Cafe Hayek

Rational Depending on Context

Bryan Caplan's book The Myth of the Rational Voter : rationally, I'm a big fan.

The Coming Recession?

Along with persons far more insightful than me, I offer a few thoughts on the current economic downturn in the new issue of Reason.

Seeing Past the Chicken Littles

Denver Post columnist David Harsanyi is superb.

There are no prostitutes in Israel

Early this morning, I turned my radio on and heard the very end of an interview on talk radio. I picked it up in mid-paragraph and here is what I heard, an imperfect transcript from a half-awake brain:

In World War II, the Democrats controlled the Presidency and the Congress, but they were careful to make sure the money was well-spent. The Truman Commission made sure there was no war profiteering. But because of the war in Iraq, Halliburton stock has tripled.

My mind must have wandered because the next remark I remember, while related to the war in Iraq, seemed to be a bit of a non-sequitor, but it was part of the general theme that Iraq was disaster:

The Philippines doesn't want any of its people there--they're worried about workers being kidnapped or held hostage or harmed so passports from the Philippines say "Not good for Iraq" but the American forces ignore this, they just wave them through, so you have 7000 workers from the Philippines working in Iraq so this has global repercussions.

Hmmm. Global repercussions? Workers without passports doesn't really strike me as the most important global repercussion of the American adventure in Iraq. Who was this guy?

It was Joseph Stiglitz, Nobel Laureate in economics.

He's so worried about America's relationship with the Phillippines that he wants to stop people from working who are evidently pretty desperate? That's a little weird to me. But the real weirdness is the claim the Republicans are venal while Democrats are noble and idealistic who would never allow profiteering (love that word) during a war. 

I'm sure Halliburton has made a great deal of money in Iraq. I'm sure the whole process stinks. But maybe Stiglitz doesn't know enough about Halliburton. One of their subsidiaries is Kellogg, Brown and Root, (KBR) formerly Brown and Root, the firm that helped LBJ and that LBJ helped in turn during war and peace. Halliburton acquired Brown and Root in 1962.

Maybe "helped" is too modest a term. Both LBJ and the Root brothers became immensely rich from their mutual efforts.

If you have not read it, please read at least the first volume of Caro's biography of LBJ. It is very long. But it is perhaps the finest portrait of the thirst for power in a human being that you will ever read. It will remind you that yes, even Democrats like to give money to their friends in return for favors later.

When I was a 16 years old, my family lived in Israel--my father's company sent him there on a project. While we were there, my aunt came for a visit and after a day of touring the country with some group, she serenely informed us that there were no prostitutes in Israel. How did she know? Her tour guide had told her so. It was a nice thought. It's nice to think that only holiness pervades the Holy Land and that the holy people who live there would neither staff nor demand the services of the world's oldest profession. But even I suspected otherwise.

Joseph Stiglitz knows better as well. But he is a partisan, evidently. I am glad not to be one.

Rewarding Bad Behavior

Reading Larry Ribstein's excellent Ideoblog today, I was alerted to this report in yesterday's Wall Street Journal.  Reading this report prompted me to send the following letter to the WSJ:

To the Editor:

Upset at what he has divined to be excessively high pay for corporate CEOs, Sen. Barack Obama wants to change "a system where bad behavior is rewarded'' (“Candidates Target Executive Pay,” April 12).

If Mr. Obama truly seeks to rein in institutions that systematically reward bad behavior, he should scale back government and forget about intruding into the private sector.  In private markets, Smith spends only Smith’s money.  Smith profits or loses depending on the prudence of his choices.  This tight connection between each person’s actions and the consequences that he or she bears provides remarkably effective carrots and sticks encouraging private persons to behave responsibly.  In the so-called “public sector,” in contrast, Smith spends Jones’s money.  Smith profits or loses depending on how effectively he uses Jones’s money to buy votes from Jackson, Johnson, Williams and other persons who are assured by Smith of their moral right to free-ride on Jones’s resources.  Surely, there is no surer recipe than this for rewarding bad behavior.

Sincerely,
Donald J. Boudreaux

No Cause for Pessimism

George Will has long been one of my favorite conservative columnists.  I often disagree with him, but even more often I agree with him.  And, boy, do I agree with the lesson he conveys in his column appearing in today's Washington Post.  Will's point is that to call today's economic woes a "crisis" is to define the word "crisis" way, way down.  Here's are the opening few paragraphs from this excellent column:

During presidential elections, when candidates postulate this or that "crisis" for which each is the indispensable and sufficient cure, economic hypochondria is encouraged, so a sense of suffering is rampant. Recently the Wall Street Journal, like Joseph Conrad contemplating the Congo, surveyed today's economic jungle and cried, "The horror! The horror!"

Declines in housing values and the stock market are causing some Americans to delay retirement. A Kansas City man had been eager to retire to Arizona but now, the Journal says, "figures he'll stay put for another couple of years." He is 59.

