Free markets are more important to the poor and working stiff than it is to the “rich”.
I agree with Walter Williams on this particular point:
Did Carnegie, Mellon, Rockefeller and Guggenheim start out rich? Andrew Carnegie worked as a bobbin boy, changing spools of thread in a cotton mill 12 hours a day, six days a week, earning $1.20 a week. A young John D. Rockefeller worked as a clerk. Meyer Guggenheim started out as a peddler. Andrew Mellon did have a leg up; his father was a lawyer and banker. Sam Walton milked the family’s cows, bottled the milk and delivered it and newspapers to customers. Richard Sears was a railroad station agent. Alvah Roebuck began work as a watchmaker. Together, they founded Sears, Roebuck and Company in 1893. John Cash Penney (founder of JCPenney department stores) worked for a local dry goods merchant.
It wasn’t just whites who went from rags to riches through open markets; there were a few blacks. Madam C.J. Walker, born Sarah Breedlove, just two years after the end of slavery, managed to build an empire from developing and selling hair products. John H. Johnson founded Johnson Publishing Company, which became an international media and cosmetics empire. There are many modern-day black millionaires who, like other millionaires, black and white, found the route to their fortunes mostly through the open, highly competitive and more free market end of our economy.
Compare that to the regulated sectors:
Restricted, regulated and monopolized markets are especially handicapping to people who are seen as less preferred, latecomers and people with little political clout. For example, owning and operating a taxi is one way out of poverty. It takes little skills and capital. But in most cities, one has to purchase a license costing tens of thousands of dollars. New York City’s taxicab licensing law is particularly egregious, requiring a person, as of May 2007, to pay $600,000 for a license to own and operate one taxicab. Business licensing laws are not racially discriminatory as such, but they have a racially discriminatory effect.
This is absolutely true. When you look at the mostly unregulated technology sectors you see countless new innovations and increased employment growth. However, when you look at the mostly regulated automotive and energy sectors you see stagnation and safety and not much risktaking. Why incur the risk when you will incur the wrath of Congress if something goes wrong?
I only wish people will wake up and come to the realization that regulation is not meant to regulate the “rich”, but is meant to prevent the poor and middle-class from shaking itself loose from an overbearing government.
UPDATE: In a blog post that is somewhat related to my comments above, please read Ed Driscoll’s blog post on the font Helvetica. It is the end result when society, in the quest for “liberty of the mind” ends up instead in conformity and authoritarianly (sic) so.
A really good video on Cuba.
Here. Also check out the Cuban bloggers’ website in Blogroll.
The disingenuous act of protesting for Mexico in the USA.
Victor David Hansen writes a really good column that deserves to be read in its entirety, but I will post the end as that is apt to everything regarding the current debate on “illegal immigration”:
I learned from this episode only that Cinco de Mayo is the moral equivalent for many of our citizens to the Fourth of July, that no one in authority at an American high school understands the U.S. Constitution, that students wearing American flags were at one point to be suspended, and those ditching class in mass were not; that reconciliation is defined by each group putting their own respective flags next to each other and then blaming the press for this national embarrassment; and that in our parochial and isolated culture of central and coastal California, no one seems to imagine that elsewhere Americans are not all unhinged, but in fact see us as the deranged. The Live Oak people seem wounded fawns, hurt as if everywhere in the United States assumes that Cinco de Mayo is the real Fourth of July.
If there were a “metaphor” in all this, then it is how multicultural instruction results in moral equivalence, cultural relativism, ignorance of American law—and irony in that millions of Mexican nationals are fleeing Mexico to enter America only within a few years to wish that their children wave the flag of the country they fled and resent those who wear the flag of the country they desperately sought to join.
The new normal: bailing out profligate behavior.
The EU approved a package to the tune of $957 billion (why not just $1 trillion?). The purpose of the package was not so much to bailout Greece, but to “defend the euro whatever it takes”, according to Olli Rehn, the European commissioner. That’s all fine and dandy, but I have a question: how is EU going to pay for this?
The Voldemort view: cognitive ability explains the “achievement gap”, not outside factors.
An anonymous poster posits an alternative view to the progressive and conservative on the achievement gap in education:
In the public domain, you’ll hear two contrasting views about the achievement gap, its cause and solution. The first is the progressive view, the one associated with “progressive education,” which holds that social injustice, institutionalized racism, white prejudice, and other societal ills cause the achievement gap. Progressives want to fix the achievement gap by moving underachieving students closer to high-achieving students whenever possible, arguing that tracking and sorting are evils that create underachieving “ghettos” that perpetuate, or even cause, the gap. In schools with a majority minority population of underachievers (i.e., inner city urban schools or charter schools specifically created for these populations), progressives push for community involvement, encouraging teachers to support their students in every aspect of life and seek to make the curriculum “relevant.”
