Futures and Options

I would vote for this woman in a heartbeat.  If her ideology were mainstream among Republicans, the party would have a fighting chance.  I would love to see her running for President when she is old enough to meet the requirements, but somehow I think she may, unfortunately, be smart enough not to want the job.

But it’s not high-speed rail.

Despite the praise being heaped upon the idea of high-speed rail by certain segments of the population, Obama’s high-speed rail plan remains a terrible idea.  Indeed, the fact that it’s a recycled plan from 2005 may just be as close as it comes to being environmentally responsible.  And even the new “high-speed” segments are not going to make rail travel competitive with airlines and automobiles.

To fly from DC to Chicago takes two hours.  By rail?  17 and a half.  There are those who would counter that people would be taking the train for the shorter hops, like the drive I’m doing every other week now from Philadelphia to Harrisburg to avoid having to take the short-hop flight.  The high-speed train would cost around $200 round-trip.  It costs me less than $20 in gasoline to make the round-trip myself in a full-size Chevy Impala.  And I have the added benefit of having a car at my destination allowing me to come and go at my own leisure.

For bulk freight, rail is fantastic, but for transportation it just doesn’t make sense.  For short distances it’s no faster than driving yourself, much less convenient, and more expensive.  For long distances it’s far slower than flying (and more expensive).

I know this is all stimulus spending and not infrastructure spending, but wouldn’t it make more sense to take that same money and put it towards things that will actually get used?  Things like highway upgrades and airport expansion?  Heaven knows that there are enough delays out of airports like Philadelphia and Chicago that they could benefit from a few new runways.

I came across something interesting today at the Cato @ Liberty blog.  The relevant part is below:

Ever cross your mind that there’s a reason government programs increase over time? I’ll clue you in: Programs increase because of public demand.

It’s not rocket science, people want more services. Period. Somebody’s got to pay for them. Hences taxes. Or perhaps borrowing. Or a combination of both. In any event, there’s no evidence people are willing to get along with fewer services.

The situation seems simple to me; so why can’t you ideologues on the far right understand what’s going on. Instead, you simply go on bemoaning the existence of programs and taxes you don’t like.

Actually, we do see what’s going on.  Saying that programs increase because of public demand is a bit like saying that sunshine increases because of a lack of clouds.  It’s blatantly obvious.  Unlike the far left ideologues, however, conservatives realize that just because the public demands something doesn’t make that something a good idea.  A child may “demand” a chocolate bar in lieu of a nutritious dinner, but that doesn’t make it a good idea to substitute a proper meal with candy.  The idea that whatever we want is inherently good is poisonous to long-term sustainability.  it prioritizes short-term planning over the long term and immediate impulse over sober judgment.

Also, with government services the demand is often overstated because the “somebody” who pays is seldom the same “somebody” who benefits; at the very least even when the people who benefit also pay into the pot, they are putting in less than they are taking out.  Social Security is an excellent example.  Individuals are, on average, withdrawing far more than they have contributed to the system.  It continues to receive support, however, because everyone expects that they too will be able to take more out than they have put in.  If everyone had to pay for governmentally-administered services in proportion to how they use those services, there would not be nearly as much demand.

It’s a very simple matter:  If you promise to provide a service for free or for well below cost, there will always be demand for it.  If you continually provide services for free or below cost, however, you must recoup those expenses somehow and simply borrowing or taxing “the rich” is not sustainable because both sources of income will eventually run dry.  Whether people are “willing to get along with fewer services” or not is irrelevant.  At some point, they will have no choice at all because it will simply not be possible to continue providing services.  And that will be a disaster because people will have made long-term plans based on the assumption of those services being available.

In the end, it comes down to the necessity of operating within a budget.  An occasional deficit is allowable, but the Bush deficits were not, nor are the (far, far larger) Obama deficits.  Yes, balancing the budget will hurt.  Sometimes reality hurts, that’s just the way things are.

First of all, no, they aren’t dead.  They’ll be showing up again somewhere I’m sure.  In business a “post-mortem” is an analysis that occurs after a project has been completed and rolled-out; an investigation of what went right, and what went wrong.

