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A Stitch in Haste

A Stitch in Time Saves Nine...But Haste Makes Waste

A collection of real-world libertarian, individualist and laissez-faire rants on law, economics, politics, culture and other current events
by an average, everyday lawyer & investment banker and part-time pop scholar.

8 May 2008

Kip's Law Sighting: "That Would Be Silly"
"A building has integrity, just like a man — and just as seldom."
--The Fountainhead

Goldilocks and the triplicate permit forms:
John Jessop earned a cult following among his colleagues after his withering comments were leaked in an e-mail which has been sent all round the country.

After being asked to fill in a "design access statement" for a storage shed on a small farm, he wrote: "The density is like on a farm, the social context is a farm in the country, the economic context is farming in the United Kingdom in 2008 (which is not very economic), the opportunities are to store equipment inside rather than the outside, the constraint is the planning system."

And under a section headed Context Analysis, he said: "The use is compatible with a farm because it is a farm building."

"It is located where it is because it is in the most convenient place, being on the farm and near the farmhouse."
...
"It can not be lower because nothing could be stored in it. It is not made any higher because that would be silly."
But since when did being "silly" stop a planning bureaucrat?

The notion that a farmer needs anybody's permission to build a farming shed on his farming land to store his farming equipment that he uses to earn his farming income shows how far the half-sibling notions of "zoning" and "environmental impact statements" have corrupted what used to be a rationally based concern for negative externalities. In the past, such reviews were cursory, common sense inquiries. Today? Yes, we the central planners have graciously allowed you to call your land a "farm," but that obviously did not mean that we would also allow you to "do farming" on it. We'll get back to you on that after we review your design access statement...

Other gems omitted from the media account:

--"Landscaping: The applicant and pervious [sic] occupants have spent a long time, probably more than a thousand years, making the countryside around the house look like farmland so that everyone can enjoy the pretty English countryside."

--"Access: There is an airport at Bristol which can be accessed by driving your tractor along the road. This gives direct access to warm sunny places all over the world."

--"Appearance: It looks like a typical modern agricultural shed in green profiled metal sheeting because that is what it is, and a great architect once said, 'Buildings should look like what they are'."

Methinks Mr. Jessop has read The Fountainhead.

Kip's Law: Every advocate of central planning always — always — envisions himself as the central planner.

Original 3-page document PDF here. (Via Fark.)

4 May 2008

Kip's Law Sighting: Ms. Maureen Felix of West Orange, New Jersey
And who, you might be wondering, is Ms. Maureen Felix of West Orange, New Jersey?

She holds the prestigious position of "random interviewee on the street" — and now seeks the higher office of your mommy:
The thought of taxing a Big Mac or a Wendy's burger came up at a New Jersey Hospital Association meeting where Gov. Jon S. Corzine was asked if it could be an option to help fund struggling hospitals. At the meeting, he reportedly called it a "constructive suggestion."

A spokesperson for the governor, however, told CBS 2 on Wednesday: "The governor is open to reasonable solutions to help solve our financing problems, but there are no plans for any fast food tax."
...
"I think this country has gone too much in the direction of fast and unhealthy food, and if people are taxed they may terminate that and turn toward more healthy foods," said West Orange resident Maureen Felix.
Of course, why anyone should give any kind of a damn what Ms. Maureen Felix of West Orange, New Jersey, thinks about whether fast food (defined how? by whom?) should be taxed (to what extent? with revenues deployed how?) — or about anything else, for that matter — remains unanswered. As does the precedent question of what basis a free society has in the first place for using taxation to control behavior rather than solely to raise revenue to fund legitimate public goods.

Because to nanny-staters, no such reason is required. Ms. Maureen Felix of West Orange, New Jersey, has an opinion, damn it. The fact that her opinion is baseless, uncorroborated, un-American, anti-freedom — not to mention mind-bogglingly stupid — in no way changes the fact that Ms. Maureen Felix of West Orange, New Jersey, has an opinion, damn it. What right do you have to mock it? And, more importantly, what right does a politician have to ignore it?

She is, after all, Ms. Maureen Felix of West Orange, New Jersey!

Kip's Law: Every advocate of central planning always — always — envisions himself as the central planner.

Via Fark. More thoughts at QandO.

26 April 2008

Kip's Law Sighting: Three Pro-Earmark Mayors
An astonishingly arrogant, and economically oblivious, op-ed in today's Washington Post by the mayors of Cincinnati, Rochester and Stamford:
Although the House and Senate have both defeated a moratorium on earmarks, the debate about direct congressional grants rages on. And generally absent is any mention of the pressing needs that these grants have helped so many of our nation's communities meet.

Are programs to reduce gang violence a good use of taxpayer funds? How about keeping sewage out of local streams? Or fixing unsafe roads and bridges before another tragedy?

