Monthly Archives: January 2009

This is Spectacular

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These are the concluding paragraphs of Bill’s op-ed in the Washington Times.  Enjoy!

“The truth is: It is not government’s function to create jobs. Putting people to work is easy, as demonstrated by Franklin D. Roosevelt’s Depression-era Works Progress Administration (WPA), more accurately known as “WPA: We Piddle Around.” The bigger challenge is to create wealth. Toyota failed to foresee the economic events that caused its expansion plans to unravel.

Keep this in mind when Congress and the White House are selecting economic stimulus projects to fund this year. If highly successful private firms like Toyota – with their extraordinary market research and years of savvy and experience – sometimes embark on projects that turn sour, how can we expect politicians, most of whom have no such business know-how, to pick winners? There is a difference, however. Companies usually risk their own money. In Washington, the politicians will be risking ours.” – Bill Shughart


Full op-ed here

No one can spend $1.5 billion of other people’s money responsibly

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By Donald J. Boudreaux
Business & Media Institute
1/20/2009 10:52:07 AM

Editor, The Wall Street Journal

200 Liberty Street

New York, NY 10281


To the Editor:


You report that Barack Obama will call for “a new era of responsibility” (“Obama to Call for a New Era of Responsibility,” Jan. 20).


His actions belie his words. By seeking an extra $800 billion for “stimulus,” Mr. Obama will generate a typhoon of irresponsibility. Consider what Arnold Kling says at the blog EconLog: “How many people will have meaningful input in determining the overall allocation of the billion stimulus? 10? 20? It won’t be more than 1000. These people – let’s say that in the end 500 technocrats will play a meaningful role in writing the bill – will have unimaginable power. Remember that what they are doing is taking our money and deciding for us how to spend it. Presumably, that is because they are wiser at spending our money than we are at spending it ourselves.


“The arithmetic is mind-boggling. If 500 people have meaningful input, and the stimulus is almost $800 billion, then on average each person is responsible for taking more than $1.5 billion of our money and trying to spend it more wisely than we would spend it ourselves.”

Absolutely no one can spend $1.5 billion of other people’s money responsibly.


Sincerely,

Donald J. Boudreaux

Don Boudreaux is the Chairman of the Department of Economics at George Mason University and a Business & Media Institute adviser.

Great Quote

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“There are, though, many especially those greedy for renown and glory, who steal from one group the very money they lavish upon another. They think that they will appear beneficent towards their friends if they enrich them by any method whatsoever. But that is so far from being a duty that in fact nothing could be more opposed to duty. We should therefore see that the liberality we exercise in assisting our friends does not harm anyone. Consequently, the transference of money by Lucius Sulla and Gaius Caesar from its lawful owners to others ought not to be seen as liberal: nothing is liberal if it is not also just.” – ON DUTIES, Bk.1. XIV. 43 (Marcus Tullius Cicero)

Original Post from Think Markets

Another Stonehenge Discovered Under Lake Michigan?

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sonarmichiganstonehengeA group of researchers using sonar to find shipwrecks on the bottom of Lake Michigan have found something far older than crashed cargo ships. They believe they’ve found a 10-thousand-year-old stone structure like Stonehenge, including a rock carved with the image of a mastodon. io9 pal Geoff Manaugh reports over at BLDG BLOG that the researchers’report (with cool sonar images) was released last year to surprisingly little fanfare. And yet the possibility of a Stonehenge-esque worship site wouldn’t be out of place at the bottom of Lake Michigan. The region already has its share of petroglyphs from ancient tribes and other standing stone sites. These submerged stones could have been raised by local populations at a time when the lake bed was dry, in the late Ice Age. More research is needed to determine whether these stones were arranged by humans, or merely look that way.

Link to article here

Knowledge is Dispersed and Incomplete

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Arnold Kling channels Hayek on the stimulus plan. Lots of insight. An excerpt:

How many people will have meaningful input in determining the overall allocation of the billion stimulus? 10? 20? It won’t be more than 1000. These people–let’s say that in the end 500 technocrats will play a meaningful role in writing the bill–will have unimaginable power. Remember that what they are doing is taking our money and deciding for us how to spend it. Presumably, that is because they are wiser at spending our money than we are at spending it ourselves.

The arithmetic is mind-boggling. If 500 people have meaningful input, and the stimulus is almost $800 billion, then on average each person is responsible for taking more than $1.5 billion of our money and trying to spend it more wisely than we would spend it ourselves. I can imagine a wise technocrat taking $100,000 or perhaps even $1 million from American households and spending it more wisely than they would. But $1.5 billion? I do not believe that any human being knows so much that he or she can quickly and wisely allocate $1.5 billion.

Post from Cafe Hayek

Don’t Spoil Your Kids

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By: Isaac M. Morehouse

Morehouse, Less Government
Posted on January 8, 2009

An article I wrote posted today on Mises.org:

It is a great irony that prosperity affords posterity the luxury of forgetting its origins. Though not a hard-and-fast rule of societal evolution, generations who grow up wealthy often lack respect for or understanding of the values and ideas that generated the very wealth from which they benefit.

There is an honesty, realism, and practical virtue often accompanying generations that have to endure difficult labor that is sometimes lost on later generations that inherit a comfortable material life. This is not a new phenomenon but is present throughout history. Compare, for example, the life and work of the ancient Greek poet Hesiod with that of the great philosopher Aristotle some 300 years later.

Hesiod lived sometime around 700 B.C. in the region of Boeotia, which he described in his Works and Days as a “cursed place, cruel in winter, hard in summer, never pleasant.” Though little is known about his life, he was apparently a shepherd who claimed to have been given the gift of song by the Muses one day while tending his flock. Regardless of the source, Hesiod’s poetry is full of colorful mythology, practical wisdom, and sound ethics. The ancient poet wrote at a time near the end of the Greek Dark Ages and at the beginning of the Archaic period. Greece was a highly decentralized region made up of mostly small, self-governing societies, and the merchant class was just beginning to emerge. Continue reading →

Society is not simple

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Here is a letter a recently submitted to the Midland Daily News

To the editor:

Dale Anger is correct with his assertion that society is not simple (“Taking Exception,” Dec. 16, 2008). He states: “I know it is easier to just mouth the simple answer, but one of the reasons we have not found answers to a lot of problems is that we keep getting these one sentence answers to problems that are much deeper.” Although there may be some truth to such a statement, I find it hard to believe that offering absolutely no solution is somehow more helpful.

Dale seemed to have a problem with allowing the market to allocate jobs, stating that there may not be enough jobs to go around. Although he did not offer a solution, I will assume he is suggesting the only alternative, which is to use government to secure jobs.

Using a quote from the beginning of his piece explains why such logic is faulty: “…government using other people’s money for the use of different people’s benefits. That is the nature of government. Anytime a government makes much of any kind of action, it is curtailing one person’s activities at the expense of others.”

Remember, the government cannot create or save jobs. The government does not produce anything of value; all it does is redistribute wealth. Unfortunately, the federal government cannot even do that correctly, as it is currently in debt for trillions of dollars. Since the government has already spent all of your money, it now has to resort to the printing press. Since the government is broke, any additional “service” the government provides will debase our currency, which is ultimately a tax on anyone holding or using dollars.

I will agree with Dale that job loss is a terrible thing in an economy. It does not make sense, however, to tax flourishing companies that are employing people in the process of creating goods that are actually demanded to subsidize companies that fail to give people what they demand. Unfortunately, no bureaucrat, politician or government wields the power to create jobs out of thin air. All the government can do is redirect them.

Believing it is possible to print our way to prosperity or create jobs out of thin air is dangerous to assume and a fallacy at best.

Kurt Bouwhuis

Ponzi Scheme

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Editor, The New York Times

229 West 43rd St.

New York, NY 10036

To the Editor:


Like many people, Ben Stein was assured that Bernard Madoff “never lost money” (“They Told Me That Madoff Never Lost Money,” Dec. 28). Unlike many people, Ben Stein wisely understood this assurance to be nonsense.


Americans should apply Mr. Stein’s wisdom to the greatest Ponzi scheme going: Social Security. Many pols and pundits assure us that this program is a great financial deal for ordinary Americans. But in principle Social Security is identical to Mr. Madoff’s fraudulent scheme: rather than generate wealth through productive investments, both schemes transfer wealth from newer ‘investors’to older ‘investors.’As long as a sufficient number of newer ‘investors’keep coming aboard – either by being duped a la Mr. Madoff or by being coerced a la Social Security – such schemes appear brilliant. This appearance, however, is a dangerous apparition.


Sincerely,

Donald J. Boudreaux

Don Boudreaux is the Chairman of the Department of Economics at George Mason University and a Business & Media Institute adviser.