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Should We Listen?
November 2, 2011 Economic Illiteracy

In an OpEd in tomorrow’s WSJ, Democratic Senate Candidate Jeff Greene tells us we should listen to the message of OWS folks. I may agree with him, but not when he pulls out the boilerplate arguments:

… ¬†These policies, and deregulation, created the environment for widespread defaults as well as predatory lending, exotic mortgage derivatives, and too-big-to-fail banks.

Now, I can understand it if an OWS member couldn’t articulate a single piece of deregulation, but can Mr. Greene do us the favor of what he means by this? It’s really inspiring to hear our leaders discuss the “facts” … “well, I cannot point to any particular deregulations, or at least ones that were harmful (e.g. do these guys want to take the CARTER airline and trucking deregulations as being bad and perhaps pin them on Reagan too?) … but I know that there was a culture of deregulation. Some may have a notecard that has a bullet pointed list that says, “Alan Greenspan was a Randian, and say something about Glass-Steagall.” So, what Mr. Greene, would you recommend – can you recommend a regulatory nirvana that existed in the past and why? Of course he cannot and will not tell us.

Here’s another:

They also spurred the development of sprawling communities where cars, the most expensive form of transportation around, became the logical way to get from point A to point B. The lowest gas tax in the industrialized world masked the true cost of operating these cars, while federal highway funds meant drivers never felt the cost of building all the roads that were paved to serve them.

It turns out that this is misleading for two reasons. First suburbanization seems to have preceded the federal highways, and while there is some evidence for highways causing suburbanization that research seems to have been called into question. Second, while we may not have a high gas tax, the federal highway tax is a tax on gasoline. So this tax exactly makes drivers feel the cost of their cars and makes users of highways actually pay the costs to them. Never mind, of course, the positive externalities we may get from having buses and trucks be able to ship goods point to point on our roads. So is it cool to just make stuff up in an OpEd? And third, he claims that cars are the most expensive form of transportation. That is so flat out false as to remain a mystery why the WSJ editors allowed it. Even if you make the most horrific estimates of the cost of carbon emissions, cars are nowhere near as expensive as say, light-rail. I guess since it’s conventional wisdom that cars are bad, you just get to say it and it is so. ¬†Here’s a start at a nuanced view, a data-driven view, of that question. I am sure Mr. Greene read it cover to cover.

And I just cannot leave these two final paragraphs alone:

In today’s global economy, our future depends not on subdivisions and cheap gas but on education and training people for the skilled trades that still command good wages. For individuals and families, the “new normal” requires answering tough questions. Do you have children? Are you paying a big mortgage on a McMansion or saving for their education?

Well, actually my wife and I are not really saving for our kids’ college education. Why should we? Every dollar we save for it will tell the schools we can pay more. Why would I do such a thing? I’d be better off buying a 40-foot boat and a time-share in Mexico. But we really are not saving much. I will give our kids cash at age 18 or 21 and let them decide what to do with it. Spending $56,000 per year to get an education in collectivism is not how I envision my savings being directed. I’d rather my kids travel the world for a year and then spend a couple of years blowing my savings on some entrepreneurial projects. They can take cheap night classes from a foreign institution while they do this in case they need some accreditation. I’m not completely joking here. But look, I am a professor in higher ed and I am not convinced I would spend $56k per year to send each of my kids there. For 1/5 the price, sure, and even then I’d kick the kids in the arse to get out and do more than just go to school.

As they ask us to recognize their fears and resentments, the Occupy Wall Street protesters are giving us a chance to address our problems before they grow worse. We should be grateful for their tie-dyed, peaceful methods and their commitment to remaining in place until they receive a constructive response.

You know, because folks haven’t been doing this for years. And as for their peaceful methods, I don’t see how disrupting a port is peaceful. I don’t see how sitting in and taking over a cable company’s building is peaceful. And forgive me, but I don’t see how advocating “Occupy Everything, Death to Capitalism” is peaceful. It is far from it – because that implies doing away with private property, freedom of exchange, freedom of contract, freedom of which job and career to pursue and all that goes with it. How quaint.

UPDATE: Occupying Everything – what goes down in the real world.

UPDATE #2: Worth many thousands of words.

"6" Comments
  1. Mike, ever since Reagan they have been sore about lower tax rates and deregulation, and ever since they have been trying to rewrite history.

    I do not want to speculate about the motives of so many people on the left, except to say that they may cling to the beliefs they learned reading Samuelson, or what they heard from somebody they found cool at an SDS smoker. Remember, some people think Castro is a liberator.

  2. When someone plays the “we’re the victims of deregulation” card, I immediately flip-on the bozo-bit for that person.

  3. ” The lowest gas tax in the industrialized world masked the true cost of operating these cars….”

    So would this imply the corollary that increasing the taxes on a product would somehow make its cost more valid? Would increasing the sales tax on sugar-fortified breakfast food (It’s only a matter of time before Captain Crunch gets his from the nanny-state do-gooders like Michael Bloomberg.) show the “true cost” of leaving for kindergarten? Isn’t it troubling that illogical demagogues somehow always end up on election ballots? What does that say about democracy?

  4. Regarding the link to the Oakland OWS scene: The appraent rampant use of drugs among the protesters striking. The issue of drug legalization aside (I am pretty much for it), these folks are spending an awful lot of their disposable income supporting some TRULY evil capitalists south of the border; or am I mistaken? I mean, they will surely boycott jeans stitched together in some “evil” exploitative maquiladora in Mexico, but are among the best customers of gangs so ruthless they make Al Capone look like a saint. I’m just sayin’….

  5. Send your children to the University of Hong Kong, 10 grand a year, top 20 in world rankings, bachelor is only 3 years, the most freedom loving culture in the world, most capitalist place on earth, and with food that is mind-blowingly excellent.

    Also beautiful women.

    Hong Kong, that’s all that needs to be aaid.

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