James informed me the other day that I have more readers than I had originally anticipated. This, he tells me, came about as a topic of interest in a company meeting, and a subsequent dissemination of my blog address. As a result, not only do my nearest and dearest have an interest in what I have to say, but apparently so does the entire IT department of my fiance's office. So hello PQAers. Welcome. I hope you like what you see.
Alas, this means I now have a responsibility to post more often than I might naturally. This was, of course, one of my initial motivations for beginning a blog, but it is also something that must be pressed upon me with regularity to result in anything of substance (i.e. posts). Therefore, I encourage anyone interested to scold me regularly to post more frequently.
The best way to do this is to respond to my posts with something interesting, informative, or infuriating (that damn alliteration tickles me every time!).
For instance, in response to Ojiikun: You already know that I am of a similar mind. Of course, teaching Ayn Rand's Atlas Shrugged this week has only done much to encourage such thinking. I am perfectly aware that the best way to defend the interests of and provide for the poorest of a nation is to increase wealth through productive endeavors. And further that the most effective way of encouraging this is to remove barriers for production, be it through minimizing taxes, removing barriers to entry such as union costs or regulations, or merely leaving people alone long enough to take care of themselves.
However, I still maintain that the market takes time to stabilize or reach an equilibrium in times of crisis. You point merely to the response of the stock market--a rather poor example of a working market--and its slide before the stimulus bill was even passed. The stock market is based on rampant speculation of what people will do in light of available incredibly limited information. The market of goods and services, however, is different in that it aggregates huge amounts of information and results from usually rational and self-interested individuals' innumerable actual actions (Sara, stop with the wordplay, already!). The stock market is a good predictor of how stocks will perform but not of what actual value results from trade. In fact, we may be able to blame a lot of this current economic situation on the speculations of banks and mortgage lenders based on limited and, often, fraudulent information.
Yet, I am aware of the logical inconsistency of passing off future earnings to a present that will only, at best, squander it and, at worst, prevent it from manifesting in the first place. Hence, I titled my last post "Sara's Shame." Though I resist your characterization of the profession of a desire to act as "capitulation to the popular worthlessness or hurtfulness of achievement and enjoyment that is now and forever proposed by those who have little interest in individuals other than themselves and their own nationally perceived usefulness and grace." Those who are proposing plans that involve the sacrifice of countless individuals are not motivated solely by consideration for themselves (though I'm sure Obama does imagine his legacy when he's trying to save the world). They are trying to champion the little guy! They are trying to build up the smallest of men, to enrich the poorest, and cure the sickest.
That, I think may be the problem.
I will point you to two articles that will lay the groundwork for my next post, and allow me to prevent this from being a very lengthy essay.
First: an interview in the New York Times with Zambian author Dambisa Moyo on aid to Africa. (Hat tip: Craig Newmark)
Second: another New York Times link, to Thomas Friedman's editorial column.
(Hat tip: Brad at the Crossed Pond)
Enjoy, and to be concluded.
Tuesday, March 10, 2009
Thursday, February 12, 2009
Sara's Shame
Cameron at The Crossed Pond discussed a quote from Jeffrey Frankel:
“They say there are no atheists in a foxhole,” said Harvard economist Jeffrey Frankel, a former Clinton administration official. “Well, there are no libertarians in a financial crisis, either.”
This quote resonates with me for a number of reasons. One, if you don't know me already or can't devise from my post on the stimulus package or coming posts having to do with economics and/or politics, I am a libertarian. I have worked for libertarian organizations in the past and regularly attend conferences sponsored by the Institute for Humane Studies and Liberty Fund.
Two, I am having a hard time defending the principles of libertarianism in the face of such a devastating economic crisis. I can point to the number of graphs that prove this is (so far) a comparatively mediocre recession. And yet, I feel certain it is only going to get worse in the coming months. I can point out that governmental meddling lead to many of the worst aspects of this crisis (Fannie Mae and Freddie Mac, mandated lower mortgage rates, subsidized risks for the largest banks). And yet, I know that corporations and private speculators contributed as much, if not more to the situation. I can decry the "porkulus" package (*shudders* What a horribly clunky term!) as a slippery slope to socialism and nationalized banks. And yet, I want something done to help bolster the economy as much as anyone.