By any reasonable standard, nearly all congressionally directed grants would be considered a good use of taxpayer funds.
Putting aside the Bridge to Nowhere, let's dissect (actually, "psychoanalyze" might be a better word) this bizarre reasoning:

1. It completely ignores opportunity cost, a/k/a the Broken Window Fallacy. The question, properly framed, is not whether "programs to reduce gang violence are a good use of taxpayer funds." The question, properly framed, is whether such programs are a better use of funds than the next best alternatives: Is "reducing gang violence" more important than whatever it was that we didn't get instead?

(And yes, that "whatever it was that we didn't get instead" can be lower taxes or budget deficits and not just some other expenditure. There are "public benefits" to low taxes and fiscal restraint and not just to unbridled majoritarian spending.)

From the op-ed:
Contrary to conventional wisdom, such congressional grants do not increase federal spending but only help to guide how this funding is directed. For fiscal 2008, Congress held to the total discretionary spending caps that President Bush demanded. So congressional grants did not add one dollar to federal spending or to the deficit.
You read that right: When we spend taxpayer money we're not really spending taxpayer money. There really is such a thing as a free lunch. Somehow.

2. It completely ignores fiscal federalism. Reducing gang violence in Cincinnati may be a "good use of taxpayer funds" when it's Cincinnati taxpayers who do the funding. But why should I pay taxes to reduce gang violence in Cincinnati? Why should taxpayers in Cincinnati pay to give me a Second Avenue subway? ("Because we took a vote" is of course not a valid answer.)

There is a moral justification (except perhaps to the anarcho-capitalists) to requiring people to pay taxes to fund legitimate public goods that they cannot help but benefit from. But that requires strict fiscal federalism: Federal taxes should only be extracted to fund federal public goods, state taxes should only be extracted to fund state public goods, and local taxes should only be extracted to fund local public goods. Any breach of those barriers is pure looting by the majoritarian mob.

3. It completely ignores progressive income taxation. There are defenders of earmarks (and their cousins, block grants) who are less unapologetic than these three mayors and who will, when called out on the fiscal federalism question, default down to the argument that, when all the taxes and expenditures are netted out, it reduces to a case of, "Everybody pays for everything, and what's so bad about that?"

Well, what's "so bad about that" is that it conveniently omits the fact that not everybody is paying for everything. It omits the fact that the bottom 40% of households, reflecting almost 50% of the population, pays no federal income tax. So, when the three mayors assert ...
In addition to local taxes, Americans send more than $1 trillion in federal taxes each year to Washington to fund projects that localities cannot undertake alone: building highways, providing for defense and so on.
... they really mean a subset of Americans — the small subset that pays the overwhelming majority of federal income taxes. So earmarks and block grants are not merely a case of "New Yorkers funding Cincinnati programs," (bad enough) but actually a case of "New York taxpayers funding Cincinnati non-taxpayers" (much worse). How is that not naked, brazen looting?

4. It completely betrays "the democratic process." It would still be illegitimate even if it didn't — "two wolves and a sheep," etc. But to suggest that it is somehow "the democratic process" to simply give legislators taxpayer money to dole out as they see fit, with no debate, no individual votes and no independent oversight (beyond the legislators patting each other on the back for their "civic-mindedness") is about as far from "the democratic process" as a non-dictatorship can get.

(Incidentally, does it really need repeating that the Senate — where North Dakota has the same representation as California — is hardly a "democratic" institution? See also, "farm subsidies.")

5. It completely ignores the fact that all politicians are, by definition, moral defectives. The three mayors:
For fiscal 2007, Congress placed a moratorium on grants ... and spending decisions were left solely to the Bush administration. What happened? The administration picked a select group of winners that got all the money — and hundreds of smaller and less well-connected communities were left out in the cold.
So the Bush administration succumbs to rent-seeking, but members of Congress do not? That lunacy does not require a detailed response any more than would a belief that the Sun-God revolves around the Flat Earth.

One last point, from the original excerpt:
By any reasonable standard, nearly all congressionally directed grants would be considered a good use of taxpayer funds.
When the ad hominem card is the only card you have, you play it. Anyone who disagrees is simply not "reasonable." Q.E.D.

Could you imagine someone saying, "Chocolate is better than vanilla, because it is unreasonable to suggest that vanilla is better than chocolate..."? It makes no sense in ice cream, and it makes no sense in economics or politics.

Indeed, the very fact that earmarks and pork are so controversial would, if anything, suggest that the "reasonable" conclusion is to scrap them. But when you're the local hack politician who is doing the actual sucking at the teat of an anonymous taxpayer halfway across the country, "reasonable" seems to take on a whole new meaning.

More thoughts from Cato@Liberty.

Kip's Law: Every advocate of central planning always — always — envisions himself as the central planner.

Related Posts (on one page):

  1. Kip's Law Sighting: Three Pro-Earmark Mayors
  2. Behold Another "Bipartisan Achievement"

23 April 2008

Kip's Law Sighting: Nudge and the Fallacy of "Soft Paternalism"
Far too much cyber-ink is being spilled regarding a new book by a noted legal scholar, Cass Sunstein, and an equally noted economist, Richard Thaler, called Nudge.

