Fisking Thomas Sowell

I don't know who Thomas Sowell is, but someone sent me this article.  Here's my commentary in blue:

Dependency and Votes



By Thomas Sowell
http://www.JewishWorldReview.com


Those who regard government "entitlement" programs as sacrosanct, and regard those who want to cut them back as calloused or cruel, picture a world very different from the world of reality.
To listen to some of the defenders of entitlement programs, which are at the heart of the present financial crisis, you might think that anything the government fails to provide is something that people will be deprived of. "entitlement programs" are not at the heart of the current deficit- that's the Bush tax cuts- that's what caused the current deficit. Entitlements are the issue for the long-term deficit.
In other words, if you cut spending on school lunches, children will go hungry. If you fail to subsidize housing, people will be homeless. If you fail to subsidize prescription drugs, old people will have to eat dog food in order to be able to afford their meds. Well, I hate to break it to people, but that's all true. What's ridiculous is to claim that cutting food spending on poor children will result in anything else but some children going hungry, or that cutting subsidized housing will result in anything else but an increase in homelessness. Of course that will be the result! To argue otherwise is dishonest. Now maybe it's worth it to allow those things to happen, maybe we can't afford to subsidize those things, but even so real people will certainly be affected.

This is the vision promoted by many politicians and much of the media. But, in the world of reality, it is not even true for most people who are living below the official poverty line. Straw man. I don't know what percentage of poor people will be affected by such cuts- it may be less than half, but it's certainly more than zero. I'd like to see this author quote some statistics if he's saying that the number is negligible.
Most Americans living below the official poverty line own a car or truck-- and government entitlement programs seldom provide cars and trucks. Most people living below the official poverty line also have air conditioning, color television and a microwave oven--and these too are not usually handed out by government entitlement programs. No doubt. Some people among the working poor will no longer be able to afford their truck since they'll have to spend more on food or housing, and so they won't be able to get to work, and they'll be even poorer.

Cell phones and other electronic devices are by no means unheard of in low-income neighborhoods, where children would supposedly go hungry if there were no school lunch programs. So poor people shouldn't be allowed to have phones? In reality, low-income people are overweight even more often than other Americans. What's that supposed to mean? That poor people are fat so they don't deserve support? Might it be relevant that healthy food costs more than crappy food?
As for housing and homelessness, housing prices are higher and homelessness a bigger problem in places where there has been massive government intervention, such as liberal bastions like New York City and San Francisco. That implies some sort of causation, which is unproven, and frankly ridiculous. Housing costs more on the liberal coasts because there's more demand for housing there. For this point to make any sense, one would have to describe a plausible way in which specific policies have caused homelessness in those places. As for the elderly, 80 percent are homeowners. whose monthly housing costs are less than $400, including property taxes, utilities, and maintenance. Good thing the elderly have social security supporting their housing costs.

The desperately poor elderly conjured up in political and media rhetoric are-- in the world of reality-- the wealthiest segment of the American population. The average wealth of older households is nearly three times the wealth of households headed by people in the 35 to 44-year-old bracket, and more than 15 times the wealth of households headed by someone under 35 years of age. Some elderly people are poor. Nobody said all elderly people were poor. Why are the elderly not poor? Because of social security and Medicare!!!!

If the wealthiest segment of the population cannot pay their own medical bills, who can? The country as a whole is not any richer because the government pays our medical bills-- with money that it takes from us. Before Medicare was passed in 1965, many elderly people couldn't pay their medical bills, and costs have only gone up. How can anyone argue with a straight face that the elderly will be able to afford private health insurance without government intervention considering how expensive medical care is today for people over 65?
What about the truly poor, in whatever age brackets? First of all, even in low-income and high-crime neighborhoods, people are not stealing bread to feed their children. The fraction of the people in such neighborhoods who commit most of the crimes are far more likely to steal luxury products that they can either use or sell to get money to support their parasitic lifestyle.
As for the rest of the poor, Professor Walter Williams of George Mason University long ago showed that you could give the poor enough money to lift them all above the official poverty line for a fraction of what it costs to support a massive welfare state bureaucracy. So is this arguing that we should start giving bags of money to poor people instead? I don't think that would go over too well.
We don't need to send the country into bankruptcy, in the name of the poor, by spending trillions of dollars on people who are not poor, and who could take care of themselves. The poor have been used as human shields behind which the expanding welfare state can advance.
The goal is not to keep the poor from starving but to create dependency, because dependency translates into votes for politicians who play Santa Claus. Before the modern welfare state existed, in the 19th and early 20th century, we had the Utopia of non-dependency. How did that work out? There were lots of desperately poor people all over the place. In capitalist societies there are always going to be winners and losers. Some of the losers are lazy. Some are drug-addicted. Some are unlucky. Some are mentally ill or mentally retarded. Some are not very bright. There is a right wing fantasy out there that if we stop coddling the losers, they'll all become winners. But that's not how it's ever worked- there's just no evidence of that sort of social policy working.
We have all heard the old saying about how giving a man a fish feeds him for a day, while teaching him to fish feeds him for a lifetime. Independence makes for a healthier society, but dependency is what gets votes for politicians.
For politicians, giving a man a fish every day of his life is the way to keep getting his vote

