Detailed Abstractions

That giant economic think-tank known as Google just announced their 3Q numbers.  Not only were the results good, but they had wonder news for all those worrying:  the recession has bottomed out:

SAN FRANCISCO, California — Google on Thursday declared the worst of the recession over and paved the way for a return to heavy spending on expansion as it reported a surprisingly strong 8 per cent jump in net revenues in its latest quarter….

Fear not friends – they aren’t basing this just on themselves, but all that economic data they have:

The optimism reflected what the company said was an across-the-board recovery in online advertising, with even the struggling financial services sector showing a return to growth….

Apparently though, Google forgot to tell Bank of America about its wonderful news (BoA 3Q):

CHARLOTTE, North Carolina (Reuters) – Bank of America Corp posted a $1 billion third-quarter loss as consumer credit woes eclipsed investment banking earnings, underlining why the bank remains on a government respirator….

I’m sure they just missed that… wonder what a really big blue chip company might be doing?  GE?:

General Electric’s third-quarter results showed just how fragile the U.S. economy remains, as its troubled financial unit dragged down earnings 44 percent, despite gains in divisions that make wind turbines, household appliances and broadcast television shows….

Not only are GE, BoA, and the 9.8% unemployed unaware of this great news, but even Google insiders don’t seem to know.  Looking at the public record, Google Insiders Sales, shows recent transactions for all senior officers dropping approximately 5% of their current Google holdings just last month.

Call me a raving skeptic if you will, but I’m thinking that you need to evaluate your decision making skills if you take your economic news directly from Google press releases.

Don’t get me wrong here, they make a great product and innovate better than almost anyone.   They are and will continue to be a force in computing for sometime to come because of their agile nature combined with some of the best minds in the world.  & I remember webcrawler… wow things are sooooo much better.

Regardless of their product however, it seems their investments into economic modeling & research in respect to business cycles is limited to zero.  I would add that if you’re an investor, that’s a good thing.  Better to let them do what they do best.

Why the press release then?  The only ones who know are those who drafted the press release and those with editing decisions prior to its release.  Without any information directly from one or more of these people, then reasoning is simply impossible to prove.

We can however ask some questions to try to find the likely answer.

(To be fair) The first possibility is simple honesty & stupidity.  Someone might have intended the “recession worst over” as a marketing technique to further enhance their aim to be seen as a very smart company.  All without realizing that overly simplistic analysis, based mainly upon very recent stock market activity and their profits do not make for effective proof.  Really, it’s just another anecdote that Google’s employees share.

Another, far more concerning possibility is their politics and desire to wish to see the President do well.  For years they have given most of their political donations to one particular party.  In 2008, Democratic candidates received 5 times more money than their Republican counterparts from Google.  Their employees, including top executives, gave 10 times more money to Democrats the Republicans.

Additionally, their search site has self-imposed constraints for arbitrary reasons.  For instance, Google refuses to allow gun dealers to advertise.   As a little experiment, slip over there real quick and run a quick search on swords or strippers.  Take note of the small advertisements to the right side of your search results.  Now do the same for guns and see what ads show up… I’ll wait.

They state their policy is to not allow advertising of weapons, but I think swords should qualify.

That could be an outlier, so let’s move forward assuming their ban on gun adverts is a true policy against weapons in general.

Then why did they also restrict advertising by Pro-life groups until forced by a judge to change their policy:

After a legal conflict between Google and The Christian Institute, filed when one the of religious foundation’s ads were rejected from the Google Adwords system, Google has changed their religious advertising policy to allow pro-life advertising to appear along with their secular and pro-choice advertising…

They did change their policy, but only after being sued.  Even giving them some credit for reversing their decision, their originally stated policy reeks of political and personal opinions:

The decision changes the former Google policy which excluded any ad containing a combination of “abortion and religion-related content“…. [emphasis added mine]

Putting all of this together, it’s hard not to reach the conclusion that Google is using its outstanding press relations due to their history as a vibrant and smart company to help those with which they agree.

Which is completely and totally their right.  It’s their right to put their money where they wish, to make internal policies as they see fit, and to accept contracts for advertising from those they want for any reason they want.  None of this freedom for me, but not for thee crap.  Let them do as they will I say.

Just make sure your informed and know who you’re doing business with as well.

PS:  If you’re not doing anything on a Saturday night and there’s positively nothing on TV including uninteresting infomercials about idiots unable to use blankets, then you can check out some pretty heavy economic think tanks.  First and foremost, the recognized economic powerhouse, generally recognized as the institution who makes the call on things like, when is it a recession?  When did it start?  When did it end?

