Maggie's Farm

Happy Dependence Day!  Between the government-sponsored electronic medical records and the Obamacare-IRS alliance, big brother is going to know everything about you and your family. For the Greater Good, natch.

It's a wonder that a single American likes this idea. Perhaps there is a large portion of Americans who like to be forced to do things. I just don't get it.

Leftists harp about the corruption in free markets, but rarely about the corruption intrinsic to centrally-controlled or -manipulated systems (see Solyndra, or Fannie Mae, for recent American examples).

Who better to discuss these topics than the great Gertrude Himmelfarb? Adam Smith - Moral Philosopher. One quote:

The "invisible hand" has been given a teleological interpretation, as if some benevolent agent is active in bringing about that benevolent end. For Smith the hand is simply a metaphor for a free market, a "system of natural liberty", in which individuals exchange their goods and services without the intervention of any supervising hand or authority. Only in such a system could the division of labour produce the "opulence" that would distribute the "necessaries of life" for the benefit of all. "By necessaries," The Wealth of Nations explains, "I understand, not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without." Society, the rich and the poor, employers and workers, even unto the "lowest order" — this is the "nation" in The Wealth of Nations. It is not the nation state in the mercantilist sense, but the people who constitute society. And not the "people", as contemporaries often used that word — those who play an active part in politics — but the "common people" as well, including the lower and even the lowest orders. By the same token, the "wealth" in the title is not the wealth of the state (again, as the mercantilist understood it), but the wealth, or well-being, of all the people. Only a "progressive" — that is, a free and industrious — economy, could bring about "a universal opulence which extends itself to the lowest ranks of the people, . . . a general plenty [which] diffuses itself through all the different ranks of society." To those who complain that if the poor shared in the "general plenty", they would no longer be content with their lot in life, Smith put the question: "Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or an inconvenience to the society?" His answer is unequivocal — and very much in the spirit of Moral Sentiments:

Servants, labourers and workmen of different kinds make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe and lodge the whole body of the people should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged.

This post is about risk.

I've been reading a bit about how western forest fires could be prevented, or reduced, by human intervention. I am opposed to that. Wildfire is a natural occurrence, and forest regeneration is a natural and necessary process and one upon which many species depend. It's well-known that fire-prevention eventuates in bigger fires.

If you want to live in the woods where fire is eventually expected, don't do it on my nickel. While I must admire the valiant forest-fire-fighters, I don't know why I am paying for them. There are dangers in the woods. Cougars, wolves, fires, bears, snakes, crazy rivers, etc. Nobody is forced to live there.

Same goes for federally-subsidized flood insurance. Seems like a no-brainer to me. Why should my tax dollars subsidize somebody to live where there is a predictable expectation of flooding? Or hurricanes or tornadoes?

Perhaps this sounds "insensitive," but adults are expected to calculate their risks in life and not come crying to me when the odds turn against them. I can be charitable when I choose to be, but I don't want to be forced by government to subsidize other peoples' adult choices.

An angry client today told me how pissed he was that the bank wouldn't swallow his $250,000 loss in the home he needs to sell now. I pointed out to him the obvious fact that he was implying that he would have been happy to keep any gain on the house, but not any loss. Then I pointed out that, if somebody wants to give up loss and to give up gain, then they should rent. When you rent, the landlord or the bank takes the risks.

In my long life experience, the more responsibility people take for their decisions and their consequences, the better and more careful decisions they make.

Good fun, at Driscoll: An Interview with Glenn Reynolds on The Higher Education Bubble.

One fascinating factoid from Glenn: "People who are accepted at Ivy colleges, and don't go, are as successful in life as those who do attend."

What is success?

Glenn contends that the Ivies now exist as places for the elite to meet elite spouses.

Lyndon Johnson's War on Poverty failed.

There are simple reasons why (relative) poverty persists in America, but the first is most significant: If poverty is defined as roughly the lowest 15% of income then, obviously, it will persist whether the poor have cars, air conditioners, farms, houses, lots of food, iPhones, TVs, a government dwelling, government medical care, government schools, government cheese, etc.

Is there abuse? Of course there is.  Welfare Loophole: Sisters Make $540,000 Babysitting Their Kids. Can't help it because the world is full of people who will work any system to their own advantage. It's their loss of dignity and self-respect. Once given up, those things are difficult to ever recover but some people don't care. Dependency can be a trap whether from government or from a trust fund.

The second major part seems to be life choices. If more money is what you want, then you have to make life plans and choices which might make that goal possible and, if you have any sense of honor at all, you will not take it from your neighbors except in desperation. This via Powerline:

Our readers know about Rawley's old hot dog joint in Fairfield from Gwynnie, but this is as good - better for seafood fans: Westfair Fish and Chips in Westport. It's right off I-95 for you hungry east-coast travellers.

