Thursday, November 22, 2012

Thanksgiving economics


 (Yes, this is a re-run from three years ago...)

The Pilgrims' Real Thanksgiving Lesson
In 1620 Plymouth Plantation was founded with a system of communal property rights. Food and supplies were held in common and then distributed based on equality and need as determined by Plantation officials. People received the same rations whether or not they contributed to producing the food, and residents were forbidden from producing their own food. Governor William Bradford, in his 1647 history, Of Plymouth Plantation, wrote that this system was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. The problem was that young men, that were most able and fit for labour, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense. Because of the poor incentives, little food was produced.

Faced with potential starvation in the spring of 1623, the colony decided to implement a new economic system. Every family was assigned a private parcel of land. They could then keep all they grew for themselves, but now they alone were responsible for feeding themselves. While not a complete private property system, the move away from communal ownership had dramatic results.

This change, Bradford wrote, had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been. Giving people economic incentives changed their behavior. Once the new system of property rights was in place, the women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability.

Once the Pilgrims in the Plymouth Plantation abandoned their communal economic system and adopted one with greater individual property rights, they never again faced the starvation and food shortages of the first three years. It was only after allowing greater property rights that they could feast without worrying that famine was just around the corner.

We are direct beneficiaries of the economics lesson the pilgrims learned in 1623. Today we have a much better developed and well-defined set of property rights. Our economic system offers incentives for us—in the form of prices and profits—to coordinate our individual behavior for the mutual benefit of all; even those we may not personally know.




How Private Property Saved the Pilgrims
By the spring of 1623, the population of Plymouth can have been no larger than 150. But the colony was still barely able to feed itself, and little cargo was returning for the investors in England. On one occasion newcomers found that there was no bread at all, only fish or a piece of lobster and water. “So they began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery,” Bradford wrote in his key passage on property.

Having tried what Bradford called the “common course and condition”—the communal stewardship of the land demanded of them by their investors—Bradford reports that the community was afflicted by an unwillingness to work, by confusion and discontent, by a loss of mutual respect, and by a prevailing sense of slavery and injustice. And this among “godly and sober men.” In short, the experiment was a failure that was endangering the health of the colony.

...

So the land they worked was converted into private property, which brought “very good success.” The colonists immediately became responsible for their own actions (and those of their immediate families), not for the actions of the whole community. Bradford also suggests in his history that more than land was privatized.

The system became self-policing. Knowing that the fruits of his labor would benefit his own family and dependents, the head of each household was given an incentive to work harder. He could know that his additional efforts would help specific people who depended on him. In short, the division of property established a proportion or “ratio” between act and consequence. Human action is deprived of rationality without it, and work will decline sharply as a result.

...

Bradford felt that, in retrospect, his real-life experience of building a new society at Plymouth had confirmed Bodin’s judgment. Property in Plymouth was further privatized in the years ahead. The housing and later the cattle were assigned to separate families, and provision was made for the inheritance of wealth. The colony flourished. Plymouth Colony was absorbed into the Commonwealth of Massachusetts, and in the prosperous years that lay ahead, nothing more was heard of “the common course and condition.”



The Real Story of Thanksgiving
Long before Karl Marx was even born, the Pilgrims had discovered and experimented with what could only be described as socialism. And what happened? It didn't work!"

"It never has worked! "What Bradford and his community found was that the most creative and industrious people had no incentive to work any harder than anyone else, unless they could utilize the power of personal motivation! But while most of the rest of the world has been experimenting with socialism for well over a hundred years – trying to refine it, perfect it, and re-invent it – the Pilgrims decided early on to scrap it permanently. What Bradford wrote about this social experiment should be in every schoolchild's history lesson. If it were, we might prevent much needless suffering in the future. 'The experience that we had in this common course and condition, tried sundry years...that by taking away property, and bringing community into a common wealth, would make them happy and flourishing – as if they were wiser than God,' Bradford wrote.

