Saturday, October 31, 2009

Progressivism and Intelligence

Salute to The Western Confucian.

A peer-reviewed journal, Intelligence, has published a study that shows that conservative (that is to say, traditionalist) values negatively correlate with high scores on SATs, when one statistically analyzes the aggregates. Here is a piece analyzing the study and common liberal ivory-tower attitudes.

The short form: While it requires a certain level of intelligence to break from tradition, it does not follow, nor do the data demonstrate, that the majority of intelligent people do so, or so do permanently. It is entirely possible that the lowest 3 quintiles are 90% conservative, and the upper two are 75% conservative.

Super short form: Just because most "progressives" are high-IQ people, doesn't mean that most high-IQ people are "progressives."

FREE Free Healthcare

Read about Remote Area Medical, a group of mobile, volunteer medical professionals who want to give away their services, without ANY money from the government. So of course they almost always have to leave the US in order to do so. In candor, I'm desperately poor and currently without health coverage, so I would really like for these guys to be able to do their work in my state. But they can't.

The right response to our health insurance and care issues is freedom. Thomas DiLorenzo does a good job of explaining how government is the problem in this article.

Saturday, October 24, 2009

A Backhanded Admission

I've been going through the archives at Stuff White People Like, with the occasional bit of amusement. Then I come to the post on Difficult Breakups.
Prior to engaging in divorce, most white people train for it by engaging in a series of long term relationships that end very poorly.
There it is, in a nutshell: the admission that "going steady" and "long term relationships" are training for divorce. The more breakups you've had, the more familiar (and thus, in its own sick way, the more comforting) divorce will seem.

Divorce is a scourge. Don't practice for it. Don't set up patterns of thought that will lead you to it. Don't date. Don't go steady. Don't enter long term relationships. Don't swap keys. Don't move in together. Don't give your whole self to somebody else, and then try to get it all back. You can't. Enter courtship and get married.

Thursday, October 22, 2009

Papa Ben and The Anglican Church

Papa Ben understands well that the future direction of the Church is found in the attitudes of her bishops. So his primary and most important reform is appointing good, faithful, and orthodox bishops. See this article, which details some of his efforts.

But he is doing more than that. With the new apostolic constitution providing Personal Ordinariates for converts from the Church of England (Inside the Vatican Article), he is also deliberately marginalizing heterodox bishops. And I approve of his desire to do so.

Now, I can forsee the possibility that these Personal Ordinariates could one day protect heterodoxy, but if that happens, then the Pope (whoever it is by then) can eliminate them.

Most of the interesting commentary regarding the new apostolic constitution that I've read is at Fr. Longenecker's blog. One thing that he said that I think is MOST appropriate, is that we should all pray for God's grace to flood over this process. St. Jude, we thought for so long that this day could never come. Remind us that with God, all things are possible, and pray for us all!

I don't have time to keep up with Father Z over at What Does The Prayer Really Say, but he has a lot to say, and more commenters than Father Dwight.

Monday, October 19, 2009

A New World Record

Nobody, but NOBODY, does more murdering than abortionists. Not the Commies, not the Nazis, not the Turks, not the War Between the States, not even influenza.

None of those has passed the 1 Billion (1,000,000,000) Mark. Abortion has.

Is it any wonder that Mother Teresa made so much effort to constantly remind people, "[T]he greatest destroyer of love and peace is abortion."

For your stack of quotes:

"Any country that accepts abortion is not teaching the people to love, but to use any violence to get what they want. That is why the greatest destroyer of love and peace is abortion." -- Mother Teresa

"It is a poverty to decide that a child must die so that you may live as you wish." -- Mother Teresa

Tuesday, October 6, 2009

Meddling with Prices: Subsidies

The government may provide a subsidy. The government takes tax money and uses it to pay part or all of the price of a good, and gives that good to some beneficiary. The good is both overproduced and overconsumed, but incentives to produce it efficiently or at increased quality are decreased. People don't care as much about these when they didn't themselves earn the money they are spending.

One of the most prominent examples these days is The Scooter Store. Tax money is diverted to scooters, increasing the seller's revenue while reducing or eliminating the buyer's cost. Consumers are more likely to buy, and not likely to hunt for bargains. Producers have an incentive to make more, but not to cut costs or prices. They both win, as do the government employees who administer the program. The losers are everyone who would have liked to use their tax money for something besides buying a scooter for somebody else, and anyone who competes with scooter manufacturers for land, employees, and raw materials.

Health care is rife with subsidies. This article by David Goldhill tells many of the ways that health care costs are diverted from people who get health care to others, and the problems this causes. When the customer isn't paying, he doesn't bother to look for a bargain. When the supplier knows he's going to get paid no matter what he does, he has no incentive to cut costs or improve quality. Mr. Goldhill's story about handwashing is a perfect example.

Another prominent example is postsecondary education (ie, at colleges and universities). As Pell grants and Stafford loans have increased, so too has tuition, ensuring that the market is always charged all that the family of the student can bear, PLUS any subsidies and financial aid they can acquire. And college students learn less and less about how to think and learn with each passing decade.

