to make five widgets, how long does it take 100 machines to make 100 widgets?

 * In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would ittake for the patch to cover half of the lake?

 * Correct Answers: Five cents, five minutes, and forty-seven days.

Most people get the "wrong" answers.  That is the point of the test.  It is claimed that people who get the answers right, however,  have a general tendency towards "reflective" thinking.  The source article for the test is here.

But as the authors acknowledge, it is basically a measure of mathematical IQ, though a particular subset of it.  So therefore any correlations with it could be explained as the outcome of general mathematics ability as well as a particular subset of mathematics ability.

But when Huffpo notes that religious people do poorly on the test,  they make large inferences from that, claiming that religious people are not critical thinkers.  Unbelievers, on the other hand are "reflective".

As I have always struggled with mathematics but am as atheist as you can get, I found that rather amusing.  So I looked up the research on which Huffpo hung its hat.  There was only one study that gave the correlation between religion and test score while also controlling for general IQ.  It is here.

And it sure is amusing.  Even BEFORE controlling for IQ, the correlation between test score and belief in God was .14, which is  of only marginal statistical significance (significant on a one-tailed test only despite N=large) and of negligible significance in any other sense.  And controlling for IQ reduced the "relationship" even further, of course.

So, to put it plainly, it is all hokum. Religious people are about as likely to get the questions right as are atheists. Hey Ho, Nonny O indeed.  I could make other criticisms of the research concerned (sampling etc.) but I can see no point in flogging a dead horse.

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I cannot tell a lie



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A nasty, brutish, imperial presidency

Thomas Hobbes wrote that the life of man is “solitary, poor, nasty, brutish and short.” Today’s White House definitely isn’t poor, lavishly feeding off the wealth of the American taxpayer, and the current presidency certainly isn’t short, with nearly four more years to run. But it is undeniably nasty and brutish, as veteran Washington Post reporter Bob Woodward has found after questioning President Obama’s narrative on the sequester issue.

Woodward, one of two reporters who broke the Watergate story that led to Richard Nixon’s downfall (immortalised in the 1976 Oscar winner All The President’s Men), has revealed to CNN's Wolf Blitzer that the White House warned him that he would “regret” his recent remarks on the sequester, made in a Washington Post column. (Read the exchange of emails between White House economic adviser Gene Sperling and Woodward posted by Politico here.) Woodward is hardly a conservative, and has been at the heart of the liberal media establishment for decades. He is, however, not afraid of challenging the status quo, as he did with his 2010 book Obama’s Wars. Woodward is not alone. Lanny Davis, another liberal columnist and former special counsel to Bill Clinton, who has penned several pieces critical of Obama’s policies, has also spoken out against similar White House tactics.

The threats being dished out to Woodward, Davis and others are extremely disturbing in a free society, and are a reflection of an imperial presidency that acts with impunity and is highly intolerant of dissent. The heavy-arm tactics that Obama’s team have deployed for years against conservatives are now being increasingly implemented as well against liberals questioning the president’s record.

Leading US political analyst Michael Barone predicted all this in a piece for National Review Online back in October 2008, when he wrote about “The Coming Obama Thugocracy.” It is an article that is strikingly accurate in its predictions. Here’s what Barone had to say before Obama even entered the White House:
 

“I need you to go out and talk to your friends and talk to your neighbors,” Barack Obama told a crowd in Elko, Nev. “I want you to talk to them whether they are independent or whether they are Republican. I want you to argue with them and get in their face.” Actually, Obama supporters are doing a lot more than getting into people’s faces. They seem determined to shut people up.

    … Once upon a time, liberals prided themselves, with considerable reason, as the staunchest defenders of free speech. Union organizers in the 1930s and 1940s made the case that they should have access to employees to speak freely to them, and union leaders like George Meany and Walter Reuther were ardent defenders of the First Amendment.

    Today’s liberals seem to be taking their marching orders from other quarters. Specifically, from the college and university campuses where administrators, armed with speech codes, have for years been disciplining and subjecting to sensitivity training any students who dare to utter thoughts that liberals find offensive. The campuses that used to pride themselves as zones of free expression are now the least free part of our society.

    Obama supporters who found the campuses congenial and Obama himself, who has chosen to live all his adult life in university communities, seem to find it entirely natural to suppress speech that they don’t like and seem utterly oblivious to claims that this violates the letter and spirit of the First Amendment. In this campaign, we have seen the coming of the Obama thugocracy, suppressing free speech, and we may see its flourishing in the four or eight years ahead.

Will American liberals now stand up to the Obama White House and condemn its blatant attempts to suppress criticism and free speech? I doubt it. The Washington Post has provided relatively little coverage of the story, despite the fact that one its own star writers has been targeted. The New York Times is, unsurprisingly, completely silent (with the exception of a small mention in a single blog) on the issue. Ironically, most of the reporting of the White House’s attempts to intimidate liberal critics has come from the conservative press, led by the Drudge Report, which has propelled the story to national prominence. Both conservatives and liberals should be rallying to the defence of free speech and freedom of the press, holding the Obama presidency to account. All Americans should be concerned by government attempts to stifle press criticism in the land of the free, tactics which undermine the very foundations of liberty.

SOURCE

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The lesson of the Iraq war is that benign intervention can work

An unusual POV from Britain below but he has a point

Ten years after the start of the Iraq war, it is often overlooked that Britain’s participation in the highly complex military operation to overthrow Saddam Hussein’s dictatorial regime was deemed to be an unqualified success.

Because of the bitter controversies over the legality of the invasion in March 2003, as well as the non-existent stockpiles of WMD, all the attention tends to focus on what happened after Saddam’s removal from power, rather than what went before. For, in purely military terms, Operation Iraqi Freedom, the US-led campaign to remove Saddam, achieved remarkable results. Within the space of just 21 days, American forces, backed by a 10,000-strong British combat division, overthrew the Ba’athists and delivered the country in a still functioning state to the Iraqi people.

But then winning military campaigns has always been the easy part of the West’s various attempts to intervene in failed states. From the original post-September 11 intervention in Afghanistan to France’s more recent involvement in tackling al-Qaeda in Mali, Islamist militants rarely offer much resistance against well-organised Western forces equipped with devastating firepower.

It is after the fighting ends that the really difficult challenges arise. In Afghanistan the Taliban simply fled across the border and regrouped in Pakistan, while in post-Saddam Iraq the wilful failure of the Americans to impose order resulted in the country’s rapid descent into sectarian conflict. The French may have enjoyed early military success in Mali, but already Islamist militants are making their presence felt by launching suicidal attacks against French and Malian army positions. No matter how great the provocation, though, French commanders insist that a resurgence in Islamist activity will not affect their withdrawal strategy, which is due to begin this month.

We will see whether the French find the process of leaving Mali as painless as their arrival, but this desire to speed the departure is certainly motivated by a determination not to repeat the mistakes of Iraq, a conflict in which the French declined to participate.

And so far as Iraq is concerned, it is undeniable that the initial, post-Saddam administration of the country was a disaster. By meddling in Iraq’s internal affairs, with ill-considered policies such as the de-Ba’athification programme, coalition forces overstayed their welcome, with the liberators quickly turning into occupiers in the eyes of the resentful populace.

Indeed, the country was only saved from the devastation of all-out civil war by the military surge masterminded by former US General David Petraeus in the summer of 2007, which succeeded in destroying al-Qaeda’s attempts to turn the Sunni heartlands into a self-contained Islamist state and reduced the violence to manageable levels.

There will be those who argue that, with an estimated 1,500 Iraqis still losing their lives to sectarian conflict each year, that country could hardly be described as a haven of security and stability. But then its people have always had a tendency towards violence. During the 1920s, when the British created the kingdom of Iraq, the Royal Air Force was regularly ordered to bomb Shia villages to keep the natives in check.

But, for all the traumas, it is also worth remembering that Iraq today has far better prospects than it would ever have had under Saddam. The government of Prime Minister Nouri al-Maliki might have inherited some of his Ba’athist predecessor’s taste for corruption and brutality, but Iraq has a constitution that enshrines democratic principles – whether Mr Maliki likes it or not – and obliges the government to uphold the rule of law. But arguably the country’s greatest asset is its booming oil-based economy, with predictions that it could enjoy double-digit growth for the rest of the decade – so long as it can steer clear of further sectarian infighting. The lesson of Iraq, therefore, must be that, handled the right way, interventionism works.

There will certainly be many who have participated in the Arab uprisings of the past two years who now cast covetous glances at the legacy the West has bequeathed to Iraq. Egyptians, Libyans and Syrians – to name but a few – would dearly love to have the freedoms that are enjoyed by post-Saddam Iraq. But without Western help, they have little chance of fulfilling their dreams.

SOURCE

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The Nordic economic example

 Take Estonia: its response to the crash was to make immediate and deep savings in the cost of government, while keeping taxes flat and low. Its economy quickly bounced back and its deficit vanished. Jürgen Ligi, its finance minister, does not need to make speeches blaming the eurozone for various national ills. He has been bold enough to make his own luck.

Estonia’s economy is smaller than Birmingham’s, so it can be written off as a curiosity. It is harder to dismiss Sweden, which is transforming itself from the most socialistic nation in the continent into a land of sun, snow and supply-side economics. The hero of its economic reforms is Anders Borg, who looks more like someone you might see protesting outside a meeting of European finance ministers than someone setting the agenda inside. He sports an earring and ponytail, as if to illustrate his cheery contempt for received wisdom. He showed this when he responded to the crash with a permanent tax cut for the low-paid, a move regarded across Europe as a bizarre gamble.

