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Posts Tagged ‘Government’

The best way to entrench the worst? Form a union. TSA approves AFGE union.

November 10, 2012 2 comments

When the TSA was first formed in the comparatively innocent times just after September 11, 2001 (yes, you read that right), it was expressly prohibited that the workforce be unionized. Since then, the number of employees has exploded from 16,500 to 62,500. The amount of abuse travelers put up with has risen exponentially, from pat-downs to porno scanners. And the number of terrorists caught by TSA has… Well, that’s still a big, fat zero.

Nonetheless, TSA Administrator John Pistole, who knows which side his bread is buttered on, has allowed the TSA to go forward with an American Federation of Government Employees union contract. And just when you thought the TSA couldn’t get any worse.

While my views on unions are well-known, I think it bears repeating that this can only end in a disaster for both American travel security and Americans’ wallets.

Consider the example of the teachers’ unions. Since 1970, the cost of educating one student from kindergarten through 12th grade has roughly tripled, from $55,000 to $155,000 in inflation-adjusted dollars. Since 1970, American students have seen no improvement in math and reading, and regression in science scores.

This is because, once unionized, the workforce becomes entirely caught up in labor concerns to the detriment of their actual jobs. Hence, students suffer once the teachers’ unions begin to treat the public school system as nothing more than a jobs bank.

Using the example of history, it is easy to see that unionization of a workforce entrenches the worst elements of that workforce. Efficiency is sacrificed, goals go unmet, poor performers cannot be fired, and consumers bear the brunt of this failure.

Of course, airport security seems important enough that we should want to avoid these things, but no matter. The screeners pressed ahead with their unionization anyway, the public be damned. After all, the attitude of the unions has always been that the public owes them jobs, not that they owe the public a job well done.

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The incredible vanishing multiplier, and economics as a science

November 9, 2012 2 comments

Here is a blast from the past. In this .pdf file, economist Robert Barro talks about the Keynesian multiplier in 2009. 2009, as we recall, was the edge of the precipice. This article was published in February of that year, concurrently with the passage of the “American Recovery and Reinvestment Act,” commonly known as the first stimulus, which granted roughly $800 billion of taxpayer money to political cronies.

Here is an excerpt:

If the multiplier is greater than 1.0, as apparently assumed by Team Obama, the process is even more wonderful. In this case, real GDP rises by more than the increase in government purchases. Thus, in addition to the free airplane or bridge, we also have more goods and services left over to raise private consumption or investment. In this scenario, the government spending is a good idea even if the bridge goes to nowhere or if government employees are just uselessly filling holes. This free lunch would make Charles Ponzi proud. If the deal is genuine, why stop with only $1 trillion or so of added government purchases?

It seems as though the best way to judge macroeconomic predictions is with the benefit of hindsight. Indeed, when economists using the same data set come up with estimates that vary by the trillions, one must wonder whether foresight per se exists at all.

With the benefit of hindsight, it is clear that the stimulus did not stimulate. Many excuses have been made for the poor performance of ARRA, but the fact remains that it has failed.

In my view this is not surprising. Most economists, whether classical, monetarist, Keynesian, or whatever else, have been consistently missing the point for decades. They have become so caught up with making their math look legitimate that somewhere along the line they forgot that it should have some connection to the real world.

Perhaps when applied to mainstream macro, “voodoo economics” is a tautology.

The radical idea that poor people are people

March 13, 2012 Leave a comment

My ongoing skepticism of “public service” is well-known, but J.E. Dyer, a writer on Christian social thought, drives the point home very well in a post on Patheos.

After many years, we have learned what happens when we seek to “redistribute” income or wealth. The goal of “redistribution” becomes more important than actually helping the poor. The abstract idea of removing income or wealth from some and transferring it to others trumps everything else. Seeking to “redistribute” income or wealth is not, in fact, a very good method of helping the poor; it is better characterized as a method of wielding power and seeking to control outcomes.

…”Redistribution” is an abstract goal, focused on numbers rather than people, and based on an invidious and theoretical dissatisfaction with material conditions. “Helping the poor,” by contrast, is focused on the people involved, and is a goal that can only be satisfied through personal attention and observation.

Of course, thinking that we can eradicate poverty totally is dangerous utopianism, but it is dangerous precisely because of the institutional structures that such thinking is wont to produce and not because it is wrong to attempt to make a person’s situation better without payment.

It is no secret that poverty has not been ameliorated by government programs before or since Lyndon Johnson’s cynical “War on Poverty.” It is also no secret that, as people become generally better off thanks to the march of market progress, the political definition of poverty is “defined up.”

And while it is certainly true that there will always be people in dire straits, isn’t it much healthier for us as a society of equals under the law to treat those people as people?

If we want to help those who are in need – and we should – the most efficacious and moral way to do so is through free action, not through government coercion. The latter reduces people to numbers and fosters a cynicism, correct in many instances, that the people being helped are not truly needy.

At worst, a system of government coercion removes all moral reasoning from the basic moral agent, i.e. the individual. Rich or poor, people qua people are what really matter. Such a system of coercion is inimical to a free and prosperous society.

Tim Carney on the false frame of regulation vs. inequality

January 25, 2012 Leave a comment

The news and the punditry tends to put out a constant stream of logical fallacies, which are easy to spot if you know what you are looking for.  However, I have to assume that many – if not most – people just lap it up, because otherwise, why would they continue unabated?

One of the latest examples is a logical fallacy called the “false dichotomy” or the “false dilemma.” Briefly, only two possible options are considered when multiple options across a spectrum may be available.  For example, if I were to say “the weather will not get any warmer tomorrow, so it must get cooler,” I have committed this fallacy by ignoring the possibility that the weather may stay exactly the same.

Tim Carney over at the Washington Examiner examines a false dichotomy in a post called “The false frame of regulation vs. inequality.” The false dichotomy posited  here is the idea that either regulation will increase or inequality will increase.  Of course, it may be true that they are positively correlated (no causation), or it may be true that an increase in regulation will cause an increase in inequality.

This is the option I find more convincing.  Tim Carney expands on this idea:

That naive-liberal postulate is false, and I suspect many of those polled don’t share it. I think when people say the economy is rigged for the rich, they are pointing, at least in part, at things like bailouts, subsidies, and other murky advantages gained by lobbying and cronyism. I notice that while the Post didn’t give it as an option, still 5 percent said that overregulation and inequality were equally bad.

Off the top of my head I can think of a few overregulations that unfairly favor the wealthy: crackdowns on food trucks in favor of restaurants, regulations blocking people from selling home-baked goods, online gaming regulation favoring big casinos, regulations keeping women from doing hair-braiding for money, and a bunch more. If you expand the notion of “regulation” slightly to include mandates, a skewed tax code, and wealth transfers, there’s plenty of evidence that our inequality stems in part from too much — not too little — government.

I have been banging on this drum for awhile on this blog.  Regulation offers false hope, since corruption, exploitation, and theft tend to calcify around the edges of the regulation.  The solution proffered by Washington is then, inevitably, more regulation.  The cycle repeats.

The real estate bubble, collapse, and bailout is the archetypal example.  People are justly outraged that everyone – everyone – in power whose hands were dirty walked away rich, in both the government and the private sector.  Only the innocents who paid their taxes were stuck with the bill.  Clearly, the regulation in this case contributed to inequality.  No serious person would argue that it did not, unless they had an agenda other than the facts.

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