An excerpt from the book's introduction:
Many of the policies we recommend can and have been implemented by the private sector (with or without a nudge from the government). Employers, for example, are important choice architects in many of the examples we discuss in this book. In areas involving health care and retirement plans, we think that employers can give employees some helpful nudges. Private companies that want to make money, and to do good, can even benefit from environmental nudges, helping to reduce air pollution (and the emission of greenhouse gases). But as we shall show, the same points that justify libertarian paternalism on the part of private institutions apply to government as well.
The premise of Nudge, usually referred to as "soft paternalism" (or, outrageously, "libertarian paternalism") can be summed up with great ease:

You're stupid.

If "stupid" seems too harsh a word, then substitute "irrational."

You're irrational, for example, because you don't max out or even contribute at all to your 401(k) plan, even if your employer matches your contributions. You're irrational because you don't sign your organ donor card. You're irrational because you make all kinds of choices that are "wrong."

What (supposedly) makes Sunstein and Thaler different from any other two-bit hubris-drenched central planner wannabe is that they claim to define "wrong" not by their own subjective tastes and preferences, but by objective standards. To ignore a costless opportunity to get free money is, they submit, objectively irrational. To deny some innocent person access to your organs after you're dead is, they submit, objectively irrational. And so on.

What also (supposedly) makes Sunstein and Thaler different is that they claim not to want to coerce anybody to behave rationally. They do not want to force you to enroll in your 401(k) plan. They do not want to seize your body after you die. All they want is to rejigger the rules a bit so that you do not have to "choose to be rational" (e.g., by having to opt in to a 401(k) plan) but rather that you would have to "choose to be irrational" (e.g., by having to opt out of your 401(k) plan). Yes, they're going to be paternalistic toward you, but not at the point of a gun.

All they want to do is "nudge" you.

What of course does not make Sunstein and Thaler different, meanwhile, is that they want to be ones doing the nudging. Kip's Law prevails yet again.

Two things amaze me about the excessive hype over Nudge. First, it seems to me that the book's thesis is, at the end of the day, its own worst enemy. A complex, dual-disciplined (i.e., law and economics) theory that, when put to the test, can only generate a handful of de minimis policy recommendations — default opt-in to 401(k) plans, a presumption of consent in organ donation, etc. — can hardly be described as revolutionary — or, for that matter, useful. To the extent that the soft paternalists truthfully say, "this far, no further" (i.e., to the extent they are eager to assure us that their proposals are "no big deal"), then they only win by losing. If the debate is simply whether the entry for "soft paternalism" should read, "harmless" or "mostly harmless,"* then the soft paternalists have lost that debate before they've even started.

Second, and far more relevant in the context of Kip's Law, is that the debate is definitely not between "harmless" and "mostly harmless." No activist legislator, nanny-stater or other anti-freedom malcontent is going to take a theory like "soft paternalism" and invoke it only in the context of 401(k) plans and organ donation. Even if all you promise to do is "nudge," then suddenly you're going to start seeing lots of things that need "nudging."

The tax code is one giant nudge: nudging us into home ownership, child rearing, charitable donating, etc. Apologists for Social Security insist that it is merely a "nudge" into saving for retirement (indeed, Thaler was a leading advisor to President Bush on Social Security reform). Hillary Clinton insists that she is not a health care socialist — she just wants to "nudge" us into (compulsory) insurance programs (which, somehow, does not constitute "socialized medicine" — but that's a whole other blogpost).

Practically any incursion into personal autonomy can be repackaged as a "nudge" — from seat belt laws to the war on drugs. Some anti-liberty laws are "nudgier" than others, to be sure. But all derive from a belief that the government is legitimately authorized not just to protect us from each other, but also to protect us from ourselves — to "nudge" us.

Mario Rizzo, a noted free-market economist at NYU, puts this in terms of "slippery slopes" —
The new paternalism claims that careful policy interventions can help people make better decisions in terms of their own welfare, with only mild or nonexistent infringement of personal autonomy and choice. This claim to moderation is not sustainable. Applying the insights of the modern literature on slippery slopes to new paternalist policies suggests that such policies are particularly vulnerable to expansion. This is true even if policymakers are fully rational. More importantly, the slippery-slope potential is especially great if policymakers are not fully rational, but instead share the behavioral and cognitive biases attributed to the people their policies are supposed to help. Accepting the new paternalist approach creates a risk of accepting, in the long run, greater restrictions on individual autonomy than have been heretofore acknowledged.
Or you can just "opt out" of Rizzo and "opt in" to Lewis Black: Government is human beings.

More thoughts from Will Wilkinson.

Kip's Law: Every advocate of central planning always — always — envisions himself as the central planner.

---

(*Explanation, for the uninitiated, here.)

