Eliminate "Gov-co"

Why doesn't McDonald's charge $40 for a cheeseburger? After all it'd more profitable. Why does Wal-Mart or the Dollar General or 5andDimes or Goodwill even exist if name-brand stores can charge as high as "the wealthy" can pay? Most people seem to inherently understand the cause-and-effect of prices and competition in the retail market. But is that only because we see it everyday in our current lives?

Consider an alternative history where during the Great Depression, advocates for the poor pressured the govt to pass a bill that created "Gov-co" retail stores. Gov-co stores are a nation-wide chain that provide cheap, generic food and goods for the poor at massively discounted prices (subsidized by taxes). Adjusted for inflation, they had prices like $1 for a new pair of tennis shoes or a button up shirt or $10 for new car tires or $20 for a new dishwasher because the rest of the cost of the goods is subsidized with taxes. At such discounted prices, no private company can compete and so not only have Gov-co stores became a national chain in virtually every town, but now the only alternative to those Gov-co stores are high-end, brand name stores selling high-end goods that cost top dollar and are only affordable to the middle class and above. At this point, very few really remember what it was like before Gov-co existed. People only recognize that only "the rich" can afford the brand name goods. But that only reinforces the need for a Gov-co to provide affordable goods for the poor.

Unfortunately, people have recognized that while the prices of Gov-co goods have remained stable (only raising with inflation), the quality of the goods has not. In addition, the quality and price of goods in the south is slightly different than the price and quality in the northeast as well as differences between urban, suburban and rural communities. Meanwhile, brand name goods continue to improve and increase in quality, though prices still cannot compete with Gov-co.

People are decrying the further and further separation between what the poor can afford vs what the rich can afford. In fact, they point out that the rich are able to afford goods that make them more productive and able to make more money compared to the poor. Something must be done. Many advocate to increase tax spending on Gov-co products to help increase the quality while keeping the prices low. Others advocate setting mandated regulations - maybe even establishing a federal agency to oversee and inspect manufacturers to ensure sufficient and consistent quality products. Tweaks to the system are constantly introduced, customer feedback mechanisms, product quality control tests are standardized, but nothing appears to really be improving the situation. (Not to strain the analogy, but imagine if IN ADDITION to everything else, if you did choose to shop at Gov-co instead of the brand name stores, you could only shop at your local Gov-co nearest your home.)

In such a situation, if someone advocated simply and completely eliminating Gov-co and allowing the free market to work in the retail space, I think few would dispute that there would be large numbers of people pointing at those high-end stores that cater to the more well-off and decry "What about the poor?" and lament that the poor would go hungry and naked because they couldn't afford to buy from those high-end stores. They'd claim that those private stores would just continue to charge high prices because people have to have food and clothing and stuff, right? The suggestion to completely eliminate Gov-co would be treated as nonsense - of being harsh, unsympathetic, and cruel. Accusations would abound that advocates are only concerned for the rich or are "in the pocket of big business".

But in reality, we know that without a Gov-co, we actually have a vibrant retail market with an enormous segment dedicated specifically to low-income consumers. Stores like mentioned above: Wal-Mart, Dollar General, 5andDimes, Goodwill, etc. all directly aim to serve low-income consumers. Critics of eliminating Gov-co overlook that the poor are a market in and of themselves and that many companies would move into that market to serve them - providing cheaper goods for lower prices and that competition in that market would help improve quality while keeping prices low.

Now this understanding that free market competition DOES encourage businesses to keep prices low and to increase the quality to attract customers is pretty common. We seem to inherently understand this about retail goods because we see it in action everyday. But many seem to have a problem with the idea that the same effects and incentives apply to education as to retail goods - I would argue, because we're only familiar with the current setup where only "the rich" can afford private schools.

Those who suggest simply eliminating public education are dismissed as naive. They are told, often even by other advocates of limited-govt, that without public education, the poor wouldn't be able to afford to send their children to school, only continuing the generational poverty and further widening the gap between the rich and the poor. Perhaps another look at the nature of competition in a free market, only in a different market, may help them see that we cannot simply assume that the current structure of "only the rich can afford private education" would continue if we eliminated public education. In fact, based on looking at other markets like retail, there is significant evidence to conclude that education providers would likely actively focus and pursue low-income customers.

