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Principled Businesses Supporting Liberty February 21, 2013

Posted by federalist in RKBA.
1 comment so far

The Left often derides for-profit businesses as mercenaries that, without proper regulation, would sacrifice the well-being of their employees, customers, and anyone else who stands in the way of turning a quick profit.

The firearms industry is offering a refreshing counterpoint: A significant number of American manufacturers have declared that they will apply the same rules and restrictions to governments as the governments apply to their subjects/citizens. [20130223 Update: ThePoliceLoophole.com is serving as a clearinghouse to list companies that are taking the initiative to close this “police loophole” themselves.]

Yesterday Barrett added this eloquent letter, explaining that they will not service or sell to any government agency that attempts to abridge the constitutional rights of Americans. They take it one step further, declaring that this policy extends to any “individual elected official who, as a matter of public record, has voted for or created regulation that violates the constitutional rights of their citizens.” It’s a great statement and a great model for principled commerce. Full letter copied here:
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Efficient Market Hypothesis Disproved! February 15, 2013

Posted by federalist in Markets.
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Efficient markets are often explained with a joke about an economist walking by a $100 bill. His companion exclaims, “Look, there’s a $100 bill on the sidewalk!” Without stopping the economist responds, “That’s impossible; if it were really there somebody would have already picked it up.”

Found $100 BillSo here’s a picture of a $100 bill my wife found folded on the sidewalk outside a parking garage. She picked it up and looked around to find its owner. Seeing nobody, she concluded it must be fake. But she brought it home thinking I would enjoy figuring out what’s wrong with it.

Well, it passes every unclassified test for authenticity. Perhaps God knew that I needed a reminder of how inefficient the real world can be.

America’s Fertility Problem February 11, 2013

Posted by federalist in Economic Policy, Education, Human Markets, Social Politics, Taxation.
6 comments

America is fortunate to be lagging the demographic collapse that is plaguing Europe and the Orient, so we will have time to observe both the socioeconomic problems that low fertility creates and the means of fixing them.

Already some European countries have adopted extreme measures to stimulate childbearing: From tax credits and grants to increasingly generous time-off and childcare programs.

Jonathan Last, author of What to Expect When No One’s Expecting: American’s Coming Demographic Disaster, summarizes the current state of affairs in America and looks at some potential policies to motivate reproduction.

Indeed, for most Americans it is irrational to choose to have children today. The marginal cost to an educated working couple is staggering: Direct financial costs alone can run well into six figures and, if one pays for the “best” education, can even break seven figures. At least one earner is usually taken out of the workforce for years, incurring substantial opportunity costs in career and earning potential. And we rarely credit parents for the time, stress, and emotional agony of raising a child to maturity. Relatively speaking, life without children is a luxury: a carefree existence flush with money and freedom.

In a selfish world in which women often out-earn men and couples can easily avoid reproducing, who is having babies? Those too incompetent to use birth control, or too ignorant to rationally account for the full costs? Those on the fringes who can actually expect a net positive return on childbearing thanks to welfare systems?

There are many who bear children for religious and altruistic reasons. Indeed, when it comes down to it, modern childbearing is a gift to society as a whole. Children might grow up to honor and support their parents, but government will all but guarantee that as adults they will pay taxes to support their grandparents’ generation.

Until recently children were mostly unavoidable products of adult couplings, but they were also greatly desired because they eventually conferred status and security on their parents. Just as modern contraception has divorced coupling from reproduction, the senior welfare systems of modern government have severed parents from the support they could traditionally expect from their particular children.

Among Jonathan Last’s policy prescriptions for restoring fertility:

  • Recognizing that children are the future tax base, reduce the cost of bearing them by significantly cutting the tax burden on parents. (Or, presumably, wait until we are so far down the demographic cliff that we have to go European and outright pay people to bear children.)
  • Destroy the higher education cartel, which defers marriage, increases the opportunity cost of stepping away from the workforce to bear children, and then exacts a final, enormous toll to get the child out of the nest and into the most desirable jobs.

Is College Cost-Effective? February 7, 2013

Posted by federalist in Education.
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This blog has long criticized the higher-education cartel and bubble.

Rick Bookstaber has a great analysis of the overt functions of higher education — to Learn, Signal, Network, and Party — and proceeds to point out that each of those functions can now be accomplished much more cheaply and efficiently than in a traditional 4-year-college. (Yes, one commenter even suggests an effective substitute for the Network/Party “feature” of college.)

Yes, I’m bearish on higher education. Unless they want to be academics, I don’t hope my kids go to college. I hope they find a passion, or at least a productive interest, and that they will use the modern tools for learning, signaling, and networking to side-step the debacle of traditional higher-education en route to fulfilling their potential.