Is the recession over yet? – II

“What is the use of living, if it be not to strive for noble causes and to make this muddled world a better place for those who will live in it after we are gone?” — Winston Churchill

Statisticians say the recession ended mid-2009, four and a half years ago. But what do you think? Does it feel like the recession ended or does it feel like we are still in a recession? In a recent poll, 74% said we are still in a recession.

It’s no wonder most people feel that the recession never ended. Employment is miserable. GDP growth is pathetic. Median family income is down for four straight years. Almost 50 million Americans live below the federal poverty line. A record 47 million people are on food stamps. One pundit declared that “More people in the United States are poor, unemployed, underemployed, looking for work, disgusted and quit looking for work, on food stamps, and on disability than anytime in our history.”

If those words look familiar it is because I first wrote them three months ago. In that column, the focus was on the worst employment picture in more than 30 years. Three recent pieces of economic news make this a good time to look more broadly at the economy.

1) On April 22, the New York Times reported that the U.S. no longer has the highest Median Family Income in the world. Canada is now #1.
2) April 30, the headline news was that in the first quarter of 2014, the U.S. economy grew at an almost non-existent rate of 0.1%.
3) That same day other headlines stated that China would soon pass the U.S. as the world’s largest economy.

Our economy stinks and we will have more such headlines if we don’t fix it. So, how do we fix it? The first step is to replace all the politicians who don’t even realize there is a problem, who do the same wrong things year after year expecting different results.

For decades, probably for more than a century, the U.S. has had the richest middle class in the world. Not just the richest middle class, but also the richest lower class, the richest upper class, and even the richest poor people. Those in the bottom 10% were much better off than the bottom 10% in any other country.

U.S. median family income is now down for five years in a row. In Canada, median family income is up for four of the last five years. Is it pure coincidence that Canada has been governed by Conservatives in recent years, the U.S. by Progressives?

The Index of Economic Freedom is an annual scoring of some 180 nations by ten measures of economic freedom. As the Index states, “The ideals of economic freedom are strongly associated with healthier societies, cleaner environments, greater per capita wealth, human development, democracy, and poverty elimination.”

The U.S. was rated economically “free” in 2006. Since then, its freedom score has dropped 6 points, it has fallen out of the top 10 to now #12 and is ranked only “mostly free”. The U.S. has lost economic freedom for seven years in a row, particularly in the areas of property rights, and freedom from corruption.

Conversely, Canada has increased its freedom score by more than 10 points over the last 20 years. It is currently ranked #6, and is rated “free”.

Hmm, is there a pattern here? The U.S. loses economic freedom seven years in a row and median family income goes down for five years in a row. Canada increases its economic freedom and median family income goes up four of the last five years. It now has the world’s highest median family income.

GDP growth in this so-called “recovery” has been pathetic. For four years it has been around 1.5% to 2%. That is the slowest by far of all the recoveries in 65 years. The Federal Reserve Bank of Minneapolis has a nice interactive chart of all postwar recoveries. The current recovery amounts to merely an 11.1% increase in GDP over the almost five years since the recovery began. Many of the previous recoveries had double or almost triple that growth. This recovery is barely half the average of the ten previous recoveries.

Imagine if we had had as much as average growth in the last five years. Investor’s Business Daily estimates that we would now have $1.3 trillion higher income. That is about $10,000 higher per household. That is the cost of bad economic policies.

Apologists for the Obama “recovery” say that the recession was especially severe. Historically, the more severe the recession, the stronger the recovery. It should have been easy to produce better than average numbers. They now say that financial recessions take longer to recover. But that’s not what they said back in 2009 and into 2010. Back then they forecast a strong recovery. It was only after their economic plans failed that they started spouting the “financial recession” excuse.

The Democrat Party would be wise to heed the words of one of its Presidential candidates from some 20 years ago, the late Senator Paul Tsongas, who said, “You cannot redistribute wealth that you never created. You cannot be pro-jobs and anti-business at the same time. You cannot love employment and hate employers.”

Did we win the war?

Always do right. This will gratify some people and astonish the rest. — Mark Twain

This year is the 50th anniversary of the War on Poverty (WOP). In January 1964, during his State of the Union speech, President Lyndon Johnson declared a “War on Poverty”. “Our aim is not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.” In August of that year, Johnson signed the Economic Opportunity Act of 1964, which stated that it was the policy of the United States to eliminate poverty. “The United States can achieve its full economic and social potential as a nation only if every individual has the opportunity to contribute to the full extent of his capabilities and to participate in the workings of our society.”

Even before the WOP, poverty rates were falling steadily. From 1940 to 1960 the poverty rate for black families dropped from 87% to 47%, then in the 60s it dropped another 17%. In 1950 the overall poverty rate was 30%. By 1956 that had dropped to 25%. By the time of LBJ’s announcement the rate had dropped to 19%.