Cameron at The Crossed Pond laments the fact that libertarians have little real comfort to offer those suffering in hard economic times. We can hardly tell people that for the market to succeed and help everyone in the long run, sometimes people have to fail miserably in the short run. Evolution and Invisible Hand defenses make Libertarians seem cold-hearted and cruel.
Cameron's solution? Shutting up. He assures us his libertarian principles are sound and the imminent failures of multiple markets will not sway his ideology. While this is ideologically admirable, it may be a bit unsound practically.
As I constantly reassure my fiance, I am not an anarchist. While there are components of the theory that appeal to me, it seems to be much too Utopian to think that if everything were to be left alone, the invisible hand would take care of things. In fact, it is because I understand the unsavory parts of the invisible hand theory that I am reluctant to espouse laissez-faire in all things economic. It is part of the principles of spontaneous order and the invisible hand theory that those who cannot compete, necessarily fail. In many situations this is perfectly acceptable. If a pin factory can make thousands of identical pins in a single day, the solitary pin maker who fails to produce as much goes out of business. The competitively and comparatively advantage succeed, while those who lack the skills and management to thrive must find something else to do.
But when entire industries fail because of rampant corruption, misapplication of speculative risk, or just plain mismanagement, thousands upon thousands of people lose their livelihoods. Factory workers are left with little recourse when the only source of income in their town shuts down. They are left with inadequate means to support their families.
The libertarian purist would point out that the factory worker can move to a new town, develop new skills to compete in new industries, develop a new business model, or suck it up and work at McDonald's. And it is true that most of the people in failed industries will find new jobs, sometimes for lesser pay or in new locations. Yet there is a time of adjustment. There may be months or years while individuals learn to cope in a new situation, acquire skills, or relocate. And it is in that adjustment period where the suffering is almost completely unalleviated by the market.
It is to that period that I find myself defending government intervention. I understand that the government is wasteful, inefficient, and ill-equipped to centrally direct the adjustment. I understand that taxpayer money is better left to the taxpayer herself. I understand, too, that the unintended consequences of government intervention in the markets sometimes create horrible disasters down the road.
But I ask myself, which sacrifices am I willing to accept? Do I accept that government spending is too often inefficient, impractical, and ill-applied? Do I accept that support of government programs is ideologically distasteful, possibly causing great harm in the future? Or do I accept that some people may have to forgo basic necessities? That children of those laid-off factory workers may go hungry, get kicked out of their homes, and forgo medical treatments all because of an ideology?
What it comes down to is the fact that there are some sacrifices I'm not prepared to make. If I have to pay more in taxes, forgo building a small business, or cut back on my own consumption, I'm more willing to sacrifice that than thousands of people's lives. Sure, the free market may respond with a much better solution, but the free market takes time. And in that time, a lot of people will suffer. It may be inefficient, impractical, and ill-advised in the long run to run up deficits, stifle entrepreneurship, and pay higher taxes today, but at least tomorrow, some child's father will have a paycheck. And I can live with the ideological inconsistency.
“They say there are no atheists in a foxhole,” said Harvard economist Jeffrey Frankel, a former Clinton administration official. “Well, there are no libertarians in a financial crisis, either.”
This quote resonates with me for a number of reasons. One, if you don't know me already or can't devise from my post on the stimulus package or coming posts having to do with economics and/or politics, I am a libertarian. I have worked for libertarian organizations in the past and regularly attend conferences sponsored by the Institute for Humane Studies and Liberty Fund.
Two, I am having a hard time defending the principles of libertarianism in the face of such a devastating economic crisis. I can point to the number of graphs that prove this is (so far) a comparatively mediocre recession. And yet, I feel certain it is only going to get worse in the coming months. I can point out that governmental meddling lead to many of the worst aspects of this crisis (Fannie Mae and Freddie Mac, mandated lower mortgage rates, subsidized risks for the largest banks). And yet, I know that corporations and private speculators contributed as much, if not more to the situation. I can decry the "porkulus" package (*shudders* What a horribly clunky term!) as a slippery slope to socialism and nationalized banks. And yet, I want something done to help bolster the economy as much as anyone.
