The Mighty Dollar, a wealth of worthless observations about money – P.J. O’Rourke

Upon which fallacious comparison and self-sanctimony my bird dog lifts his leg. – P.J. O’Rourke

The entire essay appears in the link below:

http://www.weeklystandard.com/articles/mighty-dollar_610922.html

Globular Objects

The Light Bulb Cops

The budgetary gridlock in Washington in the final legislative days before Christmas took on a farcical atmosphere when Senate Majority Leader Harry Reid refused to move a government-funding bill because, among several other features he objects to, it would overturn a de facto federal ban on incandescent light bulbs.

But late last night Mr. Reid and House Speaker John Boehner agreed to terms on the spending bill, and Republicans won on the light bulb issue. The ban is suspended for one year. The GOP also prevailed on its prohibition of funding for abortions in the District of Columbia, though most of their deregulatory policy directives were stripped from the legislation.

The fact that the light bulb ban even made the list of Mr. Reid's grievances indicates how captive Democrats are to the anti-carbon police. Fluorescent light bulbs are more energy efficient, and though they cost more they last longer than traditional incandescent bulbs. But many consumers just haven't taken to the curly cue bulbs and prefer the older, cheaper kind. So Congress decided to take away the choice for consumers by requiring that all bulbs meet energy efficiency standards. This has meant that stores like Wal-Mart and Home Depot have been clearing the shelves of the traditional bulbs.

The new "green" bulbs can cost as much as $40, which in these tough times is a financial pinch. It's also the height of global warming hysteria to think that letting a family screw a traditional light bulb into the bedroom lamp is going to melt the Arctic ice caps. For another year, at least, American consumers can still by the light bulbs they want. It was a rare victory for liberty on Capitol Hill.

-- Stephen Moore, The Wall Street Journal,  Political Diary, 12/16/2011

More on the Keystone XL pipeline

The Politico Painted Corner

“Those politically painful steps [in the euro zone] involve selling off state enterprises, firing tens of thousands of politically connected state employees and removing jealously guarded protections that limit competition in dozens of professions."

“Herein lays the crux of the European problem. Although most of the other troubled European countries may not have the same degree of tax evasion and nepotism that Greece has, each of these countries will be forced to implement painful reforms that are likely to endanger the jobs of many European politicians. None of these lessons should be lost in the US either”. – Michael Farr (1)

The above observation finds its root in public choice theory. That is,  politicos through the mechanism of government build dependent constituency classes through taxpayer dollars and/or special conditions. “Dependency” comes in many varieties such as direct transfer payments, crony capitalism, bloated public payrolls, creating special conditions, etc. The basic flaw with political constituency building exercise is that the process is built upon maintaining or increasing taxpayer dollars funnelled to the constituency and/or maintaining or expanding special conditions. Failure to produce the taxpayer dollars or special conditions means loss of the political constituency.

An example may better illustrate. Politico A knows the taxpayer is a widely diffused and to a major degree unorganized/an unrepresented group regarding tax increases. If the politico raises taxes by $1 on the very diffuse group and bestows the many, many one dollar tax extractions to a much smaller and focused group, then the recipient group will support the politico bestowing the taxpayer funds upon them. The highly diffused and unrepresented individual tax payer will make the rational decision that opposing the $1 tax increase is not worth the time and effort to oppose. Hence we have hundreds, maybe thousands, or even millions of taxpayers who individually will not take the time to oppose a $1 tax increase and the small incremental tax increase is then bundled and given to a smaller group which then become the dependent political constituency of the sponsoring politico.

Special conditions act in the same manner. If competition is lessen or distorted for the benefit of a small group which then causes a $1 increase in item XYZ’s  price, the widely diffused taxpayer/consumer once again will not take the time to oppose the $1 increase yet the $1 multiplied over many purchases of item XYZ is bestowed on a particular small and focused group.

A third rail occurs when the politico uses debt to finance political constituency building. That is to say, when a tax increase is unpopular, or taxes themselves will not create the needed revenue for the particular or aggregate political constituency building exercise(s) then debt becomes an optional revenue stream to bestow or create conditions. As more and more political constituency exercises are initiated by wider and wider number of politicos, debt is used in a fashion that increases at an increasing rate.

