Related to last week’s commentary and blog post, check out this WSJ piece, “Gates Crafts Long-Term Iraq Plan, With Limited Role for U.S. Forces,” in which Defense Secretary Robert Gates says, “My view is that whatever works economically ought to be tried.”
In college I wrote a paper for a Latin American Politics class titled, Barnum & Bailey Circus bailouts. The paper took the position that another financial bailout of Mexico would be a huge mistake and would not be money well spent. The paper was probably a little flippant because I interwove within the framework of the paper some characters with top hats, traveling bands of political circuses, and other outlandish theatrical symbolism. I was trying to make light of what I thought was a circus-like proposal, as well as rely on smoke and mirrors to downplay my lack of reading for the course.
There is nothing funny, however, about mortgage bailout proposals. Hillsdale professor Gary Wolfram has an excellent article in Human Events, titled “Econ 101: The Problem with Bailouts.” Wolfram shows how markets correct themselves, and even discusses the upsides to a now more affordable market:
As Sherlock Holmes told Dr. Watson in “Scandal in Bohemia,” one problem is that we see but do not observe. For every homeowner who loses his home and moves into a smaller home or a rental, there is another homeowner who moves into that home and out of a smaller home or rental.
It would be interesting if the media began doing stories on how much more affordable it is for people to move from rented apartments into owner-occupied homes. The house that used to cost $280,000 and was out of the reach of the young family is now $220,000 and becomes affordable.
If the federal government, including the Federal Reserve, bails out the mortgage industry in some fashion, the market will quickly learn that taxpayers will bear some of the risk of the investments of homeowners, lenders, hedge funds and other market participants. This will result in their taking more risk than is economically justified, encouraging the very activity that led to the situation of declining housing prices and foreclosures in the first place.
But if politicians keep rattling off vague proposals of bailout proposals in the belief it will raise their polls, they may have to think again. In an Associated Press article, J.W. Elphinstone, cites a newly popular online petition, Tax Payers Against a Wall Street and Mortgage Bailout. Furthermore, Peter Viles in the Los Angeles Times, references a Fox News Poll that shows 70% of the public against a taxpayer bailout.
Many of those people have been priced out of the market and understandably they don’t want to support people who cannot afford their homes, many of whom made really bad financial choices. The people against this bailout simply want back in the market, and they understand now the market is correcting itself.
Here’s a justly famous quote from C. S. Lewis on why the danger posed by a nanny government can be much more oppressive than that posed by the consolidation of economic power:
Of all tyrannies a tyranny sincerely exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.
That’s taken from his essay, “The Humanitarian Theory of Punishment,” and it speaks well to the difference between political and economic power. While Lewis is writing within the context of government power in the administration of criminal justice, just think about how perceptive Lewis’ observation is when applied to the ever-expanding reach government regulation via so-called “sin” taxes.
Progressives are right to be concerned about the conflation of those two sorts of power, but I think they are wrong to be reflexively more suspicious of economic power than political power.
In this week’s Acton Commentary, I examine the (non)necessity of promoting a democratic government in post-invasion Iraq. I haven’t written much on Iraq in this or any other venue, for a number of reasons. But this piece is one that I’ve been waiting to write for a long time, and was really only waiting for the proper occasion. That prompting came a few weeks ago when U.S. Rep. Peter Hoekstra from Holland, MI said, “The mission for us is not to establish a democracy in Iraq, but to make the region secure and stable.”
This piece appeared earlier in the Orange County Register, “Iraq: Democracy not required,” which garnered this response, “Democracy without liberty? I think not” (see also the 2003 Acton Commentary, “Success in Iraq: Guaranteed Property Rights as a Precondition for Democracy”).
Here are some links that have been floating around my inbox that are related to some of the points brought up in this week’s commentary. First and most directly relevant, from Christianity Today, “Bush’s ‘Theological Perspective.'”
Next, here is a link to an H-Net review of a recent book on civil society in post-war Germany, particularly the “Heidelberg Action Group,” whose founding manifesto “challenged socialist ideologies that stressed the role of a strong state and the primacy of national interest. They envisioned a form of socialism focused upon the realization of individual freedom and the creation of autonomous and self-reliant persons.”
And finally I’d like to point you to a review in the Claremont Review of Books by Georgetown law professor Randy Barnett on a book that argues for a greater “democratization” of the American constitution. It may come as a surprise to some, but our Constitution was initially and still remains to a large extent “counter-majoritarian.”
