A fine line exists between the seemingly simple notions of greed and self-interest. It might be concluded that greed is a subset of the broader concept of self-interest. Alternatively, some may say that there is no difference between the two. Irrespective of the choice of definition, it is universally observable that human beings are driven by WIIFM (â€œWhatâ€™s in it for me?â€). With a very few noteworthy exceptions, we all seek, as the Austrian School economist Ludwig Von Mises summarized, the â€œelimination of personal discomfort.â€
At a recent trip to the local high school track, I had occasion to observe an interesting set of father and son scenes. Both dads were teaching their sons to hit a baseball. The differences in the results could not have been more starkly different. While both of the boys were of similar age (about seven) and stature, one of them was pounding the ball into the outfield, and the other missed almost every swing. It was apparent, as it relates to their athletic ability, there was a disparate allocation of giftedness. If the game was changed, and the object was shifted to art or academics or whatever, the results would likely have been much different. But the point is the same. We are each born with a wide variety of aptitudes, interests, giftedness, personal attractiveness and assorted other abilities…and liabilities
This picture is an almost perfect metaphor for the underlying problem faced by every society in every era. No matter where we look, we find something that appears â€œunfair.â€ Someone else possesses something of value that we do not. And even though we all know we are possessors of other important â€œthings,â€ the perceived lack of parity is natively and deeply bothersome.
This bit of reflecting brings us to the recent activities of the Occupy Wall Street throng. While it is difficult to determine any level of coherent message coming from the group, the word â€œgreedâ€ seems central to their posturing. This same greed theme was echoed in a question that came from the Washington Post journalist at a recent Republican debate. The essence of the question was â€œIsnâ€™t it a problem that no Wall Street executives are in jail over the financial meltdown?â€ The inference was apparently that greed has now become a crime punishable by imprisonment. That the banking and securities regulations allowed for forty-to-one leverage on A-tranche CMOs (backed by residential mortgage debt) is apparently (at least in the retrospective view of this journalist), irrelevant. Something â€œbadâ€ happened and therefore someone must be jailed. The crime was greed. Justice must been served.
One thing is clearly certain: If greed is now a crime, we are going to need to build a bunch more prisons.
The beautiful thing about the rule of law is that greed is never on trial. And it can never be on trial. If it were, we would all be in jail. Self-interest, to the point of something resembling greed, is in our very nature. The pursuit of self-interest is what brings satisfaction to our lives. Our ability to pursue our own very personal ends, consistent with our native gifts, abilities and circumstances, is the pure manifestation of personal liberty.
If the Occupy Wall Street protestors were incensed with perceived or real corruption, or the obvious violation of laws, or even some type of â€œabuse of power,â€ the situation would look very different. If they could actually defend their case, it might even lead to meaningful and positive change. My sense is, however, that if the protestors were offered a pot of money to just go away, they would abandon their current quest in a nanosecond.
Systems of economic social justice that focus on greed (and protests with similar themes) are always doomed to fail. And they fail because they always end in some type of war, broadly defined. When the attention of a society becomes fixated on economic outcomes (and economic disparities), and not those things that bring about true quality of life, major trouble is right around the corner. When the focus of life becomes not â€œwhat each of us has,â€ but rather â€œwhat the other guy hasâ€ we enter a mindlessly downward spiral.Â
It is exceptionally important to work towards a just and equitable system of economic social justice. The place to start in that endeavor, however, is not with an overpowering emotion â€“ our indomitable sense of unfairness in the face of the general â€œrichesâ€ of others. Rather, the place to start is in a much more practical approach to lifting the overall quality of life of the most economically powerless amongst us.
The personal responsibility-based capitalistic systems of economics are certainly flawed, at least in part, by their reliance on self-interest. But they meet the objective of best serving the interests of all the participants, including those who start with very little. The greed-based systems supported by liberals and progressives are always completely flawed, as they have been proven to bring universal misery. They meet the objective of personal equality at a price that no one is willing to pay.
When greed becomes the motivator in any political and economic debate, the result is always lose-lose. The Occupy Wall Street folks should be more focused on meeting the needs of real people (of whatever description they chose), than on the perceived character flaws of a narrowly selected group of capitalists. They happen to share the same flaws as their alleged tormentors.
â€œWeâ€™re going to work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent,â€ Obama said in his speech last week to announce the $450 billion jobs package. The plan would put â€œmore than $2,000 a year in a familyâ€™s pocket and give a lift to an economy still burdened by the drop in housing prices.â€ Mark Zandi, the chief economist at Moodyâ€™s (and a self described liberal), immediately announced that the new jobs program would add two percent to GDP and 1.9 million jobs to the economy next year. Kevin Ungar of Mother Jones piled on with: â€œCurrently, the federal government can borrow at an astonishingly low 2 percent interest rate. If we can make investments that will produce a predictable return of at least 3 percent in increased revenue, why would we not want to take advantage of these low rates to make those investments?â€
With that kind of logic, maybe we should just give all our money to the Federal Government. They seem to have the capacity to simultaneously meet the challenges attached to pesky house payments, large-scale job creation, and the magic of predictable rates of return on investments. In the minds of people like Obama, Zandi and Ungar, the answers are always simple.