“Everybody was told 'stimulus, stimulus, stimulus’,” Borg said to me later. Britain and Spain followed this advice, and Borg now points to both as an example of what not to do. “Very little of the stimulus went to the economy, but they are stuck with the debt.” As a former chief economist of SEB bank, Borg approached his job with almost clinical detachment. The political clamour to borrow, spend and bail out companies made no sense to him (he briefly set up a blog to take on critics and explain why). The problem lay not so much with economic demand, he argued, but with the supply of workers. If he targeted tax cuts at the low-paid, they would have a greater incentive to move off welfare and into work.

So it was to prove. Before long, Sweden was celebrating the abolition of its deficit and the fastest economic growth in Europe. The tax cut, which almost entirely paid for itself, came alongside deeply controversial cuts to welfare, but Borg felt he had to make a choice. It was elegantly summed up in a new campaign slogan: “We are the new workers’ party.” That is a claim that many can make, but Borg had given low-paid workers the equivalent of an extra month’s salary a year. Good economics became good politics, and the Swedish Conservatives were re-elected for the first time in history.

The Nordic way has been to come up with policies that are radical, but sound dull. Borg has posed not as a ponytailed Thatcher but a slightly bored economist prescribing basic medicine. His tax cuts were justified not by grandstanding slogans (they came later) but by a 270-page book on labour market policy. His latest move, an instant, deficit-financed trimming of corporation tax from 26 per cent to 22, was described as an obvious way to “protect” the tax base. Borg has ensured the success of the Swedish pro-growth revolution by making it sound like most self-evident thing in the world.

SOURCE

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More on Joe McCarthy

Thanks to Joe McCarthy, many Americans whom the left angelicized as "free thinkers" or "liberals" were finally unmasked as hardened Soviet agents. These would include, to take 10 examples from M. Stanton Evans' masterpiece, "Blacklisted by History: The Untold Story of Senator Joe McCarthy and His Fight Against America's Enemies," Solomon Adler, Cedric Belfrage, T.A. Bisson, V. Frank Coe, Lauchlin Currie, Harold Glasser, David Karr, Mary Jane Keeney, Leonard Mins and Franz Neumann.

As for "Have you no sense of decency, sir?" This tiresome catchphrase may quiver with righteousness on history's eternal wavelength, but it is probably the biggest crock of all. As Evans writes, Army counsel Joseph Welch famously hurled the question as an accusation at McCarthy. McCarthy's transgression, we are supposed to believe, was outing Welch's young legal associate, Frederick G. Fisher Jr., as a former member of the National Lawyers Guild, a notorious communist front group.

The truth is quite different. Six weeks earlier, Welch himself was quoted in The New York Times, confirming that Fisher had belonged to the communist front and that, as a result, Welch himself had "relieved (Fisher) from duty." Welch's hearing-room histrionics, in other words, were a lot of hot air. But they worked. To this day, the truth remains lost to most people, while this thinnest fiction is immortal.

Failing to unmask the McCarthyism libel for what it is and always was -- bunk and agitprop designed to demonize conservatives, from Joe then to Ted [Freshman Republican Sen. Ted Cruz of Texas] today -- does exactly what conservatives continue to take pains to disavow. It slanders a patriot -- Joe McCarthy -- by cavalierly associating him with an odious and politically radioactive "ism."   It's time to thank the man instead.

SOURCE

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC,  AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena .  GUN WATCH is now mainly put together by Dean Weingarten.

List of backup or "mirror" sites here or  here -- for when blogspot is "down" or failing to  update.  Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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Again:  Obama says one thing and does another

President Obama told a meeting of the National Governors Association: "At some point, we've got to do some governing. And certainly, what we can't do is keep careening from manufactured crisis to manufactured crisis." Really?

Yes, really. He added, referring to the sequestration: "These cuts do not have to happen. Congress can turn them off anytime with just a little bit of compromise."

Obama has repeatedly demonstrated that he does not consider himself bound by a duty of good faith to square with the American people. He has shown that he is unafraid to utter the most egregious distortions and exaggerations; he has no fear of being called on them.

Just consider the few assertions I've cited. "At some point, we've got to do some governing." Does he mean that at some point, he needs to quit using every possible opportunity to play golf on the public's dime, that he should stop treating the people's White House as a platform for permanently campaigning, that he intends to forgo his Alinskyite tactics of bullying and demonizing in lieu of dealing with issues on the merits, that he aims to quit flouting his legal obligation to present a budget and that he will begin to exercise leadership over his party and pressure its leaders in the Senate to pass a budget? I didn't think so.

