Over @ Concuring Opinions, Nate Oman has an interesting post about the defenses of a free market (whole thing here):

Broadly speaking, I think that there are three families of arguments that can be made in defense of markets. Most commonly within the legal academy markets are defended on the basis of efficiency….

The second defense of markets is libertarian. This looks a lot of like the efficiency argument but is actually quite different, notwithstanding the fact that libertarians frequently confuse the two. In the libertarian argument what matters is not welfare but freedom. Freedom is taken as a good in and of itself, even if choices might result in reductions of welfare for the chooser….

The third argument is a defense of markets as markets.

Both the efficiency and the libertarian defenses of markets are reductionist in the sense that they see the good of markets in a unitary way. Markets are good because — properly constructed — they move resources around to maximize welfare….

Markets are good because they provide cooperation in the face of disagreement over the definition of the good and “social stability.”…

It’s a very decent article, though as a non-card carrying libertarian, I need to disagree with some of his minor points.  Namely, that libertarians are by group interested in freedom alone.  In fact, libertarians, just like other demographic groups get to the same answers through different paths and all three paths are prevalent in the current party.

For some libertarians, it is an…. intellectual/efficiency argument alone.  They believe markets aren’t necessarily moral or perfect at rationing, but they firmly believe that a free market leads to the best possible solution for the most people.

For me, I take the freedom approach.  To maximize individual welfare means one must maximize individual choices.  This might seem as too moralistic or philosophical for some as to be practical or useful, but it seems logical that reducing one mans’ freedom is antithetical to maximizing welfare.

& to be thoroughish, lots of libertarians are just tired of all the other parties and joined that cool one with that goofy, “Who is Ron Paul” stuff.  In reality, like most organizations, libertarians are not absolutists either way using a combination of thoughts to form their basis for their beliefs, but I digress.

On this view, traders are not cowardly, greedy, souless parasites (see, e.g., Shylock) constantly tempting the virtuous away from the path of justice with filthy lucre. Rather, commerce encourages courage, honesty, and fidelity. It encourages cooperation rather than predation. It allows people with widely disparate views of the ultimate ends and purposes of life to peacefully cooperate with one another. Commerce rewards the frugal and the farsighted, while punishing the wastrel and the spendthrift…..

The third, pluralist view of the good of markets gets scant attention…

If we can start with the idea that maximizing welfare includes maximizing freedom, efficiency, freedom, & moral markets work together.

When starting with the paramount of freedom in economics, one also gets into the land of (un)intended consequences and perverted incentives.  Hayek talked about this a great deal – the fact that due to the shear size and complexity of the market, any attempted centralized interference will change incentives and unlikely for the better.  Unlikely, because the “status quo” we all question exists through millions and millions of individual transactions.

For lack of a better term, a collective wisdom emerges, order out of chaos.  An answer, that we might not like, but something for which a centralized system is (highly) unlikely to do better than free individuals.  The result is the most efficient use of resources we can hope to achieve while maintaining the most individual freedoms we can.

What about the morals? Well….it’s not as if we don’t have recent examples to help us out.  Leaving out the current mess of a tax code, take the recent financial crisis.

Predatory lenders?  Sure.  Fraudulent and speculative borrowers? Sure.  The reason why it worked so well?  Government incentives pushed quasi-government agencies to purchase loans without much oversight.

Why no oversight?  No skin in the game.  They couldn’t fail.  The market believed it & they believed it.  & in the end, the government proved them right.  Do the wrong thing, over and over and over and over again until it finally collapses and someone else ends up paying the bill….

Here we go again…. yet another marketing campaign by the Obama Administration to tout bail out packages that has yet to do anything they’ve previously promised (DA Post here) as a rousing success.   These silly marketing games seem to work well for politicians, but what logic tells us is that you can’t prove a negative.  The Obama Administration can tout bailout monies spent for any reason in to any success they please because proving that it would’ve been better without the money is a nonexistent hypothetical situation for which we can only guess.

