Moral Decline or Moral Progress?

People worry a lot about declining moral values in our modern world. Commenter Evan at econlog offers a different perspective on that, in a vigorous debate about Bryan Caplan's claim that average people today have more material comforts than George Vanderbilt, the builder of Biltmore, had:
One thing I haven't heard anyone address yet is moral progress. The values of earlier time periods were sickeningly depraved. One reason I'd never want to have been born in the past, rather than today, even if my past status would have been higher, is that I enjoy being the kind of person who doesn't burn witches, own slaves, participate in pogroms, or bash gays. I think if you asked most poor people if they'd rather be a wealthy slaveowner in the past, they'd all look at you with horror.

Posted on December 11, 2010  Posted to Cato@Liberty

No Recession in Washington

Forbes looks at new data on household income in different metro areas:
Median family incomes across the country decreased dramatically from 2008 to 2009, and no region was left untouched by the recession. But despite shrinking paychecks nearly across the board, some cities still stand out for their bigger-than-average salaries. To find the places where Americans earn the most, we looked at median family income data for 2009, as reported by the U.S. Census Bureau. In September, as part of its annual American Community Survey, the Census released updated data for several hundred Metropolitan Statistical Areas — geographic entities defined by the U.S. government that roughly correspond to major cities. The place with the highest median family income is the Washington, D.C., metro area, which includes the nation's capital, as well as wealthy suburbs in Virginia and Maryland. In 2009 families in this region earned a median income of $102,340, a 0.7 percent increase from 2008. D.C. also boasts a better than average unemployment rate of 5.9 percent, far below the September's 9.2 percent national average.
As we’ve reported here before, these trends began even before the Obama administration started concentrating job creation on the federal sector. In the middle of the Bush bubble, the Washington Post reported:
The three most prosperous large counties in the United States are in the Washington suburbs, according to census figures released yesterday, which show that the region has the second-highest income and the least poverty of any major metropolitan area in the country. Rapidly growing Loudoun County has emerged as the wealthiest jurisdiction in the nation, with its households last year having a median income of more than $98,000. It is followed by Fairfax and Howard counties, with Montgomery County not far behind.
This of course reflects partly the high level of federal pay, as Chris Edwards and Tad DeHaven have been detailing. And it also reflects the boom in lobbying as government comes to claim and redistribute more of the wealth produced in all those other metropolitan areas. To slightly amend a ditty I posted a few years ago,
Mamas, don’t let your babies grow up to be cowboys, Don’t let ‘em make software and sell people trucks, Make ‘em be bureaucrats and lobbyists and such.

Posted on December 7, 2010  Posted to Cato@Liberty

Welcome to the Future

Chris Cardiff notes that Brad Paisley has put the libertarian optimism of Matt Ridley, Deirdre McCloskey -- and me -- to music in his new song and video "Welcome to the Future":
When I was a young boy, I dreamed of having my own jukebox. Jukeboxes always had this huge selection of great songs compared to the few 45 singles I owned. And you could select whichever songs you liked just by pushing a button instead of waiting for your favorite songs to play on the radio. Of course, in my imagination I owned a standard floor-sized jukebox, not something the size of a credit card that also records video. Brad Paisley brought back these memories with the opening lyrics of his hit song, “Welcome to the Future.” He dreamed of his own floor-sized arcade game when he was a boy – now he’s got one on his phone. “Welcome to the Future” starts with a familiar theme: technology-driven product innovation. But Paisley uses the second stanza to segue to the more profound theme of social change. On the surface, the second stanza continues the theme of technological change as it contrasts writing letters to video conferencing. But it is really making a deeper point when you realize his grandfather wrote the letters from his base in the Philippines, where he was fighting the Japanese during World War II. Paisley illustrates the transformative power of economic freedom, when he sings that he “was on a video chat this morning, with a company in Tokyo.”  From mortal enemies to premiere trading partners in a generation. Paisley’s final stanza evokes the most powerful image of social change. The mood changes as all the instruments are stripped away so it’s just Paisley and his guitar. I won’t spoil it for you but I will say that when I first heard this part, it gave me chills.

