Stupid, or Evil?

AIG was given a bailout of billions of dollars without having to drastically restructure their company; it was rather given as funds to keep them afloat.

As it turns out, it wasn't just Major League Baseball that made terrible contractual decisions over the last decade (Juan Pierre, Sidney Ponson, Barry Zito, Albert Belle, Kevin Brown, Darren Dreifort, FOX, and I can go on forever...), nor merely homebuyers who got mortgages on houses they couldn't afford. There were also companies that gave executives huge pay packages, most of which was in the form of bonuses, most of which were practically guaranteed bonuses.

But now is the time to get upset that they make so much money. Because they're getting bailed out, damn it. Why should these people make more than the President, after all? Are they more important? Do they do more good for the world?

This is not how things work, though. The market values people for certain reasons. And the fact of the matter is that without a significant market correction, those true values cannot come out. Home prices are crashing because they were too high. The housing market has been a bubble waiting to burst, particularly with incentives towards malinvestment through the tax code. When we shield ourselves from market corrections, we delay the inevitable, and that makes things much worse. After all - the bonuses AIG is paying out amount to something like .1% of the bailout money they received. This is like paying someone who writes grant proposals for a non-profit organization that get it $50,000,000 a year in funding being paid $50,000 per year, except that's for the whole department of grant writing. Those who are disgusted by the executive compensation should be disgusted with their elected officials - they gave in, giving billions of taxpayer dollars to companies despite their poor handling of business. Not despite, BECAUSE OF their poor handling of business. If there is anyone who should be the subject of public outrage, shouldn't it be those in office who would insist on such bailouts without requiring a serious restructuring of the companies?

So enter Senator Chuck Grassley, Republican from Iowa, and his remarks on executive pay:

“The first thing that would make me feel a little bit better towards them if they’d follow the Japanese model and come before the American people and take that deep bow and say I’m sorry, and then either do one of two things — resign, or go commit suicide.”

Go committ suicide.

Go kill yourself.

For a United States Senator, who help to shape policies to create this economic environment as a longtime member of the Senate Finance committee, even serving as Chairman in 2001 and from 2003-2006, to suggest that corporate executives should kill themselves can only be classified as stupid, or evil. Either stupid, because he hasn't the brains to realize the role of government in creating the current economic environment, or evil, for suggesting others must die for something he was complicit in, while demanding to walk away.

Best Paragraph I read Today

Our real choice is between two candidates who don't understand economics. And they both want to govern a country full of people who also don't understand economics while thinking they do. That makes the old, senile guy the only person in this scenario that isn't deluded or lying. He tells you up front that he doesn't understand economics.

From Scott Adams on the Dilbert Blog. The man does not get enough credit as an economist.

Barack Obama Wants My Vote

Observe:

I have to say that I did not expect a Reagan analogy, and neither did Ben Smith at Politico, when I stole this. But it makes sense.

Obama has going for him not so much being the man of change, but the unwavering optimist. For those on the right, he is the Democrat that probably scares them the least - Edwards is the class warfare guy, and Hillary's attempt at government-controlled healthcare still frightens those who fear death while waiting in line. Of course, he still believes government is the solution rather than the problem, but hey, he has a positive outlook.

Social Security

Well, it turns out that Bush was right that this was a problem, but it still hasn't been fixed. Barack Obama had the following to say:

"I think the best way to approach this is to adjust the cap on the payroll tax so that people like myself are paying a little bit more and people who are in need are protected," the Illinois senator said.

"That is the option that I will be pushing forward." Currently, only the first $97,500 of a person's annual income is taxed. That cap is scheduled to rise to $102,000 next year.

Obama's proposal could include a gap or "doughnut hole" to shield middle-income earners from higher payroll taxes, he said.

Uh huh, uh huh. WHAT?!! Now raising the cap on social security taxes makes sense, as Social Security would be better as a flat tax than a regressive tax as it currently is. What I want to know is when will Social Security honestly be declared not to be a pension system, but rather, just "welfare for old people?" Because that's what it is.

But the doughnut hole is basically a very open invitation for not just company cars, but company-provided housing, helicopters, etc. Sound silly? Well come on - this is the stuff tax accountants dream of.

Any other ideas?

On the Republican side, candidate Fred Thompson last week unveiled a Social Security proposal that calls for reducing benefits to future retirees and creating a system of voluntary personal retirement accounts. The plan is similar to one put forth by President Bush that ultimately stalled in Congress.

