According to the US Labor Department the United States added about 69,000 new jobs to the economy in May 2012. Yet according to demographics, about 160,000 new potential workers need jobs each month. Add those numbers to the 12.7 million already on unemployment and, at the labor department’s “brisk” growth rate of 200,000 new jobs per month, it would take over 20 years to get the unemployment rate down to 3%. Continue reading →
June 20-22, 2012 will be the dates for a big conference on the environment called Rio+20. It will be held in Rio de Janiero. Before then, and during the event, we will hear many arguments about climate change and why we need a green economy. The climate is always changing, and I believe in the value of science, living sustainably, and thinking “green.” However, I have yet to be convinced that what the United Nations has told us is based on good science or that UN agencies really have the ability to “care” for the environment and, if they did have the ability, they would be the right authority to enact taxes because of conflicts of interest. And, further I have come to be suspicious of the motives of any government or corporate official that uses the logic of fear to garner support that will increase his or her wealth or power.
The Cause and Solution to Sea-Level Rise
Unscientific linear logic
As a case in point, lets look at the issue of sea level rise. In the climate change debate there is much discussion of the rise of oceans as a result of glacial melt. Glacial melt, the argument goes, is a result of global warming; and global temperature rise is caused by the human activity that causes greenhouse gases; and greenhouse gases are created by carbon emissions, such as from burning fossil fuels.The solution, it is argued, is to have a global authority tax the use of carbon fuels and take the money to create sustainable environment programs. Continue reading →
Bankrupt European economies and the out-of-control U.S. debt are problems symptomatic of democracies. Democracy was tried by Ancient Greeks, and similar problems occurred in ancient times. Plato, in the The Republic, listed several problems of democracy, among them:
- Democracies encourage mediocre leadership.
- Leaders must pander to the selfish desires of their constituents.
- Leaders focus on short-term goals to get elected, and
- Democracies tend to spend more than they take in.(1)
Plato’s proposal was to create a communist-type government that was run by philosopher-kings, Ancient Greece’s version of the technocrat. His idea was to assign the most qualified and skilled person to perform important tasks of leadership and education.
While sympathetic to Plato’s desire to create a better society, Aristotle shot down many of Plato’s ideas in his Politics. For one thing, Aristotle understood that the most skilled people may not motivate the average citizen. He argued that one mother with 5 children could better educate them than a philosopher-king responsible for 1,000 children. First, the mother would be personally motivated to care for each child, while the teacher could not give such personal attention to all. Secondly, the teacher would primarily be motivated by the desire to seek an income for himself, and the learning by students he taught would be a byproduct, not the primary concern of the teacher.
In recent years, particularly in the state of Minnesota, constitutional amendments have become viewed as an alternative method of passing legislation when it is threatened with an executive veto. Such amendments get placed on the ballot by the legislature for a voter referendum. If passed, they become law with any action by the governor. The problem is that the purpose of a Constitution is to establish the parameters and machinery of government, including how legislation gets passed, and rights of citizens that must be protected—not as the vehicle for passage of individual laws.
The purpose of a constitution is not an alternative place to enact taxes or laws relating to the specific goals of political factions or interest groups. That is the purpose of the legislature, and a governor’s veto is an established check on the power of the legislature designed to ensure that bills serve the interest of all parties before getting signed. If a bill cannot get enough votes to override a governor’s veto it should be killed. Our founders did not intend contentious issues that had a simple majority to be an adequate form of government as it does not protect the people from what they called “mobocracy.” Continue reading →
In recent speeches President Obama has complained about the “Do-Nothing Congress” and stated this as a reason why he should get re-elected. He also has been talking about increased job growth and taking credit for this because it has occurred during his administration. But what if the increased job growth is a result of the Do-Nothing Congress and nothing to do with his administration?
Two reasons for job decline in previous years can be directly tied to an activist Congress. First, the housing bubble was created as a result of government intervention in the housing market by guaranteeing loans to unqualified buyers. This encouraged corruption in the mortgage industry because the lenders were protected in the case of loan failures, and they could make more money by creating bad loans. When this housing bubble burst, large unemployment, initially in the construction business, but later in secondary markets was the result. Hence, job decline can be directly tied to a “Do-the-wrong-thing Congress.” Continue reading →
We all knew that the Affordable Health Care Act, popularly known as Obamacare, would lead to lead to rationing. Shortly after Barack Obama became President, he and Nancy Pelosi began promoting such reforms–to redistribute a shrinking pie more equitably. Instead of doctors and patients, or even insurance companies, deciding who would receive medical care, when they would receive it, and how much they would receive, there will now be 160 panels of bureaucrats whose primary mission is to reduce health care costs to the government.
As 2014 approaches, what Sarah Palin called “death panels” are starting to take shape. In this recorded interview with Mark Levin, Jeff, a neurosurgeon, describes what it will mean for his profession.