& with upcoming elections, for which Democrats currently seem to be in some trouble (polling data here via RealClearPolitics), they will continue this regardless of any true facts which show the opposite.  This week, with some gall, they plan to use the auto show in Detroit (here via Policito):

When the president travels to Michigan on Friday, he’ll tout the revival of General Motors and Chrysler since the auto companies received billions in federal aid and government-assisted bankruptcies….

I say with gall, because they fully intend to tout even more success with blown money when the only major car company to NOT take bail out money is doing better than their rivals (here via Star-Tribune):

DEARBORN, Mich. – Four years ago, Ford mortgaged everything down to the blue oval logo to save itself. Now, even as Americans remain skittish about the economy, it’s reaping big rewards and stealing business from stumbling rivals.

Ford said Friday that it made $2.6 billion from April through June, its fifth straight quarterly profit. The company, which reported record losses in 2008, now predicts it will end 2011 with more cash than debt.

With its two longtime Detroit rivals still finding their way after spending time in bankruptcy last year, Ford, which never took government bailout money, extended its success story…..

Yep, instead of using this time to stand up for the ingenuity, the self reliance, the perseverance of private individuals working without taking tax money, they will use this to tell us all how much better off we are than if they hadn’t.

Oh… and in case you might be one of those people who know about Ford’s success, they have an answer for that as well (here via Detroit News):

Washington — The Senate’s top Democrat argued Ford Motor Co. probably would have collapsed if the government hadn’t bailed out its top two competitors….

So there you have it, even with logical evidence to the contrary, not only did the all knowing government help out two companies that are still barely surviving, but also completely fixed a company for which they contributed nothing directly.

Well, the verdict is in. The Republicans are being cast as the party of no.  The party without ideas.  The party of obstruction.

Please make no mistake about it, this marketing push isn’t really about obstruction, but about the upcoming elections.  Just as President Clinton did brilliantly prior the 1996 elections when he cast all Republicans as following Newt Gingrich and obstructing spending laws, the Obama administration is moving forward in much the same pattern.

This is possible because the White House, regardless of occupant, has historically been able to control the news cycle.  In my opinion, this should be an indictment on journalism as a whole when alternatives which exist aren’t being reported, but simply put:  when the President talks, news happens.  When your normal representative talks, you’re lucky if you even hear about it.

It worked during the Clinton Administration on spending, it worked during the Bush (43) Administration on the Patriot Act, & it certainly might work again this time. Irregardless, the campaign is back and in high gear (here via USA Today):

…”Too often, the Republican leadership in the United States Senate chooses to filibuster our recovery and obstruct our progress,” Obama said. “And that has very real consequences.”…

Or here via NY Times blog, here via WaPo, & on and on and on…

From a critical point of view however, obstructionist should not automatically be a pejorative.   Without analyzing what exactly is being obstructed, this is little more than name calling.

As an example, if say in the 1940s Congress was actively trying to “obstruct” the intermittent of thousands of innocent Japanese-Americans, this would not only be a moral good, but any thoughts to compromise solely to be seen as a non-obstructionist would be wrong.  What would be a compromised alternative?  House arrest?

Additionally, we have to be on the lookout for the differences between the marketing of bills and their actual language.  Think of the new health care legislation.  President Obama’s promises of more health care for all at cheaper prices, simply don’t seem to be fulfilled by the 2500 page law passed… or maybe they are being fulfilled, but like the Patriot Act, no one really knows what the new legislation actually means (here via Cato):

…The Patient Protection and Affordable Care Act represents the most significant transformation of the American health care system since Medicare and Medicaid. It will fundamentally change nearly every aspect of health care, from insurance to the final delivery of care.

The length and complexity of the legislation, combined with a debate that often generated more heat than light, has led to massive confusion about the law’s likely impact….