Of all the immense challenges coming out of liberal politics these days, the most pernicious are the half-truths. Whether they are knowingly providing these obvious half-truths is a question for another day. The real problem is that when the first half of the story is the part that sounds good, the omission of the more troublesome last half amounts to a lie. It is pure and simple deception.
Letâ€™s look at the comments coming out of the three individuals above. Inserted here is the last partâ€¦the part that was left out:
1) Obama â€“ Home Refinancing at 4%: â€œSomeone is currently earning 6% on the mortgage contract (like the Wisconsin Teachers Pension Fund or your retired neighbor next door), and for the government to force the refinancing of that loan is to take money out of the hands of someone who contractually deserves it, and put it in the hands of someone who does not.â€
It is truly unfortunate that so many people are in trouble with their mortgages. And it is just as unfortunate that someone who owns an asset that entitles them to a six percent return is forced by the government into an â€œadjustmentâ€ down to four percent.Â The money is just being moved between pockets. Or, was the Federal Government (you and me) going to pick up the tab for this one too?
2) Zandi â€“ GDP Growth and Job Creation: â€œIn 2013, the nationâ€™s GDP will go right back down by two percent. And this is because we will have then quit borrowing that large pile of money to artificially jack-up GDP during an election year. Because the jobs that we â€œcreatedâ€ have little effect on ongoing productivity, and have little real investment value, they will all go away in 2013 too. We will be left with another couple thousand dollars in debt for every man, woman and child in America, with next to nothing to show for it.â€
Temporary tax credits and a few improved roads and bridges do nothing more for the economy than handing out bundles of government-borrowed hundred dollar bills at the local grocery store. In truth, the bundles of money would be a more efficient and better option from a long-run economic standpoint.
3) Ungar â€“ Predictable Returns on Government Investments: â€œGovernments are really not in the investment business. Only a tiny fraction of the current $3.5 trillion dollar Federal Government budget would represent anything that might be defined as an investment. And the track record for the investment of capital by governments is stunningly bad. Letâ€™s point at the $535 million blown up in the bankruptcy of green energy provider Solyndra as the best current example.â€
I have no idea who Mr. Ungar is. He sounds like someone who just graduated with a degree in Economics from Harvard. The only thing that can be said for his argument is that the math works. If you can earn more return on your investments than your costs of funds, you are creating a positive return. With this logic, maybe we should make the Federal Government into a hedge fund.
The point in this is not to direct attention at the failed thinking. The point is rather to point at the failed willingness to communicate anything resembling the complete story. These people are again trying to sell the old â€œsomething-for-nothingâ€ fallacy. Ah, the bliss of a life without real-world trade-offs. It is no wonder that confidence in the system is so low. When politicians, economists, and journalists paint such incomplete, and consequently, biased and misleading pictures of reality, it is no wonder that our confidence in them has shrunk to nearly nothing.
It is one thing to point out that we disagree on matters of political importance. That has and always will be the case. It is a completely different thing when we fail to agree on the issue of basic honesty and routine transparency. The complexity of the world we now inhabit demands our best attempts at the whole truth. But, then again, that core whole-truth imperative has never really been different over recorded time.
The hoary Yiddish axiom that â€œa half-truth is a whole lie,â€ is once again proven accurate, timeless, and universally applicable.
It is now official. The semester is over, and the grades have been posted. Not only has the Obama Administration flunked ECON 101; they have now also summarily flunked FUD 101.
The Wall Street Journal, in an editorial entitled â€˜Bumps in the Road,â€ quoted the chief White House economist Austin Goolsbee as saying â€œthere are always bumps on the road to recovery, but the overall trajectory of the economy has improved dramatically over the last two years.â€ The WSJ goes on to conclude that â€œThe real â€˜bumps on the roadâ€™ to recovery are these policies and the larger climate of hostility towards job creators that still prevails in Washington.â€ They compare the massively positive trajectory of the post-recession Reagan administration recovery with the current economic situation. The differences could not be more starkly contradictory.
To listen to the liberal pundits is to conclude that the Obama administration is the victim of past failures and that it is now doing everything it can to save the sinking ship. No one argues that the economy he inherited was other than a mess. The issue is rather that he has done everything in his power to take a very bad situationâ€¦and make it infinitely worse. Much of life is â€œinfinitely projectable but for time.â€ It was infinitely projectable that we would be headed into a downward economic trajectory, contrary to Mr. Goolsbeeâ€™s disputations. The only question was how long it would take for the system to crumble under the stress. President Reagan did everything he could to sponsor job creation. President Obama has been absolutely masterful in destroying any hope of a reinvigorated jobs machine.