8 April 2008

Kip's Law Sighting: Must Every Private Transaction Have a "Public Use"?
To review: Regardless of what one thinks of the propriety of the government blocking strictly private employment contracts between competent consenting adults at the lower end of the work spectrum (i.e., minimum wage laws), the arguments for such incursions upon freedom of contract have exactly zero relevance to the upper end of the work spectrum. Stated differently, malcontents need an alternative rationalization for their disturbed voyeurism regarding "excessive" executive compensation ("Excessive"? To whom? By what standard?)

For some among the hubris class, the the latest fashionable rationalization is the fiction of "rising income inequality." (A fiction, as I explained recently, because income percentiles are not constant over time -- today's "top 1%" are neither yesterday's "top 1%" nor tomorrow's "top 1%," and likewise for the "bottom 20%.")

Others are less creative and just flat out claim the prerogative to subject all transactions to mob veto because -- well, because it's the mob:
Net income at Office Depot fell 23 percent last year compared with 2006; its share price fell 64 percent. Steve Odland, its chief, made nearly $18 million all told -- some 85 percent more than in 2006. With the share price of Toll Brothers, the luxury home builder, plummeting, it seems reasonable that Robert Toll, its chief, got no bonus. Still, the company took steps to ensure that he gets one this year, even if home-building doesn't recover.

It's hard to square the conceit that chief executives are rewarded for improving companies' performance with the fact that chiefs at 10 financial-services firms in the study made $320 million last year, even as their banks reported mortgage-related losses of $55 billion.
Of course, it's only "hard to square the conceit" of what other people make when you try to square it in the first place. And you only try to square it when you suffer from some ignoble mixture of envy and schadenfreude. It's one thing to feel compassion for the less fortunate; it's another thing altogether to loathe the more fortunate.

It's quite simple really: If you are uncomfortable or indignant about what the CEOs of Office Depot and Toll Brothers are paid, then don't invest in Office Depot or Toll Brothers. Don't work there. Don't shop there. But don't project your fiscal sociopathy onto others and pretend that you're not the one with an pathological fixation on something that is, literally, none of your business.

More:
In any case, the combination of inexorable income growth at the very apex of society and stagnation everywhere else can serve no public good.

The Bush administration has focused its economic policies on cutting taxes for the very richest Americans. Taxation needs urgently to become more progressive. If the United States is to continue to embrace globalization, technological innovation and other forces that contribute to economic growth, it has to share the spoils better.
One wonders how to say this any more remedially: Private contracts do not need to serve a "public good." Person A paying, out of his own pocket, Person B a sum that Person C happens thinks is "too high" is not an "externality," and Person C has no right, either alone or ganging up with his neighbors, to block or punish that transaction.

The rest is just flat-out lying: The Bush tax cuts did not benefit "the rich" at the expense of "the poor" and the federal income tax is already obscenely progressive. The data are what they are; wishing they were "oppressive" does not make them so.

(One might also note -- since the Times can't be bothered -- that Internal Revenue Code Section 162(m) already disallows the deduction of salaries above $1 million as a business expense for publicly traded corporations -- a figure which, to the best of my knowledge, has never been adjusted for inflation. Such salaries are therefore double-taxed much as corporate dividends are double-taxed. At some point "punitive" tax policy -- which is abhorrent enough -- becomes downright sadistic tax policy. Except to the Times -- for which too much bloodsucking is never enough.

---

I find it laughably ironic, incidentally, that someone at the Times chose the headline "Corporate Croesus" for this silly editorial. For those not in the know:
Croesus consulted the oracle of Delphi in Greece. The oracle replied: "If Croesus goes to war he will destroy a great empire." So Croesus went out to meet the army of Cyrus and was utterly defeated, he destroyed his own great empire.
Leave it to the Times not to understand the difference between capitalism and warfare, between an entrepreneur and an emperor, between selling and plundering, between the civility of private contracts and the barbarism of mob rule.

More:
The old story goes on to relate that Cyrus ordered Croesus to be burned alive. When Croesus saw the flames creeping upward to consume him, he remembered the words of the wise Solon and cried out, "O Solon! Solon! Solon!" Supposedly Cyrus was so moved by the story of how Solon had warned the proud king that he ordered Croesus to be released. Cyrus asked to Croesus why he shouted Solon's name, and Croesus asked him another question "what your soldiers are doing now?", showing the Persian soldiers taking all the treasures and destroying everything; Cyrus replied "They are plundering your city"; then Croesus said "They are not plundering my city, it's your city now and your soldiers are destroying your city". After that short conversation Cyrus the Great stopped his soldiers.
The worst thing that can ever happen to an advocate of central planning is to actually become a central planner. For when they do, then learn the hard way that there is indeed a difference between building a business and seizing it, between running a firm and controlling it, between making something and stealing something.

