Search This Blog

Thursday, May 28, 2009

Quick Bits, British Parliamentary Scandal, Econtalk

1. So, this whole British MP scandal is somewhat odd to me. Believe it or not, I don't really have an issue with entitlement spending. And I find it hypocritical that anyone can. We all take our entitlements, whether they're as little as using the office supplies at home, or having dinner on the firm, businesses across the world take these expenses as part of the cost of doing business. To expect government to do less is naive. It all comes down to this notion that the government's money is actually the taxpayer's money. It's just not true. Social Security is a bit different. The money you pay Social Security is ACTUALLY yours, and so you get a statement, each year that you work, for how much you have, and for how much it will pay out in time. But general taxes, they go directly to the state. No longer yours. You elect representatives to govern for you, and they use that money to do so, but it's at their discretion--not yours. Here's the thing, I could understand the anger if the things that these MPs were doing were really egregious, like paying for prostitutes and private jets, large in excess of say 8,000 dollars. But so far, most of the expenses fell perfectly within the rules. The one I heard about today was that an MP used his allowance to buy a fancy TV. So what? The BBC is really milking the people's anger on this subject. I've heard a lot of angry interviews on the subject. MPs for the most part have come out rather quizzical, since very few of them were breaking the law. I think the Brits need to give this horse a rest. You're angry at the politicians for allowing the economy to breakdown, and sure, they did. But as the song goes, when the money keeps pouring in you don't ask how. You only ask how when the money stops.


2. On a related subject, the WSJ had a reporter on their morning news radio discussing how Social Security is paid out. He made the point that Social Security money isn't sitting in escrow anywhere, it's an accounting liability that gets paid out of other budgets. I can say this with smug authority now that I'm an accounting student. No shit. Not that the reporter was wrong, or that he was in any real way to blame for this revelation. The point is that isn't news. All liabilities are columns on papers. Payouts always come out of cash, and from converting assets into cash. My issue is that Social Security is a political issue, and as such, it often gets reported in such a way as to invite criticism rather than encourage reform.


Ok, econtalk, I'm way behind in my Econtalk listenings. This comment is on the Don Boudreaux interview. Again, the popular economics arguments against control of the market really drive me mad. Most economists will admit, that no administration, Republican or Democrat, Liberal or Conservative, ever leaves the market alone. What they won't admit is that an entirely free market is, like socialism in its purest form, a complete pipedream. Boudreaux came up with an interesting concept: when calling for the masses to be allowed utmost freedom to move their money in self-corrective patterns, he said the additive of the giant of government hamfistedly acting in the delicate workings of the market mechanism is never good. This idea of the government as a giant is interesting to me. Don Boudreaux and Russ Roberts don't want the giant to act in the marketplace. But they won't admit that the giant is ALWAYS acting, ALWAYS moving. And policy, even in non-obvious economic spheres always interacts with the economy both on the macro and micro levels--so what is he talking about? One more gripe: The idea of a self-corrective market is appealing, but it doesn't take into account actual need or hardship. Don and Russ and all of his friends want the businesses that can't survive to fail. Let the market reward the lucky survivors, and let the market reward the new up and comers. The giant can't let that happen. Unlike the giant of the oceans, the whale or the shark, the giant of government must protect as many of its people as often as it can, as quickly as it can. It never sleeps, it knows no respite, it can only go on protecting and providing. And as it moves, certainly a little wanton destruction, and a lot of waste. Unintended consequences and all that.

No comments: