wakalix

What warrants explaining: equality or inequality?

Follow up to: Thomas Sowell on income inequality

Today Yahoo News reported the this Live Science article:

Conservatives Happier Than Liberals

Individuals with conservative ideologies are happier than liberal-leaners, and new research pinpoints the reason: Conservatives rationalize social and economic inequalities.

Regardless of marital status, income or church attendance, right-wing individuals reported greater life satisfaction and well-being than left-wingers, the new study found. Conservatives also scored highest on measures of rationalization, which gauge a person’s tendency to justify, or explain away, inequalities.

The rationalization measure included statements such as: “It is not really that big a problem if some people have more of a chance in life than others,” and “This country would be better off if we worried less about how equal people are.”

Upon reading this I smelled something fishy. My question, which reveals that I’ve learned something from Thomas Sowell, was: Why did the study assume that inequality was something to be explained? Why not ask people who expect equality (however defined) to be the “normal” state of affairs to explain why they think it’s normal?

In his essay, Race, Culture, and Equality, Thomas Sowell starts off listing several historical instances of inequality. He then asks

Why are there such disparities? In some cases, we can trace the reasons, but in other cases we cannot. A more fundamental question, however, is: Why should anyone have ever expected equality in the first place? …

Given similar educational disparities among other groups in other countries– disparities in both the quantity and quality of education, as well as in fields of specialization– why should anyone expect equal outcomes in incomes or occupations? …

Groups also differ demographically. It is not uncommon to find some groups with median ages a decade younger than the median ages of other groups, and differences of two decades are not unknown. …

It makes sense to blame human beings for biased rules and standards. But who is to be blamed for circumstances that are the results of a confluence of all sorts of conditions of the past and present, interacting in ways that are hard to specify and virtually impossible to disentangle?

The whole essay is worth reading.

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Obama: Demander in Chief?

I’ve borrowed that phrase from a Cato-at-Liberty post by Sallie James.  She quotes Michelle Obama:

Barack Obama … is going to demand that you shed your cynicism… That you push yourselves to be better. And that you engage. Barack will never allow you to go back to your lives as usual, uninvolved, uninformed.

James comments:

The President of the United States is the employee of the American people. He is not there to make demands of people. If I want to sit on my couch for the rest of my life eating Doritos and watching trashy television — unengaged, uninformed and uninvolved — that’s my prerogative.

Indeed, Michelle Obama’s quote reminds me of Gene Healy’s new book, The Cult of the Presidency.   The blurb from Cato’s site says:

The Cult of the Presidency takes a step back from the ongoing red team/blue team combat and shows that, at bottom, conservatives and liberals agree on the boundless nature of presidential responsibility. For both camps, it is the president’s job to grow the economy, teach our children well, provide seamless protection from terrorist threats, and rescue Americans from spiritual malaise. Very few Americans seem to think it odd, says Healy, “when presidential candidates talk as if they’re running for a job that’s a combination of guardian angel, shaman, and supreme warlord of the earth.”

Yes, both parties.  We have reason to fear McCain, too.

Popularity: 10% [?]

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PatientPowerNow.org, PatientPowerColorado.org

For the past couple of weeks I have been blogging about health care policy at the above sites.  Or site, since they are the same.  If anyone (of my huge number of readers!) has suggestions for a logo or image, I’m all ears.

Popularity: 14% [?]

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Thomas Sowell on income inequality

Arnold Kling (Swarthmore ‘75) has recommended a podcast by George Mason University Economics Professor Russ Roberts about basic economics. Kling writes that

If you had just one hour to learn essential, basic economics, listening to this talk would be the way to do it. The core topic is the reasons for income variation across people and over time. It is organized around refuting the claim that rich people need to keep poor people down. Along the way, he takes on (although not by name) the four main biases that Bryan [Caplan] has found among non-economists: anti-foreign bias, make-work bias, anti-market bias, and pessimistic bias.”

On that note, it’s time I quote one of my favorite passages from Thomas Sowell’s The Vision of the Anointed (pp.211-213).

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Health care reform for nannies

The Rocky Mountain News published my letter to the editor on their site earlier this week:

Politicians shouldn’t force grown-ups to buy insurance

In “Health-care reform for grown-ups” (April 6), the Rocky’s editorial board says “it can live with” mandatory insurance proposed in Senate Bill 217 if “value benefit plans are indeed viable and available at modest costs.” But real grown-ups can’t “live with” politicians treating them like children.

Attempting to justify this nanny-state proposal, the editors perpetuate the fallacy that the “cost-shift from the uninsured” makes insurance so expensive: Such “uncompensated care totals $600 million … according to the blue ribbon commission.” Wrong.

In a January 26 Speakout printed here, Commission member Linda Gorman showed that the Commission’s figure was much less, and that the maximum annual cost-shift was “about $85 per insured individual.” How much will SB 217 cost taxpayers?

Maybe mothers can force their four-year-olds to eat their vegetables, but politicians shouldn’t force grown-ups to buy insurance. As grown-ups, we have the individual right to make that choice ourselves.

Popularity: 27% [?]

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Tax musings

I originally had this at the end of my previous post, but it’s worth its own post.

On a related issue, I continue to be amazed at how seldom, if at all, I hear people write or talk about taxes in terms of “what am I getting for this”? I start thinking about this when pondering the “progressive” income tax. There must be a non-biased name for this. I’d prefer to call it the punitive income tax. Often defenders of it say that people earning higher income should pay more. But under a flat tax, that is, where everyone pays they same percentage of their income, those who earn more do pay more. So I don’t know how one goes about figuring out the “correct” form of tax brackets.

