'The welfare state has done to black Americans what slavery couldn't do. . . . And that is to destroy the black family.'
Friday, January 28, 2011
Wednesday, January 26, 2011
Step back for a minute from the day to day policy fights and consider how an economy can grow faster. One way is to get people to work harder or longer. The government can contribute here with policies that reward work and investment, such as lower taxes.
A second route to faster growth is innovation, which means inventions or new processes that increase productivity.
The third way is through the more efficient use of capital, both human and monetary. These resources are scarce in any economy, and growth will be fastest if they are allowed to find their highest return. If resources are allocated to less productive uses or create asset bubbles due to bad policy, then overall growth will be slower than it should be.
Government "investments"—Mr. Obama's favorite word last night—are by definition made for political purposes, rather than for their highest potential return. They are allocated by politics rather than by prices.
The path back to faster growth, more jobs and a more competitive U.S. economy does not travel through more political mediation. Nor does it lie in endlessly easy Fed policy in a misguided attempt to refloat the housing bubble or revive the financial boom. A better economy requires policies that reward work and innovation, while letting capital flow to the companies and individuals with the best ideas.
I rarely send out sports related emails, but I had to give props to my team.
It's a prestigious school that propels its graduates to desirable jobs. Wherever the team travels, especially in its conference, the opposing fans make it exceedingly clear that they would like to see them mashed into a pulpy sauce. And its team colors are blue and white.
In other words, BYU has become the Duke of the West.
Thursday, January 20, 2011
The primary economic challenge today is that our government spends too much money it doesn't have, and it is involved in too many things it cannot do well and shouldn't do at all. This burden is manifested by a $1.3 trillion annual def icit and a $14 trillion national debt. The more pernicious effects of this fiscal drag are unseen: a debased dollar, massive (and hidden) unfunded liabilities, and a crushing burden on would-be job creators.
Milton Friedman correctly argued in 1999 that the "real cost of government—the total tax burden—equals what government spends plus the cost to the public of complying with government mandates and regulations and of calculating, paying, and taking measures to avoid taxes." He added, "Anything that reduces that real cost—lower government spending, elimination of costly regulations on individuals or businesses, simplification of explicit taxes—is a tax reform."
Repealing ObamaCare is another obvious source of reduced spending. The absurd claim that this government takeover of health care produces budget savings is based on budget gimmickry—such as assumed Medicare cuts that, according to estimates by the Centers for Medicare and Medicaid Services, would put 15% of our hospitals out of business, and thus will never happen. The claim also ignores the historically explosive growth in other similar programs. Medicare grew nine-fold larger than was projected during its first 25 years. In its first 10 years alone, the program experienced a 700% cost overrun.
Entitlements—56% of the annual budget and growing—are the most difficult but also the most important programs to reform, because the total unfunded liability tops $100 trillion for Social Security and Medicare alone. The federal government does not put these liab ilities on the books, but serious budgeting requires that we deal with this ominous long-term burden now.
None of this will be easy. Many will likely demagogue any reduction in the rate of growth of spending as a devastating "cut." But the politics of spending has changed, and there is an expectation among fiscally conservative voters—Republicans, independents, tea partiers and even Democrats—that the government tighten its belt, just as American families have been forced to do.
Friday, January 14, 2011
A proposal to ban regulation without representation.
One of the most important political stories of 2011 will be regulation, as the backwash of the outgoing Congress hits the federal agencies and the White House drives its agenda via rule-making rather than democratic consent. Republicans are vowing to thwart these maneuvers, but the coming hostilities might also provide an opening to reform the modern administrative state.
The basic problem is that Congress delegates far too much power to regulators, passing ambiguous laws that convert the agencies into quasi-legislative bodies that aren't politically accountable. Even if President Obama is exploiting this trend like never before, it is hardly new, nor unique to either party. Most politicians support the status quo because, being politicians, they can take credit for popular goals and then blame the bureaucracy for the costs and problems they create.