And related to foreign policy in particular, Barnett notes the curiousity that “It has become de rigueur among American constitutional law scholars to refrain from recommending our particular form of government to others when advocating democracy around the world. While most Americans prefer the safety of our counter-majoritarian Constitution, our constitutional ‘experts’ are happy to urge others to live the truly majoritarian ideal. Now Sandy Levinson is urging Americans as well to adopt a more majoritarian constitution. But maybe the time has come instead to let the rest of the world in on our little secret.”
Update: See “The Ottoman Swede,” by Roger Cohen, which says in part, “distinct peoples forcefully gathered into a dictatorial state will react in the first instance to liberty by trying to get free of each other rather than trying to imagine a liberal democracy,” and “The Road to Partition,” by David Brooks. See also these two Marketplace pieces (here and here) with the normally rather disagreeable Robert Reich, discussing in part his new book Supercapitalism.
Some notes from a talk by Sally E. Stuart, author of The Christian Writers Market Guide:
- Publisher blogs are increasingly prevalent (for example, IVP).
- Authors are sometimes expected to provide fully developed marketing plans.
- “Secular” has become a pejorative term, now the preferred term is “General.”
- There is a move toward digital publication and dissemination, due to competition, postage, printing costs.
- Christian booksellers are facing stiff competition with decreasing margins, in part because Christian books are becoming popular in mainstream outlets like Barnes & Noble, Amazon, and Wal-Mart.
- Only 44% of Protestants read Christian magazines, which themselves only make up 21% of the magazine reading of the average Protestant.
- Christian publishing is the only publishing segment that has been growing in recent years (it is roughly 5-10 percent of the overall market).
This week’s commentary by Anthony Bradley, “Obviously, Sports Do Not Build Character,” (along with our poll question) made me think of the series of articles appearing in the current issue of Christianity Today, which included a cover story on the NFL and an editorial addressing faith and the NBA.
And that made me think of this parody (HT: the evangelical outpost):
Update: See also the new “Centre for the Study of Sport and Spirituality.”
Do you ever walk into a business and see a license on the wall and wonder if that specific industry really needs to be licensed by the state? I know I have thought that, if just a few times. John Fund of the Wall Street Journal looks at how licensing laws hinders low prices and competition in the marketplace. In a piece titled, License to Kill Jobs, Fund also explains how over regulation has stymied job growth and the ability of new entrepreneurs to become more self reliant.
Fund also notes in his column:
In the 1950s, only about 4.5% of jobs required a license to work. Today, that proportion is more than 20%. Many of the jobs that require a government stamp of approval don’t involve health or safety. Depending on the state, you need a license to be a hair braider, florist, auctioneer, interior designer or even fortune-teller.
The cost of the education for the license also hurts those who may have the necessary skills but can’t afford to meet all the requirements. Furthermore, sometimes the licensing requirements have little to do with the relevancy of the actual work performed. Another aspect Fund looks at is the arbitrary nature and requirements from state licensing, compiled by a major study by the Reason Foundation. California requires 177 specific business types to be licensed, while Missouri requires only 41. The “Live Free or Die” state of New Hampshire, requires a walloping 130 licenses for specific businesses types.
Another interesting point Fund makes is the licensing requirements hurt the very consumers it’s meant to protect. Fund notes just a few of the facts from the Reason Foundation study:
The higher prices such licensing bodies impose for services can also hurt consumers by creating incentives to do dangerous jobs themselves. “Electrocution rates are higher in states with strict electrical licensing requirements, as more consumers risk performing their own electrical work,” the study notes. “Similarly, states with stricter dental licensing laws also have the highest incidence of poor dental hygiene.”
In the Wall Street Journal piece, the author also declares how in some instances the courts have stepped in and found some of the licensing requirements completely unnecessary, and additionally acts as a regulatory infringement on the right to earn a living. Fund also declares, “Some courts are even citing the 14th Amendment’s due process and equal protection clauses in striking down protectionist government regulations.”
Which makes one wonder all the more: Are the over-zealous requirements and so called need for licensing helping the consumer or just perpetuating higher prices, and lack of competition, which can result in inferior products and service? Obviously licensing in some classes of business are needed. But does everybody, in say an interior design or the florist industry need to be licensed? There are large and powerful lobbying groups able to protect and strengthen certain businesses from more competition, but in some cases little help for newcomers trying to break into the market. In addition, we often overlook just how much the market can regulate itself.
It all reminds me a little bit about the stories you see in the news print and media about young children getting their lemonade stands shut down by bureaucratic governmental standards . Concerning the crackdown on lemonade stands, where are the “It’s For The Children” speeches when they are actually needed?