The housing crisis is also a case of subsidies causing problems. Fannie Mae and Freddy Mac are both federally subsidized companies that would promised to buy risky home mortgages from banks. Basically, they told the banks, "Make a loan to anybody who has a pulse and fills out an application. It doesn't matter if they've never paid off anything in their lives, or if the monthly payment would be twice their monthly income. If they don't pay it back, the government will buy the mortgage from you and collect the money from the borrowers." Artificially increased demand caused artificial increases in price. The artificial increases in price drew extra people into home construction. Most people who were getting the loans and knew they couldn't pay them off didn't care. They figured somebody else would come along before disaster struck and buy the home from them for enough to pay off the entire mortgage and put some money in their pockets besides.

Fannie Mae and Freddy Mac started running out of tax money to buy up bad loans, so they started selling their loans to investors and banks as "innovative mortgage-backed securities." They, and the banks, treated these MBS as part of their capital base. This meant that they could count them as part of their 3%-5% of assets that they actually have to keep on hand to pay depositors and creditors. The value of these things is hard to determine. What people are willing to pay for them at any moment may be a far, far cry from how much money they would bring in if you held on to them. The Federal Accounting Standards Board prefers that assets be valued at what people last paid for it.

How does this work? Imagine a mutual fund, whose primary asset is 10,000 mortgages, that the mutual fund company bought from Fannie Mae. Let's call it "Fannie's Upstanding Collection of Homeowners" and assign it the symbol, FUCHXX. They sell 10,000,000 shares of this agglomeration of mortgages. Your bank buys 10,000 shares of FUCHXX at $40. So they have $400,000 in FUCHXX. They count it as a $400,000 asset, even though they expect it to eventually pay them $800,000 in dividends. Then they loan out $8 million on the strength of that asset, most of which they borrowed.

News comes out that the default rate on Fannie Mae mortgages is absurdly high. Nobody is willing to buy anything based on them. FUCHXX drops to $8 a share. Your bank now has to count it as an $80,000 asset. This means it now has to either come up with another $320,000 in assets, or buy back $6.4 million in loans. Your bank is in big trouble.

That is about what happened to cause the banking crisis that launched the $700,000,000,000 Troubled Asset Recovery Program of President Bush, and the (far larger) "stimulus" package that was recently passed by the Democrat Party and President Obama. Neither of these does much to address the real problem: people were given mortgages they couldn't afford to pay off, and builders built far more houses than people would have bought if they had been limited to mortgages they could afford. The artificially high supply of mortgages is gone, leaving banks and taxpayers holding the bag. The money can't be made back by selling the houses, either. The artificially high demand for homes is gone too, leaving them worth much less than the defaulted mortgages for which they are collateral.

In this series:
Supply, Demand, and Price | Price Caps | Price Supports | Restricting Supply | Excises | Subsidies

Monday, October 5, 2009

Meddling with Prices: Excises

The government may impose taxes on the purchase or sale of a product. The taxes get added to the buyer's cost, but not the seller's revenue. This has the effect of reducing both supply and demand, and also diverting both to alternatives that cost more to make, do the job less well, or both. This is done with sugar, and the business that sugar would get is diverted to corn syrup or other corn sweeteners. The IRS, corn farmers, and Archer Daniels Midland win. Sugar cane and sugar beet farmers, sugar refiners, everyone who likes sugar better than corn syrup, and anyone competing with corn syrup buyers for corn products, loses. Further losses are imposed by transaction costs.

President Obama's "Cap and Trade" scheme is another example of this. By greatly increasing the cost of combustion-generated electricity, he drives electrical utilities towards so-called "renewable" resources that either are far more expensive, far less reliable, have far greater impacts on local ecologies, or all of these.

In this series:
Supply, Demand, and Price | Price Caps | Price Supports | Restricting Supply | Excises | Subsidies

Thursday, October 1, 2009

Meddling with Prices: Restricting Supply

The government may restrict supply, but leave the price free. This drives prices up. Approved providers win. Everyone else loses. This also reduces innovation. There are many, many markets where supply is artificially restricted. Franklin Delano Roosevelt did his best to restrict the supply of food during the height of the Depression, even when many people were struggling to feed themselves. He also used price supports. Real estate markets are restricted by zoning. And a vast array of professions are limited in supply by licensing. And the tighter licensing always results in more people, not less, either doing without or trying to do difficult or dangerous things themselves. For example, the more difficult it is to become an electrician, the fewer people become one. The fewer electricians there are, the more they charge. The more it costs to hire an electrician, the more people are too poor to afford one. The more people who can't afford an electrician, the more try to do electrical work themselves. The more unqualified people do their own electrical work, the more electrocutions there are.

Another example of restricting supply is the Cash for Clunkers program. Cars that get traded in are destroyed (see video), no matter how pristine and useful they may be. This reduces the supply of cars, driving prices higher.

In this series:
Supply, Demand, and Price | Price Caps | Price Supports | Restricting Supply | Excises | Subsidies