NBER, or the National Bureau of Economic Research, has long been the a standard bearer in economic research in all kinds of aspects of life ranging from health care to labor studies.  They are the largest non-profit economic research organization in the US and boasts about the great minds working there.  In fact, 16 of the 31 American winners of the Nobel Prize in Economics, have been associates NBER, including one of my heroes: Milton Friedman.

PSS:  They could turn out to be right.  The luck of life sometimes means you can do the wrong thing and end with the correct result and vice versa – you can do the right thing and end with the wrong result.  Therefore, to correctly analyze thought patterns over time, any one result isn’t necessarily a deterministic factor.

In what has to be a of the sign of the coming apocalypse, Juan Williams is now defending Rush Limbaugh (video).

While debating Warren Ballentine on the O’Reilly Factor, Juan Williams defended Rush Limbaugh against the constant attacks since the public caught wind of his potential investment in the St. Louis Rams.

Apparently a combination of the celebrity culture that is today’s professional sports and the proclaimed self-righteousness of the NFL, their players’ union and professional race “leaders” can actually lead to a temporary peace deal between  Rush & Juan.

That’s only part of the story – the rest of the story should be the blatant hypocrisy of an organization which demonstrates regularly that it could care less about real criminal acts, much less controversial statements from within their ranks.

The easiest example for analyzing the league’s value system based upon their actions is Michael Vick.  Giving this guy a job after he was convicted of torturing animals to death for their unwillingness or inability to fight very well was a calculated decision about money.  But that’s really just the start of the NFL’s long tradition of tolerating and enabling criminals.

It seems we can’t go more than a couple weeks without a players getting arrested for drinking and driving.  For example, the St. Louis Rams are still allowing Leonard Little to play football, even after killing someone in a drunk driving incident which he followed up with another DWI (here) arrest.

Even more recently the Rams have shown a complete disregard for the community by their willingness to take a firm stand on behalf of players killing innocent citizens.  Ignoring their past problems, they thought it might be a good idea to bring on a new player with prior DUIs.

No worries to the citizens of St. Louis though, according to the Ram’s GM, he passed the “character” test during background investigations.   I’m sure the friends and family of the deceased are glad to know this player received the all important, “I looked into his eye and saw his character” test.

Of course it’s not just the Rams.  Let’s not forget Dante Stallworth recently entered into the “NFL players who  killed innocent people” club as well.

& as NFL traditions go, drinking and driving is just one of the time honored ones.  Another tradition  is using their strength to assault others.   Domestic violence seems to be the most popular  form of this tradition (here, here, & here), including the amazing amount of courage it takes to beat your babys’ momma with an aluminum mop handle while the kids watch (here).

As bad as all that is by itself, this information truly is a very small percentage of the NFL’s actions as it relates to criminal behavior within their ranks.   The endless stream of examples includes all types of crime including assaulting cops, assaulting security guards, shootings, drug rings, weapon’s charges,  probation violations, coaches assaulting other coaches, and even just plain ole indecent exposure – which in some cases can result in a being forced to register as  sex offender.  There are literally so many available examples of NFL players’ crimes, it’s challenging to pick and choose enough examples to be convincing, while ensuring this post doesn’t end up longer than the health care bill.

Indeed, so much information exists that at least one website is dedicated to tracking it (NFL Crimes News Blog).   A while back they even promised to take down their entire site if they could go 60 days without seeing an arrest posted on ProFootballTalk police blotter.  The closest they’ve gotten is 29 days.

The basic point?  For an organization with such a demonstrable history of ignoring and enabling real crime, their attempt to come off as self-righteous based on someone’s past comments is another perfect example of style over substance.  It would almost be amusing if it didn’t show how shallow our celebrity obsessed culture can be.

Standard Libertarian Disclaimer:  As a private business the NFL can pick and chose its investors at will.  I really don’t care all that much that the NFL pulled Rush’s bid nor would I ever want to take away their rights to do so.

Of course as a corollary to their freedom to chose their investors, we all have the freedom to point out the hypocrisy of such a decision.  When the NFL, the players, and the players’ union collectively run around throwing matches at people while they know full well they are standing in a house full of gun powder & explosives, they deserve nothing more than ridicule.

For more than 20 years now, with legislation leading back almost 40 years, the United States government has been pushing the idea that every citizen should have a home.

Based upon several studies showing high correlations with positive societal behavior for homeowners, politicians, leaders, non-profits, lots of people pushed for easier access to affordable housing.  In a Federal Reserve report published in 1999, they state:

A number of recent studies attempt to measure whether there are nontraditional benefits to homeownership, such as increases in the success of children (Green and White [5]), citizenship (DiPasquale and Glaeser [3]), and a variety of family outcomes and attitudes (Rossi and Weber [11])….