7 February 2008

Kip's Law Sighting: Professor Charles Handy
"Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe. This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality."
--Peter Drucker

Usually I have to put in a least at little effort to explain why an article demonstrates Kip's Law. Rarely does the central planning advocate do so much of the work for me:
Now that I am living for a while in California, I am staggered by the amount of "unnecessary things" that I see in the malls that dot the suburbs. America is no different from anywhere else, of course — just more so.

The conundrum is this: All that stuff creates jobs — making it, promoting it, selling it. It's literally the stuff of growth. What I'd love to ask Peter Drucker is: How do you grow an economy without the jobs and taxes that these unnecessary things produce?
...
The market, unfortunately, does not differentiate between good and bad. If the people want junk, the market will provide. So we have to fall back on the conscience of our business leaders.
The most depressing thing about this quote was that it was written by a professor of business, who even founded a business school (albeit a British business school) and who is now a visiting professor at the Drucker School of Business.

You've read enough Kip's Law Sightings to connect the dots without much help from me:

--"Unnecessary"? To whom, by what standard?

--"Good and bad"? By what criteria?

--"Junk"? Defined how?

--"Conscience"? Critiqued how?

The answers will come, of course, from Professor Handy himself. By his standards. According to his criteria. As defined by him. In accord with his conscience.

Why? Because he's just so much smarter than you.

What a betrayal of Drucker's ideas this visitor at the school named for him is spewing out. All that "unnecessary junk" in suburban California malls is there precisely because it is neither "unnecessary" nor "junk." It is there because customers find use for it (i.e., they value it). The fact that you, or I, or Handy, might not understand this valuing of particular goods by our fellow consumers is utterly without consequence. Any other metric or methodology for measuring material value (i.e., the "worth of a good") other than "it sells; people buy it" relies on some combination of hubris, context-dropping or outright delusion.

Peter Drucker became famous for his study of General Motors. I'll instead use Ford — specifically, the famous (but not entirely truthful) Henry Ford quote regarding the Model T: "Any customer can have a car painted any colour that he wants so long as it is black."

In fact, the Model T was, at least in some years, available in several colors. But Ford was indeed reluctant to adapt the design of the vehicle itself. He thought that the Model T was "all the car a person would, or could, ever need." His competitors, offering products with more features and comforts, proved him wrong. The Model T lost market share throughout the 1920s and production was halted in 1927. In the arrogant mindset of Henry Ford (or Charles Handy) we should be driving (black) Model T's to this day — rather than the "unnecessary junk" now on the roads.

A person's legitimate moral authority to declare something "unnecessary junk" ends with the decision not to buy it himself. Anything more — calls for regulating it, taxing it, banning it — based solely on one's own subjective determination that it is "unnecessary junk" — is a denial of the entire science of economics.

(Via Conglomerate.)

Kip's Law: Every advocate of central planning always — always — envisions himself as the central planner.

6 February 2008

Democracy, F*ck Yeah! (Part Two)
I seem to recall a throwaway sentence or two in one of Isaac Asimov's "Foundation" books mentioning that the age of majority in his fictional, distant-future, pan-galactic civilization was seven, but that in practice it was never enforced and that children were universally treated — well, like children.

And toward the future some would have us rush:
We should hasten the enfranchisement of this generation, born between 1980 and 1995, by lowering the voting age to 16.

Age thresholds are meant to bring an impartial data point to bear on insoluble moral questions: who can be legally executed, who can die in Iraq, who can operate the meat cutter at the local sub shop. But in a time when both youth and age are being extended, these dividing lines are increasingly inadequate.
First off, I reject utterly the premise that "insoluble" is interchangeable with "unsolvable." Perhaps moral questions don't dissolve in liquid — I don't know.

But such questions are certainly not "unsolvable" — we have, duh, already solved them. The fact that some malcontents might not like the actual solution we've come up with (i.e., everyone, whether dumb or smart, mature or immature, is a minor before 18 and an adult after) does not make the questions "unsolvable" (much like how my dissatisfaction with the current state of "insoluble/unsolvable" is not a basis for demanding that dictionaries that I consider wrong be summarily rewritten to suit my subjective view).

In any case, I find it fascinating that at the same time that we are revisiting — in the opposite direction — adult standards regarding criminal penalties for juvenile offenders (statutory rape, capital punishment, life without parole, etc.), in essence finding a new robustness in the notion that "minors are not competent and should not be treated as such," that anyone could seriously suggest that we should simultaneously find that ever younger people — who can, for example, void on a whim almost any contract at any time based on legal incapacity — ought to be allowed to elect politicians who will exert government force over others.

I have an alternative proposal: Instead of starting off 16-year olds as voters, why not start them off as jurors? I wonder how the author would feel, qua criminal defendant, about having her fate determined by 12 members of "Generation ROFLMAO."