“If someone over 70 years old has a bleed on the brain in the middle of the night, I have to wait for a panel in Washington to tell me whether I can operate…. I’ve been 9 years in medical school and 10 years in training and now I’ve got people who don’t know a thing about what I am doing telling me when I can or cannot operate.” Without special permission to operate, the new prescription for a bleed on the brain for people over 70 years of age will be “comfort care.” Such decisions will not be determined by a doctor’s evaluation of whether a surgery would provide the patient with many more years of a high quality life; they will be a death sentence.
In this address, perhaps the last paper he wrote, Professor Hayek elaborates on the relationship between the evolution of the moral order and evolution of reason, arguing that the latter is dependent on the former, and that rationalists, like Marx and others, who try to construct a social order based on reason (just a small portion of the spontaneous social order) are doomed from the start.Hayek could be considered a pioneer in the field of Integral Political Economy, although he didn’t use that term. His approach is interdisciplinary and integrates scientific and historical approaches to knowledge.
The Presumption of Reason1
F. A. Hayek
Prepared for the Plenary Address, 14th International Conference on the Unity of the Sciences, Houston, Texas, 1985. © 1986, International Cultural Foundation, Reprinted with permission.
The relationship between the theory of evolution and the development of culture raises a number of highly interesting questions, to many of which economics as a science provides philosophical access that few other disciplines offer.
There has however been great confusion about the matter. So-called social Darwinism, in particular, proceeded from the assumption that any investigator into the evolution of human culture has to go to school with Darwin. This is however quite mistaken. The idea of evolution stems from the theory of language and from the theory of law, not to mention economics, and long antedated Darwinism. Indeed, not only is the idea of evolution much older in the social sciences than in the natural sciences, but I would even be prepared to argue that Darwin got the basic ideas of evolution from the social sciences. As we learn from his notebooks, Darwin was reading Adam Smith’s The Wealth of Nations at just that time, in 1838, when he was formulating his own theory. In any case, Darwin’s work was preceded by decades, indeed by a century of research concerning the rise of highly complex spontaneous orders (such as the market order, and other institutions and traditions) through a process of evolution. Even words like “genetic” and “genetics,” which have today, long after Darwin, become technical expressions of biology, were by no means invented by biologists. The first person I know to have spoken of genetic development was the German philosopher and cultural historian Herder. We find the idea again in Wieland, and again in Humboldt. Thus modern biology has borrowed the concept of evolution from studies of culture of older lineage. If this is in a sense well known, it is also almost always forgotten. Continue reading →
Today I was referred to an article in The Times (London) by Matt Ridley titled “Yes, capitalism failed. It’s just too cosy.” What Ridley was criticizing is the “crony capitalism” that reflects our current economic systems in the US and Europe. The Solyndra failure and the housing bubble are archetypical examples of the failure of crony capitalism, where politics and capital investment are too cozy.
Matt Ridley, like many neo-classical economists reminds us that this is not the economics of Adam Smith who was for a free market. Ridley concludes by stating that “capitalism represents the interests of the rich, whereas the market represents the interests of the poor.”
The culture war in the United States can be compared to one big labor dispute between employers and workers. When the 20th Century began, the United States was in the middle of a great growth of industry, and there were many industrial labor disputes. These disputes occurred in the private sector, between capital and labor. These disputes were settled by governors and courts and eventually legislation was passed that legalized private unions and placed limits on the use of power of both parties, so that labor disputes could be settled peacefully. Government served its proper role of creating rule of law and serving as a referee.
Today the situation has changed. The big labor dispute is between government unions and taxpayers. They battle it out between political parties that represent factions, with Democrats shouting “the rich need to pay their fair share,” and the Republicans repeating the phrase “no new taxes.” If a member of either party gets elected as a governor or president, he (she) is expected to represent the partisan position of the party that elected them. In no case will the government get a leader in the position to settle the dispute, one that sees both the vices and virtues of both sides. We have to ask, “Where is the referee?”
The corruption in US regulatory agencies has reached a new milestone as the FDA gave URL Pharma the sole right to sell Colcrys (colchicine), a drug used to treat gout for thousands of years. Now the price of the drug has increased from $34.83 for 60 tablets to $306.86 for 60 tablets. This problem, exposed by CBS 60 Minutes, exemplifies the ever more urgent need for US regulatory agency reform that I wrote about in April 2010. We are heading down a road that can lead the FDA to authorize one company to sell all drinking water.
This blatant conflict of interest between a corporation and the agency supposed to regulate it has turned the FDA into a pipeline for favors to friends that turns US citizens into their unwitting slaves. Ending such conflicts of interest created by regulatory agencies can greatly reduce the cost of health care in the United States, in this case nearly 10 times. Ironically, many of the proposed “solutions” provided in Obamacare rely on creating similar agencies lacking proper checks and balances that will only increase prices and divide the spoils of such a corrupt system among a few more foxes. Continue reading →