So progressives push for underachievers to spend more time with achievers who will model desirable behavior. When achievers aren’t available, progressives seek to create the value system within the child and the community by demonstrating their involvement and cultural acceptance. This is incredibly oversimplified; I’m just trying to give you a general sense. Notice, though, that a large part of the progressive view involves changing the students’ values with sympathetic teachers who understand how to develop “accessible” curriculum for students who aren’t performing at grade level.
….
The second view, what I’ll call the conservative view of the achievement gap, also focuses on student values. But instead of encouraging teachers to respect the student’s culture, conservatives say that parents and teachers of low-performing students are the cause of the gap, by failing to give the students the correct cultural values. Hard work, family values, commitment to the importance of education, and “no excuses,” to quote the Thernstroms, who are major proponents of the conservative view, will close the achievement gap. The conservatives believe that higher standards are the order of the day, and that everyone can achieve if they just work hard. Conservatives hold ed schools in extremely low esteem, and feel that the progressive push to “understand” students and teach simplified (as they see it) curriculum contributes to the problem. The conservative view is held by most politicians of any ideology. Both NCLB and Race to the Top are based on this viewpoint—which comes along with a hefty dose of blame for the teachers, the ed schools that produce them, and the unions that represent them.
…
If all you watched were the shout shows, you’d never know there was another way of assessing the achievement gap. And in fact, while progressives and conservatives have many adherents and could even be described as “groups,” those holding the third view don’t get together much. They don’t hold meetings, they don’t have organizations, and in general, they avoid the field of educational policy. People holding this third view—again, not a group—don’t talk much in public. Let’s call this third view the Voldemort View: the View That Must Not Be Named.
And so, the Voldemort View: academic achievement is primarily explained by cognitive ability, and therefore the achievement gap is also most likely caused in large part by differences in cognitive ability. People with this view don’t promote solutions, primarily because in order to even start thinking about solutions one has to be able to discuss the possible cause and mentioning this cause is politically unacceptable. People who think it likely that the achievement gap is primarily cognitive don’t usually risk mentioning it in public because it’s a career destroyer. Please do not infer any other opinions about those with a Voldemort View, because I promise you, most of what you’re likely to assume is simply wrong.
A is A except when A is not A.
An interesting post from Dr. Gad Saad:
I have written about the ensuing personal anecdote elsewhere (Saad, 2004) but it is worth repeating here. Several years ago, my wife and I had gone out for a celebratory dinner with one of my doctoral students and one of his female friends. The friend in question was a committed postmodernist and a staunch academic feminist. At one point during our dinner, I gently asked her whether she genuinely believed the postmodernist foundational tenet that there are no universal truths. The astute reader might notice the logical problem here, as the latter tenet is itself construed as a universal truth! Setting aside this embarrassing conundrum, she retorted with complete assuredness that indeed all knowledge is relative. Surely, I replied there must be some universals otherwise the pursuit of scientific truths is an utter illusion. In the hope of being more concrete, I suggested that I provide her with examples of universals and then she could explain to me how I might be misguided.
I began with a rather trivial truth or so I thought. I asked her whether it was a universal truth that within the human species it is only women who bear children. Surely this is an absolute fact no? After rolling her eyes in utter disgust and taking a few huffs and puffs, she replied that she was amazed at how sexist my example had been. At this point, my doctoral student, my wife, and I were truly baffled. The feminist explained that in the spiritual narrative of a particular group of Japanese people, it is the men who bear the children! Hence, by purposely restricting childbearing to the physical/biological realm, I was being sexist. Sure, in the biological realm, it is the women who give birth but in the spiritual arena, it is wholly conceivable for men to be the child bearers. Whereas I was well aware of the nonsensical babble of postmodernists, I must admit that this was a new height of delusional thinking.
I suggest reading the whole thing because it is not only funny, but illuminating and serves a cautionary tale for a society that insists on seeing truth as relative and not as absolute. As the author states, “These anti-science movements coupled with cultural relativism, political correctness, and an ethos of self-guilt regarding all geopolitical realities will prove the demise of Western civilization.”
If we regulate now we can prove later that the regulation was needed.
Let’s try to square this statement:
He acknowledged that it was impossible to specify just how many cancers were environmentally caused, because not enough research had been done, but he said he was confident that when the research was done, it would confirm the panel’s assertion that the problem had been grossly underestimated.