After the mid-term elections, it was generally thought that a collective sanity was about to return to our political and economic lives. The thinking was that the Democrats had done all the damage they could possibly do, and that they would turn their forward focus towards getting re-elected. The survival instinct would seemingly have indicated that they needed to take their foot off the throat of the economy. But, lo, many of us underestimated their focus on their ideology. Apparently, the beatings will continue until morale improves.
The reckless pursuit of egalitarian ends represents not only a violation of economic growth principles; it also represents a violation of basic human principles. What is now being experienced in the economy, and the pathetic (or completely non-existent) recovery, does not require any understanding of global macro economics. But it does require a base level understanding of the curriculum of FUD 101. Business people understand FUD. The Obama administration, it has now been made clear, simply do not.
FUD (the acronym used to describe any environment of FEAR, UNCERTAINTY and DOUBT), is the mortal enemy of all progress. When these characteristics exist in any human system, people do â€œwhat people doâ€ when confronted with FUDâ€¦they do absolutely nothing. They keep their heads down. They keep their powder dry. They hold their cards close. They do not â€œinvest in their futures.â€ The clichÃ©s go on indefinitely. The bane of any human existence, personal or institutionally collective, is the presence of unpredictable outcomes. And the Obama administration has created an environment where no one can predict anything with any level of certainty. The capitalist system in this country is under attack, and no one can predict where the next bombing raid might take place. FUD reigns supreme.
Had anyone in the Obama administration ever managed anything outside of the political arena, they would better see the magnitude of the damage they are creating. They would also not be surprised by what is now happening in the private sector. The President himself would not be attempting to use the bully pulpit to â€œshameâ€ business leaders into hiring additional staffâ€¦as their patriotic duty. They would also not be continuing to blame the â€œsituation they inheritedâ€ for the current situation. The path to economic recovery was well-documented thirty years ago by the Reagan/Laffer economic team. This same path has been thoroughly documented around the globe in the last several hundred years. Â It is really too bad President Obama decided instead to make up his own â€œexperimentally progressiveâ€ economic agenda.
All he really needed to do was take just one semester of FUD 101.
It was a steamy 98 degrees in Atlanta. It was clearly too hot for me to be out running at the local high school trackâ€¦but there I was. I was not alone, however. Occupying Lane 4 was a guy who I would guess was born somewhere immediately after WWII. But my track-mates age was not the interesting part of the story. The interesting fact was that the man was clad in a long-sleeved sweatshirt. Yes, and it even had a Nike SWOOSH on it. I thought to sweaty self, â€œThis has to be the most bizarre thing I have seen all week!â€ However, upon a few moments of reflection, I concluded it wasnâ€™t even close to the top of the Weekâ€™s-Most-Bizarre List.
My first cataloguing thought was that the Massachusetts tornado was the most bizarre thing that happened this week; but I concluded it only scored 8.0 on the 10 point scale. After all, the weather has been crazy this year. Then it occurred to me that â€œWeinergateâ€ was about as weird as it gets. And it did involve the Honorable US Representative Anthony Weiner from New Yorkâ€¦making it a natural candidate, by definition. Â Many of us would have been more comforted by simply hearing him say â€œThat is not mine.â€ as opposed to â€œIt was pranksters.â€ But even allowing for a couple of additional Anthony Wiener style points, he only merited 9.0 on the Bizarre Scale.
I then gave passing consideration to Barack Obamaâ€™s honoring of our fallen war heroes with an â€œ18 flag tributeâ€ at the local golf club on Memorial Day. And that might have been a winner had the event in any way stuck out from his normal complete lack of respect for people who actually believe in what America stands for. While scoring an impressive 9.5, the Presidentâ€™s behavior still fell short of this weekâ€™s winner.
The winner for the most bizarre thing that happened this week, with a score of 9.7, was Clintonâ€™s former Secretary of Labor, Professor Robert Reich, from (of all bizarre places) Cal Berkeley.
In an article in (of all bizarre places) the San Francisco Chronicle, he is quoted:
In response to slow economic growth: â€œRight now we need more public spending in order to get people back to work. And we need a new Works Progress Administration to get the long-term unemployed back to work.â€
In response to declining home prices: â€œThat means most Americans have to save big-time if theyâ€™re going to be able to retire or even send the kids to college. As a result, consumer spending will stay anemic and unemployment will remain high â€“ unless Washington fills the gap.â€
And he teaches our children this stuffâ€¦
So if the federal government is currently spending $1.5 trillion more than it receives (an annual deficit representing nearly ten percent of the entire economy), that is not enough government stimuli? What amount might be enough, Mr. Reich? (In the good professorâ€™s defense, he does likely make the highly nuanced distinction between normal unproductive and wasteful federal government spending and targeted unproductive and wasteful federal government spending.)