Modest little clam shack has a fine raw bar too. Worth a trip, or makes a longer trip enjoyable. I will drive a good ways for fresh oysters, fried clam bellies, and fresh fried Cod.

Another Maggie's favorite just off I-95 is Gene's Famous Seafood (also a simple clam shack) in Fair Haven, MA. Sippican likes it too.

What I think what they mean is "Is being Conservative a mental ailment?" After all, people routinely change their political views with life experience. Anyway, in my view it's a stupid and pointless question.

From The Hunt for Conservative and Liberal Genes:

This biological or psychic determinism -- the peculiar notion that fundamental political differences "don't really have anything in particular to do with politics" -- should explain liberals as well as conservatives. Most of its practitioners, however, seem to assume that liberal values such as fairness and compassion are, for lack of a better term, normal and that it is conservatives' beliefs and values that are different, even deviant, and thus in need of explanation... John Jost, a professor of psychology at NYU, sees conservative "aversion to ambiguity, a sense of threats, and disgust." Scott Eidelman, an assistant professor of psychology at the University of Arkansas, says "conservatives generally crave closure, prefer to act quickly, choose instinctive solutions." Riley Dunlap, a sociologist at Oklahoma State, thinks the effort to be fair and balanced is misguided. "I'm not personally convinced that there is an equal balance of bias," he says. "I believe that we see things like authoritarianism, dogmatism, closed-mindedness, to be distributed currently more on the right than on the left

I considered asking readers what crimes they may have committed, but figured few would respond despite the fact that we all have made dumb mistakes. (See The average professional in this country wakes up in the morning, goes to work, comes home, eats dinner, and then goes to sleep, unaware that he or she has likely committed several federal crimes that day.)

So my first for this summer is this:

What crimes have you been subject to in your lifetime? - Not including ordinary rip-offs, school-age or barroom fist-fights, or unpaid invoices.

I'll start it off. I had a car stolen in Hartford about 15 years ago, and we had five saddles stolen from the barn about 6 years ago while vacationing. That's all I can recall. Never anything with violence or threat of violence, thank God. Well, I did run from two would-be young muggers in Cambridge many years ago when I was fleet of foot. Got into my car on a dark street before they caught up with me. I have a CT carry permit now, but I never carry out of state. That's jail time.

It should be a piece of cake for our literate readers: How's Your Grammar?

I missed one. Shame on me, as a college graduate.

Despite the wishes of the Left, free speech remains foundational in the USA.

What is amazing to me is that there were any votes on the Supremes opposed. Why would anybody in America want to squelch voices and opinions? Unless they have contempt for the peoples' opinions?

It's a sickness, and it has a foothold, but not quite a majority, on the Court. We The People need all points of view, and we have the duty to apply our BS Detectors and biases as best we can. Seems to me that politicians are the biggest purveyors of self-interested BS, but their expensive speech cannot be outlawed.

I took Chemistry from a Nobel winner chemist in a classroom of 250 eager students, many of them hopeful pre-meds. He clearly had been assigned to one undergrad class, but he didn't seem to resent it.

He had fun talking to a class of undergrads, but he talked about whatever he wanted to, whatever was on his mind. He liked to talk about how the planet was running out of oil so there would be no substrate left for medicines and organic chemicals. He said everything you need to know is in the textbook and, if you are confused, try to grab a TA.

Well, the impatient TAs had zero interest in that chore. As a result, many of us formed study groups which were great fun. I wanted to learn Chem so as not to be an ignorant person, and later took Organic for the same reason, despite being a History major. The Chem exams were a bitch. The five in my study group all got As, back before grade inflation. Science grades were curved. The reason our group did so well was partly because one of our study approaches was to create difficult problems for eachother. We'd meet at night in an empty classroom and do everything on the blackboard (remember them?).

Conflicted: Faculty and Online Education, 2012

At Mediocracy:

In the case of universities, the anti-elitism strategy has been to insist that the degree experience become a near-universal benefit. At the same time, the belief has to be maintained that the whole thing is still in some way a major achievement, a reason for enhanced self-esteem. (This, of course, generates the familiar prizes-for-all inconsistency.)

The nagging doubt remains: as long as it is not literally for everyone, and as long as there are some institutions which are more exclusive than others, there is something about universities which is at odds with the prevailing ethos of perfect, Facebookish horizontality.