An overriding assumption by politicos is that the recipient class will not give up their advantage and hence the politico has created a perpetual constituency.  If the advantage is threatened, the politico champions the advantage with the built-in dependency constituency supporting the politico’s effort to retain the advantage for the group.

Hence it becomes problematic that the withdrawal of the incremental tax or incremental price causing special conditions will alienate the particular associated recipient class.  Therefore, the politico cannot allow, nor heaven forbid sponsor, the withdrawal of the advantage.

The alienation of losing a particular advantage [dependency] causes the recipient group to seek the advantage elsewhere. That is to say, the politico has created a Frankenstein of sorts in that political constituency building exercises are self-completing regardless of the sponsoring politico i.e. if politico A will not deliver, the recipient class will merely search and support an alternate politico that will deliver. Hence the politico perceives that the power emanates from the politico, that the politico thinks he has created the perpetual constituency that re-elects the politico come hell or high water, when in fact the politico has created something much larger that can consume the politico.

The above examples of political constituency building through taxpayer dollars, special conditions, and mounting debt occur based on the implicit assumption that unlimited taxes can be levied [which cannot] and that competition can be continuously reduced and the costs constantly passed on [which it cannot], and unlimited debt can be issued and accepted [which it cannot]

What happens when taxes are at a maximum, competition at a minimum, prices at a maximum, and debt at a maximum? The politico has painted them self into the proverbial corner. However, the momentum of political constituency building exercise continues. The recipient class demands its advantage. However, politico A-Z have nothing else to provide  when taxes are at a maximum, competition at a minimum, prices at a maximum, and debt at a maximum. To continue on the same course is assured collapse and to retrace steps is assured political defeat.

Therefore, the politico, so sure of the perpetuation of political constituency through political constituency building exercises find their self-assuredness of constituency building through taxpayer dollars, special conditions, and escalating debt was no more than a path to the eventual demise of the politico by system failure/collapse or political defeat caused by the exact same dependency recipient group the politico purposely created.

“But we have inherited a vast number of social ills which never came from Nature. They are the complicated products of all the tinkering, muddling, and blundering of social doctors in the past. These products of social quackery are now buttressed by habit, fashion, prejudice, platitudinarian thinking, and new quackery in political economy and social science”.

“The greatest reforms which could now be accomplished would consist in undoing the work of statesmen in the past, and the greatest difficulty in the way of reform is to find out how to undo their work without injury to what is natural and sound. All this mischief has been done by men who sat down to consider the problem (as I heard an apprentice of theirs once express it), What kind of a society do we want to make? When they had settled this question a priori to their satisfaction, they set to work to make their ideal society, and today we suffer the consequences. Human society tries hard to adapt itself to any conditions in which it finds itself, and we have been warped and distorted until we have got used to it, as the foot adapts itself to an ill-made boot. Next, we have come to think that that is the right way for things to be; and it is true that a change to a sound and normal condition would for a time hurt us, as a man whose foot has been distorted would suffer if he tried to wear a well-shaped boot. Finally, we have produced a lot of economists and social philosophers who have invented sophisms for fitting our thinking to the distorted facts.

Society, therefore, does not need any care or supervision. If we can acquire a science of society, based on observation of phenomena and study of forces, we may hope to gain some ground slowly toward the elimination of old errors and the re-establishment of a sound and natural social order. Whatever we gain that way will be by growth, never in the world by any reconstruction of society on the plan of some enthusiastic social architect. The latter is only repeating the old error over again, and postponing all our chances of real improvement. Society needs first of all to be freed from these meddlers—that is, to be let alone. Here we are, then, once more back at the old doctrine—Laissez faire. Let us translate it into blunt English, and it will read, Mind your own business. It is nothing but the doctrine of liberty. Let every man be happy in his own way”. William Graham Sumner, 1883 (2)

Notes:

(1)    Market Commentary from Michael Farr, 12/15/2011, Farr, Miller, and Washington.

(2)    What Social Classes Owe to Each Other, William Graham Sumner, 1883, page 72 and 73.