A few years after the WOP legislation was passed, poverty dropped to 12%. Supporters cheered that the law was working, but how much of that drop was due to the new law and how much was a continuation of a long-term trend going back to the 1940s and 50s?

Since then, now amounting to some 45 years, the poverty rate has bounced up and down between 12% and 15%. The average for the last two decades is higher than when LBJ left office. For the first time in about 50 years, the poverty rate is 15% for three years in a row. A record high 50 million Americans live in poverty. 

We can do better. We should do better.

What we have been doing for most of 50 years has not worked. The War on Poverty has not achieved its stated goals: it has not cured, prevented, or eliminated poverty. The goals were laudable but we should judge the law by its results, not its goals. The result after 50 years is an increase in poverty, not a decrease. People are trapped in poverty, not freed from it.

LBJ’s goal was to help people become prosperous and self-sufficient. Instead, people have become dependent on government, surviving from one benefit check to the next. The Act stated as a goal that “every individual has the opportunity to contribute to the full extent of his capabilities.” 50 million Americans are not contributing; the programs’ perverse incentives punish people who try to work.

Some say the WOP has been a success as measured by the great number of people receiving assistance. Wouldn’t it be better – better for poor people themselves – to measure success by the number of people who have been lifted out of poverty and no longer need assistance?

We all know Einstein’s definition of insanity: “doing the same thing over and over again and expecting different results.” For most of 50 years we have been doing the same thing year after year and the result has been to trap more and more people in poverty.

The myriad of welfare programs reward people for being poor and penalize those who try to move out of poverty and up the income ladder. Someone who works harder, takes a second job, learns more skills, might earn $10,000 more but lose $15,000 of benefits. Hence, many say “I can’t afford to take that job. I’d lose my benefits!” With perverse incentives like these, it is no wonder that we have more people in poverty and fewer people making the effort to better themselves.

New York Times’ columnist Nicholas Kristof recognized the problem: “This is painful for a liberal to admit, but conservatives have a point when they suggest that America’s safety net can sometimes entangle people in a soul-crushing dependency. Our poverty programs do rescue many people, but other times they backfire.”

As a caring society we want to help the vulnerable. But do we want to trap them into a lifetime of dependency on government, where they are punished for trying to better themselves? Is it good for society to have millions of people unable to contribute their skills and energy? Is it good for the recipients themselves to live in poverty their entire lives with no hope of ever becoming self-sufficient and moving upward? 

For Kristof, “a tentative lesson from the field is that while we need safety nets, the focus should be instead on creating opportunity — and, still more difficult, on creating an environment that leads people to seize opportunities.”

Our social safety net all too often acts as a trap net. It traps people at the edge of poverty and prevents them from moving up the ladder of success. A true safety net is rarely used. People create opportunities to reach their work site above the safety net. In the unlucky event that they fall to the net, they climb back up and continue their work.

Let’s think more about creating ladders or stairways or ramps to help people escape poverty and reach for their dreams and less about nets that support them and trap them at the edge of poverty with no hope of rising higher.

Poll: jobs, economy, government most important problems

From Gallup:

Three issues — jobs, economy, and government — have been at the top of the “most important problem” list since the beginning of the year.

gixuowzlek6ufxz_x3go_a

Americans are about equally likely to name unemployment and dissatisfaction with government as the most important problems facing the U.S., with the economy in general following closely behind. These issues have ranked at the top of the most important problem list since the beginning of 2014.

Nearly one in five Americans still cite government itself as the nation’s top problem.

Independents name as their top four problems:
  • Dissatisfaction with government
  • Jobs
  • Economy in general
  • Poor healthcare

See the full poll here.

What Is Seen and What Is Not Seen

“Suppose you were an idiot, and suppose you were a member of Congress; but I repeat myself.” — Mark Twain

The great French economist Frederic Bastiat observed that “In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

“There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.”

The same is true in the sphere of public policy. The bad economist or the thoughtless politician (but I repeat myself) sees only the direct effect of a law; he doesn’t foresee the indirect effects. In many cases the politician may consider only the short-term effects that might help him win the next election; he may not consider at all the long-term effects.

Bastiat noted that “it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa.” So when a politician urges a great new solution to some problem – or typically, the same old ineffective solution to a problem – the long-term result very often is more harm than good.

One such example was alcohol Prohibition almost 100 years ago. The problem of alcohol may have been bad, but Prohibition made the problem much worse, to the point that Prohibition was later repealed. Another example was a luxury tax on yachts to “soak the rich”. Even a mediocre economist or a slightly thoughtful politician could have foreseen the disaster it turned out to be. The tax collected virtually nothing from the rich but did send many blue collar boat builders to the unemployment line. Two years later Congress repealed the law.

With the greatest intentions of reducing poverty, politicians have enacted policies that, in the short-term, help people survive one month until the next government check, but the unseen long-term effect is to trap people in poverty, sometimes for generations. If we truly care about helping people – and I think most of us do – then wouldn’t it be better to find long-term solutions that help people escape poverty?