Or on yesterday’s Meet The Press Rep. Van Hollen stated (transcripts here via MSNBC):

…The frustration is there are lots of important bills to push for jobs that are sitting over in the Senate.  But it’s not the fault of the Democratic leadership in the Senate.  I mean, frankly, you know, John Cornyn and his allies have been trying to block a whole lot of very important jobs measures.  We in fact sent a piece of legislation over very recently that would remove these perverse tax incentives to ship American jobs overseas, that give American corporations a bonus if they ship American jobs overseas….

Just like health care, the basic idea that our representatives are working on private job creation incentives is a good one.  But just like the Obama Administration’s promises on health care, Rep. Van Hollen is selling us a job creation bill which has little chance of actually creating jobs.

To translate – what they mean by “removing incentives” is to increase taxes on businesses who outsource.  Now, some may want this to happen for various reasons, but the economics are pretty straight forward.  Tax increases have never increased jobs & forcing a tax such as this could actually result in companies simply moving their head quarters as well.

To be fair, there are bills I don’t believe the Republicans should block, for instance the extension on unemployment benefits (though it seems likely to pass soon: here via The Hill).

Yes, the point isn’t that the Republicans are doing the right thing and the Democrats are failing at every single step, the point is only intended to remind us of the old saying about representative governance:

The people will get the government they deserve.

& so long as we allow marketing campaigns to have more force in elections than critical analysis does, we will likely continue to be disappointed.

Come on…. we can’t find any good justices to nominate to SCOTUS?  This is what… the third (including the previous administration) uninspired justice nominated in just 5 years.

For such a prestigious and life long appointment, we should expect much better (via Cato here):

Elena Kagan, President Obama’s nominee for the Supreme Court, seemed to shock many people when she dodged questions about the Declaration of Independence during her testimony before the Senate Judiciary Committee…

DA posts here & here

Via Freakanomics here, which will hopefully put to rest the idea that nurses go on strike to “help” patients, from the NBER paper:

…Controlling for hospital-specific heterogeneity, patient demographics and disease severity, the results show that nurses’ strikes increase in-hospital mortality by 19.4% and 30-day readmission by 6.5% for patients admitted during a strike, with little change in patient demographics, disease severity or treatment intensity….

Robert Reich via Salon.com here demonstrates once again how much politics effects his economic analysis.  According to him, this whole economic mess, including a potential backslide can be blamed solely on deregulation:

…starting in the late 1970s, and with increasing fervor over the next three decades, government did just the opposite. It deregulated and privatized. It increased the cost of public higher education and cut public transportation. It shredded safety nets…

Which he believes is causing greater wage disparities:

…We’re back to the same ominous trend as before the Great Recession: a larger and larger share of total income going to the very top while the vast middle class continues to lose ground….

Because with deregulation, of course, companies can become EVIL:

…Companies were allowed to slash jobs and wages, cut benefits and shift risks to employees (from you-can-count-on-it pensions to do-it-yourself 401(k)s, from good health coverage to soaring premiums and deductibles)….

I submit what Mr. Reich fears is freedom – freedom of business owners to hire and fire as they wish, freedom of employees to change jobs easily (401K allows this, pension does not), just freedom.

Secondarily, you can see in his writing that the only thing the government has ever done wrong, is by not getting involved enough.  He doesn’t mention government meddling, deficit spending, enormous new health care expenses, entirely new federal agencies which more money will be needed, idiotic regulations like a moratorium on all oil drilling due to one company’s failure….

Nope, for Mr. Reich, it’s all because the government hasn’t taken enough control over the little people.

Via Cato here, more news on the Obama Administration’s transparency:

The Social Security’s trustees’ annual report is, by law, supposed to be published by April 1. This year, however, the trustees have postponed its release indefinitely. The program’s financial condition continues to remain hidden from public view — and by many accounts will continue to be so until the end of the fiscal year….

Wonder if Reich views this as an issue?