This is only 1/2 the story of course.  What these studies, our politicians, our leaders, & the rest of them  can’t conclude from this data is whether home ownership actually affects any of these additional traits.  The study itself hints at this:

…Because of the preferential tax treatment accorded homeowners, particularly low-income homeowners, and the large degree of wealth accumulated in housing, these authors argue that it is important to know the full range of homeownership benefits and costs. However, given the difficulty of credibly assigning causality to housing externalities, it is not surprising that such factors have been previously ignored.

In one such paper, Green and White [5] find a strong statistical correlation between homeownership and the likelihood of dropping out of school or becoming pregnant. Yet a reasonable interpretation of their result is that of omitted variable bias. Clearly, homeowners are different from renters along a variety of dimensions. As a result, those factors that are latent in their work, such as parental skills, interest in the educational process, wealth, and family stability, potentially bias upward any homeownership effect….

In other studies, they show correlations between home ownership & wealth accumulation, to help give more force to the “everyone needs a home” meme (study dated 2004):

For many years the federal government has promoted homeownership as an important goal for low-income families. A primary motivation of this policy goal is the concept that owner-occupied housing can be an important means of wealth accumulation, particularly for those lower-income and minority families that are able to purchase homes….

They as well admit the difficulty with this assessment:

…However, very little has been done in the housing literature to determine the importance of housing and non-housing sources of wealth accumulation. This determination has been difficult to address for three reasons. First, detailed wealth information on families is seldom available on a consistent basis. Second, such information on wealth is even less likely to be available over time so that changes in wealth can be observed. Third, the process of housing wealth accumulation is dynamic. Housing wealth accumulation depends critically on how soon a family that is renting becomes a homeowner, whether or not the family graduates to more highly valued owned units over time, or becomes a renter again and never regains homeownership….

With the current practice of press & political standards however, you might be hard pressed to find any evidence that assigning non-traditional benefits to home ownership is anything but an unqualified good.  The majority of reports dealing with low income housing stimulus are positive  (here & here).

In some cases, overly emotional logic is used (here):

After business dried up in May, Jodi Morris’ employer, an insurance agent, stopped sending paychecks.

Since then, the 43-year-old single mother has had to sell almost all of her furniture – her kitchen table and chairs, bed frames, dresser and armoire, and living room set – to pay the bills.  Morris and her 7-year-old daughter, Karly, now sleep on mattresses on the floor of their two-bedroom Ahwatukee apartment. And with no table, the two eat dinner on their cream-colored couch.

An eviction notice that arrived this month threatened to put Morris and Karly out on the street.  But Morris could be the first Phoenix resident to receive a lifeline from the federal government that seeks to rescue those on the verge of homelessness….

& without exception, our government is not immune.  The US government is right now, before the housing crisis even fully contracts (I wrote about it here), spending money to help low income families purchase homes.

Even before the housing crisis though, economists, experts, non-profits, were asking whether home ownership should be considered an unqualified good.  Unfortunately, reports questioning these basic assumptions are a very low percentage compared to the constant noise.

In some cases, even questioning the wisdom of subsidizing low income home ownership has resulted in kill the messenger attacks from non-profit groups, community leads, and even Democratic leadership, by leveling charges of racism.  With a simple misdirection trick, questioning the basic assumptions is anti-low income & since low-income households are generally minorities, questioning these assumptions must be due to institutional racism.   Politicians and leaders everywhere have a grand ole time setting up straw men in a fields of hay while standing by with gasoline and matches, but we should expect more.  We should expect to be able to ask all relevant questions we can and to get answers to as many questions as possible.  Lastly, we should let the data lead to its natural conclusion.

Assuming we truly want the best answers we can get and the best progress we can have, we must be willing to ask tough questions and live with the answers reality presents.

Anything less is little better than just allowing random superficial rhetoric to control policy.  It’s almost like we never moved away from the world Richard Feynman spoke about in 1974:

…But even today I meet lots of people who sooner or later get me into a conversation about UFOS, or astrology, or some form of mysticism, expanded consciousness, new types of awareness, ESP, and so forth. And I’ve concluded that it’s not a scientific world.

Over time I’ve come to the conclusion that where news entities fail miserably is in their analysis with international politics.  Most pundits, writers, journalists, etc, seem to be able to semi-grasp domestic policies, albeit still in the usual, overly simplistic, fits-to-the-narrative type of way, but lose all rationality with respect to international affairs.