As long ago as the 1980s, better economists and more thoughtful politicians saw the indirect effects of the welfare system – it “fostered a permanent underclass dependent on government handouts.” In 1996, a Republican Congress and Democrat President Clinton passed welfare reform with the goal of reducing the dependency trap and helping people escape poverty. Ten years later, The New Republic, a liberal magazine, looked back and editorialized that the reform “worked much as its designers had hoped [foreseen].” Since then, less thoughtful politicians seeing only the easily visible effects of welfare, and not seeing the long-term consequences, have undone most of the successful reform.

Our disability system likewise helps disabled people survive month-to-month but traps them in poverty. Wouldn’t it be better to find long-term solutions, using some amazing modern technology to help them overcome their disabilities, become productive, and no longer trapped in poverty?

Some short-sighted politicians want to extend the length of unemployment benefits beyond 26 months, but the long-term effect can be permanent unemployment. Studies have found that someone unemployed for more than six months has very little chance of ever getting a job.

Other bad economists and thoughtless politicians suggest raising the minimum wage. The immediate effect would be to slightly raise the pay for a small number of people – but cause others to lose their jobs. The long-term consequence would be to destroy many more entry-level jobs, making it harder and harder for teenagers to enter the work force.

When was the last time you saw a full-service gas station? That used to be a good first job for many young kids. Washing dishes was another good first job. Kids learned the self-discipline of showing up on time every time. While on the job they often picked up skills from the auto mechanics or cooks around them. But as the minimum wage rose, machines replaced those jobs. If it continues to rise, we will see machines taking orders for fast food, flipping burgers, and delivering the goods. The long-term effect of raising the minimum wage is disastrous for millions of young people.

Some politicians saw ObamaCare as a good idea; they did not foresee the terrible consequences. Today, some people think we will see good effects if we adopt the ObamaCare expansion of Medicaid. Not only do they fail to see the indirect, long-term terrible effects, they don’t even see the bad effects that have already occurred elsewhere. To put it simply, Medicaid is an inefficient, incredibly expensive program that provides even worse health outcomes than for people who are uninsured. Expanding it would cost even more than now predicted and would lead to much higher taxes.

To achieve better results – better economy, more good jobs, higher pay, less poverty, lower cost health care – we need to see not just the immediate effects of a policy, but to foresee the long-term effects.

Our Status Quo Governor

Manchester, NH – Gubernatorial Candidate Andrew Hemingway released the following statement in response to Governor Maggie Hassan’s State of the State Address:

“Governor Hassan successfully spoke for nearly an hour without mentioning one accomplishment of her administration. Using the words “solution and innovative” repeatedly does not unto itself mean you have achieved or even proposed an innovative solution. The people of New Hampshire are smarter than that.

“Governor Hassan gave a lot of lip service to the business community, yet every policy she proposed would harm the very community she is praising. Study after study has proven that a hike to the minimum wage harms exactly the people it is trying to help. Increasing the minimum wage causes jobs loss, it drives more people to welfare, it drives up state budgets and raises the cost of doing business. The people harmed the most? Minorities and women.”

“Where exactly are her solutions? She failed to even mention the serious problem with our healthcare situation here in New Hampshire, even though it is arguably one of the largest concerns of our citizens. 22,000 people were kicked off their insurance thanks to Hassan-supported Obamacare; 12 hospitals were removed from the network for anyone on the Exchange, or anyone with individual insurance from Anthem; Anthem is the ONLY provider approved for the Exchange. Where is her plan to bring more insurance providers into the state?”

“On education, Governor Hassan praised Common Core. This bureaucratic mess lowers existing state standards and replaces parents with bureaucrats. Common Core is not right for NH. We have increased our spending on education by over a billion dollars in the past decade; our enrollment is down and our education has not improved. Governor Hassan believes differently than me. She thinks more government control is the solution to everything, I think individual freedom is.”

“We very much are in need of certain transportation improvements for our roads and bridges. I agree with the Governor there. But she failed to tell us how we can pay for that. Just as she failed to tell us how we can pay for her expanded natural gas pipeline, or extending broadband internet. A good idea is only a good idea if you tell us how to make that idea a reality. Governor Hassan didn’t do that.

“Our Governor says absolutely nothing. She maintains the status quo, because as her record has shown, she has no solutions. This ‘do nothing’ leadership is doing nothing to improve things for students, patients or workers.” –Andrew Hemingway, Candidate for NH Governor

Great article by Rand Paul

One of Rand Paul’s strengths is that he connects well with his audiences. This article is addressed to college students but has a good message for all of us.

The federal government now attempts to micromanage American life at practically every level.

