Free Markets, Free People

Daily Archives: March 26, 2013


Economic Statistics for 26 Mar 13

Here are today’s statistics on the state of the economy:

Durable goods orders soared 5.7% in February, mainly on new aircraft orders. Ex-transportation orders, however, fell -0.5%.

New home sales in February declined 4.6 percent to an annualized pace of 411,000.

The S&P Case-Shiller Home Price Index rose 1.0% in January, following 0.9% and 0.6% gains in the two prior months.

The Conference Board’s Consumer Confidence Index plunged more than 8 points to a reading of 59.7 for March.

The Richmond Fed Manufacturing Index fell 3 points to a March reading of 3.

The State Street Investor Confidence Index fell to 88.0 on lower demand for equities and rising demand for fixed income products.

In weekly retail sales, Redbook reports same store sales slowing to a 2.6% year-over-year sales growth rate. ICSC-Goldman Store Sales plunged -1.7% from last week, up only 1.0% from last year.

~
Dale Franks
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Apologizing for authoritarianism

That’s essentially what Sarah Conely does in a NY Times op-ed. Oh, she cloaks it benignly enough -”it’s just soda” – as he supports the Bloomberg ban on large volume soda sales.  But in essence what she claims is “government knows best” and “giving up a little liberty isn’t so bad if it benefits the majority”.

You see, liberty, in her world, is much less important that security or safety.  And we, as knuckle dragging neanderthals, don’t always know what is best for us or how to accomplish our goals without the hand of government to guide us (how we ever managed to make it to the 21st century without that guiding hand is still a mystery in Conely’s circle).  Sure some can do it, but most can’t and so laws should be designed to protect and guide (coercively of course) those who can’t (or are believed to be unable).

A lot of times we have a good idea of where we want to go, but a really terrible idea of how to get there. It’s well established by now that we often don’t think very clearly when it comes to choosing the best means to attain our ends. We make errors. This has been the object of an enormous amount of study over the past few decades, and what has been discovered is that we are all prone to identifiable and predictable miscalculations.

Research by psychologists and behavioral economists, including the Nobel Prize-winner Daniel Kahneman and his research partner Amos Tversky, identified a number of areas in which we fairly dependably fail. They call such a tendency a “cognitive bias,” and there are many of them — a lot of ways in which our own minds trip us up.

For example, we suffer from an optimism bias, that is we tend to think that however likely a bad thing is to happen to most people in our situation, it’s less likely to happen to us — not for any particular reason, but because we’re irrationally optimistic. Because of our “present bias,” when we need to take a small, easy step to bring about some future good, we fail to do it, not because we’ve decided it’s a bad idea, but because we procrastinate.

We also suffer from a status quo bias, which makes us value what we’ve already got over the alternatives, just because we’ve already got it — which might, of course, make us react badly to new laws, even when they are really an improvement over what we’ve got. And there are more.

The crucial point is that in some situations it’s just difficult for us to take in the relevant information and choose accordingly. It’s not quite the simple ignorance [John Stuart] Mill was talking about, but it turns out that our minds are more complicated than Mill imagined. Like the guy about to step through the hole in the bridge, we need help.

So, now that we have these Nobel Prize winning psychologists and behavioral economists on the record saying we’re basically inept shouldn’t it be clear to you, as Conely concludes, that “we need help”?

That sort of “help” used to come from family, friends and community.  We somehow managed, for around 200 years, to grow and succeed splendidly without government intruding and trying to control our lives.

The basic premise of her piece is much the same as Bloomberg’s more direct assault:

The freedom to buy a really large soda, all in one cup, is something we stand to lose here. For most people, given their desire for health, that results in a net gain. For some people, yes, it’s an absolute loss. It’s just not much of a loss.

Or to quote a more succinct Bloomy: “I do think there are certain times we should infringe on your freedom.”

Notice the arbitrariness of the “I do think”.  His choice, not yours.  Bloomberg picked sodas.  What else could he or those like  him arbitrarily pick next time?  Think government health care for example and your mind explodes with where they could go.

And notice Conely’s dismissal of the loss of freedom as “not much” of a loss.  Incrementalism at its finest.  Pure rationalization of the use the coercive power of the state to do what they think is best for you, because, as her academic colleagues have stressed, “we need help.”  And our betters are always there to “help” us, aren’t they?

Funny too how the solution is always the same, isn’t it?

And their desire to intrude? Well its wrapped up in their concept of government’s role in our lives:

In the old days we used to blame people for acting imprudently, and say that since their bad choices were their own fault, they deserved to suffer the consequences. Now we see that these errors aren’t a function of bad character, but of our shared cognitive inheritance. The proper reaction is not blame, but an impulse to help one another.

That’s what the government is supposed to do, help us get where we want to go.

No. It’s not. That isn’t at all the function of government as laid out in the Constitution. Not even close. It has always been our job to “get where we want to go”. Government’s job was to provide certain functions to ensure an equality of opportunity (like a fair legal system, stable monetary system, etc), but on the whole we were free to pursue our lives without its interference as long as we stayed within the legal framework and did no harm to others or attempted to defraud them.

Conely’s last sentence is the mask that fronts and justifies/rationalizes every authoritarian regime that has ever existed.  If you don’t believe that, I invite you to look at the title of her last book.  “Against Autonomy: Justifying Coercive Paternalism.”

Kind of says it all, doesn’t it?

~McQ

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