"'For this community [so far as it was] was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort. For young men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men's wives and children without any recompense ... that was thought injustice.' Why should you work for other people when you can't work for yourself? What's the point? Do you hear what he was saying, ladies and gentlemen? The Pilgrims found that people could not be expected to do their best work without incentive. So what did Bradford's community try next? They unharnessed the power of good old free enterprise by invoking the undergirding capitalistic principle of private property.

"Every family was assigned its own plot of land to work and permitted to market its own crops and products. And what was the result? 'This had very good success,' wrote Bradford, 'for it made all hands industrious, so as much more corn was planted than otherwise would have been.'

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Tuesday, November 20, 2012

Quotes of the day


This first one is very appealing for those of us concerned about the direction in which the country is headed.  Almost too appealing to be true.  And indeed, if there's any evidence that Edward Gibbon ever said this, it is well hidden.  Nor is the context self-evident.
In the end, more than freedom, they wanted security. They wanted a comfortable life, and they lost it all - security, comfort, and freedom. When the Athenians finally wanted not to give to society but for society to give to them, when the freedom they wished for most was freedom from responsibility then Athens ceased to be free and was never free again.
-- Edward Gibbon (1737-1794) English historian and Member of Parliament

The lack of any provenance for that one leads to the second quote of the day:
If you can put your sentiments in the mouth of a well-respected historical figure, people who agree with them will suspend disbelief and spread them around the internet.
- Abraham Lincoln

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Thursday, November 15, 2012

Perspective

Why I would make a poor economic czar, directing the economy from on high1.




The picture overstates how much I actually know, but I couldn't make it any smaller and have it still be visible.  I know a lot about a little. I know a little about a lot.

I know nothing about most things.

Like most people...


1 - That goes for everyone else, too.

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"Price-gouging" is a good thing


There are aspects of economics that are difficult, abstract, counter-intuitive. And then there are other aspects that are really pretty straightforward, but people get them wrong anyway.
Walter Williams addresses one of them here...
Here’s a which-is-better question for you. Suppose a New Jersey motel room rented for $125 a night prior to Hurricane Sandy’s devastation. When the hurricane hits, a husband, wife and their two youngsters might seek the comfort of renting two adjoining rooms. However, when they arrive at the motel, they find that rooms now rent for $250. At that price, they might decide to make do with one room.

In my book, that would be wonderful. That decision would make a room available for another family who had to evacuate Sandy’s wrath. New Jersey Gov. Chris Christie and others condemn this as price gouging, but I ask you: Which is preferable for a family seeking shelter — a room available at $250 or a room unavailable at the pre-hurricane price of $125?

He finishes by addressing, yet again, the "broken window" crowd, who want to talk about how good it is for our society that the storm destroyed billions of dollars of wealth...
Let’s set one thing straight: Destruction does not create wealth. The billions of dollars that will be earned by people in the building industry and their suppliers will surely create jobs and income for those people. But rebuilding diverts resources from other possible uses. Natural or man-made disasters always destroy wealth. Were that not the case, mankind could achieve unimaginable wealth through wars, arson, riots and other calamities.

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Wednesday, November 14, 2012

Why Public Sector Employee Unions are a Bad Idea...


A scary look at one of the special ways that US taxpayers are in dire straits...
And while California has the biggest pension debt in the United States in dollar terms, it's not the worst off. Illinois and Kentucky plans are battling for the dubious distinction of having the lowest ratio of assets to liabilities, according to the Center for Retirement Research at Boston College.

The chronic mismanagement in San Bernardino, though, is a common feature of local government in California and around the United States. Much power over municipal finance lies in the hands of those with the most at stake — city employees, elected officials and others who depend directly on government for their livelihood.
[LB: And when the meet at the bargaining table, who represents the taxpayers? Right, no one does. What could possibly go wrong?] And California is moving to put even more responsibility and funds, not less, in their hands.
Frankly, it's tough to see how we get from where we are to where we're eventually going to end up with a soft landing rather than a crash...

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Tuesday, November 13, 2012

Veterans Day


The view from the rear of the William Diamond Jr. Fife and Drum Corps, Veterans Day weekend.