The government tells you what kind of lightbulbs you can buy, what kind of toilet can be in your home, how much water can come out of your showerhead. Privacy is seemingly an antiquated notion, with government snoops able to access third-party records, such as phone records, e-mails, financial records, and pretty much any other personal information they want, without a judge’s warrant.
:
America has drifted away from the constitutional principles of limited government, separation of powers, and individual liberty.
:
We need to do a better job of communicating why big government is the problem—why it is bad for the economy, freedom, and a restrained, yet strong, foreign policy.
:
conservative solutions are tangible too. We’re not just saying no to more government. Our proposals will lead the way to more prosperity, more stable families, political decisions made at the local level, a dollar that holds up in a global marketplace, an education system that puts students and parents first, a vibrant culture supported by religious institutions, and opportunities for young people like you to grow and lead America into a renewed age of freedom.
:
Our political opponents and the media like to portray conservatives as unconcerned about the poor, senior citizens, and minorities. Nothing could be further from the truth. But we need to do a better job of communicating the promise of conservatism, not simply the failures of liberalism. We advocate not for special privileges for “the rich” but rather for a flourishing economy that lifts everyone up, creating millions of jobs and lessening the burden of taxes and government regulation.

We need to shout to anyone who will listen, “More freedom and less government means more jobs, more wealth, and a better life for everyone.” Despite the trillions of taxpayer dollars spent on bailouts and “stimulus” plans over the past several years, the economy hasn’t fully recovered from the Great Recession.

One in six Americans lives in poverty, more than at any other time in the past several decades. This is unacceptable.
:
Decentralization of power is the best policy. Government is more efficient, more just, and more personal when it is smaller and more local. By decentralizing government, we strengthen communities, allowing people to depend on and care for one another, rather than on some distant, incompetent bureaucracy masquerading as defender of the common good. This is a message we need to do a better job communicating.

Read the whole thing.

Poll: Record high number oppose ObamaCare

A record high number of registered voters (59%) oppose ObamaCare and a record low number (36%) favor it. Interestingly, the increase in opposition comes from Democrats and independents. 30% of Democrats, up from 22%, oppose the law. Among independents, 64% (up from 53%) oppose it.

Some apparent reasons for opposition to the law include the fact that majorities think the new law will increase their taxes (63 percent), increase their insurance costs (62 percent) and increase the federal deficit (56 percent).

Meanwhile, just one voter in five thinks Obamacare will increase the quality of their health care (19 percent).  More than twice as many expect the quality of their care to get worse (39 percent) and another 37 percent think it will stay the same.

  • By 42%-27% voters think that Obama’s policies have hurt, not helped, the economy
  • A whopping 74% feel as if the country is still in a recession
  • By 55%-30% they think cutting taxes and reducing regulations would help the economy
  • 55% vs 37% think that long-term unemployment benefits discourage people from trying to find work
  • A majority (52%) think the government should provide unemployment benefits for at most one year

This couldn’t happen here, right? RIGHT?

Every so often I come across a story about a horrendous abuse of power by police. I say to myself, “I hope that couldn’t happen in NH.” The following happened in New Mexico, but I would like to think it could never happen anywhere in the United States.

A man was stopped for not coming to a complete stop when exiting a parking lot. An officer thought the man was clenching his buttocks and decided that was probable cause to search for drugs. On that flimsy evidence the police obtained a search warrant that allowed for an anal cavity search. They took him to a hospital for an x-ray, which showed no trace of hidden drugs. That is when it got worse:

  • Doctors at that hospital refused to perform an anal search, saying it would be unethical, so police took the man to a hospital in a different county – where the search warrant was invalid.
  • Doctors at the second hospital did the anal search and found nothing.
  • They then gave him an enema, searched the stool and found nothing.
  • Then a second enema and even a third enema – nothing
  • Another x-ray – nothing
  • They then prepped him for surgery, sedated him, and did a colonoscopy. Again, nothing was found.

All this without any consent of their “patient”.

If police can arrest someone just for the way they appear to be standing, and if doctors can perform medical procedures without any consent, then we live in a police state.

Not surprisingly, the man sued the city, the individual police officers, the hospital, and the doctors. The city settled for $1.6 million; the hospital has not yet settled. The settlement and national outrage over this incident may prevent a recurrence; that’s the good news.

The bad news is that it is the taxpayers who end up paying the bill. Whenever the government settles a case for their officers’ outrageous behavior, it is the taxpayers who suffer. It ought to be the wrongdoers who are punished.