So, this is a facet of today's hydra-headed "crisis" -- the man must linger in the labor force until, say, 62. That is the earliest age at which a person can, and most recipients do, begin collecting Social Security.

The proportion of people aged 55 to 64 who are working rose 1.5 percentage points from April 2007 to February 2008, during which the percentage of working Americans older than 65 rose two-tenths of one percentage point. The Journal grimly reported, "The prospect of millions of grandparents toiling away in their golden years doesn't square with the American dream."

Oh? The idea that protracted golden years of idleness are a universal right is a delusion of recent vintage. Deranged by the entitlement mentality fostered by a metastasizing welfare state, Americans now have such low pain thresholds that suffering is defined as a slight delay in beginning a subsidized retirement often lasting one-third of the retiree's adult lifetime.

George Will's wisdom inoculates him from the pessimistic bias.

I would add only that government subsidies to Americans in their 60s and older (most notably, Social Security and Medicare) are not the only forces enabling Americans today to retire earlier than in the past.  The increasing wealth generated by the private sector is another reason -- in fact, I suspect, the principal reason.

Bill vs. Barack

I just heard Stephen A. Smith on ESPN talking about the revelation that the Clintons had income of $109 million between 2000 and 2006 and that much of it came from Bill's speaking engagements. He made the observation that if Bill can make that much money as a post-Presidency speaker, imagine how much Barack Obama might make speaking after his Presidential term. After all, Barack is a better speaker than Bill.

The whole thing was a funny riff on money and politics and money and sports. And the Barack point may have been facetious. But it did remind me that Bill doesn't get paid for the quality of his speeches. He earns a great deal of money for two reasons. One is that people want to mingle and listen to celebrities of any kind. An ex-President, no matter how miserable an orator, can make a lot of money selling face time. But the real reason Bill is in demand is his wife. He's the husband of the Senator from New York and possibly the next President of the United States. People are paying for influence and access to power. They're buying a lottery ticket. Just one more reason that campaign finance laws are ridiculous. As the Washington Post reports:

Many of Bill Clinton's six-figure speeches have been made to companies whose employees and political action committees have been among Hillary Clinton's top backers in her Senate campaigns. The New York investment giant Goldman Sachs paid him $650,000 for four speeches in recent years. Its employees and PAC have given her $270,000 since 2000 -- putting it second on the list of her most generous political patrons.

The banking firm Citigroup, whose employees and PAC have been Hillary Clinton's top source of campaign donations, with more than $320,000, paid her husband $250,000 for a speech in France in 2004. Last year, it committed $5.5 million for Clinton's Global Initiative to help encourage entrepreneurship and financial education among the poor.

Unless Michelle Obama runs for office after the two terms of Barack, I doubt Barack will earn quite as much as Bill.

Get Involved By Avoiding Politics

Get involved!  And the best way to do so is to avoid politics.  I elaborate in my column appearing in today's Pittsburgh Tribune-Review.  Here are a few paragraphs:

It's a mistake to applaud greater involvement in politics as if such involvement is by its very nature the best use of people's time and effort. A more serious delusion is that politics is the only -- or, at least, the most noble -- venue for each of us to get "involved" with our fellow humans.

In fact, though, we are involved even when we pay no attention to politics. We care for our families, support our friends, work at jobs that produce goods and services for millions of people and are active members of churches and clubs. Each of us is intensely involved, daily.

Indeed, we are involved better and more fully when we act privately (that is, outside of government) than when we act politically.

Acting privately, none of us intrudes without invitation into other people's affairs. I might volunteer my opinion to my friend that he drinks too much but my friend can ignore me if he chooses. I have no way to force him to live as I believe he should live. For me, then, to become as involved as possible with my friend, I must strive to share my concerns with him in ways most likely to resonate with him.

Good friends and close family members are involved in each other's lives truly and deeply. Our friends and loved ones are not faceless abstractions ("drinkers" or "smokers" or "workers"). Each is an individual with unique desires and complexities. To share friendship or love with someone is to learn, understand and generally respect these individual characteristics.

Regardless of what any silver-tongued politician says, no stranger feels our pain or can otherwise be involved with us in ways remotely as real as are the ways that our friends and loved ones are involved with us.

Unintended Lesson

Last night, Hillary Clinton was on the Tonight Show and she gave a phenomenal example of the power of economics. Unfortunately, she did not appear to understand the example. At the 3:23 mark of this video, she tells a story (HT: Jim Colburn):

I was in Indianapolis the other day and I was shaking hands after I spoke. And there was this young boy about eleven years old and he's trying to tell me something—you know the crowd was yelling—so I leaned over and he said, "You know, my mom makes minimum wage and even though it went up, her hours were cut. So we're not making any more money. Can you help her?" You know,  when somebody says something like that to you, it really does kind of energize me.  I think, yeah, I can, I'm going to really try to help you, because this is wrong. And everywhere I go I hear stories like that about veterans who don't get health care, about people, who are, you know,  losing their jobs, and I think we can do so much better. So for me it's just get up every day and  fight on because this country's worth fighting for.