Eliminating public education and allowing free market competition into the market for education couldn't be a whole lot worse than modern public education in many places, and it has the potential to be much, much better.

Why I don't think Gingrich is a true, limited govt conservative

Newt Gingrich is toward the top of the pack again. I believe this is because Romney is really looking too moderate for many conservatives to swallow, so they are looking for someone that is a true conservative. They are willing to overlook his past indiscretions because they feel that Newt is not only a real conservative, but that his debating skills make him a perfect match against Obama (the real goal of many Republicans: Anyone, anything but Obama).

The problem is that his record and many of his statements in the past don't reflect a true, limited govt conservative. Though I don't blame conservatives for being misled, Gingrich knows exactly what conservatism is and how to sell it. So with this upswing in support for Newt, I wanted to put together my thoughts on him at the moment and why I think conservatives need to be real careful about what they think they will get in Newt.

Proposed Ron Paul "Soundbites" for Debates

I'm a huge Ron Paul fan. I don't agree with 100% of his policies, but the vast majority. I love that he's not suave and speaks simply. However, he seems to have trouble making his points in short time frames. Perhaps it's due to the complexity of the issue, perhaps it's due to the large amount of information he could call on to answer the question, perhaps it's due to the divergence from "mainstream" political thought, thus requires more explanation, but he has trouble getting his message into "soundbites" - that is, one or two paragraphs.

After watching him in debates and feeling like his answers were correct, but just didn't pack the concise punch they could, I took a stab at writing what I would love for him to say in future debates based on what I know of his positions.

TL;DR: I'd love to see Ron Paul answer some of these questions like this:

With the rampant drug problem in this country, how can you say you want to legalize [some drug]?

Let me be clear, I am not "pro-marijuana" or even "pro-heroin" or "pro-cocaine". I think drug use can be a harmful and dangerous thing. However, I am for ending the FEDERAL prohibition on narcotics. I believe in the Constitution and in the 10th amendment. There is nothing in the Constitution about drugs and I believe that those things that are not specifically mandated to the federal govt, fall to the states. In 1919, those that believed that liquor should be banned recognized that they needed a Constitutional amendment to do so. And they needed another amendment to repeal it. Drug prohibition is no different in the need for an amendment to have a federal ban. However, there is none, so it must fall to the states. If all 50 states want to prohibit cocaine, heroin and marijuana, then fine, but not at the federal level, not without an amendment. And personally, I would not support such an amendment.

Being a strong Christian, how can you support same-sex marriage when Christianity states homosexuality as a sin?

Similar to drug prohibition, this once again is an issue of federal overreach. Marriage and its recognition is not mentioned in the Constitution as a power the federal govt has authority to oversee, regulate or restrict. Thus, that responsibility should, by the Constitution, fall to the states. I can be against an act, think it's sinful, and still not believe that it's the federal govt's job to prohibit it. Beyond that, marriage to the federal govt amounts to little more than legal declaration of shared rights (e.g. medical information sharing). Is there really a Christian reason to prohibit two people of the same sex from having the federal govt recognize them as having shared rights any more than one man being granted power of attorney for another man?

By removing national standards by eliminating the dept of education and advocating non-scientific positions like denying global warming and saying creationism is legitimate, as well as ending scientific funding, aren't you putting future generations at risk of falling behind the rest of the world educationally and competitively?

Firstly, the Constitution doesn't authorize the federal govt to dictate educational policies. The Dept of Education has only been a cabinet level agency since 1980. Are you honestly going to tell me that due to their involvement, education in this country has gotten significantly better since then? No, I believe that the US became the foremost scientific and educational country in the world BEFORE govt began funding research in every scientific field imaginable and BEFORE govt began managing education for the entire nation. Govt funding and control does expand these areas but it corrupts the systems, it doesn't really improve them. Plus,

Secondly, my positions on both global warming and creationism vs evolution is that we don't know. We have very good ideas and some evidence that supports a theory, but I believe that the science isn't definitive yet. Listen, I'm not anti-science - I'm a doctor of medicine for pete's sake. I've looked at the science for these theories and while we should continue to research and investigate these ideas, I am not convinced that they are definitive enough to be teaching in classrooms as fact and setting restrictive economy-wide policies by - doubly so when considering that the Constitution doesn't authorize the federal govt to dictate such policies.