Cameron at The Crossed Pond laments the fact that libertarians have little real comfort to offer those suffering in hard economic times. We can hardly tell people that for the market to succeed and help everyone in the long run, sometimes people have to fail miserably in the short run. Evolution and Invisible Hand defenses make Libertarians seem cold-hearted and cruel.
Cameron's solution? Shutting up. He assures us his libertarian principles are sound and the imminent failures of multiple markets will not sway his ideology. While this is ideologically admirable, it may be a bit unsound practically.
As I constantly reassure my fiance, I am not an anarchist. While there are components of the theory that appeal to me, it seems to be much too Utopian to think that if everything were to be left alone, the invisible hand would take care of things. In fact, it is because I understand the unsavory parts of the invisible hand theory that I am reluctant to espouse laissez-faire in all things economic. It is part of the principles of spontaneous order and the invisible hand theory that those who cannot compete, necessarily fail. In many situations this is perfectly acceptable. If a pin factory can make thousands of identical pins in a single day, the solitary pin maker who fails to produce as much goes out of business. The competitively and comparatively advantage succeed, while those who lack the skills and management to thrive must find something else to do.
But when entire industries fail because of rampant corruption, misapplication of speculative risk, or just plain mismanagement, thousands upon thousands of people lose their livelihoods. Factory workers are left with little recourse when the only source of income in their town shuts down. They are left with inadequate means to support their families.
The libertarian purist would point out that the factory worker can move to a new town, develop new skills to compete in new industries, develop a new business model, or suck it up and work at McDonald's. And it is true that most of the people in failed industries will find new jobs, sometimes for lesser pay or in new locations. Yet there is a time of adjustment. There may be months or years while individuals learn to cope in a new situation, acquire skills, or relocate. And it is in that adjustment period where the suffering is almost completely unalleviated by the market.
It is to that period that I find myself defending government intervention. I understand that the government is wasteful, inefficient, and ill-equipped to centrally direct the adjustment. I understand that taxpayer money is better left to the taxpayer herself. I understand, too, that the unintended consequences of government intervention in the markets sometimes create horrible disasters down the road.
But I ask myself, which sacrifices am I willing to accept? Do I accept that government spending is too often inefficient, impractical, and ill-applied? Do I accept that support of government programs is ideologically distasteful, possibly causing great harm in the future? Or do I accept that some people may have to forgo basic necessities? That children of those laid-off factory workers may go hungry, get kicked out of their homes, and forgo medical treatments all because of an ideology?
What it comes down to is the fact that there are some sacrifices I'm not prepared to make. If I have to pay more in taxes, forgo building a small business, or cut back on my own consumption, I'm more willing to sacrifice that than thousands of people's lives. Sure, the free market may respond with a much better solution, but the free market takes time. And in that time, a lot of people will suffer. It may be inefficient, impractical, and ill-advised in the long run to run up deficits, stifle entrepreneurship, and pay higher taxes today, but at least tomorrow, some child's father will have a paycheck. And I can live with the ideological inconsistency.
Monday, February 9, 2009
The Stimulus Package
Today the Senate passed the $825 billion American Recovery and Reinvestment Act. While the package of spending acts differs from the package passed by the House, the overall stimulus package is one step closer to its ultimate passage.
As President Obama defends the package and pushes the Senate and House to come to an agreement and push through this huge spending plan, I am struck by just how eloquent he is, even when he moves beyond his scripted. As I plot out a complaining post about the abundance of wasteful spending, he manages to anticipate each grievance with forcefulness and assertiveness. He is a masterful rhetorician and a passionate debater. As he drives home his points, I find myself willing to nod and agree. After all, as he made clear in his news conference tonight, he just wants to do right by this country. He wants to do good, and he cares passionately about helping right this toppling economy. He wants to do the job the American people for which hired him, and he's not about to let partisan bickering or ideological differences stand in the way of stimulating the economy.
