Free markets

Sep 132010


Chance coincidence or coordinated conspiracy? You decide.

Earlier tonight the WSJ had these two items, side by side:

1: “Cuba Layoffs Show Ideological Shift: Cuba will lay off more than half a million state workers and try to create hundreds of thousands of private-sector jobs, a dramatic attempt to shift its nearly bankrupt economy toward a more market-oriented system”

2. New Medicare Chief Pledges to Cut Costs

What are the odds that the two countries would announce the same reforms on the same day if they didn’t plan it that way?

Disclaimer: I haven’t read the articles that these items link to.

Jun 142009

George Bush had his Colin Powell, and now Barak Obama has his Larry Summers.

Colin Powell sacrificed his integrity to give an eloquent speech at the UN, assuring the world of the threat posed by Saddam Hussein’s weapon’s of mass destruction. He of course had lots of doubts about it even as he spoke.

And now Larry Summers has told has said President Obama is a defender of free markets.

President Barack Obama’s chief economist on Friday defended White House economic policies against criticism that they amounted to “a kind of back-door socialism.”

In a speech to the Council on Foreign Relations in New York, National Economic Council Director Lawrence Summers said Mr. Obama’s interventions “will go with, rather than against, the grain of the market system.”

This of course is complete crap and he knows it, but just as with George Bush, the president needs his people to say things like that.

Summers is now going to have to live with this blot on his record just as Colin Powell has had to live with the one on his.

(I must admit that I was slightly swayed by Powell’s speech at the time. I am not in the least swayed by Summer’s speech. Neither of these men is among my favorite politicians, but I respect both of them enough to be saddened by what they had to do.)

Jun 082009

I posted this in the comments section of a WSJ article titled “Going ‘Paperless’ to Thwart Scalpers.”

I love scalpers, too. They don’t suck anyone’s blood. They don’t steal anything. I decide if I like the asking price, and if so, I pay it. If not, not. Usually it’s not, because my wife doesn’t want me spending a lot of money on tickets for sporting events, even though she’s the sports fan in the family. But once in a while I make use of a scalper’s services. It’s unlike Obama’s cars, where you have to pay whether or not you want one. Now THAT is something like stealing. Scalpers, on the other hand, perform a valuable public service. They should be held up as heroes to the younger generation. In fact, they deserve one of my not-so-famous Leviathan Anklebiter awards.

If people have emotional problems with the idea of free-choice prices, they should get therapy rather than keep other people from making their own choices.

May 282009

Last week we learned that Shell stockholders voted down an executive compensation plan. (WSJ: “Shell investors revolt over executive pay plan.”) They did not want to reward the managers of their company for failure.

It was just a non-binding resolution, though. As at many business corporations, the Shell company executives have managed to keep their paychecks insulated from the workings of the free market by not allowing the owners to control them.

I don’t know just how that state of affairs came about, but I would wager that the executives of this and other business corporations had allies in government who helped pull it off. Governments of the modern welfare-police state tend to fear, hate, and loathe markets and will go to great lengths to keep them from working. It’s natural for them to collaborate with business managers to suppress their operation. (You can read all about it in Milton Friedman.)

But the point is, if the owners had their way, they would not reward the managers of their company for failure.

Compare that with what happens when federal regulators fail. The usual remedy is to reward them with bigger budgets, bigger empires, and more power. That’s how we got the monstrosity known as the Department of Homeland Security. Not a single person in government suffered any consequences for being unlucky enough not to use the available information to prevent 9/11. Instead, the system rewarded itself.

That’s also what was happening in the closing months of the Bush administration when Bernanke and Paulson kept pushing for more centralized power over the economy as a reward for their mismanagement. They didn’t get their way, but they tried. Now the Obama administration is trying the same thing, and will have a better chance of getting it. (WSJ: “Single-Regulator Plan for Banks Now Close“)

White House and Treasury officials have met with numerous groups to discuss their plans to rework supervision of financial markets, and they have occasionally offered clues as to what their plans may look like. Mr. Geithner has said he thinks there needs to be consolidation and simplification in the oversight of banks, but he has declined to be more specific.

“Declined to be more specific.” Yeah, there’s probably a reason for his reticence.

Not so many months ago these same people were asking for unprecedent sums of money even though it soon became apparent they didn’t have any idea what they were going to do with it. Now they’re asking for unprecedent powers and a major reworking of the org charts in their favor, and they have no idea what they’re going to do with that, either. But they do know that they want more centralization and more power. That’s the government reward for incompetence.