Boxer might lose?!?!  In what has to be either a sign of the end times or a sign of our bright future, Senator Barbara Boxer is in a tight race against former HP CEO Carly Fiorina (via the Atlantic here):

The latest Field poll looks a bit troubling for Sen. Barbara Boxer: she leads her Republican opponent, former HP CEO Carly Fiorina, by just three percentage points (47% to 44%)…

San Fransisco’s City Council, in an attempt to prove themselves the absolutely dumbest people on Earth, might ban the sale of pets (via Huffington Post here):

…If the ordinance passes San Francisco could be the first city in the nation to ban the sale all pets except fish….

The IMF tells the US to slow down on spending (via the Hill here):

The United States must rein in its deficits sooner than President Barack Obama wants, the International Monetary Fund (IMF) said Thursday.

In an annual report on the U.S. economy, the IMF said the U.S. faces a “central challenge” in implementing a “credible fiscal strategy” to ensure that public debt is put on a sustainable path without putting the economic recovery in jeopardy….

The NSA responds to the WSJ article (posted here yesterday) concerning the “Perfect Citizen” program (via the Atlantic here):

Today’s Wall Street Journal article by Siobhan Gorman, titled “US Plans Cyber Shield for Utilities, Companies,” is an inaccurate portrayal of the work performed at the National Security Agency. Because of the high sensitivity surrounding what we do to defend our nation, it is inappropriate to confirm or deny all of the specific allegations made in the article. We will, however, provide the following facts: PERFECT CITIZEN is purely a vulnerabilities-assessment and capabilities-development contract. This is a research and engineering effort. There is no monitoring activity involved, and no sensors are employed in this endeavor. Specifically, it does not involve the monitoring of communications or the placement of sensors on utility company systems. This contract provides a set of technical solutions that help the National Security Agency better understand the threats to national security networks, which is a critical part of NSA’s mission of defending the nation. Any suggestions that there are illegal or invasive domestic activities associated with this contracted effort are simply not true. We strictly adhere to both the spirit and the letter of U.S. laws and regulations….

I’m not saying I automatically disagree that their statement is completely accurate, but we should not forget the NSA is the same agency who for years denied even having something like Echelon.

Via The Big Picture – Is WordPress As Big As Guttenberg?Almost.:

WordPress, the blogging software that powers The Big Picture along with 11 million other blogs and has 256 million unique visitors to its hosted sites, may not be as revolutionary as movable type but it is a crucial element in what has made it possible for blogging to grow from a hobby into a major threat to the mainstream media….

Via Reason.com – In England it’s so bad, cops rob you! (here):

Police in Exeter, England, say some residents make life too easy for burglars, and to prove it, they’ve burgled around 50 homes themselves. The police look for places with unlocked doors or open windows, and then they slip inside and put valuables into a bag for the owners to find.

Via Cato – Cisneros, the Clinton Administration’s head of Housing and Urban Development (HUD) explains how the government had little to do with the housing crisis – Cato responds (here):

In a recent speech to real estate interests, former Clinton HUD secretary Henry Cisnerospreposterously claimed that the recent housing meltdown “occurred not out of a governmental push, but out of a hijacking of the homeownership process by some unscrupulous interests.”

The only criticisms Cisneros could muster for the government’s housing policies over the past 20 years were that regulations weren’t tough enough and it should have focused more onrental subsidies.

Imagine that… government officials acting as if they  weren’t effecting anything even though their entire intention was to affect the housing market.  Their entire reason for being is to affect the housing market.

Seems oddly similar to recent reports from the White House on the oil spill.  Listen carefully and you’ll hear this:  ”We have been in charge since the incident occurred, but everything that is happening is someone else’s fault.”

Speaking of which, Obama’s approval rating down (here via Gallup).  In late January of this year, 66% approved, only 19% disapproved.  The latest figures show 49% approval, 44% disapprove.  That was quick…

Lastly, but certainly not least – great pictures of the birth of a star (here via Yale):

New Haven, Conn. — Astronomers have glimpsed what could be the youngest known star at the very moment it is being born. Not yet fully developed into a true star, the object is in the earliest stages of star formation and has just begun pulling in matter from a surrounding envelope of gas and dust, according to a new study that appears in the current issue of the Astrophysical Journal.

This is one of those cases where it’s almost as if the planets aligned perfectly to show anyone willing to see the complete idiocy of our current economic policies.  In the midst of a recovery that is anything other than certain, a time when the US government, its citizens, and indeed larges swaths of the world are simply broke, yet we keep on spending.

The Federal Reserve Chairman has stated directly (here via Reason.com):

Today may be terrible, but tomorrow is going to be much worse, at least as measured by such metrics as deficits, debt, and entitlement spending. In an April speech, Federal Reserve Chairman Ben Bernanke laid out the misery that awaits us. “The arithmetic is, unfortunately, quite clear,” he said. “To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above.”…

Yet just yesterday, the committee to reduce budget deficits is joining a long line of other government employees in asking for more.  Over @ Cato (here):

It’s rather symbolic of what’s wrong with Washington that a commission ostensibly created to promote deficit reduction is seeking a bigger budget….

Yep, that’s correct.  As private businesses have continued to contract to meet decreased demands, the federal government continues to grow.  This happens when the federal government is allowed to print money, but that’s a side note.

Simple fact is, we have no money, yet we are still spending like drunken sailors and it seems we don’t understand.  When the governor of New Jersey is forced to tell people directly:  unlike the US government, the state of New Jersey can’t print money, we’ve run into a major problem.

& like most problems, the federal government will not help.  They are the enemy of spending policy as we can easily see, but for those that think maybe they can help here… please watch their latest commercials for the census count and ask yourself what is they underlying theme?  On the government’s own website propoganda, what is the underlying theme?

What is the main thing they want you to take away from this?  That government is the answer.  Our leaders are telling us, in no uncertain terms the same unsustainable and morally questionable hypothesis:  Make sure you get counted…. so you too can get paid.

Maybe it’s time to start asking:  exactly where are they leading us?

The 9th Circuit strikes again…. via LA Times (here):

SAN FRANCISCO — A sharply divided federal appeals court in California on Monday exposed Wal-Mart Stores Inc. to billions of dollars in legal damages when it ruled a massive class action lawsuit alleging gender discrimination over pay for female workers can go to trial….

Now I don’t claim to be a lawyer and haven’t even played one on tv, but part of the dissent seems obvious to me:

…Judge Sandra Ikuta wrote a blistering dissent, joined by four of her colleagues.

“No court has ever certified a class like this one, until now. And with good reason,” Ikuta wrote. “In this case, six women who have worked in thirteen of Wal-Mart’s 3,400 stores seek to represent every woman who has worked in those stores over the course of the last decade — a class estimated in 2001 to include more than 1.5 million women.”…

Maybe they like being overturned (here from 2007)?

…The 9th Circuit also has a long-running streak as the most overturned, which went unbroken this year. The Supreme Court reviewed 22 cases from the 9th Circuit last term, and it reversed or vacated 19 times….

Via WSJ, The Big Brown Union Bailout

If you can’t beat ‘em, have Congress hobble ‘em. That’s the motto of some in corporate America, and Exhibit A might be United Parcel Service’s campaign to get Washington to impose its labor woes on rival Federal Express. This would be one more union bailout at the expense of business competition and economic efficiency….

This is a continuation of this administration’s policies to pay off unions at the expense of others (DA posts here).

Via Reason.com, GM’s Phony Bailout Payback

Uncle Sam gave GM $49.5 billion last summer in aid to finance its bankruptcy….  So when Whitacre publishes a column with the headline, “The GM Bailout: Paid Back in Full,” most ordinary mortals unfamiliar with bailout minutia would assume that he is alluding to the entire $49.5 billion. That, however, is far from the case….

I say if you want to buy American, buy Ford – no bailout money and still going strong.

& cool science news via e!Science (here):

…In a study published as an Advance Online Publication in the journal Nature Nanotechnology on Sunday, physicists at Ohio University and the University of Hamburg in Germany present the first images of spin in action….