So, what went right:

• A grass-roots effort started by a schoolteacher in Seattle was able to draw in a sizable amount of protesters in over 800 cities in the US; something that has historically been difficult at best for Conservatives.  We’ve proven that the conservative base can, in fact, be motivated.  And, unlike the protests against AIG executives, the Tea Parties actually drew more protesters than reporters.
• The protests were peaceful.  I saw no reports of vandalism or arrests and we didn’t have idiots laying down in the streets and no business was disrupted.  This is a clear differentiation from the majority of liberal protests I have seen in the news.

And, of course, what went wrong:

• Poorly chosen date.  By choosing to hold these protests on “tax day” the message was muddled.  While “tax day” is a high-profile day and appears to be a reasonable choice, the fact is that the protests were not anti-tax and the choice of day allowed confusion over that fact.
• The message was allowed to get lost in the noise.  The point of the protests was to come out against excessive governmental spending, especially the ridiculous amounts of pork-barrel spending that were slipped through under the guise of the “Stimulus” bill.  Many media reports, however, referred to the Tea Party participants as “Tax Protesters”.
• Allowing the opposition to frame the message.  Ridiculous and unfounded claims of astroturfing went largely un-refuted and the media were able to frame the event as a protest against taxation when the fact of the matter is that taxation is only a peripheral issue.  Yes, most (all?) of the participants in these protests feel that taxes are too high, but they view that as a symptom, not the disease.  The core of the protests was excessive governmental spending (something that, as I pointed out yesterday, most people seem to agree is bad), not the tax rates in and of themselves.  This message was not clearly communicated and the choice of tax day for the protests only further inhibited the ability to make this fact clear.

Overall, I am inclined to consider these events a qualified success.  The Tea Parties accomplished something that has not been managed in a long time; they gathered significant numbers of conservatives together through grass-roots efforts in over 800 locations across America.  For a group that historically does not show up to protest anything, that’s huge.  The lack of vandalism or disruption of business is also huge.  We’ve shown that conservatives are not like the idiots who lay down in the middle of the street to stop traffic or chain themselves to buildings.  We’ve proven that conservatives are committed to peaceable assembly which is a stark contrast to many other protest movements that advocate disruption and confrontation.

Still, there remains much to do.  As Repurblican pointed out a few days ago, the message needs to crystallize and be disseminated more clearly.  The focus needs to come out clearly and with strong emphasis.  Counter-claims need to be repudiated forcefully and immediately and this, as yet, has not been accomplished.  Without a strong center, this movement will get hijacked and it will peter out.  We’ve reached the point where it truly becomes do or die.  From here on out we need to repudiate the kooky hangers-on, clarify the message, and keep moving; if yesterday’s protests become an end rather than a single step, all effort towards these Porkulus protests will have been for naught.

According to a Rasmussen poll, only 25% of people in the US think we need a greater amount of governmentally-administered services and the necessarily accompanying higher tax rates.  Perhaps there is some hope remaining after all.

Despite the implications in my (hopefully) humerous previous posting, I do intend to revisit the Tea Party phenomenon later today after I have had a chance to digest the news reports and the firsthand accounts of the participants (including the teaparty founder, Keli Carender).  I’m open to revising my opinions and, frankly, I hope that I am able to do so.  The less kooky the Tea Parties come off, the better we all are and, honestly, I don’t believe that the guy in the Little Green Footballs post is who Keli had in mind when she started this whole thing.

You may tempt me with redheads, but I shall not be swayed from my skepticism of your effectiveness!

I was reminded again today of H. L. Mencken’s famous quote that, “For every complex problem, there is a solution that is simple, neat, and wrong.”  Today’s trigger is a piece, purportedly from a letter to the editor, but which has been making the rounds on the Internet for at least a month now.  The idea is ambitiously called “Patriotic Retirement” and the “letter” runs as follows:

There’s about 40 million people over 50 years old……. in the work force – pay them $1 million apiece severance with the following stipulations.

1) They leave their jobs. Forty million job openings – UNEMPLOYMENT FIXED

2) They buy NEW American cars. Forty million cars ordered – AUTO INDUSTRY FIXED.

3) They either buy a house or pay off their mortgage – HOUSING CRISIS FIXED.