The price of most products people buy do not depend on one’s income or wealth. One exemption is property insurance, such as home-owners or car insurance. But the customer can determine his preferred level of coverage.

My guess is that underneath the desire for a “progressive” tax system is the idea that one person’s need is a moral claim on another person’s wealth. Not to get into a dissertation on ethics here, but I don’t see what facts support such a claim. And even if it were true, is an action ethical if one is forced to do it?

Back to taxes, I found some IRS data quite interesting. For example Table 1 here shows that as fo 2005 the top 10% of income earners pay more than 70% of all income taxes. Table 7 at this IRS site (an Excel file), shows how much the top X percent of income earners pay in income tax as a percentage of total income tax collected. For the top 10% of income earners, their share has risen from 54% in 1986 to 70% in 2005. Of course, people move in and out of this top 10% group every year.

The Detroit News published results of Congressional Budget Office report showing that since the tax rate cuts of 2000 (not simply “tax cuts” as cutting the tax rate can increase total tax revenue), people in the top 20% of incomes paid more taxes than before the rate increase.

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Taxes reach into both our wallet & soul

I’m paraphrasing one of my favorite lines in Yaron Brook’s recent commentary in Forbes about how politicians use tax exemptions to garner political favor and control our behavior. He does a fine job of connecting what we usually consider to be an economic issue with a moral issue. Here are some excepts:

Tax policy works by attaching financial incentives to a long list of values deemed morally worthy. If you want to maximize your wealth come tax time–and who doesn’t?–you must look at the world through tax-colored glasses, “voluntarily” adjusting your behavior to suit social norms and thereby qualifying for tax breaks. In this way, the social engineers of tax policy preserve the impression that you’re exercising free choice, while they’re actually dispensing with your reason and your judgment. …

Government’s job is not to dictate your values but to protect them. In a free country, you choose values and then use your own money as a tool to achieve them. But a value-rigged tax policy reverses this cause and effect–it uses your money against you, bribing you with tax breaks that let you keep some of your earnings in exchange for abandoning your preferred values. …

Today, it is commonly accepted that Uncle Sam has a right to reach not only into your wallet but into your soul, through tax policies that substitute some version of the “public interest” for your own rational desires. …

In place of the limitless variety that emerges when individuals plan their own lives in a free society, tax laws strive to impose a dreary sameness–as if every individual should get married, have children, buy a home and save for retirement on a government-approved schedule–and as if every company should look to bureaucrats for the one true path to selecting real estate, equipment, fuels, employees and financing. Such artificial homogeneity has no place in the tax policy of a government dedicated to protecting individual rights.

Popularity: 26% [?]

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No compassion in forced giving

The Rocky Mountain News published a commentary of mine about the inherent immorality of government-run charities and a proposal to challenge such charities to compete with voluntarily-funded charities.

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Politicians: Sitting on your hands & doing nothing might be an improvement

Yesterday the Denver Post published the following letter to the editor that I submitted. A scan of the print edition is here.

Re: “Health coverage gets new push,” March 28 news story.

Democrats like state Sen. Bob Hagedorn, and state Rep. Anne McGihon want to force us all to buy medical insurance - as they define it. But government-mandated insurance does not guarantee actual care. Consider Canada, England and Massachusetts.

The Canadian Broadcasting Corporation reports that “109 people had a heart attack or suffered heart failure while on the waiting list. Fifty of those patients died.” The BBC reports that “up to 500 heart patients die each year while they wait for potentially life-saving surgery.” The Boston Globe reports that in response to soaring costs, Massachusetts “policymakers could face difficult choices: spend more state money or cut back the two programs by reducing enrollment, cutting subsidies, or eliminating benefits.”

Sen. Hagedorn says it’s “immoral for us to sit on our hands and do nothing.” Hence, instead of passing more laws that kill, politicians should do something that is moral and actually works: repeal laws that make insurance prohibitively expensive.

For example, Colorado House Bill 1327 would allow us to buy insurance plans that meet less damaging regulations of other states. This would make quality, affordable insurance available to thousands of Coloradans.

Popularity: 45% [?]

Posted in healthCare, letterToEditor | 1 Comment »

“For the general good of society”…whatever

The Rocky Mountain News posted my letter in response to this news article about how or if government should force one group of people to buy broadband internet access for another group of people.

Jeff Smith writes that CU law professor Phil Weiser “would like to see public rather than industry funds used to stimulate broadband deployment, arguing that such services are for the general good of society” (March 10). This is journalistic smoke and mirrors.Extending broadband access to rural and remote areas is not a choice between”public” and “industry” funding. Since “the public” both pays taxes and funds industry when buying products, it pays either way. The choice is between voluntary trade and coercion.

Aesop’s fable of the City Mouse and Country Mouse is about trade-offs. If government should force City Mouse to buy broadband internet for Country Mouse, must Country Mouse buy City Mouse therapeutic getaways to the countryside?

If broadband access is for “the general good of society” what isn’t? Since a smelly, dirty, and immobile populace is surely “bad for society,” how about tax subsidies for soap, deodorant, and shoes?

Incidentally, both Phil Weiser and I graduated from Swarthmore College.

One could argue that certain goods are “public goods,” but fast communication and access to information is not one of them. The Wikipedia entry on public goods includes articles skeptical of the concept.

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