And what gap is it that Washington needs to fill? I guess this assumes that irrespective of how poorly the economy is managed, and unrelated to how little money consumers have to spend, that the government can just step in and â€œcreate an economy.â€ Does he really not understand the notion of rational investment and the resultant productivity increases that singularly drive economic growth? Is his whole world just one very large social and political abstraction for Mr. Reich? Whatever it is, it is truly bizarre.
Apparently, this is the thinking of people like Mr. Reich: If something isnâ€™t working, has never worked, and will very likely never work, and yet you believe in it very stronglyâ€¦just do more of it. If you do not find yourself tortured enough by running outdoors in temperatures of nearly 100 degrees, slap on a sweatshirt! The underlying logic embedded in both of these scenarios is both beautifully and brutally consistent.
For his remarkable jeremiad, Professor Reich is credited with a score of 9.7, and is the winner of the â€œMost Bizarre Thing of the Weekâ€ Award. Well done, and congratulations, Bob!
While living in San Francisco, I was always a little concerned that I may have been in non-compliance with a California State Department of Transportation regulation. It appeared to me that it might have been mandatory to display both a state-issued license plate on the back of my car, along with a â€œCOEXISTâ€ bumper sticker.
The message of COEXIST is, I suppose, interesting in terms of its banal universality. Almost all of us earnestly desire to live peacefully with one another. There is, however, the ever-present and small group of people who would wish the rest of us dead. While I am not at all certain of this, I suppose (at least in theory) the COEXIST bumper stickers could potentially wear on the psyches of this latter group, causing them to re-think their murderous positions. Unfortunately, the message is not directed at the worldâ€™s most deadly extremists. It is directed at the rest of us.
A few weeks ago I encountered a more interesting configuration of messages on the back of a car in front of me. The ubiquitous COEXIST bumper sticker was situated immediately next to a â€œfatâ€ Christian â€œfishâ€ symbol that had been embedded with the word BUDDHA. The irony was absolutely impressive.
If I could have talked with the driver of the car, I would have asked; â€œSo let me get this right. You want all of us to live in peace and harmony, and yet at the same time, you have no qualms about simultaneously insulting the faith systems of those around you? Is that what you intended to communicate?â€ My guess is that the owner of the vehicle had not even begun to ponder the absurd levels of their exhibited hypocrisy.Â Essentially, their message was this: We can all live in a state of political blissâ€¦if everyone simply agrees with them. If everyone else can just learn to be tolerant, then life will be wonderful. At least the logic is simple.
I have just one question. Shouldnâ€™t the rules we personally make up apply to ourselves?
Liberals always fail to recognize the obvious trade-offs that surround both their opinions and their actions. It is only possible to advertise and support complete tolerance if you are willing to act tolerantly yourself. Tolerance comes with a cost. That cost is called restraint. The liberal left, in their arrogance, is unwilling to recognize or pay this cost. They have seemingly come to believe that they can have it both ways.
My view of the notion of tolerance that is attached to the COEXIST bumper stick is of a much more barbarian variety. I am tolerant of things I consider good and right. I am intolerant of things that I view as either evil or corrupt. I am tolerant with people who support the interests and conditions of others. I am intolerant of those who would abuse their fellow-man. I am tolerant of kindness. I am intolerant of meanness; in any of its forms. I am intolerant of tolerance at any cost. And I am intolerant of self-apotheosis.
Since when did the sophomoric notion of tolerance somehow become virtuous in and of itself? Tolerance is not a virtue. Tolerance is a response. It is a response that can be directed at the good, or it can be directed at evil. If tolerance is the personally selected response to evil, then it is itself evil. Â If William Wilberforce, Abraham Lincoln, Martin Luther King, Jr. and Rosa Parks had been tolerant, the world would be a very different and uglier place. Tolerance is very likely the advised course of action in many (if not most) situations. But the whole concept of tolerance as a â€œphilosophy-of-lifeâ€ is misdirected and dangerous, both morally and politically. It has no foundation on which to operate.
In the worldâ€™s marketplace for ideas, those who propose â€œcoexistenceâ€ and tolerance are clearly entitled to their â€œbooth.â€ They lose the right to be listened to, however, when the very first words out of their mouths are intellectually incoherent, philosophically baseless, and radically self-condemnatory. In a world characterized by terrorism on one hand, and boundless acts of personal sacrifice on the other, blind tolerance is the prescription for those without the moral wherewithal to make any meaningful distinctions between the two.
The perplexing political and social questions of our day are never adequately addressed with simple tolerance. The real questions will remain â€œTolerance of whatâ€¦and for what reason?â€