With your focus on privacy, freedom and personal rights, why do you want to restrict a woman's privacy and freedom and ban abortion?

It's not about restricting her freedom or invading her privacy. However, as a doctor who has delivered thousands of babies, many of which were not full term, I recognize that what is inside a woman's womb is a life. In addition, the law recognizes it as a life since as a doctor, I was legally liable for that life and that life has inheritance rights. And as such I am a firm advocate for the protection of rights and the right to life is a critical one. Also note that my position is that I don't believe the federal govt has the Constitutional authority to be the "Abortion Police" - to either legalize or ban the practice. If a state wants to ban abortions or allow them, the Constitution doesn't grant the federal govt the authority to overrule that. At the core, I believe that protecting life is the first and most crucial step in protecting liberty.

Your policy calls for closing all military bases in foreign countries. Do you also want to shut down military bases in the US?

Well, I'm not sure that's necessary. How about we take it one step at a time and implement my foreign policy first and evaluate things at that point? I will emphasize is that what I want to do is cut the military, not defense. I think a strong defense and intelligence network is essential to a strong country. However, our military is overgrown and expansive. The military has become a tool of aggression instead of defense. I believe that our intervention in the affairs of other countries and the entangling alliances we get involved with cause us to be LESS safe. [If you agree that govt intervention in the economy causes problems, can't you see that govt intervention in the affairs of foreign countries causes problems? (this line can be added or removed based on who the audience is)] We are now in a position, we have SO many enemies, thanks to over 50 years of intervention around the world, where we feel we have to keep our boot on the necks of every country out there for fear they will try to get back at us. That's not only dangerous and not sustainable, it's not moral.

Are you suggesting that we invited 9/11?

Absolutely not. WE the people did not cause 9/11. But the actions of the US govt over the last 50-60 years did - and on our behalf. WE the people didn't overthrow a democratically elected leader and replace him with a puppet dictator that brutally oppressed his people, but the US govt did. WE the people didn't supply Saddam Hussein with weapons and encourage him to attack Iran in the 80s, but the US govt did. WE the people didn't give billions of dollars to dictators that oppressed their people, but the US govt did. [More detail about what the US govt has done and emphasize the difference between WE the people and the US govt] These aren't the acts of everyday Americans, as the question implies, but the acts of govt.

You have no problem with Iran getting a nuclear weapon? Aren't you basically advocating sticking your head in the sand and hoping terrorism goes away?

Our founders warned us to avoid entangling alliances and to avoid meddling in the affairs of foreign countries for fear of exactly the type of backlash we are seeing now. Look at the 1998 fatwa, bin Laden's letter right after 9/11, his letter in 2002 or 2006, or the statements of various other terrorists and the core justification behind all of the attacks was our continued military presence, intervention and sanctions on countries in the middle east. If we were to implement my foreign policy - a foreign policy NOT of isolationism, but of non-interventionism; if we were to end the active combat around the world; if we were to return our troops home from over 700 bases in over 135 countries; if we were to stop just giving money to foreign countries, countries that are often ran by authoritarian dictators; if we were to focus our defense spending on strengthening measures of ACTUAL defense; if we were to ensure a strong international intelligence network; if we are open, friendly and freely trade with all countries; if we were to do all of that, (besides saving hundreds of billions of dollars a year), why would they attack us? What would be the purpose? What would they be trying to get us to STOP doing by threatening attack?

And the idea that, without provocation or justification, Muslims will simply attack us, minding our own business, for no other reason than to get their virgins or similar is nothing but a ridiculous and ignorant caricature - even of Islamic extremists.

Math doesn't lie... Right?

If a bucket has 2 apples in it, and you add 2 more apples, how many apples are now in the bucket?

4 right?

2 + 2 = 4

"Math doesn't lie." Right?

That's true, "Math doesn't lie." But math CAN be wrong.

What if I told you the correct answer is 6?