More:
Driving laws provide the best model for combining early beginnings and mandatory education. Many states have had success with a gradual phasing in of driving rights over a year or more, starting with a learner's permit at age 16.
I can't speak for all states, but in New York a learner's permit is a determination, not that one is qualified to drive, but precisely the opposite: that one is not yet ready to make independent decisions about one's own driving ability. In New York, a permit holder cannot drive alone, cannot drive with multiple passengers, cannot drive at night in some cities and counties, and cannot drive under any circumstances on certain bridges, tunnels and highways.

How, exactly, could such gradualist rules map to a voting booth? You could vote at 17, but only accompanied by your parent?

Still more:
Similarly, 16-year-olds who want to start voting should be able to obtain an "early voting permit" from their high schools upon passing a simple civics course similar to the citizenship test.
That is a total non sequitur. Either require a civics course or don't. If it makes sense for 16-year olds, then it makes sense for 30-year olds or 90-year olds. Conversely, if we are going to argue that 30-year olds can vote while 16-year olds can't because the former have more "life experience" than the latter, then no PowerPoint presentation on bicameralism or the pocket veto is going to substitute for that.

One more:
The phasing in of credit cards at 16 could work with firm restrictions. A parental co-signer should be required until young applicants have made a year of on-time payments from their own wages. The most important requirement would be passing a mandatory financial literacy test. The applicant would define "compound interest," correctly decipher the fine print on a credit card agreement and argue with a robotic customer service representative over a mysterious fee. Surely this graduated system would be safer than handing young people a $2,000 line of credit just as they leave home for the first time.
At last we dive head-first into Kip's Law: "Surely"? The only thing I'm sure of is that credit card companies know their business better than I (or this malcontent) do. "Safer"? To whom? By what standard? (And, incidentally, minors already can obtain co-signed credit cards — I had one myself when I started college at 16.)

The malcontent ends with this presumptuous, warm-fuzzy-feeling drivel:
The more we treat teenagers as adults, the more they rise to our expectations.
I've watched enough episodes of Judge Judy to know that this is the most idiotically incorrect thing I will read this week (Super Tuesday notwithstanding). The more we treat minors as adults, the more ways they find to get themselves — and others — into trouble. As she often says, "They're not fully cooked."

The absolute last thing we need is such youngsters "learning-permitting" their way into a polling station.

---

(The twenty-one drinking age is another matter altogether and a subject for other blogposts.)

Related Posts (on one page):

  1. Democracy, F*ck Yeah! (Part Two)
  2. Democracy, F*ck Yeah! (Part One)

31 January 2008

Is There Really a "Too Fat to Eat Out" Bill in Mississippi?
Sometimes politicians introduce sarcastic bills in their legislatures to make a "slippery slope" or "jump the shark" sort of point -- a publicity stunt.

Please let this be that:
Any food establishment to which this section applies shall not be allowed to serve food to any person who is obese, based on criteria prescribed by the State Department of Health after consultation with the Mississippi Council on Obesity Prevention and Management established under Section 41-101-1 or its successor. The State Department of Health shall prepare written materials that describe and explain the criteria for determining whether a person is obese, and shall provide those materials to all food establishments to which this section applies. A food establishment shall be entitled to rely on the criteria for obesity in those written materials when determining whether or not it is allowed to serve food to any person.
The location is Mississippi, the nanny state activist legislator is state representative W.T. Mayhall, Jr., and he insists it's no joke:
He said that while, regrettably, he doesn't believe his bill will pass, this is serious. He wrote it, he said, because of the "urgency of the obesity crisis and need for government action." He hopes it will "call attention to the serious problem of obesity and what it is costing the Medicare system."
As I blogged previously:
The notion that "other people pay for obesity" is totally circular and obnoxious. Keep the true nature of this argument in perspective: The nanny-state central planners decide to provide public health care benefits, of whatever flavor, which are by definition paid for with public money (i.e., taxpayer money). They then turn around and tell those very same taxpayers that, since it's "the public's" money and not theirs, the government can therefore impose controls on the public's behavior to compensate for the resulting mismatch -- that the government itself created! -- between the "public" that pays for the benefits and the "public" that receives them.

The government creates the moral hazard in the first place, then turns around and decries it -- all the while escalating the tax-and-regulate, tax-and-subsidize, tax-and-ban, tax-and-control spiral and all the while defending the practice with Orwellian economic double-talk.
From the Northest liberal ivory tower of Paul Krugman to the brain-dead bumpkin bayous of Mississippi, we are as a people going totally insane.