Gee, why does that sound familiar? Maybe Because George Bush already tried it and fell flat on his face. The government doesn't need to get involved with private accounts - because they're private. Private accounts already exist. This is as mind-boggling as the need to hire a scout to find out if Greg Maddux can pitch.

Privatizing Social Security is something that the US simply cannot do because it was put off far too long. To pull it off, it needs a more comfortable position, and the only way to get there is to raise the retirement age at an astounding rate.

Most importantly, the Minimum retirement age, which Bill Bradley has pointed out before, should be raised. Getting that up to 65 in the next decade and 70 by 2030 is not an unreasonable goal with the full retirement age rising along with it up to 70 and ultimately 75. After all, the program was created when the retirement age was 3 years in excess of life expectancy; it doesn't take a mathematician to figure out that if the retirement age slips to more than 10 years below life expectancy, then you have a problem. If you get the retirement age back up to life expectancy minus 3, you're in excellent shape.

At that point, Social Security stops being a source of income for a generation of people living off that and their savings for 20 years. Then you can talk privitization, because you'll reduce the impact it has on people's lives. Getting there would be harder, but it's a good start.

Reading the Bible for School?

Stephen Prothero, the chairman of Boston University's religion department thinks that public schools should teach Bible literacy.

Biblical illiteracy is not just a religious problem. It is a civic problem with political consequences. How can citizens participate in biblically inflected debates on abortion, capital punishment or the environment without knowing something about the Bible? Because they lack biblical literacy, Americans are easily swayed by demagogues on the left or the right who claim — often incorrectly — that the Bible says this about war or that about homosexuality.

One solution to this civic problem is to teach Bible classes in public schools. By Bible classes I do not mean classes in which teachers tell students that Jesus loves them or that the Bible is the inerrant word of God, but academic courses that study the Bible's characters and stories as well as the afterlife of the Bible in literature and history. Last week, the Georgia Board of Education gave preliminary approval to two elective Bible courses designed to teach religion rather than preach religion. As long as teachers stick to the curriculum, this is a big step in the right direction.

He concludes with a more concrete proposal:

What makes sense is one Bible course for every public high school student in the U.S. This is not a Christian proposal. It does not serve the political left or the political right. It serves our young people and our public life.

What is perhaps the most striking is that the author of this particular story thinks the only people who would be alarmed about public schools teaching their kids about the Bible are people who are not particularly religious. It is in public schools more than universities that it makes a difference whether or not you agree with a teacher's stance on an issue, because that teacher has some genuine authority over you, including the capability to give you detention or get you suspended. If you were to present the Gordon Tullock line that you have a better chance of dying on your way to the voting booth than for your vote to actually make a difference in a high school civics class, that would not go over so well. Conservatives already have a hard enough time with schools teaching macroevolution and global warming, so if you contradict what they believe about the Bible, they'll certainly not take it lightly.

What would conservative Christians argue about if the Bible was taught in schools? Well, try David's relationship with Jonathan; it's been argued that the two had a homosexual relationship, particularly in light of 2 Samuel 1:25-26. will the curriculum mention that Jonathan's willingness to risk his life for David was what he was referring to, as Jesus said "Greater love has no one than this, that a man lay down his life for his friends" (John 15:13)? Or for that matter, will it mention the cultural differences in showing affection?

Further, if an entire course is taught on the Bible, that can certainly cover a lot of ground. It's not inconceivable that a student could read the entire Bible during a full-year course. Were the course to mandate that, then it would certainly be difficult to impartially teach the Bible, particularly with such verses as, "All Scripture is breathed out by God and profitable for teaching, for reproof, for correction, and for training in righteousness" (2 Tim 3:16, ESV) among others.

Frankly I don't think this will ever happen (and incidentally, doesn't this just look like a ploy to find jobs for religion majors?). I would favor it only for one reason: because it's so divisive and personal an issue, it will likely make an excellent conversation starter for parents to take interest in what their kids are learning, and that is one of the most important keys to success for kids who aren't already motivated enough. For the most part, though, I'm pretty sure it won't happen, and I'm not disapointed at all by that.

NY Times: ManBearPig isn't real

The Times did not deny that global warming exists, far from it (but were that the case you'd just have to get a little bit suspicious). What they did say, though, was that Al Gore's An Inconvenient Truth was not entirely, well, true.

“I don’t want to pick on Al Gore,” Don J. Easterbrook, an emeritus professor of geology at Western Washington University, told hundreds of experts at the annual meeting of the Geological Society of America. “But there are a lot of inaccuracies in the statements we are seeing, and we have to temper that with real data.”