She then launched into a litany of economic disaster ("we're borrowing money from the Chinese to pay for oil from the Saudis") and finished up talking about the "deteriorating middle class."

I don't believe the story. What eleven year-old boy whispers into the ear of a big shot the details of his mother's wage/hours mix? And I like how she had to lean over--no one--not even Bill Richardson or Sinbad--can contradict her.

But let's give Hillary the benefit of the doubt. Suppose the story really did happen. She clearly thinks the story is emblematic of something important that needs to get fixed. What is it? Just when you help someone by passing a minimum wage, greedy employers ruin everything by lowering the hours. Well, we need to "fight" and fix that, too.

I wish Jay Leno had pointed out that the cut in hours was the result of passing the minimum wage--that it was as inevitable as gravity. I wish he'd said that the story showed how the minimum wage is a false promise of prosperity. I wish he'd pointed out that fighting isn't enough, caring isn't enough, that prosperity can't be legislated any more than self-interest can be made illegal. I wish Jay Leno had said that when you find yourself in a hole, the first thing to do is to stop digging.

And if that little boy really exists, I'd like to tell him that a Senator fighting for you is a losing proposition. You have to fight for yourself. If your Mom wants more money, she needs to go back to school or work a second job. And as for you, stay in school. It's the best way to avoid earning the minimum wage.

Making Americans Poorer

"Clinton Proposes Plan to Make Firms Inefficient" would have been a more accurate headline to this report at Newsweek.com.  I sent this letter in response:

Courting blue-collar votes, Hillary Clinton promises to use "tax incentives to persuade companies to 'insource' jobs in the United States" ("Clinton proposes plan to keep jobs in US," April 2).  Because firms 'outsource' jobs only when doing so lowers firms' costs of production, Mrs. Clinton's proposal amounts to bribing American firms not to lower production costs whenever possible.  She wants to encourage American firms to produce inefficiently, which is to say wastefully.  In short, she wants us to be poorer than we would otherwise be.

Mrs. Clinton's proposal is further evidence that good politics typically is bad economics.

Sincerely,
Donald J. Boudreaux

The Dark Art

Today's edition of the Wall Street Journal reports on Barack Obama's economic "plan" and, on another page, summarizes remarks on the economy recently offered by Hillary Clinton.

Sen. Clinton said, as the WSJ reports, that "she fears the U.S. is slipping into a Japanese-style economic malaise that will overwhelm the Federal Reserve's considerable powers"  Sounds scary.  To alleviate our fears, she and Obama each offer their own "solutions" for the economy.

But how scared would you be if such fears were expressed instead by, say, your veterinarian or your proctologist?  Because these specialists (and perhaps even geniuses) in their respective fields have no expertise at diagnosing the economy, you'd be well-advised to take their economic concerns with a grain of salt.  And you should do the same, but doubly so, with any pronouncements on the economy offered up by Sen. Clinton, Sen. Obama, and Sen. McCain.  Not only do these politicians have no expertise in economics -- their specialty is winning political elections -- but as Sen. Clinton's recent sniper-fire whopper reveals, successful practitioners of the dark art of politics possess an unusual propensity to lie and dissemble.

Almost all that any politician says on any topic other than political strategy should be treated with even less respect than would be accorded a professional circus-clown's speculations about string theory.

Always looking out for the little guy

You know how politicians are--always looking out for the little guy. Always ready to protect the little guy from the evil corporation. So why does Chicago only have one Wal-Mart? To protect workers from being exploited. You get two Wal-Marts and they're sure to drive down wages. So the government has to protect the workers. Doubt me? Read this story from the Chicago Tribune. The picture and headline at the top says most of it. But read the whole thing. It's a beautiful example of how politicians only care about the general good:

Memories

I certainly remember attending the December 1985 meeting of the American Economic Association in New York.  When I walked into the hotel lobby, I was immediately surrounded by economists, dozens, perhaps hundreds, of them praising my unpublished doctoral dissertation.  Ronald Coase was in the front line, telling me what a genius I am.  Paul Samuelson fell to his knees before me, embarrassingly worshipful, to exclaim that my work has finally shown him the light.  That's what happened.

..... What?  You say that there's no record of my legions of fans greeting me and singing my praises in December 1985?  Do you mean to say that the record quite clearly shows that, while I did indeed attend those meetings, my presence there made absolutely no discernible impact?  Is it true that the cameras did not record Coase's encomiums to me or Samuelson's homage paid to me?  Hmmm.....  Well, perhaps I misspoke.  It proves, you know, that I'm human.  Anyone, after twenty-two years, could mistake his complete anonymity at a meeting of illustrious scholars for his being feted, celebrated, and glorified.  I am, you know, only human.

A Non Sequitur

Just last week, David Brooks described many successful politicians (such as Eliot Spitzer) thusly: "their sensitivity synapses are still performing at preschool levels" and they "have an almost limitless capacity for self-pity."  Not a pretty picture of people in power.