26 January 2008

Kip's Law Sighting: The Lethal Hubris of Scientocracy
No, not Scientology ... Scientocracy:
Perhaps the most significant news last week on the climate change front was the announcement that plastic shopping bags will be banned in China in six months' time.
...
The ban in China will save importation and use of five million tons of oil used in plastic bag manufacture, only a drop in the ocean of the world oil well. But the importance in the decision lies in the fact that China can do it by edict and close the factories. They don't have to worry about loss of political donations or temporarily unemployed workers. They have made a judgment that their action favours the needs of Chinese society as a whole.
Of course, these same wizened autocrats also decided that "the needs of Chinese society as a whole" required at least 300,000 people to be forcibly relocated so their "environmentally conscious" dictatorship could host the 2008 Olympics. And how exactly China's suppression of expression and its criminalization of dissent helps to fight global warming remains unaddressed. Maybe in a future op-ed...
Liberal democracy is sweet and addictive and indeed in the most extreme case, the USA, unbridled individual liberty overwhelms many of the collective needs of the citizens. The subject is almost sacrosanct and those who indulge in criticism are labeled as Marxists, socialists, fundamentalists and worse. These labels are used because alternatives to democracy cannot be perceived!
"Unbridled individual liberty overwhelms many of the collective needs of the citizens"? We should be so lucky. Meanwhile, how exactly would these (strictly hypothetical) non-megalomaniacal autocrats decide what constitutes a "need" of the collective or how best to "bridle" individual liberty? Blank-out.

(And is the author suggesting that China is not "Marxist" or "socialist"? I'm sure its rulers would have something to say about that.)

Meanwhile, speaking strictly in terms of oil consumption, why does the U.S., qua consumer of oil, get blamed for its "addiction" to liberal democracy, but Saudi Arabia, qua producer of oil and one of the most illiberal anti-democracies in the world, garner nary a peep from this blame-spewing malcontent? Blank-out.
Reform must involve the adoption of structures to act quickly regardless of some perceived liberties.
So "collective needs" are unarguably self-evident, while liberties are merely "perceived"? How convenient.
The Chinese decision on shopping bags is authoritarian and contrasts with the voluntary non-effective solutions put forward in most Western democracies. We are going to have to look how authoritarian decisions based on consensus science can be implemented to contain greenhouse emissions.
So ignore Acton, and ignore every shred of evidence, from around the globe and across the centuries, that authoritarianism conserves nothing but its authoritarians and contributes nothing to the environment but corpses. Instead use one (utterly asinine) data point to propose a whole new theory of global slavery. Condemn the whole planet — which you pretend to love — to bloodshed, poverty and death, and dare to call it "science," because you happen to think banning plastic bags is neat-o.*

Kip's Law: Every advocate of central planning always — always — envisions himself as the central planner.

(Via Life, Liberty Pursuit.)

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(*It isn't.)

23 January 2008

Another "Faux Externality" Anecdote: From "Boob Tax" to "Boob Tube Tax"
A few days ago, in another context, I wrote the following:
Note also the lack of any outer bound for this faux-externality theory of tax-to-control policymaking. If every private transaction, by its impact (however minuscule) on supply and demand constitutes an "externality," then what isn't deserving of punitive taxes?
Here's a magnificently sublime example:
An alliance of more than a dozen New Mexico environmental groups will lobby again for legislative approval of a 1 percent sales tax -- or "sin tax" -- on new televisions and video games to fund outdoor education programs.

Such a tax could raise an estimated $4 million a year, according to a legislative study last year. The money would fund programs aimed at teaching students outdoors.
...
Some studies in the last five years have linked the increasing amount of time children spend watching television or playing video games to lower academic scores, obesity and increased attention-deficit disorder.
Of course, unless children are actually eating their television sets, there is no proximate relation between television and obesity (or ADHD) -- and certainly not a sufficient connection to warrant a warm-fuzzy-feeling tax on those who neither create nor suffer from the faux externality: an individual with no children, or with underweight children, would pay the tax and receive no benefit.

But tax their TVs anyway. Pretend there is an externality where there isn't one so as to legitimize your (self-serving) proposal. (Remember, the activists proposing this insolent tax are precisely the groups that would benefit from the boondoggles the tax would fund. Environmentalists can have conflicts of interest too, after all.)

Bottom line: This proposal is not a "Pigou tax" -- it is rent seeking, pure and simple. And it's bad policy.

Note also that New Mexico is one of the poorest states in the nation and has a far worse "childhood food insecurity problem" than "childhood obesity problem." Just saying.

Via Junkfood Science, who reminds us that
there is no credible evidence for a new "nature deficit disorder" children are claimed to suffer from, or that getting them outside and teaching them about the environment will eradicate childhood obesity or attention deficit disorder.
As if that mattered to those nanny-staters who would save us from ourselves.

17 January 2008

Kip's Law Sighting: Professor Frank Pasquale's "Boob Tax"
I've blogged previously about proposals to tax cosmetic surgery for no other reason than because some self-appointed arbiters of what are "proper" and "improper" uses of one's money or one's professional skill would prefer that you not get breast implants or a round of liposuction. (Recall that cosmetic surgery is almost never covered by health insurance.)