Interestingly enough, I think their failures in both domestic & international analysis stem from the same basic cause, oversimplification.  But it would seem that the degree to which it effects each type of analysis differs due to the lack of incentives private interests have in resolving inaccurate reports on international issues.

Thinking about the counter thought to international policy, domestic policy, we see incentives existing to resolve press inaccuracies.  For instance, if the press pushes inaccurate opinions and analysis which oversimplifies a given topic, a special interest group or two, plus at least one political party, and finally non-profits everywhere will try to enlighten by showing the fallacy of the common narrative.

This is because people rightfully see domestic issues as more directly impacting their lives.  The corollary is that our politicians, our leaders, our special interests, and our non-profits tend to focus where we as a society focus.

The problem that can stem from this seems intuitive – inaccurate press on international issues should be held as highly suspect, but get printed without much serious disagreement.   Since very little counters popular wisdom, this gives the press a power to change opinions and as well as spread myths.

This leads to all kinds of odd conclusions, with large swaths of people all over the planet prone to believe in things without substantial proof nor any degree of rational logic.

For instance believing that western countries are somehow to blame for poor countries with constant internal strife and corrupt governments which inefficiencies and lack of resources.  Or said another way, people all over believe in a zero sum game.  This is true not only in the international sense, but also when dealing with immigration and free trade issues.

Mistaken assumptions such as zero-sum games also lead to beliefs about what one thinks a President can actually do, versus what reality tends to dictate what will actually be done.  This leads to politicians making believable, yet highly impossible claims about given international situations.  This has been done to all recent Presidents, including President Obama when pulling a missile defense shield out of Poland & Czechoslovakia was made to appear as a rash decision amounting to abandoning our allies, when in fact it wasn’t a bad decision when concluding what options were open and what were the greatest threats to our security and security in the region (wrote about it here, though Mr. Obama went and said it had nothing to do with Russia… which was just amazing… wrote about that here).

It leads to pundits everywhere snidely remarking how this action wasn’t “tough” or that action was going to anger others because it was “unilateral”.  With little recourse, journalists  print all sorts of things without taking into any account the actual framework through which any given action action was taken, under what circumstances, with what available options, or really they just leave out anything resembling actual analysis.

Unfortunately, it seems no organization is immune.  A recent piece published in the Economist titled  Even greater expectations discussing the idiotic Nobel Prize Committee decision, is a far cry from the analysis for which the Economist is known.

They rightfully begin with the question the world was asking, “Is it premature to give Barack Obama the Nobel peace prize, less than a year into his presidency?”, but delve quickly into non-international events dressed up to seem as if change had already happened:

…Most broadly, he has sought to engage with opponents, saying that America would “extend a hand, if you unclench your fist”, for example to those who were earlier dismissed as an “axis of evil”. Somewhat to the discomfort of Iran’s president, Mahmoud Ahmadinejad, who had bolstered his domestic support by vilifying America as an aggressor, Mr Obama has proposed holding talks about nuclear affairs, removing a precondition that Iran first abandon enrichment of uranium. Mr Obama made withdrawal of American forces from Iraq one of the main pledges of his election campaign and has since overseen a slightly quicker run down of troops than was envisaged by Mr Bush. Towards North Korea, too, Mr Obama has dangled the prospect of bilateral talks and closer engagement.

Regarding Russia Mr Obama has developed a policy of notably warmer ties, dubbed “hitting the reset button”. Relations had become especially frosty towards the end of Mr Bush’s presidency when war broke out between Georgia, an ally of America, and Russia…

Continuing with this as reasoning:

…Yet Mr Obama’s main achievement is a change of tone in foreign policy. A speech given in Egypt in June was an eloquent call for a new understanding between America and Islam. It was designed both to assure Muslims, now thought to number 1.6 billion around the world, that America is not set on a crusade. Similarly it was intended to convey to any Americans (and others) who believe in the notion of a “clash of civilisations” that friendly ties between religions is eminently possible.

Similarly, American policy towards small and repressive regimes, ranging from Myanmar to Cuba, has shifted in mood, if not yet substance, by offering the prospect of engagement if governments demonstrate progress towards democracy…

Which to date has not only done absolutely nothing to help international cooperation, but has made our interests tougher to protect.  In nearly every UN Conference on whatever, for instance the G-20 dealing with the economic crisis, the US asks for a lot of cooperation and everyone goes their separate ways.

In some ways this is to be completely understood.  American solutions for economic issues will differ from that of Germany or the UK.  Even though the same basic problem afflicts most countries during the global recession,  their banking industries are setup with much different regulations, making the solutions for one country not necessarily compare to another country.  The separate policies might even be attempting the exact same “type” of solution, for instance increasing capital requirements, but under different systems any one specific solutions will affect different countries differently.