It is this ambiguity which seems to keep the what-are-universities-for programme busy, and makes boggling about the question so appealing. Nothing is said which contravenes the basic pseudo-egalitarian ideology, but a certain frisson is generated by juxtaposing mutually inconsistent requirements...

What is a "college education" in America, these days? Seems to me that there is no such unitary thing, and that it can mean almost anything. As I have mentioned here in the past, I have interviewed college grads who could not do calculus or even explain basic statistics, read a foreign language, or write a grammatical, well-structured formal essay. These basic skills can be achieved in high school, by those who want to learn stuff.

Or easily achieved in the library or on the internet. Not everybody is driven to learn things.

There's a debate going on these days about the notion of "college for all," and Robert Samuelson has been scoring points.

College for All, of course, entails extensive remediation for kids who are not prepared for, or capable of, "higher ed" as we older folks think of it. It also entails lowering expectations and standards. I don't blame the schools - I mostly blame the students. There is no such thing as "getting an education," because all learning is ultimately self-education. Without drive, curiosity, discipline, determination, and IQ nothing valuable will happen.

The education industry, naturally, markets itself and wants to fill all of their seats with warm, paying bodies even if they are not capable of serious high-school level achievement. Here's a summary of the current debate on college-level remediation.

That's a model. The Next Model for Higher Ed.

What do people want? Useful knowledge, or a piece of paper?

Growing Pell-Mell - The government’s program to help low-income students is out of control:

There are two major problems with the program: Not only has it expanded to cover more than half of all students, but almost anyone—regardless of academic background—can qualify. Recipients must meet only a minimal academic standard: obtaining a high school diploma or the equivalent. There are no minimum SAT scores or GPAs.

Consequently, many grant recipients go to college but flunk out or lose interest, often going deep into debt at the same time.

Government Created Potentially Catastrophic Education Bubble:

Like housing, government tried to orient higher education through a social engineering lens and “established Sallie Mae in 1972 to encourage banks to loan more money for college. The Affordable Care Act of 2010 allowed the government to loan money directly to students. The following year the Taxpayer Relief Act extended tax breaks to student loan borrowers. Predictably, the Federal Reserve kept interest rates at historically low levels, making college loans cheaper.”

In the meantime, “the price of a college education soared…[and] by law, lenders cannot even deny Stafford and Perkins loans (types of federal student loans) based on the borrower’s credit or employment status. What other reason is there to deny a loan?

From DeLong in The American. A quote:

Special interest avarice has no natural limits. A generation ago, economist Mancur Olson made the point that a special interest’s appetite has no limit because it gets the benefits while the costs are borne by society at large. This incentive structure means that the interest will keep grabbing even when the costs imposed on society at large far exceed the benefits to the interest. And its Washington representatives have an incentive to be even less reasonable, as they have to juice the troops to keep the stream of dues coming.

Some commentators are under the illusion that the current national crisis will sober up the special interests. But that is not how it works, because a crisis makes special interests less, not more, responsible. The situation becomes, in the language of game theorists, a “last-period problem.” As a game approaches an end, the players have no need to cooperate for the sake of protecting long-term relationships. Their incentive is to grab as much as possible before the game ends, or, to translate to the real world, before the society collapses. Do not look for crisis to bring out a sense of responsibility in the advocates for the interests.

Politics is all about such cases, but here's one for today: Big Sugar Wins in the Senate. Same old Plunder Politics, spreading the sugar around to buy votes and allies.

Well, first for your cigarettes, then salt, then your french fries, then your cokes. Now your cigars.

What next? What next?

The biggest problem with America is a too big, too power-mad, overweening government which refuses to leave the people the heck alone to make their own choices in life.

It's a sickness, the desire to control one's fellow adults. What neurosis motivates such things? A normal American detests such jerks, by homeland instinct.

Update - Here it comes: NY City Mulls Adding Popcorn, Milk to Soda Ban

Here's the quote:

Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. They may be more likely to go to Heaven yet at the same time likelier to make a Hell of earth. Their very kindness stings with intolerable insult. To be ‘cured’ against one’s will and cured of states which we may not regard as disease is to be put on a level of those who have not yet reached the age of reason or those who never will; to be classed with infants, imbeciles, and domestic animals.

—C. S. Lewis, God in the Dock

We have mentioned many times here that actively-managed investment funds and accounts, after fees, perform worse than index funds.

Fund managers naturally hate that fact, as do investors for whom hope often conquers experience. You cannot dispute the facts: Active Fund Management Is A Loser's Game.

Despite the data, I often think that people want to know that there is a sober person behind the wheel, somebody you can phone when you want to. Somebody who cares. Somebody who is smarter than the markets. They pay for that fantasy.