But reading Brooks's latest column (in yesterday's edition of the New Orleans Times-Picayune), I discover that Brooks -- with disquieting inconsistency -- nevertheless trusts these emotional and ethical dwarves with power to regulate persons' private choices.  I sent this letter in response.

David Brooks notes that "behavioral economists demonstrate every day [that] human beings are powerfully and unconsciously influenced by ... ideas and assumptions" that cause them sometimss to make systematic mistakes ("Not a good time to trust the market," March 20).  True.  But Mr. Brooks himself mistakenly draws the conclusion that this fact justifies government regulation.

The undeniable truth that each of us frequently makes foolish decisions does not justify overriding our freedoms, especially if (as is likely) the same "powerful and unconscious ideas and assumptions" that cause us to err when acting privately will cause us to err when acting politically -- and will cause also those persons in political office to err when exercising their power.

For all of their insights, behavioral economists have never demonstrated that political power cures its holders of any of the cognitive ailments that afflict the general lot of humankind.

Sincerely,
Donald J. Boudreaux

Emotional and Ethical Dwarfs

Speaking of all-too-many successful politicians, David Brooks -- in his New York Times column today -- notes that "their sensitivity synapses are still performing at preschool levels" and that they "have an almost limitless capacity for self-pity."

In other words, politicians are children disguised as adults - persons who ought to be playing with wooden blocks while seated at their little desks in Romper Room rather than playing with our liberties and resources while seated at their mahogany desks within marble-domed monuments to their stupid power.

Mamet on government and markets

David Mamet has written an extraordinary confessional for the Village Voice (I've edited this link, ht: Drudge) where he describes his philosophical change of heart from being an anti-American, anti-market believer in man's perfectibility to something different. An excerpt:

What about the role of government? Well, in the abstract, coming from my time and background, I thought it was a rather good thing, but tallying up the ledger in those things which affect me and in those things I observe, I am hard-pressed to see an instance where the intervention of the government led to much beyond sorrow.

But if the government is not to intervene, how will we, mere human beings, work it all out?

I wondered and read, and it occurred to me that I knew the answer, and here it is: We just seem to. How do I know? From experience. I referred to my own—take away the director from the staged play and what do you get? Usually a diminution of strife, a shorter rehearsal period, and a better production.

And then Mamet shows an understanding of public choice theory applied to theater:

The director, generally, does not cause strife, but his or her presence impels the actors to direct (and manufacture) claims designed to appeal to Authority—that is, to set aside the original goal (staging a play for the audience) and indulge in politics, the purpose of which may be to gain status and influence outside the ostensible goal of the endeavor.

He goes on to say he's been reading Sowell and Friedman (and Paul Johnson and Shelby Steele). Sounds like he would like some Hayek if he hasn't tried him already.

Read the whole thing, although the site is slow right now from the raft of comments (190 and rising rapidly) and Drudge's link.

And if anyone out there knows Mr. Mamet or someone who knows him, I sure would like to invite him to be a guest on EconTalk.

The Spitzer Matter: It IS Private

I sent this letter just now to the New York Times:

Gov. Eliot Spitzer says that his patronage of prostitutes is a "private matter" ("Spitzer Is Linked to Prostitution Ring," March 10).  He's correct; that matter is between himself and his family and is no one else's business.  I wish only that Mr. Spitzer understood that many of his most famous crusades - for example, against musical-recording companies aggressively marketing their products, against banks lending money to lower-income consumers, and, indeed, even against prostitution rings(!) - were crusades against behaviors that in each case is a "private matter."

If Mr. Spitzer wants us to butt out of his private affairs, he should from here on in set an example by butting out of everyone else's private affairs.

Sincerely,
Donald J. Boudreaux

Of course, Spitzer is a professional busy-body, so he's unlikely to mind only his own business even as he asks us to mind only our own.

Ikenson on Obama

Cato's Dan Ikenson takes the measure of Barack Obama.  Here's Dan's opening paragraph:

As an advocate of free trade, I feel slightly vindicated by reports that the Obama campaign quietly assured the Canadian government that the Senator’s strident words about NAFTA in last week’s debate were merely political rhetoric. We’ve long been saying that opposition to trade is mostly an artifice of politics. But the story begs the question: Is Obama (a) economically illiterate; (b) dishonest, or; (c) naïve. The answer is (d), all of the above.

(HT Sallie James)

Ohio and NAFTA

The Wall Street Journal's superb columnist Mary Anastasia O'Grady says this today about the protectionist pronouncements pouring forth from both the Clinton and Obama camps:

After watching the Obama-Clinton debate in Cleveland on Tuesday, I came away convinced that both candidates for the Democratic presidential nomination want to run this country like Argentina.

In that country, Juan Peron-inspired labor syndicates and their bosses dominate the economy and work hand-in-glove with the state. Together they have ensured Argentina's isolation from international commerce and investment, and a slow but steady decline in living standards.