Posted on December 6, 2010  Posted to Cato@Liberty

It’s Too Bad We Didn’t Have a Group Like This during the Bush Administration

A pair of conservative groups founded with the help of Republican political guru Karl Rove raised more than $70 million since their inception last spring.... "After a successful 2010, we are shifting toward our goals for 2011 and beyond," Collegio said, adding that the Crossroads duo will be "active throughout 2011 in support of a conservative, free-market legislative agenda."
--Washington Post

Posted on December 4, 2010  Posted to Cato@Liberty

Eugene Robinson Thinks the Government Already Owns Your Entire Paycheck

Pulitzer Prize-winning columnist Eugene Robinson at the Washington Post complains about Republicans' insistence that tax rates not go up next month, while they also resist more government spending:
In other words, there's no additional money in the national coffers for the victims of the most devastating recession since the Great Depression. But to help investment bankers start the new year right, perhaps with a new Mercedes or a bit of sun in the Caribbean? Step right up, and we'll write you a check.
No. No. No. When the government fails to raise taxes, no one "writes a check." People who are not taxed don't get a check from the government, they simply get to keep the money they have already earned. No check will be coming from "the national coffers" to taxpayers if tax rates are left at their current rates. Robinson seems to think that all the money in America is "in the national coffers," and the question for Congress is who to give it to.

Posted on December 4, 2010  Posted to Cato@Liberty

Democrats, Republicans, and the Upward March of Government Spending

Writing about the meeting between President Obama and congressional leaders -- where some hoped to find some agreement on taxes and spending issues -- Dana Milbank quotes two skeptics:
"There's a reason why we have Democrats and Republicans," incoming House speaker John Boehner said at his news conference. "We believe in different things." "We have two parties for a reason," Obama said a few minutes later. "There are real philosophical differences."
No doubt there are. But it's hard to find the differences on this chart of the upward march of government spending, handily provided by the Heritage Foundation: To the naked eye, it looks like a pretty steady climb through the Johnson-Nixon-Ford-Carter-Reagan-Bush-Clinton years, with a bit of acceleration under Bush II and then a sharp jump in 2008 and 2009. Heritage's color-coding refers to Congress only, so you can't see that the slight slowdown in the Clinton years occurred under divided government. And of course the TARP and other 2008 spending was proposed and forced through by the Republican White House, even though Congress was indeed Democratic at the time. But the bottom line is: If we have two parties for a reason, because they believe in different things, why don't we see some real differences in the growth of federal spending?

Posted on December 4, 2010  Posted to Cato@Liberty

Taxes and Uncertainty

It looks like Republicans and Democrats may have made a deal on blocking the tax increases that loom on January 1. No details yet, but reports are that they will extend the current tax rates for one to three years. That means investors and businesses will face continuing uncertainty and the real prospect of a tax increase in one to three years. Unfortunately, pundits continue to use terms like “extending the Bush tax cuts” or “tax breaks for the wealthy.” In reality, American taxpayers have faced a particular range of personal income tax rates for the past eight years. If the 2001 and 2003 tax laws are allowed to expire, then Americans will see increased tax rates on income, dividends, capital gains, and estates. So the issue is not “tax cuts” or “tax breaks,” it’s whether we should increase taxes in 2011. And as I noted before, President Obama understands this. He said in mid-November, "I want to make sure that taxes don’t go up for middle class families starting on January 1st." The president's got it right. Taxes are about to go up, and the debate in Congress is whether that's a good idea. Unfortunately, President Obama does want taxes to go up for business owners, corporate executives, and investors on January 1, the very people whose decisions have the most immediate impact on economic growth and job creation. And that’s the issue we should be debating: Is it a good idea, especially in a time of continuing high unemployment and slow growth, to raise taxes on investors and entrepreneurs. And even if Congress delays the decision, is it a good idea to leave investors uncertain about what tax rates they'll face in a year or two? Let’s hope Congress and the Obama administration soon learns that higher taxes, more regulation, a larger share of GDP shifted to government, fears of Fed monetization of soaring debt — not to mention newspaper reports of Obama budgeteers “flipp[ing] through the tax code, looking for ideas” and threats of "an array of actions using his executive power to advance energy, environmental, fiscal and other domestic policy priorities" — can only discourage employers, investors, and entrepreneurs. Robert Higgs has cited the role of “regime uncertainty” in prolonging the Great Depression, as investors worried about what FDR might do next. Will Wilkinson points to Treasury Secretary Tim Geithner’s saying “businesses want certainty. They need certainty so they can make long-term plans today.” Unfortunately, Will says, “Creating completely irresponsible, economically chilling regime uncertainty would appear to be the basic modus operandi of the Obama administration.” A temporary extension of today's tax rates, with a continuing threat of a rate hike in a year or two, is entirely in keeping with a regime of uncertainty.