Downtown Malden, 11/11/2012




Approaching the Battle Green in Lexington, 11/12/2012


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Quote for today...


... as I watch the frothing rage of those who can't believe that any business would have the unmitigated gall to raise prices or cut hours or, basically, respond in any way to the new burdens heaped upon them by Obamacare and the increased taxes that are coming.

Experience is the school of mankind, and they will learn at no other.
- Edmund Burke

There's a lot of learning coming...

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Friday, November 09, 2012

The Doctrine of the Trinity


For no reason other than I was listening to Professor Cary talk about it on my ride in and I felt like mapping it...


The seven statement Doctrine of the Trinity:
  1. The Father is God
  2. The Son is God
  3. The Holy Spirit is God
  4. The Father is not the Son
  5. The Son is not the Holy Spirit
  6. The Holy Spirit is not the Father
  7. There is One God

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Thursday, November 08, 2012

Idle thought...


Government is the only entity which can offer services of lower performance at higher cost, and still see the demand for those services increase...

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Wednesday, November 07, 2012

The Day After


This is the thought that keeps running through my mind - if this incumbent, with this record, running this campaign, can beat this challenger, what is America in 2012?  And what hope is there for ever returning to a society of individual rights and strong economic growth?

It may seem strange that any men should dare to ask a just God's assistance in wringing their bread from the sweat of other men's faces...
- Abraham Lincoln
But that seems to be what we've come to.  I keep thinking about the arguments of the slave-holders, that their system was in fact a kindness, more humane than the free labor system of the north, because their slaves had free food and housing and social security.

I went to bed last night, long before it was all called, because it started trending badly early, and I knew that I needed to get some sleep, and I wouldn't otherwise.  Slept until about four, woke to the depressing, but at that point not unexpected, news that we have four more years of Barack Obama to look forward to. I haven't read the returns, don't know what happened, or where, and frankly, don't much care.  I know that Scott Brown lost.  I know that rugged individualist "Live Free Or Die" New Hampshire has given up the ghost and become MA north politically.

Horrified by what's happened the last four years.  Terrified by what's to come in the next four.

One of the things that's coming soon, has probably already started, is the recriminations from those who didn't support Romney in the primary against those who did.  Let me just say this - the idea that another one of those candidates, be it Gingrich or Santorum or Perry or whoever, would have run a better campaign, or come closer to winning, strikes me as extremely far-fetched.

And this is not time for recriminations, because this is not a campaign failure or a candidate failure.  This is a system failure, and we need to figure out how to fix it.  Things are going to get worse before they get better, but if just letting them get worse until everyone sees how bad they are is the cure to the political problems, we're never going to get them fixed.


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Tuesday, November 06, 2012

"Midnight in Manchester"


Great, great piece from Robert Costa on Romney's last campaign event before election day...
It’s past midnight in Manchester, and they’re hopeful. So is Romney. “The president was right when he said he can’t change Washington from the inside, only from the outside,” Romney says near the end. “Let’s give him that chance!”

As the crowd rises for the last time, Romney begins to slow his words. “This is much more than our moment; it’s America’s moment,” he says. “We’re almost home. One final push, and we’ll get there. We’ve known many long days and short nights and now we’re close. The door to a brighter future is there. It’s open. It’s waiting for us.”

Romney begins to hit his right hand on the podium, emphasizing every word. “Walk with me,” he pleads. “Walk together.” A second later, he backs away and waves. As he bends down and dips arms into the crowd, grasping shoulders and outstretched hands, “Born Free” plays for one final late-night spin.
Read it all...

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"Data the Romney Campaign is Looking At"


Rich Lowry has a slew of tea leaves that the Romney camp are apparently reading, and they're all positive. Truth or spin? Probably some of each.

Offered anyway...

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"An Admirable Candidate and Man"


Win or lose (and I still expect "win"), this is worth saying.