"Entitlement" is just a fancy word for dependency. As for the scary stories politicians tell, in order to keep the entitlement programs going, as long as we keep buying it, they will keep selling it. So the answer here is to return to the 1920s in our social policy. Think of all the things our society has accomplished since the modern welfare state was created starting in the 1930s. While building that state we won WW II, vaulted to the top of the nations in the world economically, won the Cold War, and emerged as the world's only super-power. Seems like we're doing OK to me.

The President's Israel-Palestine Speech

I think this section from Yossi Klein Ha-Levi's New Republic piece on Obama's latest Middle East initiative is spot on:

...to be an ambivalent Israeli is to be torn between two conflicting certainties. As an ambivalent Israeli, I know that a Palestinian state is an existential necessity for me—saving Israel from the untenable choice between being a Jewish and a democratic state, from the moral erosion of occupation, from the growing movement to again turn the Jews, via the Jewish state, into the symbol of evil.
But I also know that a Palestinian state is an existential threat to me—forcing Israel back into eight-mile-wide borders between Palestine and the Mediterranean Sea, with the center of the country vulnerable to rocket attacks from the West Bank hills that overlook it.

This is the fundamental dilemna for Israel.  The Palestinians are not a negotiating partner at this time- Hamas is still dedicated to Israel's destruction, and therefore peace with that entity can not really be considered (not that Hamas would consider it anyway).  But endless occupation and subjugation of  millions of Palestinians can not be accepted either.  When Left and Right argue about this, they invariably talk around each other: "We have no partner for peace!" .... "We can't continue to occupy people without giving them rights!".  Both statements are true.

The Jewish Right along with the more general US Right has followed the lead of Bibi Netanyahu and condemned Obama's speech yesterday as a cave-in to Palestinian demands.  This seems preposterous to me when looking at what he actually said.

So while the core issues of the conflict must be negotiated, the basis of those negotiations is clear: a viable Palestine, and a secure Israel. The United States believes that negotiations should result in two states, with permanent Palestinian borders with Israel, Jordan, and Egypt, and permanent Israeli borders with Palestine. The borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognized borders are established for both states. The Palestinian people must have the right to govern themselves, and reach their potential, in a sovereign and contiguous state.
As for security, every state has the right to self-defense, and Israel must be able to defend itself – by itself – against any threat. Provisions must also be robust enough to prevent a resurgence of terrorism; to stop the infiltration of weapons; and to provide effective border security. The full and phased withdrawal of Israeli military forces should be coordinated with the assumption of Palestinian security responsibility in a sovereign, non-militarized state. The duration of this transition period must be agreed, and the effectiveness of security arrangements must be demonstrated.
These principles provide a foundation for negotiations. Palestinians should know the territorial outlines of their state; Israelis should know that their basic security concerns will be met. I know that these steps alone will not resolve this conflict. Two wrenching and emotional issues remain: the future of Jerusalem, and the fate of Palestinian refugees. But moving forward now on the basis of territory and security provides a foundation to resolve those two issues in a way that is just and fair, and that respects the rights and aspirations of Israelis and Palestinians.
Recognizing that negotiations need to begin with the issues of territory and security does not mean that it will be easy to come back to the table. In particular, the recent announcement of an agreement between Fatah and Hamas raises profound and legitimate questions for Israel – how can one negotiate with a party that has shown itself unwilling to recognize your right to exist. In the weeks and months to come, Palestinian leaders will have to provide a credible answer to that question. Meanwhile, the United States, our Quartet partners, and the Arab states will need to continue every effort to get beyond the current impasse.