Yet the Constitution vested Congress with the duty to make laws, not to make vague suggestions about what it might be good for the law to be. And now there is a growing movement to force Members to take responsibility for the laws they pass, and to force Administrations to be accountable for the laws they create through regulation.
Monday, January 10, 2011
I’m not quite ready to adopt all the “Chinese Mother” parenting techniques, but I think there are valuable lessons that western parents, myself included, could learn.
Despite our squeamishness about cultural stereotypes, there are tons of studies out there showing marked and quantifiable differences between Chinese and Westerners when it comes to parenting. In one study of 50 Western American mothers and 48 Chinese immigrant mothers, almost 70% of the Western mothers said either that "stressing academic success is not good for children" or that "parents need to foster the idea that learning is fun." By contrast, roughly 0% of the Chinese mothers felt the same way. Instead, the vast majority of the Chinese mothers said that they believe their children can be "the best" students, that "academic achievement reflects successful parenting," and that if children did not excel at school then there was "a problem" and parents "were not doing their job." Other studies indicate that compared to Western parents, Chinese parents spend approximately 10 times as long every day drilling academic activities with their children. By contrast, Western kids are more likely to participate in sports teams.
What Chinese parents understand is that nothing is fun until you're good at it. To get good at anything you have to work, and children on their own never want to work, which is why it is crucial to override their preferences. This often requires fortitude on the part of the parents because the child will resist; things are always hardest at the beginning, which is where Western parents tend to give up. But if done properly, the Chinese strategy produces a virtuous circle. Tenacious practice, practice, practice is crucial for excellence; rote repetition is underrated in America. Once a child starts to excel at something—whether it's math, piano, pitching or ballet—he or she gets praise, admiration and satisfaction. This builds confidence and makes the once not-fun activity fun. This in turn makes it easier for the parent to get the child to work even more.
Tuesday, January 4, 2011
If the new Congress to be sworn in on Wednesday is the tea party's cardinal achievement so far, its most symbolic achievement will come on Thursday, when the first order of business in the House will be a reading, aloud, of the Constitution. That event alone will not bring us any closer to limited government. But it will help get a debate going that for too long has been dormant.
In 1794, for example, James Madison, the principal author of the Constitution, rose on the House floor to object to a bill appropriating $15,000 for the relief of French refugees... He could not, he said, "undertake to lay [his] finger on that article of the Federal Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents." The bill failed.
Throughout the 19th century, members of Congress and presidents alike rejected legislation because they believed there was no constitutional authority to enact it. The bedrock presumption of our polity, they understood, was individual liberty. The Constitution gave the federal government the authority to pursue certain limited ends, like national security and ensuring free interstate commerce, but otherwise left us free to pursue our ends either through the states or as private individuals. It did not authorize the federal government to provide us with the vast array of goods and services that today reduce so many of us to government dependents.
Thus the first question the new Congress should ask of any proposed law is: Does the Constitution authorize us to pursue this end? If not, that ends the matter. If yes, the second question is: Are the means we employ "necessary and proper," as constrained by the principles of federalism and the rights retained by the people that are implied by a government of enumerated powers? In essence, the Constitution is no more complicated than that. It was written to be understood by ordinary citizens.
How, then, did modern constitutional law get so complicated and federal power so expansive? One reason is that several provisions in the Constitution were written broadly to allow for contingencies. But those provisions were never meant to open the floodgates to boundless congressional power. The presumption was that any political redress of unexpected problems would be done with due deference to the larger structure, aims and principles of the document. This brings us to the main reason Congress leapt its constitutional bounds: a fundamental shift in the climate of ideas.
Early 20th-century Progressives, inspired by European social democracies, rejected the Constitution's plan for limited government, advocating social engineering schemes instead. Rule by government experts was the order of the day.
The Supreme Court was wrong in allowing Congress to exercise power not granted it by the Constitution, and courts today are wrong when they uphold those precedents…