How about his statement that we can't keep careening from manufactured crisis to manufactured crisis? Does he mean that he is finally going to renounce his policy, first divulged by his former chief of staff Rahm Emanuel, not to let a crisis go to waste, that he regrets having painted a false picture of crisis about the nation's uninsured to force Obamacare through Congress, that he is sorry that he used the 2008 financial collapse as an excuse to enact recklessly irresponsible bills to spend more borrowed money under the guise of stimulating the economy, that he is sorry he leapt on the Sandy Hook shootings to begin a frantic manufactured-crisis-driven crusade to ratchet up his effort to severely restrict the rights of gun owners, that he plans to repent for falsely laying the blame for our disgracefully unbalanced budgets on the "rich," who are already contributing more than their fair share, that he is going to square with the American people about the shameless hyperbole and corruption in his environmental agenda and cease and desist from his dishonest fear-mongering about carbon emissions to advance that agenda, that he is sorry for exaggerating the effects of the Gulf oil spill in order to justify breaching his promises to remove restrictions on offshore drilling and that he is going to quit pretending that America's infrastructure is in a crisis state of repair in order to fuel his case for ever-greater government control and the creation of public-sector jobs? I didn't think so.

Indeed, if Obama is so weary of crisis governance, of which he is the peerless master, then why is he using these very same speeches to manufacture a phony crisis over the sequestration? We are talking about very small-percentage cuts here, mostly in the rate of spending increases.

If Obama were interested in changing his MO from crisis-mongering to governance -- instead of doubling down on his effort to expand the scope, reach and control of the federal government at any cost, literally -- then he would quit characterizing every single activity of the enormously wasteful federal government as an essential service.

Private-sector businesses don't enjoy the luxury of simply injecting public funds into their ailing enterprises to avoid cutting expenditures they can't afford. Are private-sector businesses and employees that much less important to Obama than public-sector services and employees? Silly question.

In his ongoing crisis-stoking, Obama never laments the real economic destruction his own policies have already caused. When he does deign to acknowledge economic difficulties, he callously understates the dismal conditions we're experiencing -- and the hardship people are already enduring as a result of his ideological intransigence against cutting spending and reforming entitlements.

But what makes Obama's oratorical flurry against crisis governance an even more insulting farce is that we do have a real, wholly unmanufactured crisis looming that will affect far more than a limited number of government jobs and programs. At the risk of breaking an already broken record, I'd like to point out again that we are going bankrupt because Obama won't agree to spending cuts and entitlement reform.

It is time that he quit playing games and insulting our intelligence by blaming Republicans for the sequestration he authored and for allegedly refusing to compromise when they are the ones who have compromised. They have done so on taxes, whereas he has refused to compromise on spending and entitlements. You make a deal with Obama, and he moves the goal posts.

Seriously, how can Obama continue this charade with a straight face? How long will the public tolerate it?

SOURCE

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Pro-homosexual bias at The Washington Post

If you're a reporter at the Washington Post and you aspire to write unsigned editorials, just send an email to the ombudsman.

That's a lesson one might draw from yesterday's extraordinary column by Patrick Pexton, the veteran journalist who, according to the Post's website, "represents readers who have concerns or complaints" about "accuracy, fairness, ethics and the newsgathering process." One such reader wrote to both Pexton and a Post reporter to complain that the paper's coverage of same-sex marriage gives "short shrift" to "the conservative, pro-family side of the argument."

Pexton, who withholds the names of both the reader and the reporter "at their requests," quotes the reporter's response at length: "The reason that legitimate media outlets routinely cover gays is because it is the civil rights issue of our time.

 Journalism, at its core, is about justice and fairness, and that's the 'view of the world' that we espouse; therefore, journalists are going to cover the segment of society that is still not treated equally under the law."

The reader wrote back: "The mission of journalism is not justice. Defining justice is a political matter, not journalistic. Journalism should be about accuracy and fairness."

Whereupon the reporter dug in: "Should the media make room for racists, i.e. those people who believe that black people shouldn't marry white people? Any story on African-Americans wouldn't be wholly accurate without the opinion of a racist, right? Of course I have a bias. I have a bias toward fairness. The true conservative would have the same bias. The true conservative would want the government out of people's bedrooms, and religion out of government."

In addressing the disagreement, Pexton acknowledges his own bias on the subject and his incomprehension of opposing arguments:

Many Americans feel that allowing gay men and lesbians to marry diminishes the value of their heterosexual marriages. I don't understand this. The lesbian couple down the street raising two kids or the two men across the hall in your condominium--how do those unions take anything away from the sanctity, fidelity or joy you take in your heterosexual marriage? Isn't your marriage, at root, based on the love and commitment you have for your spouse, not what you think about the neighbors?

That's a straw man. We've been following this debate for years, and we've never heard opponents claim that same-sex marriage would diminish or endanger their own marriages. Their arguments are based on morality, tradition, and worries about the effects on the institution of marriage, on society as a whole, and on the rights of individuals and institutions that adhere to the traditional view of marriage. The merits of those concerns are of course debatable, but Pexton is either obtuse or disingenuous in reducing them to a nonsensical appeal to self-interest.