Washington Waste – dumb uses of taxpayer money

Sen. Tom Coburn (R-Ok.) has again issued his annual “Wastebook”  containing 100 of the dumbest uses of taxpayers’ money:

  • the National Endowment for the Humanities devoted almost $1 million to the Popular Romance Project to “explore the fascinating, often contradictory origins and influences of popular romance as told in novels, films, comics, advice books, songs, and internet fan fiction, taking a global perspective—while looking back across time as far as the ancient Greeks.”
  • The National Science Foundation spent a quarter of a million dollars to study “attitudes toward the Senate filibuster among the American public.”
  • The Army spent nearly $300 million on a blimp for surveillance in Afghanistan—only to drop the project after its inaugural U.S. flight, selling the airship back to its maker for $301,000.
  • The International Trade Association devoted nearly $300,000 to send Indi Rock music executives on a tour to Brazil.
  • The National Institutes for Health dropped $335,525 on a study which determined that “marriages that were the happiest were the ones in which the wives were able to calm down quickly during marital conflict.”
  • The $1.9 million Senate Office of Education and Training provides classes for staffers on such subjects as sleeping well and making small talk.
  • The National Endowment for the Arts used $10,000 to underwrite the PowerUP Project, which featured choreographed (utility) pole dancing.
  • Housing and Urban Development used $1.2 million to create an apartment designed for the deaf in Tempe, Arizona, only to then decide that three-quarters of the residences should be occupied by people with normal hearing.
  • The Agriculture Department gave an Oklahoma winery $200,000 to purchase new equipment.
  • The Institute of Museum and Library Services gave a New York museum $150,000 to create an exhibit on play.
  • NSF spent $2.9 million to create sites “where arts and science will be used to educate the public about Indianapolis’s water system.”
  • The Commerce Department provided Las Vegas with $800,000 to think about economic development.
  • The U.S. Marshals Service dropped nearly $800,000 on promotional “swag,” including Christmas ornaments.

Millennials Are Tiring of Liberal Failures

National Review predicts that 2014 will be “the year that a majority of millennials become disillusioned with their allegiance to today’s liberal movement and look elsewhere for political relevance.”

A poll by Harvard University’s Institute of Politics found strong majorities – nearly 2:1 – opposing Obama’s handling of the economy, health care, and the federal deficit. “A majority of Americans under age 25–the youngest millennials–would favor throwing Obama out of office.”

The Pajama Boy ObamaCare ads did not go over well with millennials.

The real Pajama Boy has a 50 percent chance of being unemployed or underemployed, on average is laden with thousands of dollars of student-loan debt, and is increasingly likely to still live at home with his parents.

Millennials “realize that a government that can’t design a website can’t be expected to manage the intricacies of the entire health-care industry. In the wake of the news that the NSA collects mountains of metadata, they also fret that the government that wants you to talk about health care could (with a warrant) listen in on that very conversation.”

Other data suggest that millennials share conservative views of government:

  • 51% believe that when government runs something, it is usually wasteful and inefficient
  • 86% support private Social Security accounts
  • 74% would change Medicare so people can buy private insurance
  • 63% support free trade
  • only 38% support affirmative action

Here is the opening for conservatives to win back millennials. “Conservatives must offer positive, uplifting solutions that emphasize upward mobility, opportunity, and personal liberty through education, job creation, and reforming the over-intrusive federal government.”

Government knows best

“It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.” — Thomas Sowell

Are you smart enough to make your own decisions or do you need the government to make decisions for you? Our governments – federal, state, and local – more and more think that you are not smart enough so they make decisions for you.

Imagine that you have lived in your house for 20 years. For you and your husband that house is perfect; you love it just the way it is. Then tragedy strikes and it burns down. Fortunately, you have insurance and you quickly decide to rebuild it precisely as before.

Then the government says “Nope, we won’t let you rebuild it as it was. Your ceilings were too low; you must raise the ceilings and roof.” No matter that you lived with those ceilings for umpteen years and they were just fine for you, government knows best and you’ll have to make the ceilings higher.

Later, the government tells you that you must install more outside faucets. Personally, I have never lived in a house that had more than two faucets outside. Most had just one. Now government says “We won’t let you live in your own house unless you have three outside faucets. Oh, and while you are at it make sure you have outside electrical outlets on three sides.”

You grumble and curse but you do what government decides is good for you, and finally your house is finished and ready for you to move in. “Not yet!” says the government, “Your water heater is 30 gallons; you should have at least a 40 gallon tank.” But you reply, “30 is plenty for us. That’s all we ever had.” Doesn’t matter, the inspector says. Someday you might sell the house and the next family might want a larger heater. Well, they can install a larger water heater, you reply. Finally you give in and replace the perfectly good water heater with a slightly larger one just to get the government off your back.

The above happened to a friend of mine. She is still seething that she and her husband do not have the right to choose what is right for themselves, that the government makes those choices for them.

Many government agencies treat citizens as if they are children incapable of making good decisions themselves. The Department of Energy (DOE) justified recent regulations on the basis that consumers needed to be protected from their own “irrational” choices. The DOE determined that 79% of the benefit of the new regulations was “correcting irrational consumer behavior” while only 3% of the benefits was reducing CO2 emissions.

Federal agents raided an Amish farm at 5 a.m. for the crime of selling raw milk to people who wanted to buy raw milk. I have never tried raw milk, but many say that it tastes better and is much healthier. If adults decide to drink it, should their decisions be blocked by armed federal regulators?