“He” is Dr. LaSalle D. Leffall Jr. of Howard University, the chair of the President’s Cancer Panel (umm, why is there a “President’s Cancer Panel?), who published a report that all of the chemicals in th country are the leading cause of cancer. The solution the panel came up with is to take a “precautionary” approach to regulating chemicals in the country, even though it cannot prove that the chemicals and its pollutants causes cancer. When the American Cancer Society, not an exactly conservative leaning group, says that the government is overreacting, then you know that the government is clearly just looking for ways to expand its power. Here is the Dr. Michael Thun from the American Cancer Society:
Unfortunately, the perspective of the report is unbalanced by its implication that pollution is the major cause of cancer, and by its dismissal of cancer prevention efforts aimed at the major known causes of cancer (tobacco, obesity, alcohol, infections, hormones, sunlight) as “focussed narrowly.”
The report is most provocative when it restates hypotheses as if they were established facts. For example, its conclusion that “the true burden of environmentally (i.e. pollution) induced cancer has been grossly underestimated” does not represent scientific consensus. Rather, it reflects one side of a scientific debate that has continued for almost 30 years.
There is no doubt that environmental pollution is critically important to the health of humans and the planet. However, it would be unfortunate if the effect of this report were to trivialize the importance of other modifiable risk factors that, at present, offer the greatest opportunity in preventing cancer.
In other words, the purpose of this report is not so much to inform on the causes of cancer and how to fight the disease, but to show that “chemicals” cause cancers in Americans and call for more regulations that will not have anything to do with curing cancer, but instead will just expand the government’s power into sectors that it has no business controlling.
This should surprise people on two fronts: 1) if the government is proactively regulating things without concrete proof then there is no limit to what the government will want to regulate and 2) being precautionary in regulating means that we will no longer have a free society where people are free to make their own decisions about things that affect them. For an administration that said it will place science back in its “rightful place” it sure seems as though the administration is subscribing to its ideology to regulate as much as possible and let others worry about the fallout.
More on that Times story here.
Four reasons why the Congress is the proximate cause of the financial crisis.
James Pethokoukis lays them out:
1) Credit Ratings Agencies. While the crisis does not have a single cause, the behavior of the credit rating agencies is a defining characteristic. It is impossible to imagine the current crisis without the activities of the NRSROs. And, it is difficult to imagine the behavior of the NRSROs without the regulations that permitted, protected, and encouraged their activities. … Rather the evidence is most consistent with the view that regulatory policies and Congressional laws protected and encouraged the behavior of NRSROs.
2) Credit Default Swaps. I am suggesting that the evolution of the CDS market, the fragility of the banks, and the Fed’s capital rules illustrate a key feature of the financial crisis that is frequently ignored. The problems with CDSs and bank capital were not a surprise in 2008; there was ample warning that things were going awry. Senior government policymakers created policies that encouraged excessive risk taking by bankers and adhered to those policies over many years even as they learned about the ramifications of their policies.
3) The SEC and Investment Banks. Consider three interrelated SEC decisions regarding the regulation of investment banks. First, the SEC in 2004 exempted the five largest investment banks from the net capital rule, which was a 1975 rule for computing minimum capital standards at broker- dealers. Second, in a related, coordinated 2004 policy change, the SEC enacted a rule that induced the five investment banks to become “consolidated supervised entities” (CSEs): The SEC would oversee the entire financial firm. Specifically, the SEC now had responsibility for supervising the holding company, broker-dealer affiliates, and all other affiliates on a consolidated basis. Third, the SEC neutered its ability to conduct consolidated supervision of major investment banks. … The combination of these three policies contributed to the onset, magnitude, and breadth of the financial crisis. The SEC’s decisions created enormous latitude and incentives for investment banks to increase risk, and they did.
4) Fannie and Freddie. Deterioration in the financial condition of the GSEs was not a surprise. … But, Congress did not respond and allowed increasingly fragile GSEs to endanger the entire financial system. It is difficult to discern why. Some did not want to jeopardize the increased provision of affordable housing. Many received generous financial support from the GSEs in return for their protection. For the purposes of this paper, the critical issue is that policymakers did not respond as the GSEs became systemically fragile. Again, I am not arguing that the timing, extent, and full nature of the housing bubble were perfectly known. I am arguing that policymakers created incentives for massive risk-taking by the GSEs and then did not respond to information that this risk-taking threatened the financial system.
So everyone recognizes that Congress had a major role to play in the financial crisis (and it must necessarily be so: when Congress has the power not only to make the rules but to enforce them AND to play them, then everyone else must follow the rules of Congress, make sure they are not violating them, and play with Congress as if it were another competitor). So the question I have is: if you recognize that Congress had a major role to play in the financial crisis, why is everyone okay with giving Congress more powers to regulate industry? Perhaps we should pare back Congress’s power and have them engage in less regulation and not more to bring back actual solvency and balance to the markets?
WTF?!! 