Even so, the reporter's self-righteous rant went too far for the ombudsman. Pexton concludes by agreeing with the reader that the Post "should do a better job of understanding and conveying to readers, with detachment and objectivity, the beliefs and the fears of social conservatives." Along the way he comes very close to conceding outright the paper's liberal bias:

Because our profession lives and dies on the First Amendment--one of the libertarian cornerstones of the Constitution--most journalists have a problem with religionists telling people what they can and cannot do. We want to write words, read books, watch movies, listen to music, and have sex and babies pretty much when, where and how we choose.

That "libertarian" is quite a dodge. Most journalists are anything but libertarian in areas where that would mean siding against the left, such as guns, education, taxes, nonsexual health care and nonmedia corporate free speech. And as blogress Mollie Hemingway notes, Pexton's disparagement of those who disagree with him as "religionists," which means zealots, is invidious. Was Martin Luther King a religionist?

The anonymous reporter, however, goes far beyond bias, and even beyond bad faith--that is, beyond abusing his credibility as an "objective" reporter to further his cause. To judge by his emails to the reader, he has achieved a perfect Orwellian inversion. He has convinced himself that objectivity and bias (or at least his bias) are one and the same thing.

Or has he? This is where the reporter's insistence on anonymity is telling. If he really believes that propagandizing for same-sex marriage constitutes good journalism, why wouldn't he leap at the opportunity to express that view openly in the pages of the newspaper? There are two possible answers. One is cognitive dissonance: Upon further reflection, he realized that his view was illogical and would make him look foolish. The other is social pressure.

Notwithstanding the pervasive so-called libertarian bias that Pexton describes, it is possible that enough of the old-fashioned ethos of objectivity survives in the Post newsroom that it would be harmful to a reporter's career to be exposed as so brazen an advocate. In other words, while there seems to be little question that the Post is biased, it may be less biased than the anonymous reporter's screed would indicate.

Hal Holbrook as Deep Throat in "All the President's Men. Four decades later, a Washington Post reporter requests anonymity.
If that's the case, then in granting the reporter anonymity and not affording other reporters or editors an opportunity to respond, Pexton depicted the problem of bias at the Post in an inaccurately harsh light. That would be a disservice to readers, but even more a disservice to the Post--and especially to any conscientious journalists who happen to work for the Post. Imagine that you're a Post reporter who covers the debate over same-sex marriage but, unlike Pexton's secretive scribe, you make an honest effort to play it straight and be fair to both sides. Your reputation is now tainted by the supposition--propagated in the very pages of the Post--that Post reporters believe bias is objectivity.

Why would the Post agree to grant one of its own reporters anonymity to ventilate views that make the paper's own newsroom look like a den of bias and unprofessionalism? According to the paper's website, Pexton "operates under a contract with The Post that guarantees him independence." That presumably means he has complete discretion in interpreting the paper's policies on source confidentiality, if he is expected to follow them at all.

Pexton's two-year term as ombudsman ends this week. In his Feb. 17 column, he broke the news that "discussions are underway within The Post" about abolishing the position of ombudsman: "For cost-cutting reasons, for modern media-technology reasons and because The Post, like other news organizations, is financially weaker and hence even more sensitive to criticism, my bet is that this position will disappear." Unsurprisingly, he hopes it doesn't:

Can I say for certain that an ombudsman makes The Post more credible? No, I can't point to any good study saying that. But people's trust in the media is declining. Eliminating the ombudsman seems a shortsighted move.

Surely Pexton's spotlighting a particularly egregious example of journalistic bias at the Post doesn't enhance the paper's credibility. And his agreement to conceal the reporter's identity makes it difficult if not impossible for the editors to take remedial action aimed at restoring readers' trust.

One may salute Pexton for being honest enough to broach the subject of liberal bias and to report on a compelling example of it. But even that doesn't do much to burnish the Post's credibility. After all, he operates under a contract that guarantees him independence.

SOURCE

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The savage  intolerance of the liberal media



Fox News political analyst and “Special Report” panelist Juan Williams said in an interview with The Daily Caller’s Ginni Thomas that mainstream media outlets “stab” and “kill” dissenting voices.

Williams was fired from National Public Radio in 2010 after saying he sometimes gets “nervous” when seated on an airplane with Muslims, while making a broader point about the importance of religious tolerance.

“I always thought it was the Archie Bunkers of the world, the right wingers of world, who were more resistant and more closed-minded about hearing the other side,” he said. “In fact, what I have learned is, in a very painful way — and I can open this shirt and show you the scars and the knife wounds — is that it is big media institutions who are identifiably more liberal to left-leaning who will shut you down, stab you and kill you, fire you, if they perceive that you are not telling the story in the way that they want it told.”

SOURCE

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Hollywood again

Argo — the movie that won Best Film — is yet another piece of Hollywood’s Brit-bashing junk history that casts Brits in a poor light.

The film, directed by and starring Ben Affleck, tells the story of how the Canadian government and the CIA managed to rescue six American diplomats from the clutches of the Iranian students who occupied the U.S. embassy during the 1979 Islamic revolution.