That just doesn't sound to me like "throwing Israel under the bus".  It sounds like what everyone knows has to be the basis of eventual peace.  I mean everyone: Ehud Olmert, Avigdor Lieberman, past American negotiators, George W. Bush, basically everyone.  (These links are all to Jeffrey Goldberg's blog, which has lots of great posts up on the topic).  It acknowledges Israel's major dilemna I started off with, and tries to square the circle as best as it can be squared.

My question for the Right is this: What is your plan for long-term peace and prosperity between Israel and the Palestinians?  There are over 4 million Palestinians living in West Bank and Gaza, under occupation.  If we can never trust the Arabs to make peace, then what are we going to do with these people?

Of course, someone on the Left can be asked: What makes you think we can trust the Palestinians enough to allow them sovereignty, given their history of terrorism and implacable opposition to our very existence? 

My answer is this: right now we can't trust them.  But forever is a long time.  Israelis should openly acknowledge what it will take to make peace happen, even if they know it's not possible now.  When I was growing up, the violence in Northern Ireland had been going on for centuries and looked like it would never end.  Now there's peace there.  South Africa looked like a hopeless case- and then there was an orderly transition to Black rule.  Things change, sometimes when we don't expect it (look at the "Arab Spring" we've just seen and could never have predicted).  Israel's position should be the one Obama enunciated: sovereignty and land for peace and security.  After all, in the long run, what other option is there?

More on Austerity and Keynes

It's tough to parse all the evidence in order to determine what the best course of economic policy is during a bad recession.  I've tried to present some evidence showing that stimulus measures and deficit spending works better than austerity.  That link focuses on the problems in Ireland and England, who have tried austerity and found it wanting.  Now here's Matt Yglesias with some results from Baltic countries, which also went with balancing their budgets instead of spending and have found themselves in a terrible near-depression.

But a correspondent of mine points out that the US, with its huge Keynesian spending, hasn't done so hot either.  But the point is to compare the results of different systems across time and country. Every country has done poorly during this period in history, but it's still useful to point out which countries have done relatively better and which have done relatively worse. So with the Baltics we have one data point, looking good for Keynes.
One thing I've been thinking after watching this great video is the point made by the Keynes character when he notes that Hayek's position during economic hardship is basically that government can't do anything useful and should essentially just let things play out, remove any regulation and taxation that is getting in the way, and then let the Invisible Hand do the work.

Well, that's kind of what Ireland and the UK and the Baltics are doing, at least in comparison to the Keynesian stimulus in the US. In the short term that has led to worse performance in those places in the US, though of course there could be other factors at play too. And maybe the conservative argument is that in the longer term this pain in the Baltics will be worth it, as the surviving institutions will be stronger and the moral hazard stuff will have been dealt with.

If one wants to successfully argue for austerity budgets in times of serious recessions, I think one needs to come up with some data that shows them working. I've been laying out data that supports stimulus such as the above links and of course my favorite historical example of the US in the 1930s and 1940s. I'd like to see some real-world examples of austerity working during a bad economic downturn.

Happy Debt Ceiling Day!

So today is the day that we reach the Debt Ceiling, and we're still waiting for Washington to raise the Debt Limit so that borrowing can continue.  And as I search the news at 8:45 PM Eastern time, it looks like the day will come and go.  I guess it's no big deal, as the Treasury can play some games to get us to August relatively painlessly.  But if the ceiling isn't raised eventually, the US would have to default on some mandatory payments such as debt service (which seems unlikely- can't upset the bondholders) or social security (can't do that- old people vote) or maybe social programs (bingo!).  Apparently the bond market is unconcerned, as interest rates remain low so the rest of the world's budgets must be even worse or something.