This is a sharp left turn for the Democratic Party leadership. One of the most significant global trade-liberalization rounds in the 20th century bore the name of John F. Kennedy. Now Hillary Clinton and Barack Obama, by threatening to dissolve the North American Free Trade Agreement unless it is converted into a cudgel for Big Labor, want to drag us backward.

Also, as Rossputin's Ross Kaminsky points out to me in an e-mail, the unemployment rate in Ohio in December 1993 -- the month before NAFTA took effect on January 1, 1994 -- was 6.5 percent.  Says Ross: "It has never since touched a level that high again.  Why the hell doesn't anyone say that in public? It's so obvious a thing to look at."

Great point.  (Of course, the reason that Clinton and Obama don't speak this truth is because to do so would not help them politically.  Remember, they seek office and power rather than truth and understanding.  To expect either of them to utter even one politically inconvenient truth is as reasonable as expecting your pet turtle to recite from memory the Magna Carta.)

Looking at the data on Ohio's unemployment rate from the early 1990s onward is indeed revealing.  The unemployment rate in Ohio was declining before NAFTA took effect (it was, for example, 7.0 percent in January of 1993).  The rate continued to decline, reaching 3.9 percent as recently as February of 2001.  From that date, it began to rise, hitting 6.2 percent for a few months in 2004.  From November 2004, Ohio's unemployment began again to fall, settling in to the mid-five-percent range pretty much since then.  The most recent reading (for December 2007) is 5.8 percent.

Also, the most recent month prior to NAFTA going into effect in which Ohio's unemployment rate was as low as 5.8 percent is October 1990.

Ohio's unemployment rate before and after NAFTA took effect emphatically does not tell a tale of workers in that state being harmed by expanded trade between the U.S., Canada, and Mexico.

We Should Expect No More

I sent this letter today to the Washington Post:

Each campaign season I catalog the countless instances of politicians being held to ethical standards comparable to those to which people hold their household pets. Case in point: the usually wise Sebastian Mallaby - exposing Sen. Clinton's and Sen. Obama's deceits about NAFTA - sighs that "Quite a lot of trade populism can be forgiven, even if it is intellectually dishonest.  Like it or not, trade liberalization has stalled, so mild populism makes no practical difference" ("Democrats, Off Course On Trade," March 2).

In other words, aspirants to what is typically called the highest office in the land are forgiven when they intentionally deceive voters as long as these deceptions make "no practical difference."  I don't much care if my dog deceives me under such circumstances, but I surely teach my son that such dishonesty and lack of integrity is intolerable in himself and in other human beings.

Sincerely,
Donald J. Boudreaux

(My apologies to dogs, cats, hamsters, and goldfish everywhere.)

What's the Buzz?

Reflecting on the misinformation, half-truths, and weasel-words that form the bulk of political-campaign speecifying, I conclude that listening to politicians' campaign speeches yields about as much information as listening to insects buzzing: in both cases you're made aware that annoying, and possibly dangerous, pests are nearby.

Shift Happens

Hillary Clinton and Barack Obama are increasingly hostile to trade (or so they say on the campaign trail -- admittedly not a stage on which truth and frankness get many lines).

There are countless distressing facets of this anti-trade nonsense.  One of these is the weaselly "I'm for free trade as long as it's fair trade" refrain.  Such a claim (now as familiar in political campaigns as Dunkin' Donuts) is a cowardly attempt by the candidate to stand on both sides of the issue by invoking a word ("fair") loaded with emotion but devoid, in this context, of meaning.  No one, as far as I know, favors unfair trade -- but by slapping the label "unfair" on any trade that a candidate's favorite constituents dislike, that candidate can oppose free trade while claiming still to support free trade.

Such a rhetorical gimmick is unfair.

Also distressing is the fact that Austan Goolsbee, the fine economist who is a close adviser to Obama, apparently is ignored by the would-be President of the USA on this front.  Of course, I have no knowledge of what Goolsbee says and doesn't say to Obama, but I presume that Goolsbee isn't in the anti-trade camp.  Consider that just this past June Goolsbee had this excellent column in the New York Times, with this key passage:

We [Americans] hate experiencing major adjustments and industry transformations that force people to look for new jobs. That experience has made many skeptical about the future of the United States in the world economy. Yet the evidence seems to show that for all our dissatisfaction, we are the most flexible economy around and may be best poised to take advantage of the coming changes on a global scale precisely because we are so good at adjusting.

A related source of distress is Alan Blinder's recent skepticism of trade -- his lending his good name and the prestige of the economics profession to protectionists.  It's very bizarre (especially in light of the fact that Blinder wrote this).  In today's New York Times, "Economic Scene" columnist David Leonhardt quotes Blinder as saying that "Trade has winners and losers ... and there have been a lot of losers in Ohio."  I've written elsewhere about "winners and losers" from trade.  But I can't resist making my point again, if only in a slightly different way.