When it comes to reaching our hand out to those regimes, we see that North Korea, Russia, and Iran have been openly hostile to any US intents.  Iran’s deadline of October the 1st to fess up or face sanctions has come and gone, even while it was precipitated by Iran admitting to an additional enrichment facility.

And all this, including that all important warming of US-Russian relations, Russia has stated publicly the will continue to trade with Iran, meaning they will back them, if the UN, lead by the US impose stricter sanctions against Iran.

Now these situations are fluid to some extent, especially between cautious friends such as US-Russia and most of the controversial moves taken by Iran & North Korea would likely have happened to test any new US President’s resolve.

The issue is that by glossing over the realities we end up believing in myths.  Think about all that talk about “unilateral” action as if it’s a huge negative due to the controversy surrounding the last semi-unilateral decision to be made, without understanding that this is exactly as we should expect it.

No country should do something the US requests if they know in the end the analysis states otherwise.  On the international stage, Europeans, Cechs, Persians, Africians, indeed every person deserves the same representation we deserve – for their representatives to look out for their interests.

Now this can and does lead to all kinds of international policies from all different governments that appear wrong or unseemly when in truth it’s a playing field for which no one actor controls the rules which leads to countries making decisions that seem antithetical to their stated morals or goals.

It also allows one country to look at another as particularly egregious, regardless of their country’s current international policies.   It should be obvious that while beating up on your own politicians on domestic policy makes sense, doing so on the international stage is just beating yourself up.  Even if well-deserved, it’s easier to beat up on other country’s policies than it is to self reflect.

In some ways, national feeling probably affects this as well.  When most countries populations have enough information to dislike a number of other countries, going against that grain can be seen as being unpatriotic.  You certainly wouldn’t see a major political figure like Tony Blair coming to the US to air Britain’s dirty laundry or Putin to do the same in the US against Russia.

It also allows for journalists to paint country X with any brush they choose.  This helps some countries as the press will like some allies, but can obviously hurts or diminish countries for which popular sentiment doesn’t exist.

In the end, what it does is allow for a type of international superiority by enhancing nationalistic feelings.  When only reviewing other countries’ by hand picking policies, self-selecting cultural attributes, last recent controversy, crazy politicians, one can get the opinion of their general greatness over all those “other” people.

Lastly, and in my opinion, the most unfortunate consequence of this misinformation, is our inability to actually analyze international issues.  In between these simplistic news stories real trade-offs on the international stage are being made and constantly simplified.  From a high-level view the policy might appear to be utterly wrong, but in reality  might not be so.  It might simply be the least bad of all the bad options.  & it might really be the policy itself which is wrong.

For real analysis however, historical context, actions taken versus realistic options available, trends, and a number of other data points are required.  Without honest sourced information cost/benefit analysis simply isn’t possible.

Over at the Huffington Post, Keli Goff wrote an interesting, yet disturbingly short sighted piece about particular health care costs which exist in large part due to personal private choices.

She begins the piece titled Mad at Greedy Insurers for This Health Care Mess? Then Why Aren’t You Mad at Your Greedy Neighbors discussing the government’s bail out of private businesses:

Raise your hand if you are still filled with anger when you hear the name AIG and picture the more than $100 million of your tax dollars that were delegated–without your consent–for employee bonuses there.

Now raise your hand if you were angry when you learned that Citigroup (which has received so much bailout money that American taxpayers have been dubbed “its major stockholder”) was planning to spend $50 million of your money on a luxury jet….

Even though the numbers she sights are a far cry from the actual tax dollars given to private business, she uses the anger over the bail outs to compare with the lack of anger of health care costs related to personal choice:

…There is something inherently distasteful about being expected to foot the tax bill for someone else’s personal choices–particularly bad ones–and not being given any choice of your own in the matter. Which is why I am so surprised that there has been so little anger expressed by leaders on either side of the health care debate when it comes to the issue of personal choice and responsibility in health care…

…According to the Centers for Disease Control, “obesity costs our nation as much as $147 billion per year in direct health care costs and lost productivity.” And according to the nation’s oldest anti-smoking organization smoking costs taxpayers a whopping $300 billion dollars annually, or 1,000 times the amount of the AIG bonuses….

Utilizing this ratio of anger levels contrasted with actual dollars, she follows through by discussing the trait both costs have in common, personal responsibility:

…Some health care reform advocates will argue these costs would be lower if there were government subsidized health care, but my question is why should the government, specifically taxpayers, subsidize health care costs for conditions that are not only preventable but essentially chosen by the patient? With all of the anger surrounding the health care debate, at town halls, in the House and Senate, where is the anger about personal responsibility?…

Like many before her, she perfectly frames the clear distinction between individual actions which don’t harm others and societal responsibility.  She uses our innate disgust of having to foot the bill for the negative consequences of others and sees the fundamental issue of both problems.