Victor Davis Hanson:
But whatever the verdict, conservatives can appreciate the way Romney conducted himself throughout the campaign. If one reviews the primaries, it is hard to imagine that the other rival candidates would have done as well as Romney has the last eight months. He ran against overwhelming odds that might have stymied others — a biased, sometimes vicious media, the Candy Crowley debacle, suspect polls that sought to create Obama momentum as much as sample voters, incumbency, and a $1 billion negative ad-based Obama campaign that sought to portray him as a near-felon and veritable killer of the innocent.

Through it all, he worked incredibly hard, blew the supposedly mellifluous Obama away in the first debate, and appeared far more presidential than the incumbent in the second and third.
I agree entirely...

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Franchise exercised


Down to the polling place, this morning, waiting in line for the door to answer.  Eighteen year old daughter voting for the first time.  (So is the nineteen year old son, who is in the service and stationed out of state, so voted absentee two weeks ago.)  My wife fed the first ballots into the machine.

The first three votes cast in my precinct went to Mitt Romney for President, and for Scott Brown for the US Senate. 

I doubt that either will win that precinct, but there it is...

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Election day


A couple of thoughts as we head to the polls...

  • If the electorate is as Democratic as it was in 2008, Barack Obama will win a second term.  Many of the polls are suggesting that that will be the case.
  • I can't believe it.
  • Either way, I'm more than ready for it to be over.
  • We really have two different electorates in this country, with very different assumptions and expectations.  Someone is going to be not only disappointed, but shocked tomorrow morning.  Certainly, there are many on the right who have looked at all of the data and really believe that Romney will win.  And I get the impression that many of Obama's supporters have not even considered that possibility.
  • The polls cannot all be right.  Maybe none of them are.  But for the past month, or more, they've been telling two different stories.  With the topline results, they've been saying that it's a very tight race, with Romney possibly slightly ahead in the popular vote and Obama clearly ahead in the electoral college vote.  But the internals have suggested that Romney has a huge lead with independent voters.  Those two stories are only reconcilable if there is a massive majority of people voting who claim to be Democrats, a bigger Democrat majority than we actually saw in 2008.  Given what's happened since then, how likely is that?  Well, it's obviously preposterous.  
  • And, as much as I hate - hate! - to be in the position of arguing that the polls are wrong (I'd much rather my candidate had a big lead than to be arguing that the polls are wrong, which feels like sophistry and rationalization [and the next time I engage in either of those won't be the first]), there's another part of it.  The response rate on political polls is actually down to 9%.  That is, for every 100 houses or phone numbers that a pollster chooses as part of its sample, it ends up with just 9 valid responses.  Even if they are doing a perfect job of choosing their initial dataset, there's just no way of knowing how representative of the actual electorate the final response set is.  They've got all kinds of techniques and data to weight the results, but all of the results rest on assumptions that may or may not be true.  Are there some kinds of voters who are more likely to be missed?  Are the 6% that the pollsters reach that won't answer the questions more likely to support one candidate than the other?
  • There's a possibility that Obama's Sandy-related photo-ops actually changed the trajectory of this campaign.  In which case, his re-election would qualify as an act of God, because there's nothing he could have done to change it on his own.
  • My emotional investment is more than adequate evidence for me that the Federal Government is far too big and obtrusive. If the Federal Government were kept within its Constitutional boundaries, the average citizen should have little to no contact with it from year to year.  Instead, it is a constant, overwhelming presence, influencing all that we see and do.

I've been hesitant to make a prediction.  Yes, I've been telling people for months that I expected Romney to win an election that ended up being not particularly close.  But I'm so emotionally invested that it's difficult for me to tell where the analysis ends and the wishful thinking begins. 

But here it is anyway...

Romney wins the popular vote 51-48.  And the electoral college vote 315-223.




