Something must [be seen to] be done.

Look, we did something.

From Charles C. Mann’s fascinating book 1491: New Revelations of the Americas Before Columbus (p. 235, emphasis added):

Spread at its greatest extent over seven hundred miles of the coastline, Chimor was an ambitious state that grew maize and cotton by irrigating almost fifty thousand acres around the Moche River (all of modern Peru only reached that figure in 1960).  A destructive El Niño episode about 1100 A.D. made irrigation impossible for a while.  In response, the government forced gangs of captive laborers to build a fifty-three-mile, masonry-lined canal to channel water from the Chicama River, in the next valley to the north, to farmland in the Moche Valley.  The canal was a flop: some parts ran uphill, apparently because of incompetent engineering, and the rest lost nine-tenths of its water to evaporation and seepage.  Some archeologists believe that the canal was never meant to function.  It was a PR exercise, they say, a Potemkin demonstration by the Chimor government that it was actively fighting El Niño.

Whenever I hear a politician or government official say: “This may not be an ideal solution, but we must do something about [you name it].” I think of the ancient Peruvians and their up-hill canal — and about ways to hide my wallet.

 

Markets in Everything – 4×4 Bypass

Over at Mark Perry’s excellent Carpe Diem blog, Mark has an ongoing series about “markets in everything.”  As soon as I saw this, I thought of his series.

As you can see from this photo, Hurricane Sandy took out a section of Hwy 12 on North Carolina’s Outer Banks.

There is a bypass across the sand, but it requires a 4×4 vehicle. When we drove through today, there was a thriving trade of locals with 4x4s and trailers ferrying two wheel drive vehicles (sometimes with an entire family still inside) across the half-mile or so of sand. A waitress at a local restaurant told us that the going rate was a surprisingly reasonable $25.

There were orderly queues of cars waiting on the side of the road to be loaded, and the only government presence I could see was an NC DOT pickup truck who was keeping an eye on the condition of the sand road.

Edit:  I sent these pictures to Mark, and Carpe Diem is carrying the story.

 

Obama on Special Interests — “You keep using that word . . .”

We need to stand up to the special interests, bring Republicans and Democrats together, and pass the farm bill immediately.

Barak Obama

This quote has already been posted by much greater bloggers than I (here, here and here, for example), but it is just such a great example of double-speak. I couldn’t pass it up.

 

Congressman Rogers on Healthcare

 

The unbounded hubris of politicians

It beggars belief.

It’s crazy for a group of mere mortals to try to design 15 percent of the U.S. economy. It’s even crazier to do it by August.

Yet that is what some members of Congress presume to do. They intend, as the New York Times puts it, “to reinvent the nation’s health care system”.

(HT Jeremy)

 

Healthcare Santa Claus

George Newman has a good review of the often inconsistent arguments being put forward in favor of health care “reform.”

I was glad to see him address the “health care represents a rising proportion of our income” issue. 

That’s not only true but perfectly natural.  Quality health care is a discretionary, income-elastic expense — i.e. the richer a society, the larger proportion of income that is spent on it.  (Poor societies have to spend income gains on food and other necessities.)  Consider the alternatives.  Would we feel better about ourselves if we skimped on our family’s health care and spend the money on liquor, gambling, night clubs or a third television set?

When discussing this issue, I regularly ask people if they would rather have today’s healthcare at today’s prices or 1950’s healthcare at 1950’s prices.  No one has ever chosen the 1950s option.  (People would prefer to have today’s healthcare at 1950’s prices, and I too wish that Santa Claus was real.)

Newman, Parsing the Health Reform Arguments

(HT Andrew B.)

 

What Adam Smith really said.

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

— Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Book I, Ch. 10, ¶ 82)

This Adam Smith quote is often used to emphasize the evil and collusive nature of “big business.”  Unfortunately, like so often happens in these instances, everyone forgets the rest of the quote.

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

Smith wasn’t advocating for anti-trust legislation; he thought such laws were unenforceable and inconsistent with liberty and justice.  Rather, Smith cautioned against government mandated collusion.

Coyote Blog illustrate how we have quite ignored Smith’s admonition.

I can add a million examples.  Hair braiders are stepped on by the government in collusion with licensed beauticians.  Taxi companies get the government to quash low-cost or innovative shuttle transportation.  Discount casket companies are banned by government in collusion with undertakers.  Take dentistry.  Why do I need to go to an expensive dentist when 99% of my dental needs could be served by a hygienist alone?  Because the government colludes with dentists to make it so.  And don’t even get me started on medicine.  My guess is a huge percentage of the conditions people come into emergency rooms with are treatable by someone without a 4 year medical degree and 6 years of internship.  Does one really need a full medical education to stitch up a kids cut knee?  Well, yes, you do today, because doctors collude with the government to make it so.  Why can’t people specialize, with less than 10 years of education, on just, say, setting bones and closing cuts?  Why can’t someone specialize in simple wills or divorces without a full law degree?