How to protect your nest egg in the Land of ZIRP? Don't ask me. I bank 10% of my pre-tax income each year, religiously. My nest egg, paltry as it is, is 1/4 equity index funds, 1/4 bond index funds, 1/4 cash, and 1/4 in one really good hedge fund. It may all blow up someday, but I intend to never need the money anyway. The men in my family never quit working and I will keep that wholesome, old-fashioned tradition going unless or until disease or the grim reaper get me.

Retirement ages people, or most people. It ages them, mentally.

I think it is an old New Englander ethic: be stingy, save, resist temptations to buy stuff, and work forever. Use money for overpriced education, books, booze, theater, adventure, and travel.

Excellent, sane article: Scandal Street. A quote:

Democratic institutions have strong incentives to flatter the feelings of the ignorant and greedy among us, who are a large voting constituency. For this reason, Congress and the regulatory agencies treat the inevitable parting of fools and their money as a deficiency in the marketplace. When Granny puts all of her money into baht-denominated commodity swaptions and then loses it, the fault cannot possibly be hers: Surely there is something wrong with the market, surely those marginally employed and penniless borrowers were tricked into thinking they could afford half-million-dollar suburban spreads, surely companies with no profits or assets would have been outstanding investments if only we’d had the right regulations, etc., and we have to figure out a way to give people their money back. But when JPMorgan makes a boneheaded sort-of-a-hedge-sort-of-not investment and takes a $5 billion (and counting) lump, obviously JPMorgan is at fault, and it’s a national scandal.

Aren't investments all about risk? Who is too dumb to know that?

"I think the message is that, first of all, voters are seeing the fundamental unfairness of government becoming its own special interest group, sitting on both sides of the table."

Indiana Gov. Mitch Daniels, on Wisconsin

Gateway posted this: At Netroots Elizabeth Warren Asked: “Do You Consider Yourself a Role Model to Women of Color”.

Which Mel Brooks movie was it when the character said their religion was Druid, and he says "That's funny. You don't look Druish"? Spaceballs, I think.

The article: Affirmative Action Starts to Unravel:

"Negative action," i.e., discrimination, occurs when a rejected Asian-American applicant would have been accepted "if he/she was white." But when that same rejected Asian-American applicant would have been accepted if he or she were black or Hispanic, that's "positive or affirmative action."

As the writer notes, there is nothing fair or rational about affirmative action. It's just a race-based political spoils system, and everybody knows it.

How much does a busy pediatric Dentist make?

I obtained some inside information. A local, solo practitioner guy nets, for himself, $1.4 million per year. His gross is almost double that. He works hard, keeps three rooms going at a time, and around 40% of his practice is children's Medicaid which apparently pays well. The rest is self-pay plus some dental insurance.

He has two hygienists, a receptionist, and a billing person in the office. A small businessman.

But would you want his job?

From You’re Not Special (h/t Vanderleun):

...you’ve been pampered, cosseted, doted upon, helmeted, bubble-wrapped. Yes, capable adults with other things to do have held you, kissed you, fed you, wiped your mouth, wiped your bottom, trained you, taught you, tutored you, coached you, listened to you, counseled you, encouraged you, consoled you and encouraged you again. You’ve been nudged, cajoled, wheedled and implored. You’ve been feted and fawned over and called sweetie pie. Yes, you have. And, certainly, we’ve been to your games, your plays, your recitals, your science fairs. Absolutely, smiles ignite when you walk into a room, and hundreds gasp with delight at your every tweet. Why, maybe you’ve even had your picture in the Townsman! And now you’ve conquered high school... and, indisputably, here we all have gathered for you, the pride and joy of this fine community, the first to emerge from that magnificent new building...

But do not get the idea you’re anything special. Because you’re not.

There is nothing easy about leading an "ordinary" life - whatever that is - and you will always be precious to your parents.

From Kay Hymowitz' American Caste - Family breakdown is limiting mobility and increasing inequality:

...the single-mother revolution has left us with the following reality. At the top of the social order is a positive feedback loop, with kids raised in stable, high-investment, and relatively affluent homes going to college, finding similar mates, and raising their own children in stable, high-investment, and relatively affluent homes. At the bottom is a negative feedback loop, with kids raised by single mothers in unstable, low-investment homes finding themselves unable to adapt to today’s economy and going on to create more unstable, single-mother homes.

Not only do we have more poverty, inequality, and immobility; we have the makings of a caste society, with an inherited elite and an entrenched proletariat. That’s not an America that anyone finds very attractive.

Raising kids as a single parent is something that only extraordinary people can do well.