Monday evening I listened to an NPR radio program about the Fannie Mae/Freddie Mac crisis. There was talk about “How we got into this mess.” I didn’t hear it all the way to the end, but I’ll bet the program never got around to considering that the current Congressional behavior with respect to Medicare funding also explains how we got into the Fannie Mae/Freddie Mac mess.
When free markets fail to serve the poor, these people don’t like free markets. When free markets succeed in serving the poor, these people don’t like free markets. There seems to be a pattern here. If only I could figure out what it is.
Markets for the Poor in Mexico
Helping the poor may be virtuous, but when the poverty industry starts losing “clients” because the market is performing good works, watch out.
Compartamos Banco knows what it’s like to have a tarnished halo. The Mexican bank specializes in microfinancing for low-income entrepreneurs in a country that never used to have a financial industry serving the poor. Compartamos not only figured out how to meet the needs of this excluded population, but also how to make money at it.
Alan Jacobs at The American Scene argues with the “freetards.”
That’s a new term for me. I think I’ll steal it and use it myself without paying any license fees for it.
His first article on the subject was titled, “My writing doesn’t want to be free.” He credits the Fake Steve Jobs for the term.
Jacobs questions the applicability of the method whereby bands give away free music as a kind of loss leader. That idea is one that comes up a lot in these discussions — the freetards tell us to give away our writing/music/software for free and make money on X.
So here’s my question: If giving away your stuff on the internet as free loss-leading MP3 files or PDF’s is a virtuous way to sell something else, how come in international trade it’s considered evil? There they call it dumping or predatory pricing, and there are treaties and laws against it. It can be argued that authors who give away stuff for free are hurting others who’d like to sell their goods just as much as those countries who sell lead ingots below price in order to drive competitors from the market.
In Monday’s WSJ, Mary Anastasia O’Grady gives us more information about Peru. In the weekend edition she told about President Alan Garcia’s transition from socialism to democratic capitalism. In this article she tells about the turnaround in Peru itself.
I suppose it would be wearisome to have to point out that the changes Peru has instituted are 180 degrees different from the changes that Clinton and Obama want to make in our country. The changes in Peru include removing barriers to international trade. Here in our country, on the other hand, two of our presidential candidates want to raise barriers.
It’s no wonder Obama doesn’t like to talk specifics.
I went looking for some after I read the article at the Washington Post titled, “Obama links broad ideas to economic specifics.”
Despite its title, the article didn’t give any specifics. It does hint that those are to be found elsewhere, though. It says, “Obama
did not lack proposals for what he would do as president — his
planks took up a whole section of his stump speech.” But it seems
that the Post did not care to inform its readers about those.
So I went looking for myself and found this web page. If it really and truly represents the Barak Obama campaign platform, and Obama ever has a chance to implement it, we’re in for some major problems.
I’ll pick on just one item for now:
Obama believes we need to do more to promote economic development in Mexico to decrease illegal immigration.
If he really meant it, he ought to stop the NAFTA-bashing. And maybe he could show he has a clue about how to develop healthy relationships with Latin American countries by letting the U.S. go forward with a trade agreement with Columbia.
That’s just one. I’ll bash some of the others later. But if these are campaign planks, the lumber yard where he bought them ought to go out of business.
I probably should credit someone for putting a great idea in my head, but I don’t remember who. Maybe it’s George Will, who got me thinking about price-fixers such as Hillary Clinton and Barak Obama.
With the command-and-control propensity of contemporary liberalism, Clinton predictably advocates a policy that has a record, running from Roman times to the present, that is unblemished by success. It is the policy of price controls: Her proposed five-year freeze on interest rates would be a control on the price of money.
Despite this “unblemished” record, there are probably people out there who think they are smart enough to make such controls work.
Well, if they’re so smart, let them practice on their own, first. Some of us think government is too expensive. Let them put a freeze on the amount of money government is allowed to take in. No cuts in “services,” no layoffs, just put a freeze on the price of government. Then, after they use their brilliance to get that to work, they can talk to us about putting freezes on private-sector transactions.
Mark Milke, writing for the Calgary Herald, tells how Castroism took one of the wealthiest countries in Latin America, and turned it into one of the poorest. He doesn’t expect much to change under Raul.