And yet not every complaint against this stimulus plan emerges from party politics nor even ideological divides. There are real reasons to remain wary of this package and the speed with which it is being pushed through. While both houses of Congress have debated for days on the floors of Congress and still further in committee hearings, much of that debate has revolved around the insertion of more and more spending programs in the name of "doing something."
This is a very understandable human reaction to crisis. When something bad happens and it looks like things will only get worse, the temptation is to act immediately and aggressively. And yet, with the catastrophic misallocation of funds in last year's bank bailout, we must become aware that accountability and responsibility means caution and deliberate care in any action. After all, the Patriot Act was a piece of legislation that was pushed through because "something needed to be done now."
And there are issues to which nearly all ideologies and parties adhere, which have, even so, failed to receive adequate attention. So I would like to evaluate see exactly what is in this bill. We've been assured that there are none of the ubiquitous earmarks that pepper our normal legislation. No pork has been inserted to direct funds at specific companies or legislative districts. So what is in this bill?
Though the entire text of each piece of legislation that goes through the House and Senate is available to the public, very few of even those who sign the legislation ever read the entirety of most of the bills. Most people settle for the summaries written by the very committees that draw up the laws. It's understandable to want to rely on a short summary; after all most bills are hundreds of pages long. As a graduate student though, I'm far too used to reading hundreds of pages of mostly nonsensical half sentences. So here are some of the things I've uncovered in the bill: (I use the zeros to emphasize and help visualize the extent of the spending.)
As President Obama defends the package and pushes the Senate and House to come to an agreement and push through this huge spending plan, I am struck by just how eloquent he is, even when he moves beyond his scripted. As I plot out a complaining post about the abundance of wasteful spending, he manages to anticipate each grievance with forcefulness and assertiveness. He is a masterful rhetorician and a passionate debater. As he drives home his points, I find myself willing to nod and agree. After all, as he made clear in his news conference tonight, he just wants to do right by this country. He wants to do good, and he cares passionately about helping right this toppling economy. He wants to do the job the American people for which hired him, and he's not about to let partisan bickering or ideological differences stand in the way of stimulating the economy.
And yet not every complaint against this stimulus plan emerges from party politics nor even ideological divides. There are real reasons to remain wary of this package and the speed with which it is being pushed through. While both houses of Congress have debated for days on the floors of Congress and still further in committee hearings, much of that debate has revolved around the insertion of more and more spending programs in the name of "doing something."
This is a very understandable human reaction to crisis. When something bad happens and it looks like things will only get worse, the temptation is to act immediately and aggressively. And yet, with the catastrophic misallocation of funds in last year's bank bailout, we must become aware that accountability and responsibility means caution and deliberate care in any action. After all, the Patriot Act was a piece of legislation that was pushed through because "something needed to be done now."
And there are issues to which nearly all ideologies and parties adhere, which have, even so, failed to receive adequate attention. So I would like to evaluate see exactly what is in this bill. We've been assured that there are none of the ubiquitous earmarks that pepper our normal legislation. No pork has been inserted to direct funds at specific companies or legislative districts. So what is in this bill?
Though the entire text of each piece of legislation that goes through the House and Senate is available to the public, very few of even those who sign the legislation ever read the entirety of most of the bills. Most people settle for the summaries written by the very committees that draw up the laws. It's understandable to want to rely on a short summary; after all most bills are hundreds of pages long. As a graduate student though, I'm far too used to reading hundreds of pages of mostly nonsensical half sentences. So here are some of the things I've uncovered in the bill: (I use the zeros to emphasize and help visualize the extent of the spending.)
- The act reads more like a supplemental federal budget than anything else. With "additional amount[s]" for everything from "tactical communications equipment" for local, state, federal, and homeland security forces as well as the defense department, construction funds for federal buildings, and "property acquisition" funding, it's hard to find the allocations directed at the actual economy beyond the federal government.