But there's more to taxing cosmetic surgery than just arrogant majoritarian standards of propriety. As law professor Frank Pasquale demonstrates, what separates one boob tax (cosmetic surgery) from another boob tax (strip clubs) is the preposterous redefinition of "externalities" to try to legitimize a cosmetic surgery tax:
I've proposed taxing cosmetic surgery before, and some cities (like Beverly Hills) are starting to target taxation in this way. Beverly Hills merely argues that "the centers become a drain on resources relative to the taxes they pay"[.] But if these interventions also "constitute the kind of annuity medicine that will entail regular surgical tuneups," their externalities are larger than once thought.
I've debunked this preposterous redefinition of "externality" previously:
If I lock my apartment door on my way to work, then perhaps, technically, yes I have imposed "negative externalities" on my neighbors, who are now prevented from, for example, coming in and watching my television. But if we start defining down externalities to the point where private people and private businesses not engaging in altruistic deviation from profit maximization is an "externality," then the word no longer has any real meaning, and any or every policy proposal, no matter how anti-capitalist and anti-libertarian, is functionally and morally equivalent.
Applied to Pasquale: A physician who -- has she no shame? -- chooses to become a cosmetic surgeon consequently does not become a cardiologist or a pediatrician. That is, we are told, somehow an "externality" warranting a corrective (i.e., a punitive) tax. Cosmetic surgery requires anesthesiologists. Greater demand for anesthesiologists drives up the price of anesthesiologists. This is, we are told, somehow an "externality." And now we have Pasquale's jump-the-shark redux: breast augmentation requires maintenance (i.e., "tune-ups") -- more (private-to-private) "externalities." Somehow.

Since there are no bona fide externalities from plastic surgery (no third-party reimbursement, no taxpayer subsidies, etc.), malcontents such as Pasquale have no choice but to redefine "externality" to become more -- forgive the pun -- "plastic." When reality contradicts you, redefine reality to suit your needs. How convenient.

Note also the lack of any outer bound for this faux-externality theory of tax-to-control policymaking. If every private transaction, by its impact (however minuscule) on supply and demand constitutes an "externality," then what isn't deserving of punitive taxes?*

As I noted in a comment at Pasquale's post:
Do you support taxing braces? Surely all that "unnecessary cosmetic dentistry" is imposing "externalities" upon "legitimate" dental practices.

Or how about infant male circumcision, which is also an unnecessary vanity procedure that "crowds out" other medical procedures?
Some more examples: Only the vain get contact lenses rather than eyeglasses. They should be punished via a contact lens tax. Indeed, those who wear anything but the cheapest eyeglass frames are generating "externalities" -- slap a tax on designer frames too. Add your own examples in the comments.

One last, modest proposal: Someone who chooses -- has he no shame? -- to become a law professor generates an "externality" by not becoming a pediatrician. Shall we be seeing a "law professor tax" any time soon?

Kip's Law: Every advocate of central planning always -- always -- envisions himself as the central planner.

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*Or, for that matter, command-and-control socialist regulation generally -- see Wickard v. Filburn, 317 U.S. 111 (1942).

Related Posts (on one page):

  1. Kip's Law Sighting: Professor Frank Pasquale's "Boob Tax"
  2. Is Cosmetic Surgery "Unneeded" Medicine?

1 January 2008

Kip's Law Sighting: Professor Alan M. White
On why any central planner worth his salt should advocate banning subprime mortgages:
The welfare harms caused by subprime mortgage lending are readily measurable. They include the direct impact of more than two million foreclosures on families, the resulting property value losses, the social and fiscal impact on cities where subprime mortgages were concentrated, the price discrimination resulting in black and Latino homeowners paying unnecessarily high rates, and the broader impacts on the credit markets and the economy.

The disastrous consequences of subprime mortgage lending were in part the result of deregulating mortgage interest rates. Similar harms can be prevented in the future by reimposing reasonable interest rate limits on first-lien mortgages.
Of course, the utilitarian gobbledygook term "welfare harms" conveniently blanks out the fact that the overwhelming majority of subprime mortgages are not only not in foreclosure but also not even in default.

And the fact that not every foreclosure "victim" is a family (in fact many or most are speculators with multiple loans covering multiple properties, many of which are empty or even unfinished). Indeed, as I noted previously, often the borrower is not the victim but the victimizer.

And, most importantly, the fact that if even one competent consenting adult wants to take out a subprime loan, and even one lender wants to offer a subprime loan, then both ought to left alone to do so.

--All the loans that are not in default? Blank out.

--All the properties not in foreclosure? Blank out.

--All the property values not declining? Blank out.

--"Social and fiscal impact"? Impact to whom? Defined how? By what standard?

--"Unnecessarily" high rates? Unnecessary to whom? By what standard?

--"Reasonable" interest rate limits? Reasonable to whom? By what standard?

No, all that matters is that some nebulous, arbitrary, subjective measure of "welfare harms" should give politicians, bureaucrats -- and their codependent law professor enablers -- sanction to restrict freedom of contract for all.

Kip's Law: Every advocate of central planning always -- always -- envisions himself as the central planner.