Would you cry foul and declare your original answer to be true? Would you show me mathematical theorems and proofs that demonstrate that 2 + 2 DOES in fact equal 4?

As I said, "Math doesn't lie.", but math CAN be wrong when it tries to represent the real world. Or, let me rephrase - we are wrong when we assume that the world described by the math, identically represents the world in which we live.

In our scenario, that math didn't lie. In fact, the math wasn't wrong. But we were wrong when we assumed that the math accurately represented the world. What the math failed to take into consideration was that John also added 2 apples to your bucket. Thus, there are now 6 apples in your bucket.

"That's not fair! You never mentioned anything about anyone else." 

That's true, but when we create math to model the world, we aren't TOLD all the characters and variables and the exact scale and nature of their effects. We have to derive them ourselves. Sometimes, in simple systems, we can deduce all of them and the math does accurately reflect that system. However, the more complex the system, the more variables, the more interactions, the more complex the math, the more difficult it is to discover all affected and affecting variables, and the easier it is to miss (or misunderstand) something. Thus, when we create mathematical models to represent extremely complex systems, the potential for overlooking variables (or even simply under or over estimating their effects) is not only possible, it's likely.

In the world described by the math, John doesn't exist. Nobody other than you exists. Therefore, if you only added 2 more apples, there will only be 4 apples in the bucket now. It's simple, it's straightforward, but it'd be wrong. Overlooking John as a variable means that, while the math didn't lie; while the math wasn't wrong, it did not reflect reality. And if we had based our actions on the result of that math, we would have potentially made the wrong decision.

Let's say that we adjust our math, represent John, and based on this math, decide we have enough apples to bake an apple pie. However, what happens to our plans if, because of our mathematical oversight of not considering Sally, we only wound up with only 1 apple in our bucket because our math didn't represent that she removed 5 apples for herself? Based on our math, we would have concluded that we had enough apples, and we would have began preparing to bake. However, at some point, we would have come up very short of apples.

Similarly, when we try to model complex systems like climate or the economy, we can easily draw the wrong conclusions and plan the wrong actions based on, not faulty, but incomplete, math.

Even looking at previous data can be misleading if not all variables are considered. If we look at data that shows that home sales went up at the same time that tax rates went up, we could draw the conclusion that higher taxes cause increased home sales. Based on this conclusion, we could plan to raise them even more in hopes of further increasing home sales. However, by overlooking that a new factory opened up a few miles down the road, our conclusion would be wrong, and our actions would be mistaken. In the end, our wrong conclusion and the following actions might have led to not only the reduction in home sales, but also possibly the closing of the factory.

This type of oversight can happen easily. Looking at some specific economic data, one can easily see how people would conclude that getting into WW2 got us out of the Great Depression. However, the data doesn’t tell the whole picture. Similarly, many economists and politicians will bring up a chart or point out some data that indicates that their prescribed action worked in the past and should be implemented now. But without taking a full, contextual view of that event and that time, it’s difficult to understand all the variables that may have affected things.

“So are you saying we can’t trust math? Well we might as well throw it all out the window?”

My point isn't to say we should ignore math. My point is that we need to be cautious about just blindly trusting what math "tells" us. We need to understand that in complex systems, even a small misunderstanding of a single variable, let alone possibly omitting one entirely, can change a negative feedback system into a positive feedback system. We need to be careful about basing actions on mathematical models without trying to look at the entire context of the situation. Otherwise, we may very likely find out we don't have enough apples.

The "Good Side" of Regulations

We have created a system, a bureaucracy, that is self-perpetuating. People whose job is to come up with more and ever more invasive regulations, restrictions, directives and mandates.  I've complained about these rules before. Crafted "in the name of the people" for our own good, and enforced with the full, threatening power of the government.

Some would argue that some regulations are necessary. Well, some may be tolerable, but what if we reached that point a long time ago? What if we have passed the point of acceptable, useful, needed regulations and into the point of pedantic bureaucratic market meddling? Worse, the organism we've created encourages ever more regulations. New bureaucrats with something to prove, departments that must show they're doing something to earn that ever larger budget they're requesting. How will we ever know if we've gone beyond that necessary point? 