Romney states that are likeliest to be lost if Obama wins:  OH, PA, WI, IA
Obama states that are likeliest to be won if there's a Romney landslide:  MI, MN, NV, OR



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Monday, November 05, 2012

Predictable History, Unpredictable Past


This Associated Press story suggests that the campaign is Too Close To Call
As the 2012 presidential campaign moves to a close, national polls say the race between Barack Obama and Mitt Romney is too close to call.
Romney's big lead over Obama from last summer is gone as the hard-fought battle has tightened over the past three months, following the pattern of presidential contests in years gone by.
As more and more Americans focus on the decision of which level ro pull tomorrow, the polls also say Obama's hopes may be damaged because many of those who support him may not vote.
The original watershed mark for the final round of polls was the nationally televised debate between Romney and Obama last month. But late-breaking developments regarding the Americans killed in Libya, or the Americans without power and heat due to Hurricane Sandy could make recent poll results quickly obsolete.
...
While the polls seem to have different results, in fact, the differences are all smaller than the error margins to which all polls are subject. This means that the polls cannot be said to put either man in the solid position as the frontrunner.
In addition, the close race spotlights the unique system of picking a president - the election is decided by who wins the most electoral votes, which are awarded sate-by-state. It is possible in a close race that a candidate could win the most populate votes nationwide and still lose the electoral vote to his or her opponent.
Of course, every election is decided by who actually goes to vote. But the polls this year demonstrate that the issue of turnout is ever more critical than ever. For example, among registered voters, the Pew Research poll put the race at Obama 49% and Romney 42%. But when the results were weighted to reflect possible turnout, their results were Romney 47% and Obama 50%.
Ok, that's not exactly what it said. To see exactly what it said, you need to replace 2012 with 1980, Obama with Carter, and Romney with Reagan. It wasn't published today - it was published on the day before the 1980 election. The day before Ronald Reagan won 50.7% of the vote vs. Jimmy Carter's 41% (John Anderson took 10%). The day before Reagan won 489 electoral votes.

Too close to call...

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Saturday, November 03, 2012

Red Rocks



More Romney video...



I know that this Republican can't wait for Tuesday...

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Revenge Or Love Of Country

Closing argument

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Friday, November 02, 2012

"Obama unworthy commander-in-chief"


I think it's fair to say that the editors of the Las Vegas Review-Journal have left no room for misinterpretation in their endorsement of Mitt Romney. More specifically, in their passionate endorsement of the end of the Presidency of Barack Obama.
This administration is an embarrassment on foreign policy and incompetent at best on the economy - though a more careful analysis shows what can only be a perverse and willful attempt to destroy our prosperity. Back in January 2008, Barack Obama told the editorial board of the San Francisco Chronicle that under his cap-and-trade plan, "If somebody wants to build a coal-fired power plant, they can. It's just that it will bankrupt them." He added, "Under my plan ... electricity rates would necessarily skyrocket." It was also in 2008 that Mr. Obama's future Energy Secretary, Steven Chu, famously said it would be necessary to "figure out how to boost the price of gasoline to the levels in Europe" - $9 a gallon.

Yet the president now claims he's in favor of oil development and pipelines, taking credit for increased oil production on private lands where he's powerless to block it, after he halted the Keystone XL Pipeline and oversaw a 50 percent reduction in oil leases on public lands.

These behaviors go far beyond "spin." They amount to a pack of lies. To return to office a narcissistic amateur who seeks to ride this nation's economy and international esteem to oblivion, like Slim Pickens riding the nuclear bomb to its target at the end of the movie "Dr. Strangelove," would be disastrous.

Candidate Obama said if he couldn't fix the economy in four years, his would be a one-term presidency.

Mitt Romney is moral, capable and responsible man. Just this once, it's time to hold Barack Obama to his word. Maybe we can all do something about that, come Tuesday.
I can't honestly say that I've never seen anything like that, because that's not an uncommon level of vitriol for internet commentary. But it's quite something to see from a major newspaper.

I don't disagree with a word of it, of course...

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Thursday, November 01, 2012

Triplets Move Back Home


This is a commercial for Tide laundry detergent. It is not political in any way. And the fact that they are making and running an ad like this one is illustrative of a key reason that many of us have felt all along that Mitt Romney is going to win in November.


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Secretary Of Business


Another effective ad from Team Romney...


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"Five Days" to go...


Five Days

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