- The EPA receives $1,000,000,000 for Hazardous Material Cleanup and Leaking Underground Storage.
- Only $3,250,000,000 billion of the $825,000,000,000 go to "Training and Employment Services" targeted at improving the employability of unskilled workers and providing opportunities for young workers. Also, on top of that, $120,000,000 for community service opportunities for older Americans.
- $400,000,000 must be divided between the fifty states for unemployment benefits. This is understandable, as we want Americans working and not collecting benefits, but it's a "Recovery" act, and this would seem to be privileged over funding for broadband expansion in an economy stimulus.
- Oh, yeah. The broadband section. The Senate has allocated $9,000,000,000 to expanding broadband internet access to rural areas. That doesn't included the $650,000,000 designated for conversion from analog to digital signal. Of that $650,000,000, “$90,000,000 may be for education and outreach, including grants to organizations for programs to educate vulnerable populations...about the transition and to provide one-on-one assistance to vulnerable populations, including help with converter box installation.” Well, I guess that's a good one-off job.
- There is the $1,100,000,000 for the Early Head Start program aimed at educating pre-kindergarten children. That's something I can maybe get behind.
And I'm spent. I got through eight of the sixteen titles of this act. I didn't get close to the official titles on Health Information Technology, the state allocations, the creation of a new advisory and accountability board or read any of the subtitles to this act. I find it hard to believe many of the individuals who have voted for or against the piece have done more.
From what I did read, though, I can conclude that while a majority of the spending may be defensible standing alone, considering the pieces of this legislation in light of the claims of this package, this piece of legislation is merely a supplemental budget for 2009. We already passed a $3.1 trillion budget for this year. With this package, we bring it up to nearly $4 trillion (that's $4,000,000,000,000). I'm not even bringing up the previous bailout nor the proposed $1 trillion that Obama is rumored to be preparing for the near future.
While we've sworn to have more accountability this time around, I have my doubts. I understand the desire to act now, but hasty acts could plunge us further into the red. The intentions are good, and I want to have faith in our elected leaders. Yet, I urge caution and awareness as we take this giant leap forward in federal spending.
In the beginning there were the words.
So it begins.
Hello, my name is Sara, and I am a writer.
"Writer of what?" I hear you, my imaginary audience, query.
Why of many things! I am a woman of many passions: from news and politics, to science fiction and fantasy, to couture fashion and shoes.
After three years of graduate school in political theory, I have recently decided to venture into the realm of my truest and longest passion: I am diving full time into the worlds of writing. Enough with these roundabout career choices that dance with and flirt with writing. Merely trading tantalizing tidbits is no longer enough for me. I am ready for a full-blown affair with the written word, and every faithless job before must prepare to bid me adieu. I'm ready to consummate my love, and no tease of a "secure" career can deter me.
So, I ask you my now imaginary and, hopefully, soon-to-be tangible readers, join me on this whirlwind romance. You will find all of my passions caressed here with the longing of a true lover of literature, language, and life. Find here politics and pop culture, fashion and fantasy, and almost (un)allayed allocation of alliteration.
My name is Sara, and I am a writer.
Hello, my name is Sara, and I am a writer.
"Writer of what?" I hear you, my imaginary audience, query.
Why of many things! I am a woman of many passions: from news and politics, to science fiction and fantasy, to couture fashion and shoes.
After three years of graduate school in political theory, I have recently decided to venture into the realm of my truest and longest passion: I am diving full time into the worlds of writing. Enough with these roundabout career choices that dance with and flirt with writing. Merely trading tantalizing tidbits is no longer enough for me. I am ready for a full-blown affair with the written word, and every faithless job before must prepare to bid me adieu. I'm ready to consummate my love, and no tease of a "secure" career can deter me.
So, I ask you my now imaginary and, hopefully, soon-to-be tangible readers, join me on this whirlwind romance. You will find all of my passions caressed here with the longing of a true lover of literature, language, and life. Find here politics and pop culture, fashion and fantasy, and almost (un)allayed allocation of alliteration.
My name is Sara, and I am a writer.
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