How weak is the science of global warming?

Still, Dr. Hansen said, the former vice president’s work may hold “imperfections” and “technical flaws.” He pointed to hurricanes, an icon for Mr. Gore, who highlights the devastation of Hurricane Katrina and cites research suggesting that global warming will cause both storm frequency and deadliness to rise. Yet this past Atlantic season produced fewer hurricanes than forecasters predicted (five versus nine), and none that hit the United States.

That last sentence basically said that forecasters predicted 9 out of the last 5 hurricanes. That's the standard joke about economists - they've predicted 9 of the last 5 recessions. Heck, if this stuff isn't better than macroeconomic theory, then screw it.

On that Most Fascinating of Topics

Barack Obama. And Tort Reform.

So apparently now Al Sharpton has decided he's not going to endorse Obama that easily. This story reveals a little more about an issue Obama supports, tort reform. Sharpton thinks that victims of police brutality need to be able to sue the police department, and this limits their ability to do that.

On the subject of tort reform, it just strikes me that the benefits of such practices is that lawyers will not have nearly the incentive to attract clients, from ambulance-chasing to charing nothing except for a portion of winnings in court (that is to say, if they lose, all their work was for free). Now of course, if a lawyer cannot get $10,000,000 in tort damages that way, their expected payout surely decreases. This will reduce the number of some of the more frivolous lawsuits; even the ones that fail are costly to businesses because their lawyers do not work for free, and of course, business costs are part of what is covered by consumers in the price of goods and services. Consumers are a demographic of all people, sexes, races, and creeds (well, maybe not the Amish, but you get the idea), after all.

***

The most bizarre part of the story came right at the end.

Does Sharpton's endorsement matter? CBS 2 polled some New Yorkers and the
results were mixed, but the majority appeared to lean toward the side that
believes Sharpton's endorsement will make a difference.

The very premise of such a question seems absurd. It probably went something like this:
"Will Sharpton's influence matter?"
"Well, not for me, but I can see that it might matter, sure."
I wouldn't be surprised if the above exchange happened with a lot of white people polled. The point is that you don't conduct opinion polls by asking people what they think other people think, if you want anything useful anyway; what you ask is what they think and then you get a representative sample and judge from that. Therefore, the question should have been, Do you care what Al Sharpton thinks?

HA!

Don Boudreaux makes a great point, which I think a lot of people were probably thinking.

Political Compass - You should go here

Political Compass is brilliant, and it's probably the best way to describe someone's politics. This is me right here. I've taken it a few times, and I'm pretty steadily in about the same area.

The way it works is that it just trashes the left/right model used in American politics, because it's actually quite useless. Adding labels means less and less, so it uses words with absolute meaning to describe your political inclinations. What it does is put economic beliefs on the left/right axis and then other issues of state control on the up/down axis, so that way you can understand, for example, the Libertarian party.

Frankly, I think the best model would account for military and foreign relations to be on a separate axis, maybe a willingness to use military force axis. You might be an economic libertarian who's a social libertarian as well, but you feel the military needs power to do what's necessary internationally, or whatever.

But anyway, it's on the sidebar, and if any of the two people that read this blog want to comment, leave your coordinates.

What's the difference between a janitor and a maid?

Let's say you wanted to hire someone to clean your house, so you decide that you're going to hire a maid (used to mean young girl, and there's all the tradition of women cleaning and that sort of thing associated with it too). If this is someone who's independent, she'll probably go for about $20/hr.

What if you have a firm and you need to hire someone to clean your office building, probably about 10 people. You could hire 10 maids (each at $20/hr), and they'd be independent contractors. Or on the other hand, you could purchase some captial stock, like cleaning fluids, vacuum cleaners, those floor buffer things that aren't quite zambonis, squeegies, power washers, etc which will last for a good while and then hire people who can clean stuff using your stuff. This will cost you about $12/hr for these workers, and that's a bit on the high end, like if they're unionized. Naturally, you'd rather go with these, and they'd be called janitors, which is from the Latin for doorkeeper.

What these two have in common is that they both are involved in hygenic maitenence; you might call them cleaning people. This entire post, I'm poking fun at Russell Roberts, because for being politically correct and calling maids "cleaning people," he confused someone who thought he meant janitors, and got labeled "Hack of the Day." Too bad, but remember this lesson: political correctness isn't free.

But don't get me wrong, I like Russ. In fact, you should all go buy this book if you haven't already read it. Don't ask to borrow my copy; it's upside down.