It’s sort of like what the Shell executives want, only on a much more massive scale, beyond anything that even Dilbert ever imagined could happen.

May 142009

A few days ago I finished Sergei Khrushchev’s book, “Nikita Khrushchev and the creation of a superpower.”

I wish he had had as much to say about the Soviet Union’s domestic economy as he did about missiles and the space race. Maybe I’ll find some of that in his other books, though I it’s understandable where his emphasis lay given that his own job was in the missile industry.

He does give some tantalizing descriptions of how industrial planning worked in the 1950s and 1960s. And he provides plenty of evidence that his father understood very well the relationship between the domestic economy and the USSR’s prowess in military and space technology.

And he introduced me to someone I had not known about: Yevsei Liberman.

Liberman, a pragmatist, came very close to understanding the need to introduce a market economy, calling it material self-interest; but as someone who had grown up while an irreconcilable struggle was being waged against any manifestations of freedom in the economy, he could not bring himself to pronounce the seditious word.

I went to Google to learn more. So far I’ve found contradictory information. The New York Times obituary in 1983 said, “Although Mr. Khrushchev evidently endorsed the proposals, they were not put into practice until after Leonid I. Brezhnev succeeded to the Soviet leadership in 1964.” But other sources say his proposals were eviscerated before being implemented. I’m now looking for a book to read that can help explain this. What I’d really like is one that can give accounts that are close to the action and personal, like Sergei Khruschev’s, but I’ll probably have to settle for less.

Mar 212009

My Kensington Pocket Mouse broke the other day, so tonight I sat down to order one of those Logitech Nano mice. I wanted the tiny USB receiver so I could put it in my notebook computer and leave it there, without worrying about breaking it off when I move around. But I learned that the mice are not full-sized. For some reason neither Kensington nor Logitech puts mouse dimensions on their web site, but I was able to find some reviewers who had measured the things. The Logitech Nano 550 is bigger than my Kensington mouse was, but I want full size. Googling for “full-size mouse nano receiver” tells me I’m not the only one. So I’ve put my credit card away. For now I’ll just drag my corded optical mouse around with my computer, and wait for Kensington or Logitech or somebody to come out with what I want.

Dec 182008

It’s bad enough that one of these years I’ll have to retire from my day job. But to make it worse, there is the existence of things such as Boston College’s “Center for Retirement Research.” That in itself isn’t the worst of it. The worst is that it’s led by a director, Alicia Munnell, who has this to say in last weekend’s WSJ:

The 401(k) system has had a chance, and in my view, it has failed. As a major shource of retirement income, it has shown itself unreliable–a point the financial crisis has driven home.

For the record, my own retirement savings are not in a 401K, but in TIAA-CREF. But TIAA-CREF is similar in that it’s another defined-contribution system. Those plans are hated by people who hate markets and human choice. Here’s an example of the attitude you find, from the same WSJ article.

We’ve shifted the risk and responsibility for retirement onto individuals. The evidence is at best mixed on how well this is working out.

Somebody has a government-centric outlook on life, it would appear, if he views individual risk and responsibility as an aberration.

To be sure, not all of the WSJ article is anti-choice. There are some pro-choice proposals to make 401(k)s better and more available. But there are plenty of people who just don’t like humans taking over the government’s job of running their lives.

Their solution? Turn investment decisions and planning over to the financial geniuses who now want to invest in GM and the Big Three.

Dec 042008

Bailing the bailout

If he was serious about this, Hank Paulson would be escorted from Washington by U.S. marshals. … Mr. Bush, I had thought you were actually going to do what you said you were going to do with the $700 billion. You did not do it; your Treasury Secretary continues to audible at the line of scrimmage.

–Economist King Banion of SCSU Scholars, 13 November 2008

Interactive learning

How does “a virtual learning environment” differ from “interactive learning” (what learning isn’t “interactive”, come to that)…

Sam Leith at 25 November 2008

Upcoming fad: blogs without headlines

The judge ruled that since the blog had a headline, that made it an online newspaper, and brought it within the law’s remit.

— John Ozimek at The Register, 26 September 2008

We’re up against 2-year-olds

…we have to start thinking about changing everything we’re up against….especially adults who use the word “safety” the way 2-year-olds use the word “No!”

Free Range Kids

Oct 072008

Bush says we need to be patient. “It’s going to take a while.”

So why was he so impatient last week? Why the big hurry to pass something, anything, even if it was all larded up with more of the same poison that sickened the economy in the first place? Why couldn’t we have taken a while to examine the causes of the financial crisis and come up with measures that would actually address it?