Although the movie is a cracker — tense and terrifying — like so much that comes out Hollywood, Argo plays fast and loose with the facts. And unsurprisingly, the Brits are given a real pasting. For, according to the Affleck version of the rescue mission, the six embassy staff were refused refuge by British diplomats. ‘Brits turned them away,’ says a senior CIA character in the film.

The sad irony is that what really happened in Tehran in 1979 is just as thrilling as Argo, if not more so — and it involved astonishing British pluck.

When the American Embassy was overrun by armed students on November 4, 1979, five members of staff managed to escape by a side exit. The remaining 55 embassy staff were to be held captive for a further 444 days.

The most senior member of the escaped group was Robert Anders, who worked in the visa department. He decided the best place to find refuge was the British Embassy.

The group made its way through the bustling streets, only to find the British embassy was also surrounded by an angry mob.

Thinking on his feet, Anders quickly took the group back to his flat and from there tried to contact anybody who might help rescue them.

After a tense night, a call came through from the British embassy informing the five terrified Americans that it could give them refuge in its residential compound, which was known as Gulhak.

As Argo neglects to mention, this was an exceedingly brave offer. Both the British embassy and residential compounds were under serious threat. After what had happened to the Americans, the British understandably feared an attack on their own staff.

The Iranian revolutionaries had dubbed Britain the ‘Little Satan’, and for our officials to shelter diplomats from the ‘Great Satan’ (America) meant running a huge risk.

Much more HERE

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC,  AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena .  GUN WATCH is now mainly put together by Dean Weingarten.

List of backup or "mirror" sites here or  here -- for when blogspot is "down" or failing to  update.  Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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The importance of culture

In my days of writing academic journal articles (1970-1990), one of my most frequent themes was criticism of the way my fellow psychologists used students as their  subjects of study.  They seemed to assume that what was true of American college students was true of human beings everywhere.  And those psychologists who didn't use their students as subjects of study used white rats!

So I was something of a lone voice in expressing dissatisfaction with the reigning research traditions.  I was virtually the only voice in psychology saying that what is true of American college students might not be representative of other populations and sub-populations.

But as I have often found, my way of thinking does gain ground eventually and that has now happened again after the relatively recent work of a small group of researchers led by an anthropologist (Henrich).  You can read a lengthy summary of their work here.  They did a lot of cross cultural research among non-Western cultures which showed that in most of the world's cultures people think radically differently from the way "Westerners" generally and Americans in particular think.  And their evidence was sufficiently extensive and cogent to gain widespread acceptance, though I doubt that research traditions will change much.  More caution about generalizations can however hopefully be expected.

The new evidence was in fact stark in the way that Americans were shown to be at the far extremes of how the rest of the world thinks.  Americans are consistently outliers on most things.  There are great variations in the world's cultures but no culture  is as "weird" as American culture.

The only surprise is that that was a surprise. "American exceptionalism" anyone?  Modern Western civilization is an outlier to all of history. It is different precisely because it represents a new and better way of dealing with the world.  It dominates the world because it is different -- but different in an adaptive way.  It is a freak of cultural evolution that has transformed the world in a matter of only 200 years or so. It is clearly a pity that the Left are now beavering away to destroy that culture.

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British Capital Gains Tax hike led to FALLING revenues

The Adam Smith Institute is calling on the government today to slash CGT rates in next month’s Budget in order to boost revenue and economic growth. 2010-11 figures now released by HM Revenue & Customs (HMRC)  show that the rise in Capital Gains Tax (CGT) was a failure. Meant to raise more revenue, in fact it raised less.

CGT was raised from 18% to 28% for most taxpayers (entrepreneurs’ relief stayed at 10%) in June 2010, nearly three months deep into the tax year. This unusual timing allows economists to see the impact of the rate changes during the year.

Clearly, many people sought to realise gains before the rate increased, knowing that the Coalition Agreement committed the Government to a sharp increase in CGT rate.  There was also a 34% drop in 10% ER disposals, probably because entrepreneurs feared further tightening.

However, this highlights the fact that CGT is effectively a voluntary tax, paid only when people choose to dispose of assets. If they perceive rates to be too high, they choose to keep assets rather than dispose of them.  Only a few people are forced to sell assets – many of them elderly people who build up assets throughout their lives and then cash them in to live on.

High CGT rates depress economic activity and prevent the flow of capital to where it can be most productively used. This lowers both economic growth and government revenue.  This is why the Adam Smith Institute is urging the government to slash CGT rates to their pre-2010 levels, which would raise more revenue for the Treasury and also stimulate growth.

For example, if someone owns a buy-to-let flat and is thinking about selling it to raise seed money for a new business, the fact that a large chunk of the proceeds has to be paid in tax will deter them.  They may well decide to keep the flat and not start the business, thus depriving the state not only of the CGT revenue, but also the taxes that would be paid by the new business and its employees.