A Pennsylvania city spent $2 million renovating its ballpark. The teams were about to play, fans were about to enter the stadium when a government inspector refused to allow it to open because the “mirrors in the men’s room were a quarter-inch too low.” A speech in Congress complaining about such micro-regulating received a very rare standing ovation.

A magician was told that he needed a federal “animal exhibitor’s” license to display his one bunny rabbit. Later he was ordered to write a disaster plan to save the rabbit from “Fire. Flood. Tornado. Air conditioning going out. Ice storm. Power failures”, etc.

Some towns have regulations about how tall your grass can be. In Georgia, a “Code Compliance Officer” entered a woman’s house, located her bedroom, and woke her up to give her a ticket for her front lawn being too long. Lest you think that is urban legend, it is a true story and it indicates how full of self-importance some of these regulators are.

Around the country, kids selling lemonade or girl scout cookies on their own land suddenly find police officers telling them to cease and desist because they are violating some regulation. One enterprising teenager saved up his money to buy a hot dog stand. He and his parents thought they had followed all the regulations, obtained all necessary permits, but he was shut down for operating too close to a restaurant. It had nothing at all to do with safety, and everything to do with restaurant owners not wanting competition.

In some states only a licensed funeral director could sell a casket. It had nothing to do with safety – the casket sellers were not handling any bodies. The funeral directors wanted a monopoly so they could keep their prices high.

Should you have the right to choose an interior designer, floral arranger, or hair-braider or should government make that decision for you?

How about a compromise? Let the government issue all the licenses and regulations it thinks are good for you. But let them be advisory, not mandatory. If you trust only a licensed floral arranger then so be it. But if you choose to hire an unlicensed interior decorator or floral arranger let the government not interfere.

LTE: Free people in a free society

Re “On insurance, easiest choice may not be best” (Monitor Forum, Dec. 12):

Lisa Kaplan Howe informs us that people “were allowed to keep” old insurance policies. But this turns on its head the relationship between a people and their government.

Free people in a free society aren’t allowed to keep things – it is their inherent right to keep what they think is best for themselves. The question should not be what the government allows people to do; it should be what the people allow their government to do.

Should a woman have the right to choose what insurance is right for her, or should government make that choice for her? Obamacare interferes with a woman’s right to choose her insurance; now many women have lost their choice of doctors.

Howe warns us that we “may be paying more than you need to.” Does she not know that the new Obamacare policies have much higher premiums and higher deductibles? She tells us that “assisters won’t keep any of your personal information.” Is she unaware that the assisters (navigators) have not had background checks and that some of them could be felons? Has she not heard of all the security flaws in the website that make it easy for hackers to obtain private information? Obamacare has proven to be a disaster. The solution is more freedom of choice. Let people decide what is best for themselves, not what the government will “allow” them to have.

(Published in Concord Monitor, Dec. 19. I like that the Monitor added emphasis as seen above.)

Americans prefer the pre-ObamaCare health care system

Some interesting results from a Reason-Rupe poll:

  • 55 percent of Americans say they prefer the old pre-ObamaCare health care system, while 34 percent prefer the new health care system.
  • 70 percent of Americans oppose making young people pay more for health care to help fund health care for older or less healthy Americans.
  • 57 percent believe lower cost health care plans that provide fewer benefits than required by the Affordable Care Act should be allowed.
  • 54 percent of those surveyed feel government is generally a “burdensome part of society that impedes the ability of people to improve their lives,” while 41 percent feel “government is primarily a source of good and helps people improve their lives.”

Many more poll questions and responses here.

We are a caring and generous society

“The history of recent decades has involved replacing what worked with what sounded good.” — Thomas Sowell

According to an old story, a small town in Italy was having a problem with vipers. So the town council established a “viper bounty” to pay people for bringing in dead vipers. The result was that people started breeding vipers in their basements.

This illustrates one of the basic laws of economics: People respond to incentives. They do more of something when the reward increases; they do less of something when the penalty or cost increases.

Much of our public policy suffers from a failure to understand the basics of human behavior. Politicians perceive a problem, rush to pass a law that sounds good, pat themselves on the back, then go on to the next problem. They rarely look back to examine whether their “solution” actually fixed the problem or made it worse. If the program doesn’t work, their answer always is that it needs more money. They never admit that they were wrong.

Consider our many programs to help the poor and vulnerable. We are a caring and generous society. We donate hundreds of billions of dollars and countless millions of hours of our time to helping others. Caring for the vulnerable attracts almost universal support. But good intentions don’t automatically produce good policies.

Shouldn’t the goal of our anti-poverty programs be to help people move up out of poverty? Most if not all of the programs don’t even try to reduce poverty. Instead, they simply hand out money so the poor will be a little less destitute. Those unfortunate people remain in or near poverty, dependent on government sometimes for their entire lives – and their children’s lives.