As Adam Smith clearly saw, the real danger is not collusion between business men and business men, but collusion between business men and government.  Government is so much more dangerous because it is always done “for our own good.”

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies, The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.

–C.S. Lewis

 

The Logic of Government Housing

“It feels stupid not being able to go into all the rooms of your apartment any more.”  (via Outside Story).

I’m about as cynical as you can get when it comes to government, but I couldn’t make this stuff up.

BERLIN, Feb 2 – More than 100 German housing association tenants are obediently following tough new rules by agreeing not to use all the space in their apartments to avoid being forced to move out.

The local housing authority in the eastern town of Loebau said on Friday the new regulations stipulate the tenants — who all live on welfare — now only qualify for smaller homes.

Because there is a shortage of smaller dwellings, the tenants are being allowed to stay, so long as the space they use does not exceed the new limit.

“The recipients are only allowed apartments of a certain size, but there aren’t enough smaller apartments available,” said Matthias Urbansky, head of the local housing authority.

“The people involved seem to be quite happy with the new set up,” he said, noting that inspectors nevertheless make regular patrols to ensure the rooms standing empty are not being used.

Not everyone sees the sense of living in an apartment with off-limits areas.

“It feels stupid not being able to go into all the rooms of your apartment any more,” one 49-year-old woman was quoted as saying in the Dresdner Morgenpost newspaper.

 

Utah’s school voucher and distortions in the education market.

On Friday, the Utah state house of representatives passed a bill creating a statewide school voucher program.  The bill is expected to pass the state senate and be signed by the governor.  The program makes a voucher available to every public school student in Utah, which the student can use toward tuition at a private school if they so choose.  The value of the voucher is between $500 and $3,000 annually based on family income, and there are relatively few requirements that the private schools must meet.  (Utah government schools spend about $3,500 annually per student.)  More specifics are here.

I think this voucher program is a good thing.  It goes at least some way toward addressing what I see as a significant distortion in the education market created by government  schools.

Imagine for a moment that the government decided to make a car available to every citizen old enough to drive.  The government provides only Ford Focuses, which retail for about $15,000 in the United States.  I think one would see a couple of things happen to the automobile market.  First, and most obvious, there would no longer be any cars on the market for less than $15,000, why buy a car worth less than the one you could get for “free”?  Perhaps less obvious, I think that you would see almost no cars in the $15,000 to $40,000 range as well.  Why would you pay the full $20,000 for a car that was only $5,000 better than the car you could get free?  Put another way, the incremental value of the car would be only $5,000 while the incremental cost would be $20,000.  I expect you would start to see a market for private cars only at a much higher price point, where the $15,000 lost opportunity cost was not as important.  I also expect that you would see some specialized cars for those who really needed something other than a Focus.  Though, you would almost certainly see a lot of people making do with the Focus even if it wasn’t entirely appropriate.

The same thing happens with education.  My eldest daughter is five-years-old and currently attends a government school in Arlington County, Virginia.  Our county spends in the neighborhood of $5,000 annually per student and has very good schools compared to the national average.  However, this system creates the same dilemma for me as the government car would create.  If not for the government school, I might decide that I would prefer my daughter get $7,000 worth of education, but I’m faced with paying the full $7,000 for an incremental gain of only $2,000 in education.  And, even if I was willing to pay the full $7,000, it is unlikely I would be able to find a $7,000 education.  The government schools have pushed these options out of the market.

Even worse, government schools force all children into a single solution.  Much like the carpenter with a Ford Focus covered with ladders and stuffed with tools, children who would be much better off with a different “vehicle” face a stiff incentive to fit into the solution provided.

I think vouchers are a good start to addressing this and other issues with “public” education.  I hope Utah’s experiment proves successful, actually and politically.

[NOTE:  A brief, unscientific survey of private schools in Arlington Co. shows that almost all schools are either significantly more expensive than public school, overtly connected to a religious denomination, or both.  Interestingly, the number of schools available decreases significantly for higher grade levels, with only one private high school in the county.  A number of these schools are also notoriously difficult to get into–stop and put your name on the waiting list on your way home from the hospital if you expect to get in.]

[Disclaimer:  My dad has been a public school teacher and administrator in Utah for thirty-plus years.]

 

Fungible.

This quote:

The government, environmental groups and some of the Netherlands’ “green energy” companies are trying to develop programs to trace the origins of imported palm oil, to certify which operations produce the oil in a responsible manner.

From the New York Times article about the environmental horrors of “renewable” palm oil fuel, reminds me of this wonderful Dilbert comic.

(HT Catherine H.)