Trade is just one manifestation of consumer sovereignty.  Just as there are, by Blinder's calculus, winners and losers from consumers shifting their expenditures from goods made in America to goods made abroad, there are winners and losers from consumers shifting their expenditures from goods made in Illinois to goods made in Arizona - and from consumers shifting their expenditures from donuts, beef, cigarettes, whiskey, and train travel to bagels, fish, yoga lessons, wine, and air travel.  Trade plays no unique, or uniquely important, role as an avenue of economic change spurred in part by consumer sovereignty.  The only practical way to rid the economy of such "loses" is to try to freeze it, a futile step that will in the long-run only make losers of everyone.

(I thank my friend Greg Papandrew for the title of this post.)

My Physcian Can't Bandage My Cut.... So I'll Trust Him Also to Educate My Son and to Run My Pension And to.....

Yesterday I sent the following missive to the New York Times:

So America's infrastructure has suffered what you describe as "decades of underfunding and inattention" ("Before Another Bridge Falls," 23 February 2008).  This fact should shake the foundations of your faith in big government.  Adequately supplying public goods such as roads and bridges ranks among government's least objectionable and most widely agreed upon duties.  And yet government fails even at this core task.

Perhaps one reason for this failure is that government has loaded itself with too many other tasks that drain its attention and resources away from attending well to its chief duties.  Or perhaps government, even at its finest, is incurably clumsy and untrustworthy.  Whatever the reason for government's failure to supply sound infrastructure, don't you see the danger in entrusting this same agency with the power to govern our diets, to "redistribute" our incomes, to regulate our industries, and, indeed, to intervene in nearly all of the ways that you famously demand?

Sincerely,
Donald J. Boudreaux

Anchovy ice cream

Here's my commentary that ran earlier today on NPR's All Things Considered comparing politicians to those who sell anchovy ice cream by promising that it's delicious. Why do we believe them?

Low Standards

I sent this letter on Sunday to the Washington Post:

Dear Editor:

I'm forever flabbergasted by the preposterously low standards to which politicians are held.  Case in point: in today's lead editorial ("Trading Down") you correctly note that Senators Clinton and Obama each now is trumpeting more and more wrongheaded populist themes - including suspicion of trade - only to increase her or his chances of securing the nomination.  So by your own assessment (which I share) the next President of the United States might well be someone who endorses policies that he or she knows to be unwise AND who lies in order to score with the electorate.

If a man tonight falsely assures a woman of his undying love only to score with her, we rightly regard him as a sleazeball.  But when politicians do essentially the same thing, save on a much larger scale, we call them "public servants" and treat them as our saviors.  Very strange.

Sincerely,
Donald J. Boudreaux

Tyler Cowen on Elections

My GMU colleague (and Marginal Revolution's) Tyler Cowen -- in his column in today's New York Times -- explains why political elections turn more on style than on substance:

Here are Tyler's concluding paragraphs:

That might sound pessimistic, but it’s not. Many Americans will be living longer, finding new sources of learning and recreation, creating more rewarding jobs, striking up new loves and friendships, and, yes, earning more money. Just don’t expect most of these gains to come out of the voting booth or, for that matter, Washington.

And if you’re still worrying about how to vote, I have two pieces of advice. First, spend your time studying foreign policy, where the president has more direct power, and the choice of a candidate makes a much bigger difference. Second, stop worrying and get back to work.

Uncle Sam Clearly Does Not Live on a Budget

The Mercatus Center's Veronique de Rugy exposed, in the pages of the Los Angeles Times, many of the absurdities and dangers of Bush's recently submitted budget -- a $3.1 trillion monstrosity.

Must Uncle Sam really spend $10,333 annually for every man, woman, and child in America?

The opening paragraph of Vero's excellent op-ed speaks volumes about the current occupant of the White House.

If President Bush's budget for fiscal 2009 is approved in its current form, U.S. government spending will have increased by more than $1.2 trillion since President Clinton left office; adjusted for inflation, that's a 35% increase. Bush has increased spending at three times the rate Clinton did when he was president, and also has given us the biggest defense budget since World War II -- and that's regularly budgeted defense spending, not counting funding for the wars in Iraq and Afghanistan.

I Let My Voice Be Heard on Election Day!

Today is the day of the Chesapeake Primaries.  Citizens of Virginia, Maryland, and DC get to vote for their parties' presidential nominees.  I live in Virginia.  I don't vote.

At some point I'll write a longer essay justifying my refusal to vote in political elections, but here I'll content myself to riff just a bit on non-voting.  I'm prompted to so riff because, on the radio this morning, I heard a reporter proclaim "Let your voice be heard.  Vote!"

My first reaction to this all-too-common claim is that no single vote is ever "heard" in any meaningful way.  Whether your preferred candidate wins (or loses) by 10,462 votes rather than by 10,461 vote is irrelevant.  How "heard" is your vote in such a case?

Indeed, my not-voting is surely heard at least as loudly and as relevantly as would be any vote that I cast.  The lower the turnout in elections, the louder the message that the choices either stink or are too close to each other to matter.  Why is this result not a message?  Surely it is.  Surely it speaks just as clearly and as loudly as does a vote for candidate Smith.