Let’s take a look at this more critically, shall we?  The US life expectancy is 78 years (on average, for men it’s 75 years, for women, it’s 81 years, but for simplicity, let’s use the average).

If someone is 50 years old and receives the $1,000,000 to retire, that amounts to $35,714.28 per year until that person’s death.  Assuming they die at 78.  If they live longer, it’s less per year.  So they’re probably going to be looking for another job eventually anyway because, unless all of these people live in areas with ridiculously low costs of living, that $35,714.28 per year just doesn’t go very far.  If someone is 60 years old, then it becomes more reasonable at $55,555.55 per year.  Of course, this is all assuming that this is tax-free income.  If it is taxable, lop at least 40% off of those numbers so that Uncle Sugar can have his cut.

Requiring the purchase of a new American car (neglecting the fact that many “Japanese” cars are built in America and many “American” cars are built in Canada or Mexico), would mean that the person would sacrifice about a year’s worth of his or her payout in order to buy the car.  Or they would buy a small car (on which auto makers see very little profit) and promptly sell it, creating a glut of nearly-new used cars that would serve only to depress the automotive market further after the initial, artificial, spike in sales.  More important, however, is that this addresses a symptom and not the disease.

Simply increasing demand through a government mandate will not provide an incentive for increased quality or new ideas, which again serves only to harm automotive companies in the long run.  The situation we currently have exists because US automotive firms have been slower to react to changes in the marketplace than foreign firms have been and simply forcing people to buy the current products will not drive the innovation that US auto makers truly need to see.  In fact, their current state of desperation is, interestingly, the most likely means to ensure that their products will actually improve and become competitive once again.  Look at Ford, for example.  Ford was in a desperate place a few years ago and made the very bold move of ousting William Clay Ford from the position of CEO and bringing in Alan Mulally.  Under Mulally’s leadership, Ford has begun a rather impressive turnaround.  Not only are they the only US auto maker to decline federal bailout money, but they are also producing a hybrid that bests Toyota’s comparable offering (the new Fusion hybrid that offers superior mileage to Toyota’s Camry hybrid, and, I speak from experience with both cars, offers a superior driving experience).  Desperation breeds innovation.

Buying a new house or paying off a mortgage represents the potential sacrifice of 3 or more years worth of the payout in most scenarios and once again ignores the underlying causes.  First of all, people who are 50 or older are unlikely to be upside down in their mortgages.  These are not, by and large, the people who are at risk of losing their homes and they are not, by and large, people whose mortgages represent a high risk to the banks.  Sure, there will be some people here who fit both those categories, but not in significant numbers.  The 50+ and employed demographic is not where most of the risk lies.  Because of this, a stipulation requiring that these people either pay off their mortgage or buy a new house (presumably outright rather than with a loan) would not have any significant affect on the amount of toxic assets carried by banks.  Additionally, many people in this age group already have their homes paid off, so forcing them to buy a new house is also going to force them to sell a house as well (most likely they would buy a house and then sell it again immediately given the hassles involved with moving and also with renting), which means no real progress is made as houses would remain on the market, just now with different owners.

And, lest you think I’m letting something slip, there’s the small problem of the math.  $1 million multiplied by 40 million people is $40,000,000,000,000.  $40 Trillion.  That’s significantly more money than we’re spending on large companies.  More expensive, less effective.  Everyone loses.

At first blush, the proposition seems good.  But upon actual critical analysis it falls apart, fast.  It’s a “feel-good” solution that is actually no solution at all and it represents our collective (and unfortunate) desire for simple “quick-fix” remedies that don’t require us to think about complex issues.  Reality doesn’t work that way.  The problems we are facing today are complex, and the solutions will also be complex.  We’re going to have to actually think to get ourselves out of this one.  I know that’s frightening to many people, but it’s unavoidable.

It seems that Maryland Senator Benjamin Cardin has proposed a bill that would allow newspapers to claim non-profit status and operate as tax-exempt entities.  It may just be me, but I’m pretty sure that most newspapers have been operating without profit for a while now.

_{*Sorry, I know it was a bad joke, but I couldn’t resist it.}

Much like this Dilbert strip, we are not better off when people like you try to help.  Please, for the love of all that is good and decent, shut up.  You’re only making it that much more difficult for conservatism to be taken seriously.