In economics, religion, and politics, the moral path is freedom.

More examples of unintended consequences

Five more examples of unintended consequences.  The problem? People don’t always do what you tell them. They often do something totally different from what you expected. (Cross-posted from my other blog, Nonprofit Update.)

Cracked describes 5 Laws That Made Senses on Paper (And Disasters in Reality). (Caution, some naughty words.) These examples are from government.  My three favorites are how to:

  • increase number of guns on the street
  • increase number of cobras on the loose
  • increase pollution from cars

Gun buybacks increase number of guns on the street. (more…)

By Jim Ulvog, ago

3 of the common myths about capitalism

  • Pro-capitalism = pro-business
  • Capitalism generates unfair distribution of income
  • Capitalism is responsible for the financial crisis and great recession

Not true. Those three (false) myths disposed of in this video:

[youtube=http://www.youtube.com/watch?feature=player_embedded&v=KGPa5Ob-5Ps]

 

That is from Professor Jeff Miron from Harvard.

A few highlights from the video:

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By Jim Ulvog, ago

Crony Capitalism is the reason we won’t find any incandescent bulbs on the shelves

As of the start of 2013, it is illegal to manufacture or import 40- and 60-watt incandescent light bulbs in the U.S.  Last year the 75-watt bulbs were gone and the 100-watt the year before. The last of the smaller bulbs will be off the shelf.

Then you will only be able to buy more expensive bulbs that may or may not last a lot longer.

Why?

It isn’t to improve efficiency or save consumers money. That’s the excuse.

Blame crony capitalism. The ban is courtesy of businesses seeking favors from the government and the government happily granting said favors.

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By Jim Ulvog, ago

Is it moral for an economic system to make life better for billions of people?

The answer is yes, according to Walter Williams, who says Profit Has Improved The Human Condition.

Of course, he explains when compared to heaven or a utopia where unicorns romp freely and all the food you want magically appears on your table every day, capitalism falls short. When compared to every other economic system on earth, it does wonders.

Apart from billions of people being lifted out of grinding poverty, let’s examine other changes relatively recent in our human history, like how it becomes possible to gather wealth. Mr. Williams says: (more…)

By Jim Ulvog, ago

Graph to illustrate Thatcher’s comment that socialists want the poor poorer provided the rich were less rich – Part 2

Previously mentioned a graph that illustrates the idea that socialists

would rather the poor were poorer provided the rich were less rich.

Here is a revised graph:

inequality graph 2

This is a much busier graph. Like the earlier graph, it is from Dave Poling and is used with his permission. Here are a thousand words to describe his graph.

It shows the same relationships –

In a generation, the poor become as well off as the middle were a generation earlier. The middle gains a lot and is as well off as the rich a generation earlier. And yes, the rich become really rich.

Under socialism, the rich, middle, and poor all get worse off.

An addition to this graph is the government and cronies. I call the latter group the crony capitalists, those companies and individuals who make their business thrive by lobbying the government and getting special treatment. They do quite nicely under socialism, thank you very much.

Since there is so much going on here, let’s look at the graphs in more detail.

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By Jim Ulvog, ago

Simple explanation of cronyism – the difference between “pro-business” and “free market”

Perhaps we could rephrase that as the difference between “pro-consumer” and “pro-single interest”.

National Review Online discusses how thrilled some self-serving lobbyists are that a certain deal in Washington will benefit members of their focused trade group. It’s a good deal because their members will make money off the deal. See Sometimes, Being ‘Pro-Business’ and ‘Free Market’ Are Opposed.

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By Jim Ulvog, ago

Graph to illustrate Thatcher’s comment that socialists want the poor poorer provided the rich were less rich – Part 1

Here is a graph to illustrate previously mentioned  statement from Margaret Thatcher that socialists

would rather the poor were poorer provided the rich were less rich.

Check this out:

 inequality graph 1

That chart is used with permission from Dave Poling.

Since a picture is worth a thousand words, the graph stands on its own. So here are 400 words to explain the one picture.

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By Jim Ulvog, ago

The Great Recession just sort of happened. The Fed had absolutely nothing to do with it.

A long article from the Federal Reserve on the housing bubble and recovery from the great recession doesn’t mention the fed’s role in anything other than generating the recovery. See:  Subprime Mortgage Crisis. Absolutely no mention of the massive role played by easy money and Congressional policy pumping up the housing market.

The first part of the article is called How and Why the Crisis Occurred.

The short paraphrase is the runup in housing prices, increased demand for homes, surge in subprime loans, collapse of prices, and mass of foreclosures kinda’ sorta’ just happened.

No cause mentioned, especially no role assigned to the federal government in general or the Fed in particular.

Let’s look at the article in more detail.

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By Jim Ulvog, ago