To paraphrase Winston Churchill: “They want to give you a line where you can wait for a handout… I want to offer you a ladder so you can reach for your dreams.” Democrats measure success by how many people receive assistance. Republicans measure success by how many people no longer need assistance.

The myriad of welfare programs reward people for being poor and penalize those who try to move out of poverty and up the income ladder. Someone who works harder, takes a second job, learns more skills, might earn $10,000 more but lose $15,000 of benefits. Hence, many say “I can’t afford to take that job. I’d lose my benefits!” With perverse incentives like these it is no wonder that we have more people in poverty and fewer people making the effort to better themselves.

New York Times columnist Nicholas Kristof recognized the problem: “This is painful for a liberal to admit, but conservatives have a point when they suggest that America’s safety net can sometimes entangle people in a soul-crushing dependency. Our poverty programs do rescue many people, but other times they backfire.”

Democrats like to claim that they are for the poor, that Republicans are for the rich. The truth is that we Republicans are for all people to have the opportunity to become rich. The Democrats are for policies that keep people poor. If they really cared for the poor, they would fix a system that traps people in poverty. They would reward, not penalize, people who try to better themselves and escape poverty.

Bad policies are condemning people to lifelong poverty, trapping them there, and killing all hope of a better life.

Three simple rules will keep most people out of poverty: “finish high school, get a full-time job, and wait until age 21 to get married and have children.” Follow all three rules and you have just a 2% chance of falling into poverty. Break all three rules and your chance of winding up in poverty is 76%. Tragically, government policies create incentives to break all three rules.

Welfare programs pay more to a teenage girl who has children, and pay less if she gets married, thus violating the third rule. ObamaCare provides a terrible incentive for businesses to limit employees to part-time work. This year 96% of all new jobs are part-time jobs, making it very hard to follow the second rule.

But the worst incentive of all is the government school system in too many parts of the country. In the inner cities the school systems are so bad that half the children drop out before they graduate and half those who do graduate are functionally illiterate. They will never get a decent job or a shot at the American dream.

The politicians and even the teachers know that the schools are terrible. That is why they send their own kids to private or parochial schools. Parents cry out for voucher programs that would let them send their kids to the same good schools that the politicians and teachers use for their kids. But the politicians and teachers care more about teachers’ jobs than they care about the kids whose lives they are destroying.

Did I mention which party runs all of these cities, has held the mayoralties, the city councils, the school boards for more than fifty years? Democrats run the welfare and school systems; they have created the policies that ruin the lives of the recipients of their handouts. And these are the people who say they care for the poor. They like the poor so much that they want more of them.

Poll: America’s best days are in the past

More than half (52%) of likely voters think the nation’s best days are in the past. Only 31% think the best days lie still ahead. — Rasmussen Reports

It is understandable that so many people think that. But they are wrong. The economy does stink. We are in the worst, most prolonged recovery in 70 years. Unemployment is awful. Millions of people have given up even looking for a job. Median family income is down. Debt is up. Growth is down.

But these bad things don’t just happen. They are the result of bad policies from politicians who do not understand the Law of Unintended Consequences, who do not understand that good intentions are not the same as good results.

The right policies can put us back on the right track to growth and prosperity. Most people think the country is headed the wrong direction. We need to elect politicians who agree with us, who know that we are on the wrong track and that we need to change direction. 

 

Students – and adults – don’t know history

In 2010, students performed worse on [history] than on any other NAEP test. That year, less than half of eighth-graders knew the purpose of the Bill of Rights, and only 1 in 10 could pick a definition of the system of checks and balance on the civics exam.
Some students do learn civics. But many have not. One history teacher reported that his students thought “they probably knew more about the Constitution and our government than most adults.” So he challenged them to question many of the adults they knew. The kids were right – most adults had not learned their civics.
80% of the adults they surveyed couldn’t name all 10 Amendments in the Bill of Rights, or what each Amendment did. 50% of that group, didn’t know there were 10 Amendments in the Bill of Rights. 92% of the adults surveyed couldn’t name the three branches of government, and didn’t know that the term “Congress” included both the House of Representatives and the Senate. The largest eye-opener… 97% of the adults had know idea what each branch’s duties included. They attributed everything (making the laws, raising taxes, sending in the military, etc. ) to the Executive Branch. My kids got a large boost in self-confidence when they were able to tell the surveyed adults that only the Legislative (Congress) Branch can make laws, raise taxes, or send in the military; and that the Judicial Branch only decided if the laws were Constitutional. They had the most fun telling the adults, that the President’s job was to enforce the laws, or as one student put it “So, really the President is basically just like a spokes model for a company, right? , he just advertises the country to the world.”
In order to pass 8th grade US history, every 8th grader has to pass the US Constitution Test (100 multiple choice and two short answer/essay questions) with a 70% or better on the multiple choice section and 70% on the two short answer/essay questions. The test is given the last month of the school year, and students are allowed to take the test three times. The students thought it would be fun to challenge the principal, and have him also take the test. He accepted the challenge. They were not allowed to use notes, books, computers or any informational source other than their own brain.
80% of the class passed on their first attempt, the remaining 20% passed on their second attempt. The principal, (who admitted to ‘cheating’ by using the internet in his office to look up some answers) didn’t pass. His score was only 62% on the multiple choice and he didn’t answer the short answer/essay questions.
This is sad – and dangerous for our country.