I have several reasons for not voting.  Having my non-vote "voice" heard is just one of them.

Blowing in the wind

I'm writing a piece on how politicians use rhetoric to win votes but ignore that rhetoric when they're in office. Here's a beauty, a quote from George Bush in a debate with Al Gore on October 3, 2000:

I would take the use of force very seriously.  I would be guarded in my approach.  I don't think we can be all things to all people in the world.  I think we've got to be very careful when we commit our troops.  The vice president and I have a disagreement about the use of troops.  He believes in nation building.  I would be very careful about using our troops as nation builders.  I believe the role of the military is to fight and win war and therefore prevent war from happening in the first place.

Who's Generous?

I sent this letter today to the Baltimore Sun:

Like you, Tim Sharman is dismayed that George Bush's past struggles with chemical addictions do not prompt him now, as President, to be more "generous" in his budget toward the poor (Letters, February 7).  I oppose most of Mr. Bush's policies.  But I oppose even more the notion that it is possible to be generous with other people's - that is, with taxpayers' - money.

Suppose Mr. Bush reconsiders the budget and increases welfare expenditures substantially.  This move might or might not be wise policy.  But it certainly doesn't signal that the President has become more generous. A politician, like you and me, can be generous only with his own money.  A politician spending other people's money is, at best, implementing sound policies - and, more realistically, much closer to a burglar who "generously" uses part of his booty to buy rounds of drinks for his buddies.

Sincerely,
Donald J. Boudreaux

The People's Romance

The latest EconTalk is a conversation with my colleague Dan Klein on the economics of coordination—how markets connect people around the world doing various parts of a task that get combined into a finished product without any of the people contributing the task necessarily knowing that they're working together. Along the way, we talk about what Dan, calls The People's Romance, the idea that the highest human activity is a government project of some kind that "we" work on together. Dan argues that such an urge to is widespread and that it degrades our culture. I argue it's dangerous. Enjoy. Next week is William Easterly.

With Such Standards, Everyone is Heroic

I sent this letter yesterday to the Washington Post:

Rick Perlstein suggests that it's petty and unjustified to criticize Sen. Hillary Clinton for earmarking $1M of taxpayers' funds to pay for a museum at Woodstock ("Getting Past the '60s? It's Not Going to Happen," February 3).  His argument is that the amount of money involved is so relatively small - only "one-millionth of the federal budget."

The ethical standards to which we hold politicians are truly meager.  Mr. Perlstein apparently cares neither about the constitutionality of such earmarks nor about whether or not they serve the public interest.  Earmarks such as this one are okay, in his view, simply because the size of each one is so paltry in comparison with Uncle Sam's budget.  I wonder if Mr. Perlstein or Sen. Clinton would excuse me if I refused to pay my taxes this year on grounds that my taxes are an infinitesimal portion of federal revenue.

Sincerely,
Donald J. Boudreaux

Clinton and the Colonel

With apologies to the heirs and memory of the late, great Colonel Harland Sanders, I sent this letter today to the Wall Street Journal:

Whenever this economist reads campaign advertisements masquerading as opinion pieces in respectable newspapers - such as Hillary Clinton's "My Plan for Shared Prosperity" in your edition today - I feel like I imagine Julia Child must have felt whenever she heard Colonel Sanders brag about his "secret recipe."  No matter how many primitive taste buds his recipe satisfies at first bite, in the end it produces only uninteresting junk food that's hazardous to human health.

Sincerely,
Donald J. Boudreaux

Of course, the good Colonel never forced anyone to eat his deep-fried delicacies.

Butt Out

Here's a letter that I sent yesterday to the New York Times:

Senator Arlen Specter imagines that it is his and his fellow maharajahs' duty to investigate why the National Football League destroyed the Patriots' tapes of the Jets ("Goodell Defends Handling of Patriots' Spying Case," February 2).

If I were NFL Commissioner Roger Goodell, I would respond to Sen. Specter's threat to call a Senate committee hearing to investigate this matter by saying only "Dear Sen. Specter:  The rule that the Patriots violated is one that the NFL, not Congress, created.  We are a private organization quite capable of enforcing our own rules.  So butt out; this matter is none of your damn business.  Sincerely...."

Sincerely,
Donald J. Boudreaux

The Wonky Genius

Bill Clinton is considered a policy wonk, the guy who really understands the details of public policy. Here he is on the stump giving his insights into global warming and energy policy. My favorite parts are the unnamed countries that have created growth and reduced inequality by pursuing green energy  policies and the millions and millions of jobs Hillary will create by going green. Millions and millions! I also like the swipe at China and India and Brazil et al implying that they don't care about their grandchildren. Enjoy.

"Everybody knows that global warming is real," Mr. Clinton said, giving a shout-out to Al Gore's Nobel Peace Prize, "but we cannot solve it alone."

"And maybe America, and Europe, and Japan, and Canada -- the rich counties -- would say, 'OK, we just have to slow down our economy and cut back our greenhouse gas emissions 'cause we have to save the planet for our grandchildren.' We could do that.