He notes one of the old explanations we tend to get from the left:
Some will point to the U.S. trade embargo as the source of Cuba’s economic ills. I agree. It’s a significant reason for Cuba’s poverty, that and the Communist system itself — and both should end.
I, too, agree that the U.S. trade embargo should end. The remaining good reasons for having it went away in the early 90s.
But here’s a question. How come politicians of the left want to blame the U.S. embargo for Cuba’s poverty, yet are eager to emasculate NAFTA? On the one hand they want to cut off trade with other countries, because they think it will make us prosperous. On the other they say Cuba’s lack of trade with us has made the country poor.
Even if they subscribe to the ridiculous notion that the benefits of trade are a one-way street, helping our Latin American neighbors but hurting us, why is it only Cuba they want to help? What do they think will happen if we reduce trade with Mexico?
Where can I get a George McGovern for President bumper sticker? I didn’t have one on my car back in 1972 (I’m not sure my wife would have approved) but I was a McGovern supporter back then.
Well, mostly I was against Nixon and Watergate, but I was suffering from a bout of leftwingism, too. I got over it in time for the 1976 elections, though suffered some lingering symptoms until Ronald Reagan’s first year in office.
But here is George McGovern at the WSJ, sounding like the type of libertarian-leaning Republican that could make me become a Republican again:
…Under the guise of protecting us from ourselves, the right and the left are becoming ever more aggressive in regulating behavior…
…There’s no question, however, that delinquency and default rates are far too high. But some of this is due to bad investment decisions by real-estate speculators. These losses are not unlike the risks taken every day in the stock market….
…Health-care paternalism creates another problem that’s rarely mentioned: Many people can’t afford the gold-plated health plans that are the only options available in their states.
Buying health insurance on the Internet and across state lines, where less expensive plans may be available, is prohibited by many state insurance commissions. Despite being able to buy car or home insurance with a mouse click, some state governments require their approved plans for purchase or none at all. It’s as if states dictated that you had to buy a Mercedes or no car at all.
Economic paternalism takes its newest form with the campaign against short-term small loans, commonly known as “payday lending.” …
…Anguished at the fact that payday lending isn’t perfect, some people would outlaw the service entirely, or cap fees at such low levels that no lender will provide the service. Anyone who’s familiar with the law of unintended consequences should be able to guess what happens next.
Researchers from the Federal Reserve Bank of New York went one step further and laid the data out: Payday lending bans simply push low-income borrowers into less pleasant options, including increased rates of bankruptcy. Net result: After a lending ban, the consumer has the same amount of debt but fewer ways to manage it.
Since leaving office I’ve written about public policy from a new perspective: outside looking in. I’ve come to realize that protecting freedom of choice in our everyday lives is essential to maintaining a healthy civil society.
Why do we think we are helping adult consumers by taking away their options? We don’t take away cars because we don’t like some people speeding. We allow state lotteries despite knowing some people are betting their grocery money. Everyone is exposed to economic risks of some kind. But we don’t operate mindlessly in trying to smooth out every theoretical wrinkle in life.
The nature of freedom of choice is that some people will misuse their responsibility and hurt themselves in the process. We should do our best to educate them, but without diminishing choice for everyone else.
I’ve been wondering what to do with my vote on election day. Now I think I know. I’ll write in George McGovern’s name!
Speak loudly and carry a big club to bash our neighbors with. That’s the foreign policy being proposed by Hillary Clinton and Barak Obama.
And I’m glad to see the Wall Street Journal explain it in terms like The Reticulator was using last September.
Why do they hate us? Because we act like a global, unilateral bully, when we do what Clinton and Obama are recommending.
Usually I don’t like the consolidation of industries, techie or otherwise. But in Audible.com’s case, I’m glad to see them getting bought out by Amazon.
I’ve been on Audible’s mailing list for a long time, looking forward to the day when I could sign up. I need more books to listen to while riding my bike. But it just didn’t make any sense if Audible didn’t have any means of browsing and searching their collection. Yes, they had something called “Browse”, but it wasn’t anywhere near what is usually thought of as a browse function. Every once in a while I’d send them an e-mail telling them I’d like to sign up whenever they had a browse function working. But they never fixed it.
I’ll bet Amazon won’t let that state of affairs remain. Amazon knows how to do search and browse.