People’s reluctance to pay a large cheque to the state is increased by the knowledge that much of their capital gain is actually due to inflation. Indeed, roughly half of taxable gains are attributable to inflation .

Dr Eamonn Butler, Director of the Adam Smith Institute says: “The coalition policy of a sharp increase in CGT rates has failed.  Not only has it raised less revenue, it has also reduced the available capital in the economy. That is the last thing businesses need at a time when bank loans are so difficult to get.”

More HERE

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Exports are actually a COST

by Don Boudreaux

Yesterday evening I received an e-mail from Justin Yang, a high-school student in Los Angeles, asking me to elaborate on why I object to government policies designed to promote economic growth through exports.  I made a mental note to ponder how best to respond to Mr. Yang, which I’d originally intended to do only through private e-mail.  But then I cuddled up in bed last night with Chris Wickam’s 2009 volume, The Inheritance of Rome.  While Wickham’s work is masterful and deeply enjoyable, I noted that back on page 40 he wrote that the economies of Tunisia and of Syria/Palestine, circa the 5th century A.D., “depended substantially on exports for their prosperity.”

Many people – high-school teachers, celebrated historians, politicians, the list is long – are convinced that nations can grow wealthy through exports.

This belief is nonsense.  Or, more precisely, this belief in “export-led growth” is nonsense without further elaboration in which the benefits of exports are revealed to be the imports they make possible, and exports themselves are explicitly reckoned as, and recognized to be, costs – that is, without further elaboration to make clear that exports are valuable only because they enable people to increase their imports.

But because so many people talk and write endlessly about “export-led growth” or “successful economies built on exports” – and because the economically untutored mind seems to be a natural host for parasitical mercantilist myths in which exporting generally was indeed considered to be valuable in and of itself – it’s worthwhile to explain why exporting per se is no means of growth.  The explanation is simple.  Here are some alternative scenarios.

First scenario: American producers employ labor, capital goods, and raw materials to produce goods that are routinely loaded onto big cargo ships – themselves American-made – and then just as routinely sunk, along with the cargo ships, in the middle of the ocean.  Lots of exports in this case.  No imports.

Does anyone suppose that these exports will lead to growth?  No.  It’s obvious even to the most ardent and misinformed protectionist that a policy of routinely sinking American-made goods into the ocean is a recipe for impoverishment and not for prosperity.  (Caveat: it’s true that some Keynesian economists regard such a policy to be productive during times of slack demand.  But let’s ignore that issue here and focus, not on short-run macroeconomic issues, but on longer-run questions of economic growth.)

Second scenario: American producers employ labor, capital goods, and raw materials to produce goods that are routinely loaded onto big cargo ships.  These ships sail safely to foreign ports.  The American-made goods are unloaded, but Americans refuse to take payment in exchange.  We give these goods to foreigners.  Once again, no one of sense would identify such a policy as one that promotes economic growth in the U.S.

Third scenario: American producers employ labor, capital goods, and raw materials to produce goods that are routinely loaded onto big cargo ships.  These ships sail safely to foreign ports.  The American-made goods are unloaded, and in exchange Americans receive money – Australian dollars, euros, yuan, yen, rubles, you name it.  When this money is sent to America, Americans burn every last note of it to ashes.  I here refrain from speculating on the likelihood that “no one would identify such a policy as one that promotes economic growth in the U.S.” – but, in fact, no one of sense would identify such a policy as one that promotes economic growth in the U.S.”  Goods exchanged for ashes is a poor deal for the ash recipients.

Fourth scenario: American producers employ labor, capital goods, and raw materials to produce goods that are routinely loaded onto big cargo ships.  These ships sail safely to foreign ports.  The American-made goods are unloaded, and in exchange Americans receive money – Australian dollars, euros, yuan, yen, rubles, you name it.  When this money is sent to America, Americans stash every last note into their mattresses, safes, and lock-boxes.  Spending such money, it is reasoned by many, would be harmful to the American economy.

As in the first three scenarios, Americans’ trading practices in this case will only make Americans poorer, not richer.  Such trading practices will not “lead” growth.  Such trading practices – aimed at maximizing exports and minimizing imports – cannot possibly be ones on which to build long-term, sustained, wide-spread prosperity in America.  Giving stuff away and receiving in return only paper (or digital entries in bank accounts) never to be spent impoverishes; it doesn’t enrich.

Fifth scenario: American producers employ labor, capital goods, and raw materials to produce goods that are routinely loaded onto big cargo ships.  These ships sail safely to foreign ports.  The American-made goods are unloaded, and in exchange Americans receive money – Australian dollars, euros, yuan, yen, rubles, you name it.  When this money is sent to America, Americans eventually spend it in Australia, Europe, China, Japan, Russia, you name the foreign location.  The more Americans export, the more Americans can import.  And that – the ability to import – is the point of trade.  In the ability to import lies the purpose and value of exporting.