"But if we did that, you know as well as I do, China and India and Indonesia and Vietnam and Mexico and Brazil and the Ukraine, and all the other countries will never agree to stay poor to save the planet for our grandchildren. The only way we can do this is if we get back in the world's fight against global warming and prove it is good economics that we will create more jobs to build a sustainable economy that saves the planet for our children and grandchildren. It is the only way it will work.

"And guess what? The only places in the world today in rich countries where you have rising wages and declining inequality are places that have generated more jobs than rich countries because they made a commitment we didn't. They got serious about a clean, efficient, green, independent energy future… If you want that in America, if you want the millions of jobs that will come from it, if you would like to see a new energy trust fund to finance solar energy and wind energy and biomass and responsible bio-fuels and electric hybrid plug-in vehicles that will soon get 100 miles a gallon, if you want every facility in this country to be made maximally energy efficient that will create millions and millions and millions of jobs, vote for her. She'll give it to you. She's got the right energy plan."

Nature of the Politician

Here's a letter that I sent this morning to the New York Times:

To the Editor:

The headline you give to today's eight letters discussing this year's presidential campaign is "The Tug of War for America's Heart" (Letters, January 29).

Behind all the soaring (if vacuous) rhetoric, all the shamelessly Janus-faced pandering, and all the sleazy campaign tactics lies one motive: each candidate's lust for power, fame, and the tawdry glory that comes with high political office.  Make no mistake: while pretending to tug for my heart, these candidates really are tugging for my freedoms and my wallet.

Sincerely,
Donald J. Boudreaux

Worstall on Bureaucratic Actions

Here's a letter that I sent yesterday to the Wall Street Journal:

Arthur Brooks reports on research showing that "political intolerance in America ... is to be found more on the left than it is on the right" ("Liberal Hatemongers," January 17).  I'm not surprised.  "The right," after all, includes many persons who are liberal in the original sense.  These persons distrust centralized power and celebrate markets and free trade as liberating humankind from poverty, tyranny, and superstition.  True liberals do not fancy themselves fit to tell others what to ingest, what not to smoke, what merchants to patronize, what insurance to buy, or otherwise how to live.

True liberals understand that society is indescribably complex and that our knowledge is always tentative.  In contrast, too many of today's "liberals" - overestimating their own intelligence and underestimating both the intelligence of others and the dangers of government power - egotistically yearn to remake society according to their own images.

Sincerely,
Donald J. Boudreaux

Lending evidence to the hypothesis that today's so-called "liberals" overestimate their own intelligence, the insightful Tim Worstall over at the Globalization Institute's site has this important post on -- oh my! -- a big bureaucratic blunder.  Turns out that government bureaucrats are human after all.

Misbehaving Amazon? Or Misbehaving State?

In his 2002 book Creative Destruction, Tyler Cowen explains "How Globalization is Changing the World's Cultures" -- for the better.

The government of France, however, seems to be intent on slowing this process of improvement for its citizens.  Check out this post by Nate Anderson over at Ars Technica (HT Konstantin Medvedovsky):

Did you hear the one about Amazon? It offered free shipping in France, got sued for it by the French Booksellers' Union, and lost. Now it's choosing to pay €1,000 a day rather than follow the court's order. Ba-da-bing!

No, it's not funny, but that's because it's not a joke. The Tribunal de Grande Instance (a French appeals court) in Versailles ruled back in December that Amazon was violating the country's 1981 Lang law with its free shipping offer. That law forbids booksellers from offering discounts of more than 5 percent off the list price, and Amazon was found to be exceeding that discount when the free shipping was factored in.

Thwarting the ability of ordinary French citizens to get good deals on books makes books more difficult for French citizens to get.  France's cultural richness is less than it would otherwise be.

Some commentors to this post take issue with identifying firms protected by the government from competition as disreputable.  I'm in the camp whose members - finding nothing especially magical, glorious, magnanimous, informed, or trustworthy about the state or political actions - hold that hiring the state to forcibly stop people from patronizing competitors at mutually agreeable prices is no different morally than hiring a street gang or your brother-in-law to do the same.

On the job leisure

Many of us have jobs that allow us to take our leisure on the job throughout the day and at our own discretion. We're not on an assembly line. We don't punch a clock. We don't have scheduled coffee breaks. We can surf the web or call home or take a doctor's appointment. This is a fundamental improvement in the quality of life, though it's partially offset for many of us who work from home at all hours to make up for the time we spent checking out the latest news on the Red Sox.

Then there are the really privileged, the people whose jobs allow them to take months off from their jobs pursuing their own interests and hobbies. These people are so special that no one seems to complain when they spend so little time at their jobs. These people are called U.S. Senators. A number of them are running for President, a 100 plus hour-a-week hobby that leaves little time for anything else.

How can the poor citizens from Arizona, New York, and Illinois (to pick a few prominent examples) get by with being so poorly represented in the Senate? Maybe this representation thing is overrated. Or at least the Senate thing.