If only she had stopped there.  If only she understood clearly that when I hurt myself, I should be the only one liable for the resolution, we’d be in total agreement.  Instead, she illogically assumes that individual responsibility is shared among all citizens:

…To be clear, personal responsibility is not only up to consumers.  Mayor Bloomberg’s success in curbing smoking in New York is due to a multi-pronged strategy of aggressively fining bars and restaurants that allow patrons to flout the anti-smoking ban and raising the cost of cigarettes, in essence targeting the dealer as much as the addict….

Not only is responsibility shared in her view, but government force is also the solution.  Therefore since targeting these “bad smoking” behaviors has coincided with a decrease in the number of smokers , why not continue these policies to control other “bad” behaviors?

…A similar strategy should be undertaken federally against fatty foods and drinks (including many of the ones I love).  But as long as groups like the AFL-CIO oppose efforts to hold Americans financially accountable for their personal health choices, so that the system can afford to treat those who do not choose to be sick…

Thinking more critically though, this turns out to be very short sighted thinking devoid of any historical context and antithetical to fundamental human behavior.  Indeed, I think most people agree with her that when people make bad decisions that affect only themselves, they should be solely responsible for the consequences.

Where she fails is in properly analyzing government as the solution.  If one fully analyzes her solution, the lack of follow through in her thinking becomes easily spotted.

First, we know that human behaviors are heavily influenced by incentives.  It’s natural and obvious; we do things that benefit us.  For those willing to see reality for what it is, examples are all around us.  We can see it in the use of commission programs for corporate sales force.  We see it in TV commercials and marketing campaigns.  We even see it in the tax code.   Through denial or lack of contemplation though, some fail to see that this same fundamental human behavior also affects our decisions as they relate to health care.

In fact, one of the reasons for rising health care costs and bad personal choices is individual consumers have been moved further and further away from the actual cost.   In the US, part of rise in health care costs can be attributed to  government incentives which pushed health care plans away from individuals and towards employers.  For the same reason, others countries with socialized medicine also see rapidly rising costs of health care.

Second, we also know that historically, when governments are given the power continue to assume more and more control over individual lives, it ends in tyranny.  As we allow government to assume more responsibility for individual actions, we necessitate their ability to control those actions.

Assuming we still believe in a free society, one of the prices we pay is having the responsibility for the negative consequences brought about by our choices.

For instance, if you smoke – society doesn’t owe you CHEMO.  If I you eat 30K calories a day – society doesn’t owe you gastric bypass surgery.  If you drink a bottle of whiskey a day – society doesn’t owe you a liver.

However, by not of following the logic of her solutions and ignoring historical contexts, she can safely and happily assume government control is the answer:

…So the next time you are reminded of how angry you are at AIG or any other institution that was “bailed out” with your money, just remember that AIG may have mugged you once, but McDonald’s and your neighbor keeping them in business (and whoever invented the doughnut, bacon cheeseburger), will be sucking your wallet dry for decades to come….

Which only leaves us in the end with nothing more than a false dichotomy as if we only have two choices:  either we pay for it or we control it.

Really, due to faulty logic, she has unwittingly made a very cogent argument against government provided health care.  IE – we don’t need to control that behavior if we are not paying for it.

But I don’t know if she understands that by continuing to promote societal responsibility for individual choices, she is also logically promoting less freedom and more government intrusion.  I don’t know if she even believes in the value and morality of freedom.  I also don’t know that she doesn’t fully understands all of this, but due to value differences only, still believes government control to be the answer to health care problems.  And I really don’t know which is worse – being wrong based upon ignorance or understanding the full ramifications of increased government control, but not caring.

The truly concerning part should be that it doesn’t matter which is worse as the results are always the same.   For as long as we have enough people with these types of beliefs, we will continue to lose more and more individual freedoms.

As Hayek stated:

“We must show that liberty is not merely one particular value but that it is the source and condition of most moral values. What a free society offers to the individual is much more than what he would be able to do if only he were free.”

Some weeks ago, Judge Richard Posner wrote two policy analysis pieces on Harvard Law School Forum on Corporate Governance and Financial Regulations (part 1 & part 2).  They addressed a government report discussing the financial crisis along with legislative solutions.