So when, for example, historian Chris Wickham writes that some late-empire-period economies ”depended substantially on exports for their prosperity,” what he must mean (whether he knows it or not) is that those economies depended substantially on trade for their prosperity.  Trade, not exports.  Mr. Wickham could just as accurately – indeed, more accurately – have written about these economies that they “depended substantial on imports for their prosperity.”  To the extent that exports played an important role in creating prosperity for denizens of those economies, exports played that role only insofar as exports enabled the denizens of those economies to enjoy more imports.  The prosperity is found in the increased consumption made possible by greater imports.

Greater exports are indeed an indispensable means of increasing a people’s consumption through imports.  It is, however, highly misleading – it promotes the worst sort of economic fallacies and, hence, it promotes destructive policies – to speak of exporting as being the source of prosperity.  Trade in such cases is the source of prosperity, not exporting per se.

So to young Mr. Yang – and to everyone – I ask that every time you encounter phrases such as “export-led growth” or “economy built on exports” that you hear or read these phrases in your mind as “trade-led growth” or “economy built on trade.”  The reason, again, is that the economic improvement at home is found not in the sending of stuff to strangers, but in the receiving of stuff from strangers.  Exporting can be a means to prosperity – and an important means, to be sure – but exporting itself is not what makes people wealthy; rather, trade – the receiving of valuable goods and services in exchange for exports – is what makes people wealthy.

SOURCE

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Shepherds and Sheep

 Thomas Sowell

John Stuart Mill's classic essay "On Liberty" gives reasons why some people should not be taking over other people's decisions about their own lives. But Professor Cass Sunstein of Harvard has given reasons to the contrary. He cites research showing "that people make a lot of mistakes, and that those mistakes can prove extremely damaging."
Professor Sunstein is undoubtedly correct that "people make a lot of mistakes." Most of us can look back over our own lives and see many mistakes, including some that were very damaging.

What Cass Sunstein does not tell us is what sort of creatures, other than people, are going to override our mistaken decisions for us. That is the key flaw in the theory and agenda of the left.

Implicit in the wide range of efforts on the left to get government to take over more of our decisions for us is the assumption that there is some superior class of people who are either wiser or nobler than the rest of us.

Yes, we all make mistakes. But do governments not make bigger and more catastrophic mistakes?

Think about the First World War, from which nations on both sides ended up worse off than before, after an unprecedented carnage that killed substantial fractions of whole younger generations and left millions starving amid the rubble of war.

Think about the Holocaust, and about other government slaughters of even more millions of innocent men, women and children under Communist governments in the Soviet Union and China.

Even in the United States, government policies in the 1930s led to crops being plowed under, thousands of little pigs being slaughtered and buried, and milk being poured down sewers, at a time when many Americans were suffering from hunger and diseases caused by malnutrition.

The Great Depression of the 1930s, in which millions of people were plunged into poverty in even the most prosperous nations, was needlessly prolonged by government policies now recognized in retrospect as foolish and irresponsible.

One of the key differences between mistakes that we make in our own lives and mistakes made by governments is that bad consequences force us to correct our own mistakes. But government officials cannot admit to making a mistake without jeopardizing their whole careers.

Can you imagine a President of the United States saying to the mothers of America, "I am sorry your sons were killed in a war I never should have gotten us into"?

What is even more relevant to Professor Sunstein's desire to have our betters tell us how to live our lives, is that so many oppressive and even catastrophic government policies were cheered on by the intelligentsia.

Back in the 1930s, for example, totalitarianism was considered to be "the wave of the future" by much of the intelligentsia, not only in the totalitarian countries themselves but in democratic nations as well.

The Soviet Union was being praised to the skies by such literary luminaries as George Bernard Shaw in Britain and Edmund Wilson in America, while literally millions of people were being systematically starved to death by Stalin and masses of others were being shipped off to slave labor camps.

Even Hitler and Mussolini had their supporters or apologists among intellectuals in the Western democracies, including at one time Lincoln Steffens and W.E.B. Du Bois.

An even larger array of the intellectual elite in the 1930s opposed the efforts of Western democracies to respond to Hitler's massive military buildup with offsetting military defense buildups to deter Hitler or to defend themselves if deterrence failed.

"Disarmament" was the mantra of the day among the intelligentsia, often garnished with the suggestion that the Western democracies should "set an example" for other nations -- as if Nazi Germany or imperial Japan was likely to follow their example.

Too many among today's intellectual elite see themselves as our shepherds and us as their sheep. Tragically, too many of us are apparently willing to be sheep, in exchange for being taken care of, being relieved of the burdens of adult responsibility and being supplied with "free" stuff paid for by others.

SOURCE

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC,  AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena .  GUN WATCH is now mainly put together by Dean Weingarten.

List of backup or "mirror" sites here or  here -- for when blogspot is "down" or failing to  update.  Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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