But the part that is often overlooked is that whether you agree with the regulation or not, they have a cost. By requiring that businesses improve their product in some way, or that they pay their employees more, or that they use more expensive equipment, or that they use more environmentally friendly processes, you are increasing the cost of producing that product. And since that company isn't going to sell their product for a loss (at least not for very long), then that company is going to increase the price of the product in order to cover the increased cost of producing it. 

So in the end, it is you and I, that pay the increased cost of these regulations! 

Again, you can argue about whether each new regulation is worth the associated cost, but, as this link shows, it seems to me that we have already passed the point of diminishing returns a long time ago.  

http://mises.org/daily/4781

Slippery Slope

Many like myself criticize government regulations and intervention by saying that while the act may seem and sound reasonable now, it will lead to ever more invasive actions. We talk of the slippery slope. We have, for years, suggested that increased regulations were, instead of protecting people, were going to lead to the OPPOSITE of freedom. And all along, we have been dismissed and chastised for "fearmongering" or simply exaggerating.

One of my personal favorites when decrying regulations was to suggest that if it doesn't stop, pretty soon 10 year olds' lemonade stands will be forced to submit to health inspectors and apply for a permit or be forced to shut down. And, predictably, I've been accused of using an absurd fallacy to make my point.

However, the slippery slope exists and while the results are absurd, it's not fallacious to be wary of it.

Along similar lines, people like myself have also argued that a truly free market has not existed for years ... like 150 years at least (if ever). While it's sometimes difficult to see the negative impacts of federal intervention, this is a great example to see how even local govt intervention can distort a market in favor of those with political ties. What's bad is that this kind of government "preferential" intervention goes back forever. Even in the mid-1800's, when the concept of robber barons and of industry's tyrannical oppression of its customers really began, we can look closer and see that most such instances (I would recommend you read the entire book or hopefully that first section, but at least read a page or two starting half way down page 12) were actually cases of govt intervention ending a free market and creating a preferred market for a specific preferential industry, business, or person.

Anyone that even TRIES to argue that the US is a free market is so removed from reality as to be dismissible. Keep these stories in your back pockets the next time someone says that the "free market" failed or that "free market capitalism" is the cause of our problems.

Government vs Free Markets

Now I'll admit I don't know everything, or even very much, about the operations of the United States Postal Service. I work with computers and electronic mail is how I prefer to deal with everything. However, today I came across yet another indicator that, in the long run, government typically cannot compete with the free market, even on ground slanted in their favor, let alone on even ground.

The post office is now suggesting that they will to do away with Saturday delivery. In addition, there is the ever-present threat of closing post offices.

This is because the post office is, and has been, operating at a significant loss for several years now (even before the recession began). Their last quarter in the black was back in 2006 (and that was while issuing over $2 billion in bonds ... aka debt). They operated Q4 (Oct-Dec) of 2009 at a deficit of, get this, $300 million! In 2008 and 2009 they apparently lost $2.8 billion and $3.8 billion respectively. It was on target to be nearly $7 billion in losses for 2009, but by issuing bonds (shown as 'Debt' in the chart) the yearly revenue didn't end up being as bad.
Interestingly, notice that the difference in mail volume barely changed between 2005-2007. Really only 2009 was the first year to see a significant drop in volume and yet a huge swing in revenue took place starting in 2007.

The USPS has been struggling even beyond its fiscal problems. Even Obama said so. Though underlying the deteriorating work environments and aging employees (and a congressional requirement to pre-fund health benefits to employees), most of the problems come back to money. To combat this trend, there have been discussions regarding how to improve the post office's fiscal situation. Some have even mentioned fully privatizing the post office (note: that's from 1995).

Keep in mind, the USPS isn't strictly a government agency.  It only gets about $3 billion of federal tax money. It operates primarily from the revenue from its services. However, at the same time, there are a significant number of advantages (note: I'm not sure how old that article is as it claims the Post Office has made profits in the preceding years, which isn't the case currently) that they have over any truly private organization. It's sorta positioned as a pseudo-governmental entity:  Lots of the benefits of government with many of the freedoms to act like business.

Yet despite the advantages, it looks like some difficult times ahead for the USPS.