The joys of government-run health care

Canadian Rose Oxford needed cataract surgery. The good news is that it would have been free. The bad news is that she may go blind before she finally gets the surgery.

Her October appointment was cancelled because the hospital exceeded its quota of surgeries; it was 200 procedures over budget. She now has a standby date in December, more than two months after her ophthalmologist detected the problem.

 

Government solutions often have disastrous consequences

The problems of Obamacare’s healthcare.gov or the negative consequences of the law should come as no surprise. … Government-program incentives tend to favor interest groups instead of rewarding success or punishing failure. … The health care law was designed to expand health care insurance coverage rather than to improve health outcomes — a choice that benefits the insurance industry without necessarily producing better and more affordable health care.

Those are just a few observations in a recent column by Veronique de Rugy. You probably haven’t heard of her but she is a brilliant scholar at the Mercatus Center. Here’s more:

Obamacare, like Medicare and Medicare Part D, is yet another law that concentrates benefits on older Americans (who are often active voters) at the expense of young and healthy ones (who aren’t as active voters). … government institutions themselves are inherently prone to bad decision-making, often choosing the interest of politically favored groups. … The institutions of government themselves are inherently incapable of performing certain tasks well even when the people in power are smart, compassionate and well-intentioned.

Read the whole thing. It’s short and very readable.

Can you solve this simple puzzle?

A bat and ball cost $1.10.
The bat costs one dollar more than the ball.
How much does the ball cost?

Simple puzzle, right? Well, more than 50% of students at Ivy League colleges got the wrong answer. At other universities the rate of wrong answers was 80%. The lesson of this simple problem is:

many people are overconfident, prone to place too much faith in their intuitions. They apparently find cognitive effort at least mildly unpleasant and avoid it as much as possible.
One of the problems with government is that many of our “leaders” are overconfident, quick to choose a “solution” that they are sure is right for everyone, and are reluctant to do the analytical work to determine whether their answer is even reasonable. Their overconfidence and reliance on intuition inevitably leads to unintended consequences.

Who said and where …

I have little interest in streamlining government or in making it more efficient, for I mean to reduce its size. I do not undertake to promote welfare, for I propose to extend freedom. My aim is not to pass laws, but to repeal them. …I will not attempt to discover whether legislation is “needed” before I have first determined whether it is constitutionally permissible. And if I should later be attacked for neglecting my constituents’ “interests,” I shall reply that I was informed that their main interest is liberty and that in that cause I am doing the very best I can.

 

“unfree nation supervised by an overweening and bloated bureaucracy”

[They] see the uninterrupted forward march of the American left. Entitlement spending never stopped growing. The regulatory state continued to expand. The national debt grew and grew and finally in the Obama years, exploded. They see an American population becoming unrecognizable from the free and self-reliant people they thought they knew. And they see the Republican Party as having utterly failed to stop the drift toward an unfree nation supervised by an overweening and bloated bureaucracy. They are not interested in Republican policies that merely slow the growth of this leviathan. They want to stop it and reverse it. And they want to show their supporters they’ll try anything to bring that about. (my emphasis)

That Brit Hume commentary has it just about right. Too many Republicans, especially in Washington, are content with Big Government as long as they have a hand in running it. The grassroots and, polls show, the American people prefer smaller government:

far more voters continue to favor a smaller government with fewer services than a bigger government that provides more services. — Pew Research Center

 

The Declaration of Dependence

We hold these truths to be self-evident, that all people should be made equal, that they are endowed by their government with certain unalienable Rights, that among these are jobs, healthcare and housing.–That to secure these rights, Governments must rule over the people, deriving their just powers from the consent of the elite, –That whenever the people becomes destructive of these ends, it is the Right of the Elite to alter or to abolish it, and to institute more Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect the power and control of the elite. …We, therefore, the Representatives of the political elite, in faculty lounges, Assembled, appealing to the United Nations for the rectitude of our intentions, do, in the Name, and by Authority of government, solemnly publish and declare, That the American people ought to be governed by the United Nations; that they are Absolved from all Allegiance to the Constitution, and that all political connection between them and the Founding Fathers, is and ought to be totally dissolved; and that as highly-taxed and dependent States, they have full Power to levy taxes, disrupt Peace, contract new departments and agencies, regulate Commerce, and to do all other Acts and Things which the political elite may of right do. And for the support of this Declaration, with a firm reliance on the protection of the establishment media, we mutually demand your Lives, your Fortunes and your sacred Honor.

Via the great Dan Mitchell.