Posted on December 2, 2010  Posted to Cato@Liberty

Holiday Gift Recommendations

I decided last year to give a young colleague a post-graduate course in political science and economics — P. J. O’Rourke’s books Parliament of Whores and Eat the Rich. So I went to my local Barnes & Noble to search for them. Not in Current Affairs. Not in Economics. No separate section called Politics. I decided to try Borders. But first — to avoid yet more driving around — I went online to see if my local Borders stores had them in stock. Sure enough, they did, in a couple of stores just blocks from the Cato Institute. Checking to see where in the store I would find them, I discovered that they would both be shelved under “Humor–Humorous Writing.” Oh, right, I thought, they’re not books on economics or current affairs, they’re humor. Yes, P.J. is one of the funniest writers around. But what people often miss when they talk about his humor is what a good reporter and what an insightful analyst he is. Parliament of Whores is a very funny book, but it’s also a very perceptive analysis of politics in a late 20th century democracy. And if you read Eat the Rich, you’ll learn more about how countries get rich -- and why they don’t -- than in a whole year of econ at most colleges. In fact, I’ve decided that the best answer to the question “What’s the best book to start learning economics?” is Eat the Rich. On page 1, P. J. starts with the right question: “Why do some places prosper and thrive while others just suck?” Supply-and-demand curves are all well and good, but what we really want to know is how not to be mired in poverty. He writes that he tried returning to his college economics texts but quickly remembered why he hated them at the time--though he does attempt, for instance, to explain comparative advantage in terms of John Grisham and Courtney Love. Instead he decided to visit economically successful and unsuccessful societies and try to figure out what makes them work or not work. So he headed off to Sweden, Hong Kong, Albania, Cuba, Tanzania, Russia, China, and Wall Street. In Tanzania he gapes at the magnificent natural beauty and the appalling human poverty. Why is Tanzania so poor? he asks people, and he gets a variety of answers. One answer, he notes, is that Tanzania is actually not poor by the standards of human history; it has a life expectancy about that of the United States in 1920, which is a lot better than humans in 1720, or 1220, or 20. But, he finally concludes, the real answer is the collective "ujamaa" policies pursued by the sainted post-colonial leader Julius Nyerere. The answer is "ujaama—they planned it. They planned it, and we paid for it. Rich countries underwrote Tanzanian economic idiocy." From Tanzania P. J. moves on to Hong Kong, where he finds “the best contemporary example of laissez-faire….The British colonial government turned Hong Kong into an economic miracle by doing nothing.” You could do worse than to take a semester-long course on political economy where the texts are Eat the Rich and Parliament of Whores. So, bookstore owners, leave them in the Humorous Writing section for sure, but also put copies in the Economics, Politics, and Current Affairs sections. And of course P. J. would want me to mention his brand-new book on American politics, Don't Vote: It Just Encourages the Bastards. Buy 'em all and make it a year-long course.

Posted on December 2, 2010  Posted to Cato@Liberty

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