News Flash: negative news for profit

In a ground-breaking piece of investigative reporting, the Washington Post laments the public’s growing dissatisfaction with our economy. Via Carpe Diem, Drew Carey hosts a piece called “Living Large: America’s Middle Class” for reason.tv.

Despite news outlets singing the sorrows of subprime and heralding a recession, we have never been better. Among all the negativity, I have yet to hear anyone suggest they would be better off living in 1905 or even 1995.

Watch the video and start living large. And then maybe you won’t believe all the negative junk you hear day in and day out in the papers and on the news.

North Korea lives in the dark ages (literally)

Via Strange Maps. This is a perfect picture to illustrate the difference between organizing society privately (capitalism) versus publically (socialism).

Inconvenient Links for February 5, 2008

Currently open in my browser tabs:

1. From Carpe Diem, in 2004, Exxon (XOM) paid $27B in taxes–the same amount as the bottom 50 percent of the population.
2. Via Marginal Revolution, the credit crunch that wasn’t.
3. Via Knowledge Problem, a futures market for sports tickets.
4. From Cato @ Liberty, the holes in Bush’s proposed budget. $3.1 trillion with a T.
5. From Coyote Blog, Pittsburgh public school numbers. The current school system is designed more to benefit administrators than students.

Enjoy…

You are bankrupting your children

Via Mankiw’s blog, a piece in the NY Times by Mankiw himself, entitled “My Birthday Wish: Not Burdening Our Children.” He talks about America’s long-term economic future, hitting on several important points that are (somewhat surprisingly) politically neutral:

1. Social Security, FDR’s “compact among the generations” has grown well beyond its original and intended scope.
2. 4.5 percent to 15.3 percent and the current level of taxation is not sustainable.
3. Healthcare has advanced at a rapid pace, bringing higher costs and benefits.
4. Something needs to be done and the national debate is not up to the task currently.

He sums up my attitude about the current correction a/k/a “recession”:

My birthday wish is for all of us to stop asking what the government can do for us today. Instead, we should focus on what we can do together to prepare the economy for our children and grandchildren. That means getting ready to care more for ourselves in old age, perhaps by retiring later, perhaps by saving more. I hope that when I celebrate my 100th birthday in 2058, my descendants won’t look upon Grandpa and his generation as the biggest economic problem of their time.

One step in the right direction is acknowledging the unfunded liability on the government’s balance sheet, something I talked about before. As a young American, newly in the workforce, each paycheck causes me to shake my head. I see money I need, money I earned, going to a program I will likely never benefit from.

FDR’s “compact among the generations” was not a compact with my generation. It was passed on to us without our consent. And we are forced to abide to it–in my case, on a bi-weekly basis.

Free trade is economics, fair trade is marketing

Via Greg Mankiw, Steven Landsburg in the NY Times talks about the myth of protectionism. Interesting look at the moral side of the debate. Friedman often cited free trade as one concept that almost all economists–from Adam Smith on up–agree on. “Fair trade” makes for good marketing but doesn’t help those it intends to. It’s important to judge based on outcomes, not intentions.

Cash out of Social Security

Came across an article from 2003 (by Arnold Kling at EconoLog) about the logic behind Friedman’s proposal to transition out of Social Security. Friedman himself sums it up:

What you should do, in my opinion, is to give every person who now has a claim on Social Security bonds equal to the value of his claim, and set him free. Let him save. Let him do what he wants with it. That would not add a dollar to the debt we now have; it would just convert an unfunded debt into a funded debt.

Currently, government liabilities are hidden. We don’t let private companies account this way, why then the federal government? It isn’t privatization, it is transparency that would force debate on the issue. Unfortunately, Social Security lingers in the dark–to the tune of over $50 trillion–without resolve in Washington.

Greed is good (for progress)

Via Carpe Diem, “What a Difference a Century Makes.” It is amazing to see the progress that has been built on capitalism’s back. The negative connotation of “greed” doesn’t change the fact that progress is a by-product of self-interest. Reminds me of Rand in Atlas Shrugged:

So you think that money is the root of all evil? Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?