One of his main points, was that due to the recency of the events,  we likely don’t know all the mechanisms which helped put is into the current mess (from part 1):

The Report is premature in two respects. The first is that it advocates a specific course of treatment for a disease the cause or causes of which have not been determined. Now it is not always necessary to understand the cause of something you don’t like in order to be able to eliminate the effect. If you have typical allergy symptoms you may get complete relief by taking an antihistamine; it is not necessary to find out what you’re allergic to. But generally, and in the case of the current economic crisis, unless the causes of a problem are understood, it will be impossible to come up with a good solution. The causes of the crisis have not been studied systematically, and are not obvious though they are treated as such in the Report. (Remember, the Great Depression of the 1930s ended 68 years ago and economists are still debating its causes.) We need some counterpart to the 9/11 Commission’s investigation of an earlier unforeseen disaster.  The Report asserts without evidence or references that the near collapse of the banking industry last September was due to a combination of folly—a kind of collective madness—on the part of bankers (in part reflected in their compensation practices), of credit-rating agencies, and of consumers (duped into taking on debt, particularly mortgage debt, that they could not afford), and to defects in the regulatory structure. This leaves out many potential causes that other students of the crisis have emphasized….

The Report is premature in a second sense, one illustrated by the proposals (discussed in greater detail in the second part of this two-part article) for limiting the provision of credit to high-risk borrowers. In an economic boom, thrift (restraint in consumption) reduces the amplitude of the business cycle by reducing consumption and increasing savings, savings that can be reallocated to consumption at the bottom of the cycle. Thus thrift makes the peak of the cycle lower and the trough higher. But in the trough of the cycle, thrift, by reducing consumption, retards economic recovery, because the less that people spend on consumption goods the less production there is and therefore the higher the unemployment rate, which by reducing incomes further depresses spending, which further depresses production, and so on. To tighten credit at the bottom of the cycle is therefore bad timing. And while the Report creates the impression that high-risk borrowers are feckless consumers unable to curb their greed for material goods, many high-risk borrowers are small businesses dependent on credit-card debt to finance their business….

Additionally, there should be little fear that businesses and investors are going to make the same set of mistakes before the recovery has even begun in full force (in part 2):

…For a time at least, the world’s central bankers, and the financial industry itself, will be hyper?alert for another housing or credit bubble. The wisdom of delay is confirmed, in my eyes at least, by the proposals in the Report….

What Mr. Posner failed to see (as did I) is that the government would, in less than a microsecond,  decide to continue the same policies which helped cause the current mess.  Reported by WSJ:

WASHINGTON — The Obama administration is close to committing as much as $35 billion to help beleaguered state and local housing agencies continue to provide mortgages to low- and moderate-income families, according to administration officials.

The move would further cement the government’s role in propping up the housing market even as some lawmakers push to curb spending at a time of rising debt.

The effort, which could be announced as early as this week, is aimed at relieving pressure on government-operated housing finance agencies, which have been struggling to find funding amid the downturn….

For those playing the home game, this means we are taking a problem caused by excessive credit and government incentives and trying to fix it by:

1. Preventing the normal contraction that needs to happen by artificially propping up failed business and bad home purchasing decisions.
2. Keep money cheap by keeping interest rates very low.
3. Then, repeat the same process that got you to the recession in the first place by incentivizing the market to buy a commodity (housing) which is still overvalued in some places.

As Einstein was once quoted saying, “The definition of insanity is doing the same thing over and over again, but expecting different results.”  With all due respect to Mr. Einstein, I’m beginning to think that “insanity” is too nice of a moniker as the word connotes misunderstanding due to ignorance or failure to be able to understand.

In this case, I’m not sure what word or phrase will have encompass the idiocy of our government, but I’m thinking this is willful stupidity combined with a big helping of arrogance.

Of course if voters refuse to punish those people responsible, we’ll continue to have the same government.

Today, MO Congressmen Todd Akin – R (and I’m sure others) released a statement concerning a change the President is making in foreign policy arena:

“The President’s decision to back away from our plans to put missile defense sites in Poland and the Czech Republic effectively abandons two of our allies who had worked hard and taken political risks for the sake of European and American security. The Administration has sent a clear signal to our central and eastern European allies that the United States, under this President, cannot be counted on to stand by our commitments.”

“With the Iranian regime continuing its aggressive pursuit of nuclear weapons and Russia’s commitment to reassert its regional hegemony, the United States must strengthen, not weaken, their commitment to the safety of our friends and allies around the world. The technology changes proposed may be of some merit, but the Administration needs to fully brief the Congress and our NATO allies before proceeding with this dramatic change in course.”

“Given our desire and need for a stronger commitment by our NATO allies in Afghanistan, President Obama’s decision to abandon our Polish and Czech allies will only make that effort all the more difficult.”

Not to attack Mr. Akin directly on this view as he is ranking Member of the House Armed Services Subcommittee on Seapower and Expeditionary Forces, the rhetoric is simplifying a more complex issue.  As Russia tries to reassert itself within the region and the question of giving missile defense technology to Poland and Chech is tricky.  These countries are seen by Russia as inside their historical sphere of influence (Eastern Bloc).

Additionally, Russia has used these countries as a man made border to reduce any potential opponents ability to invade.  They do this and are concerned by it because they have no real natural borders such as the US with two oceans.

So while it’s true that this move strengthens Russia, what we need right now is Russia’s help to control Iran from building nukes.  When the UN passes embargo’s against Iran, but Russia and others continue to trade with Iran, we basically haven’t done anything that is likely to deter Iran from their current stated goal of obtaining nuclear weapons.

Realistically and by all known analysis, Iran isn’t anywhere near being able to build an actual weapon.  They are close to having the fuel required, but the technology to actually make that fuel into a weapon is very complex and not something with which they have experience.

Additionally, even if Iran could build a nuclear war head that could result in a very large explosion, they still don’t have good missile technology, circuits capable of withstanding the radiation, and many other technologies required to make all of it useful.

Having said that, Iran is a threat and as a proactive supporter of terrorism, remains a country we have to be cognizant of.

So my personal opinion is that our fear of Iran right this second might be overblown which would make this decision unnecessary, but I also know what I don’t know… like whether Russia has given us assurances of help with Iran, whether the existing publicly available analysis is correct, or any number of other factors which should be used in the calculus for deciding on any given action.

Either way, taking knowns & the unknowns together, the decision itself isn’t as easy as the “abandoning our allies” rhetoric would make one think.

It’s quite an exciting time to live for those people who love to see barriers broken.  We’ve come a long ways from the 50′s segregation to the first African-American President and likely to be the first Hispanic female Supreme Court Justice.

Of course if those were the only firsts, we’d be doing just fine, but there are others to list:

First time in American History where the budget will include a 1 to 2 trillion dollar deficit (here):

WASHINGTON — The federal deficit has topped $1 trillion for the first time ever and could grow to nearly $2 trillion by this fall, intensifying fears about higher inflation rates, inflation and the strength of the dollar.

The deficit has been widened by the huge sum the government has spent to ease the recession, combined with a sharp decline in tax revenues. The cost of wars in Iraq and Afghanistan also is a major factor.

(that I’m aware of) The first time in history we will waste tax payer money, during a recession, to investigate a non-existent program (here – emphasis added is mine):

WASHINGTON – Congressional demands for an investigation grew on Monday over new disclosures that a secret CIA program to capture or kill al-Qaida leaders was concealed from Congress for eight years, perhaps at the behest of former vice President Dick Cheney.

The program, which never got off the ground and remains shrouded in mystery, was designed to target leaders of the terrorism network at close range, rather than with air strikes that risked civilian casualties, government officials with knowledge of the operation said Monday.

& finally, the brand new era of the czars (here) with names such as:

1. Infotech Czar
2. Faith Based Czar
3. Cybersecurity Czar
4. Compensation Czar

In  a time fraught with issues such as nuclear proliferation (there is a czar for that as well) from Iran & NK, a declining economy (new unemployment figure 9.5%), continuing wars, we might be looking into the future with an undeserved pride in our decision making abilities.

Getting back to the basics of what made our country able to stand as the the superpower it does today would be a better use of our time than hiring more czars to control more of our economy.

We seem to be moving fairly quickly from a society that was known for fierce independence.  A society known for arrogance, but revolutionary innovations which have increased the standard of living for millions. A society that truly stood as a beacon of freedom in a world where the majority live in crippling dictatorships.

We moved from a society that would rather ask their neighbors for help, but instead they now ask the government (or call a lawyer).  A society that wanted to live free, to a society that believes it’s ok to take by force money from your neighbors so long as most people feel they are spending it incorrectly.

Maybe instead of attempting to fix everything, as if the current decision makers have more of the truth than did previous generations, we should instead follow the doctors’ calling:  First, do no harm.

This isn’t to say changes aren’t needed, but the last time some sales guy told me I had very little time to make a decision, I laughed and walked away. & that was a for some piece of electronics I didn’t really need.  It even took me three months to buy a new car.

If we truly want to make effective changes that will really impact others’ lives in a  positive way, prudence and open skepticism of our government is warranted.

Of course yelling fire in a crowded theater makes for better tv debates and news reports, but it’s possible prudence is the virtue we should be heeding at this time.