Greed: upon further review

Among the many other questions raised by the nebulous concept of “greed” is why it is a term applied almost exclusively to those who want to earn more money or to keep what they have already earned – never to those wanting to take other people’s money in taxes or to those wishing to live on the largess dispensed from such taxation. No amount of taxation is ever described by the anointed as “greed” on the part of government or the clientele of government. – Thomas Sowell, The Vision of the Anointed, page 186.

An Unlimited Supply of Amateur Reformers

“The most prevalent theme in President Barack Obama's Dec. 6 Osawatomie, Kan., speech was the need for greater "fairness." In fact, though the president never defined the term fair(ness), he used it 15 times“. - Walter E. Williams (1)

As previously elaborated upon, “fair” is what you are doing and the other person is not doing, -or- fair is where you go to get your pig judged. “Fair” or “fairness” are subjective contextual terms that boil down to political double speak.

However, deferring to William Graham Sumner, we find some insight:

“The amateurs always plan to use the individual for some constructive and inferential social purpose, or to use the society for some constructive and inferential individual purpose. For A to sit down and think, What shall I do? is commonplace; but to think what B ought to do is interesting, romantic, moral, self-flattering, and public-spirited all at once. It satisfies a great number of human weaknesses at once. To go on and plan what a whole class of people ought to do is to feel one's self a power on earth, to win a public position, to clothe one's self in dignity. Hence we have an unlimited supply of reformers, philanthropists, humanitarians, and would-be managers-in-general of society“. (2)



Notes:
(1) Economic Fairness, essay by Walter E. Williams, 12/14/2012

http://townhall.com/columnists/walterewilliams/2011/12/14/economic_fairness



(2) What Social Classes Owe to Each Other, William Graham Sumner, 1883, chapter eight: On the Value, as a Sociological Principle, of the Rule to Mind One’s Own Business, page 69.

The Keystone XL Pipeline Meets Public Choice Theory

If one considers alternative energy schemes as crony capitalist ventures, with taxpayer dollars being profit to the rent seeking special interests, then is the postponement of the XL pipeline  merely an exercise in the best interest of the special interest?

A special interest, in this case alternative energy, can only rent seek (acquire taxpayer dollars) if the special interest has a politico or collection of politico enablers. Governments do not think, act nor react. Only politicos think, act and react. Hence politicos through the mechanism of government allocate taxpayer dollars to special interests. Therefore, politicos associated with alternative energy have a vested interest in the political constituency exercise that taxpayer dollars generate.

Many of the politicos with a vested interest in the crony capitalism of alternative energy also have a vested interest in environmentalists. As the formula goes, the politico through the mechanism of government uses taxpayer dollars to build a political constituency. In this particular case the constituencies are associated in that the crony capitalist of alternative energy “appear” to also be the champion of the environmentalist. Therefore the politico enabler receives a double constituency building outcome through the awarding of taxpayer dollars.

Digressing for a moment, consider the concept of big oil windfall profit tax. Is crony capitalism, in the area of alternative energies, a substitute as it were for a big oil windfall profit tax, which creates the same "effect" for a particular political constituency? Stated alternatively, if one champions a big oil windfall profit tax and wants to capture the political constituency such a proposed tax caters to, then if one can not achieve the windfall profit tax does one use crony capitalism in the area of alternative energy to achieve the same political constituency building effect?

Now consider a fully engaged crony capitalist exercise in the area of alternative energy with hundreds of billions of taxpayers money allocated. Also consider that these alternative energies are not price competitive. Further consider that the same associated politicos have not only subsidized alternative energy but have mandated its usage. Therefore, a fully engaged crony capitalist system generating a non-competitive above market price has been guaranteed to perpetuate as the same politicos have added mandated usage. Political dupery at its zenith!

　
Enter the XL pipeline, a facilitator of lower priced, much less subsidized, and price competitive energy source. The fully engaged crony capitalist exercise, the political dupery as it were, views competition as a threat. Competition from the private sector no less. Hence simply eliminate competition and preserve the fully engaged crony capitalist exercise.

You see, its not that certain politicos are against monopoly, they are just against “private monopoly”.