As I've written before, it's really frustrating to watch Obama invite hostage-taking by Republicans, who say they won't allow the debt ceiling to be raised without budget concessions- even though John Boehner is on record admitting that it has to be raised and the entire Wall Street elite is clearly saying the same thing.  I can only conclude that Obama is willing to make "concessions" becuase they're not really concessions at all- he's very comfortable with more spending cuts and uninterested in fighting for a clean vote even though the politics of the matter favor the Democrats.
But a thought occurs to me.  This is really cynical, so I really don't want this to be right.  Let me lay it out:

• The Democrats are still in power for the most part- in control of the Senate and the Presidency. 
• Failing to raise the debt ceiling will be bad for the economy and will make it much harder to finance our debt.  It could jeopardize the recovery.
• Failure in the economy will politically benefit the party that is out of power
• The Republicans are the party out of power- mostly
• Because the Republicans are in control of the House, they do have the power to block the increase in the debt ceiling
• Even if Republicans in the House are clearly responsible for the failure to raise the ceiling, they have proven expert at twisting and confusing facts in the Common Wisdom through Fox News and with the help of the pathetic mainstream media- and remember they're (mostly) not the ones in power
• Democrats continue to be just terrible at power politics, of the sort that might force some conservatives to do the responsible thing

Again, sure hope this is just a cynical fantasy!

Blogging Doldrums

Sorry fans, but I haven't got much to post on.  With NBA and NHL playoffs in full gear it's just too hard to find the time.  I'll be back to it in a few days I'd imagine.

Osama Bin Laden and the Super-Villain Fallacy

Good news that Osama Bin Laden has been killed by US security forces.  He essentially declared war on us, and when you do that you accept that the country that spends as much on the military as the rest of the world combined is going to be coming for you.  Of course he wanted to die, so I guess everyone got their wish.

So it's a nice symbolic victory, but let's not pretend it has more strategic significance than it really has.  I really don't understand the American obsession with single villains as the Key to Everything.  Bin Laden was certainly the most important person in Al Qaeda, but he's now had ten years to carefully plan for the organization to survive his death.  In any case Al Qaeda central was already pretty decimated by US actions in Afghanistan and Pakistan, and its only hope for effective terrorism since 2001 has been among small cells that have little to no connection to the central leadership.

This brings to mind the country's reluctance to bring Guantanamo prisoners to trial on US soil.  Remember the haughty speeches about the terrible danger to us in bringing these terrorists into the US?  It's like these guys are Magneto, capable of destroying us all by their meer proximity.  In reality they're just people, and our fear of them gives them way too much credit.

What I'd like to see is a realistic acceptance and understanding of the danger really posed by terrorism, along with a sober assessment of what costs are worth incurring to fight it.  It's incredibly easy in the US to shoot up or blow up a crowded place, be it a government building or a mall.  We can never be totally safe from that, just as nobody anywhere in the world is totally safe.  But let's not freak out about Jihadists establishing a Sharia-based dictatorship in the West- that's just making their fantasy into our nightmare.  And it's not realistic- there is no existential threat from Islamist forces.  They can make our lives unpleasant for a brief time, and they can kill some of us, but they can't fundamentally harm our society unless we allow it.

Libya Update

So it seems that NATO bombs have killed one of Qaddafi's sons and a few of his grandchildren.  There are denials from NATO that civilians or the Qaddafi family are targeted, so maybe the whole thing is propaganda.  But at least we're keeping the bombing of Libya in the news a bit, now that the Royal Wedding is over (oops, sorry, no blog post coming on that one).

One of my conservative correspondents over email has criticized the government for failing to just "take him out", i.e. kill Qaddafi and be done with the whole thing.  He wrote to our group:

You may recall a few weeks back I said "go after Qaddafi". The civil war that has killed and maimed countless innocent men, women and children since then would likely have ended as soon as he was killed.

Now this is just stupid.  Killing the leader there would be the start of our problems, not the end.  Do people think about what would happen next?  Haven't we learned anything from our Iraq and Afghanistan experiences?  Look, I'm not saying we should never intervene anywhere internationally, but we certainly need to have a clear-eyed sense of what we're getting into.  It's been proven over and over and over again that a targeted killing or a well-placed bomb is not going to offer a simple solution to an international problem.

Qaddafi looks like he's not going away quietly.  We're not going to bomb him into submission.  The rebels don't look like they're organized enough to take him down.  Even if they can take him down, the next likely stage would be a civil war for power, not an easy transition to Democracy.  The USA has no stomach for another long occupation ending in another few million people hating us.

Sorry, the only option is to leave them alone.  That stinks too, by the way, and leaves Qaddafi in power wiping out the rebels and committing atrocities.  But that outcome isn't on us- we're not doing it.  And we can only postpone the bloodbath, not stop it.  Time to get out.